China said it wants multilateral lenders to participate in the debt restructuring of poorer nations as part of a three-point plan put forward at talks with the World Bank and other creditors in Washington this week.
(Bloomberg) — China said it wants multilateral lenders to participate in the debt restructuring of poorer nations as part of a three-point plan put forward at talks with the World Bank and other creditors in Washington this week.
Wang Wenbin, a spokesman for the Foreign Ministry, outlined proposals delivered at the Global Sovereign Debt Roundtable, providing fresh insight into China’s demands to find a solution to the debt crisis.
“First, multilateral creditors need to come up with solutions on their participation in debt treatment as soon as possible,” Wang said Friday in response to a question from reporters in Beijing.
“Second, the International Monetary Fund needs to takes action in information sharing on debt sustainability assessments as soon as possible. Third, parties concerned need to agree on the specific way for creditors to participate on comparable terms as soon as possible.”
China appeared to be softening its stance over how to restructure billions of dollars of debt, with people familiar with the talks saying a proposal under discussion would see the World Bank provide fresh low-interest concessional loans and grants to countries that have defaulted. In exchange, China would drop a key demand that multilateral development banks take losses alongside other creditors in debt restructurings.
Wang’s comments suggest China — the biggest bilateral creditor to poor countries — is continuing to push for multilateral creditors to take stronger action in the process.
China wants all parties to take “credible steps” to implement the so-called Common Framework on debt relief, he said.
The talks on Wednesday in Washington included People’s Bank of China Governor Yi Gang, World Bank President David Malpass, IMF Managing Director Kristalina Georgieva, US Treasury Secretary Janet Yellen, as well as officials from G-20 host India and Zambia — which is seeking debt relief.
In a separate statement on Friday, Yi said China is willing to implement the debt relief program along with other parties.
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