The Chinese do not participate in the multilateral dialogues on the reduction of the debt of the poorest countries. China also wants the World Bank and International Monetary Fund to agree to a cut. This year, developing countries have to pay external debts worth 35 billion dollars: 40% is owed to Beijing.
Beijing () – The advanced economies of the G7 consider China to be the main obstacle in multilateral efforts to restructure the foreign debt of developing countries, burdened by the effects of the Covid-19 pandemic, the Russian invasion of Ukraine and the consequent energy crisis.
This was explained yesterday by US Treasury Secretary Janet Yellen during a meeting with some of her African counterparts. Yellen added that the need to bring Beijing to the negotiating table had been discussed. The German Economy Minister and his Spanish colleague expressed the same disappointment.
The Chinese dispute that they will not participate in debt reduction schemes if the World Bank and the International Monetary Fund (IMF) do not accept cuts in what is owed to them.
In 2020, the G20 launched a mechanism to involve China and India in restructuring the debts of the poorest countries, which was immediately joined by the Paris Club, which brings together Western economies, the IMF and various private creditors.
This year alone, developing countries have to pay foreign debts of 35 billion dollars: 40% is due to China, reports the World Bank. Beijing is the world’s leading lender to low-income states, especially in Africa, Central Asia, Southeast Asia and the Pacific. Most of them have received funds under the banner of the Belt and Road Initiative, Xi Jinping’s megaproject to increase China’s geopolitical weight with investments in infrastructure around the world.
In absolute terms, at the end of 2020, the countries most indebted to Beijing are Pakistan (77.3 billion dollars), Angola (36.3 billion), Ethiopia (7.9 billion), Kenya (7.4 billion) and Sri Lanka (6.8 billion). In percentage values with respect to GDP, they are Djibouti (43%), Angola (41%), Maldives (38%), Laos (30%) and the Democratic Republic of the Congo (29%).
