China willing to play constructive role in debt talks

BEIJING (Reuters) -China is willing to “constructively” participate in solving the debt problems of relevant countries under a multilateral framework, Premier Li Keqiang said on Wednesday.

China, the world’s largest bilateral creditor, has criticised multilateral lenders for not accepting losses, or haircuts, on loans to low-income countries while Beijing is being asked to do so on credit it has extended on its own.

In a phone call with International Monetary Fund Managing Director Kristalina Georgieva, Li said solving the debt problems of low-income countries requires the participation of all creditors, according to a State Council, or Cabinet, statement.

A spokesperson for the IMF told Reuters that Georgieva “had a very productive call with Prime Minister Li, who reaffirmed China’s willingness to play a constructive role in resolving the debt problems of countries in debt distress”.

China urged Group of 20 nations last month to conduct a fair, objective and in-depth analysis of the causes of global debt problems as calls mount for lenders to help debt-laden poor countries by accepting large losses on their loans.

China is a major lender to high-debt countries such as Ghana and Zambia.

Zambia owed Beijing nearly $6 billion out of a total external debt of $17 billion at the end of 2021, government data showed. Ghana owes China $1.7 billion, according to the International Institute of Finance, a financial services trade association focused on emerging markets.

(Reporting by Meg Shen and Ryan Woo, additional reporting by Jorgelina do Rosario in London Ediing by Tomasz Janowski and Gareth Jones)