US: China Blocks Debt Relief in Africa

US Treasury Secretary Janet Yellen has accused China of obstructing international efforts to reduce the debt burden of poor countries, particularly in Africa. Yellen said at a news conference yesterday at the headquarters of the International Monetary Fund (IMF) in Washington that “the obstacle to further progress is a major creditor country, namely China.” The People’s Republic is the largest state creditor of developing countries.

“There’s been a lot of discussion about what we can do to bring China to the table and promote a more effective solution to these problems,” Yellen said, referring to annual meetings of the IMF and World Bank that run through Monday.

The IMF and the World Bank continue to call for China to participate in debt restructuring of poor countries within the framework of negotiations between the 20 leading industrialized and developing countries (G20). In Yellen’s judgment, Beijing was “not constructive” on the issue.

Many countries are taking on even more debt as a result of the coronavirus crisis. Also, rising interest rates are also causing problems for them. The US Treasury Secretary has warned that the financial situation of African countries and other developing countries is “very worrying”. Total Chinese government debt is estimated at $500 billion to $1 trillion.