'Fruitful Exchange' with China on Debt Management-
International Monetary Fund Managing Director Kristalina Georgieva said she had a "fruitful exchange" with her Chinese counterpart this week on her repeated calls to speed up debt treatment in countries such as Zambia and Sri Lanka.
This week, Georgieva, World Bank President David Malpass and other financial leaders met with officials from the People's Bank of China, China's Ministry of Finance, the Export-Import Bank of China and the China Development Bank in China's Anhui province.
Georgieva said the discussion touched on the common framework for debt treatment established by China, the United States and other major G20 economies at the end of 2020, as well as the specifics of some countries seeking debt relief.
The implementation of the common framework process has been halted and only one country, Chad, has completed the debt-servicing process, but the relevant agreements have not led to any real reduction in Chad's debt.
Zambia is working to complete its debt restructuring in the first quarter of 2023.
"We need to build on the momentum of the Chadian debt treatment agreement to accelerate and finalize debt treatment options for Zambia and Sri Lanka so that the IMF and multilateral development banks can disburse rate payments," Georgieva said in a statement.
Georgieva said new cases of debt crises are emerging as global financial conditions tighten.
"We discussed how to prevent individual countries' debt distress from triggering a global debt crisis," she said, calling for the need to accelerate the application of the G20 debt treatment framework in a more predictable way and the need to cover a wider range of countries.
Speaking at the conference, Malpass said the discussion focused on the urgent need for more rapid progress on the debt issue, adding that "a change in China's position is critical to this effort."”
He welcomed Premier Li Keqiang's proposal for "systemic debt engagement" during the meeting and stressed the need for transparent disclosure of China's loan contracts, the removal of confidentiality and non-restructuring clauses, and hidden collateral and custody arrangements.
Georgieva said she "also sees room to build a platform for more systematic engagement on debt issues, in which China can play an active role," though she did not give further details.
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