‘A really beneficial trade,’ comments IMF chief during debt discussion with China

The U.S. Kristlina Georgieva, the head of the International Monetary Fund, said she had a “fruitful dialogue” with her Chinese colleagues this week about her repeated appeals for accelerated debt relief for countries such as Zambia and Sri Lanka.
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), stated on Friday that she held a “fruitful dialogue” with Chinese colleagues on debt difficulties.
The IMF head stated this in a statement made at the end of the seventh “1+6” Roundtable organised by Chinese officials in the province of Anhui. Georgieva, World Bank President David Malpass, and other financial executives met with officials from the People’s Bank of China, China’s finance ministry, and its EXIM Bank and China Development Bank this week in China’s Anhui province.
Georgieva, World Bank President David Malpass, and other financial executives met with officials from the People’s Bank of China, China’s finance ministry, and its EXIM Bank and China Development Bank this week in China’s Anhui province.
Georgieva stated that the conversations included the shared framework for debt treatment established by China, the United States, and the other Group of 20 major economies in late 2020, as well as certain individual situations of nations requesting debt relief.
The common framework process has come to a standstill, with just one nation, Chad, having completed the debt treatment procedure and its agreement not resulting in any actual debt reductions.
Zambia is aiming to complete its debt restructuring by the first quarter of 2023.
“We need to capitalise on the momentum of the agreement on Chad’s debt treatment and accelerate and finish debt treatments for Zambia and Sri Lanka, which would allow for IMF and multilateral development bank disbursements,” Georgieva said in a statement.
According to Georgieva, other nations are also facing rising debt difficulty as global financial conditions tighten.
“We discussed how we can prevent isolated examples of financial distress from generating a worldwide debt catastrophe,” she added, urging for faster, more predictable progress on debt remedies and the framework’s extension to new nations.
In his remarks during the meeting, Malpass stated that the discussions centred on the urgent need for faster progress on debt difficulties, adding that “changes in China’s attitudes are crucial in this endeavour.”
He welcomed Premier Li Keqiang’s support for a “systematic engagement on debt” during the meetings, and emphasised the importance of transparent disclosure of China’s loan contracts, as well as the removal of non-disclosure and non-restructuring clauses, as well as hidden collateral and escrow arrangements.
“More openness would assist investors in making educated decisions, building confidence, and expediting the debt reconciliation and restructuring procedures,” he added.
Georgieva stated that there is “room for more systematic engagement on debt issues, where China may play an active role,” but provided no additional information.