China moves to head off “debt trap diplomacy” concerns at BRI forum

China moves to head off “debt trap diplomacy” concerns at BRI forum

25/04/19

Luke Foddy, Communications Manager

China has used the 2019 Belt and Road Forum for International Cooperation in Beijing to address global concerns around the project’s financing.

Speaking at the forum – which is assembling world leaders including Russia’s President Vladimir Putin and Pakistan’s Prime Minister Imran Khan as well as economic figures such as IMF Managing Director Christine Lagarde – the People’s Bank of China Governor Yi Gang outlined plans to “build an open, market-oriented financing and investment system,” the Financial Times reports.

“We need to objectively assess developing countries’ debt problems” Governor Yi said. “We need to consider a country’s complete debt-servicing capabilities.”

His comments follow those of Finance Minister Liu Kun, who said China will work with counterparts in other countries to build a “high quality, high-standard,” financing system for the Belt and Road Initiative (BRI), according to Bloomberg.

The BRI has faced growing criticism from some quarters over the financial obligations partner countries take on for projects, with US Vice President Mike Pence accusing China of engaging in “debt diplomacy” in an October 2018 speech.

The comments at this week’s forum indicate that China has heard these concerns and is seeking to address them. Beijing will release its analysis framework for BRI debt-sustainability later today (Thursday), Governor Yi added.

China Daily reports that 37 heads of state and 5,000 participants from 150 countries are attending the forum, which ends on Saturday. UK Chancellor Philip Hammond is among them.