“It would not make sense if the funds made available to these countries were used to repay Chinese debts,” said Yellen on Thursday (local time) in a congressional hearing in Washington. She is in contact with the government in Beijing on this matter.
The G20 countries, including the USA, agreed in April to extend the suspension of interest payments for the world’s poorest countries until December. The background to this are fears that these states could fall behind in the economic recovery from the Corona crisis. Chinese financial institutions are among the major lenders to low-income countries.
You now want to make sure that the relief for these countries does not end up in the hands of China, said Yellen. “We talked to China about their participation.” Accordingly, Beijing has promised to participate as an equal partner in this debt framework.
At the same time, the finance minister campaigned for money to be made available for the debt relief measure. The initiative is organized by the International Monetary Fund and the World Bank and is open to 73 countries. So far 47 have asked to participate in the program.
(AWP)
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