(Adds details)
By Andrea Shalal
WASHINGTON, April 20 (Reuters) - As the world's largest
official bilateral creditor, China should participate in
meaningful debt relief for countries facing problems, but it has
served for too long as a "roadblock" to necessary action,
Treasury Secretary Janet Yellen said in a major speech on
U.S.-China relations on Thursday.
Yellen said the United States expected China to make good
its pledge to work constructively on issues such as debt relief
and climate change, noting that delays in restructuring raised
costs for both borrowers and creditors.
Speaking at Johns Hopkins University's School of Advanced
International Studies, Yellen welcomed China's recent provision
of credible financing assurances for Sri Lanka, but said
Washington continued to urge China's "full participation" in
providing debt treatments for Zambia, Ghana and other countries.
Yellen's remarks came after global finance officials from
creditor and debtor countries, the International Monetary Fund
and World Bank and the private sector met in Washington last
week on ways to accelerate long-stalled debt restructuring
efforts. The IMF estimates that more than half of low-income
countries are close to or already unable to service their debts.
IMF chief Kristalina Georgieva said on Friday that the new
Global Sovereign Debt Roundtable had made "tangible progress" on
debt restructuring issues. She said China and other participants
had reached a common understanding that multilateral development
banks could provide positive net flows to countries in need,
instead of accepting outright reductions in debt levels.
China has long been unwilling to accept losses on loans
unless private-sector creditors and multilateral development
banks shoulder their share of the burden.
"China's participation is essential to meaningful debt
relief, but for too long it has not moved in a comprehensive and
timely manner. It has served as a roadblock to necessary
action," Yellen said.
The United States and China - as the world's largest
economies - had a responsibility to work together to help
emerging markets and developing countries facing debt distress,
she said.
"China’s status as the world’s largest official bilateral
creditor imposes on it the same inescapable set of
responsibilities as those on other official bilateral creditors
when debt cannot be fully repaid," the Treasury secretary said.
Yellen said Washington was working with other stakeholders
to improve the Group of 20's Common Framework process for
low-income countries and the overall debt treatment process,
adding, "Solving these issues is a true test of
multilateralism."
She said the United States and China - the two largest
emitters of greenhouse gases - also needed to work together to
tackle climate change, and called on Beijing to end overseas
financing of unabated coal-fired power plants.
(Reporting by Andrea Shalal, additional reporting by David
Lawder; Editing by Franklin Paul and Jonathan Oatis)
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