‘Cope with your own debt’, China tells US over Zambia debt relief | Business and Economy News
Washington and Beijing are vying for influence in Africa, where Chinese banks are major lenders.
The Chinese government says the United States should stop pressuring Beijing on debt relief for Zambia and focus on averting a government default at home, which could have repercussions for the global economy.
“The biggest contribution that the US can make to the debt issues outside the country is to cope with its own debt problem and stop sabotaging other sovereign countries’ active efforts to solve their debt issues,” the Chinese embassy in Zambia said in a statement on Tuesday.
The US government has a cap of $31.4 trillion on how much it can borrow, and it reached that limit on Thursday.
US Treasury Secretary Janet Yellen implemented “extraordinary measures” to ensure the US government can continue paying its bills in the short term and then travelled to Africa. On a visit to Zambia, she said it was crucial to address its heavy debt burden with China.
The country failed to make a $42.5m bond payment in November 2020, becoming Africa’s first sovereign nation to default during the COVID-19 pandemic.
“It’s taken far too long already to resolve this matter,” Yellen said on Monday.
Washington is trying to woo African nations as the influence on the continent of its rivals Russia and China grows.
During her visit to Africa, which also included Senegal and South Africa, Yellen pushed to expand US trade and business ties.
“The United States is all in on Africa, and all in with Africa,” Yellen said on Friday in Dakar as she touted the fruits of a new “mutually beneficial” US economic strategy towards Africa.
In responding to Yellen, China zeroed in on the battle between Republican lawmakers and Democratic President Joe Biden’s administration over raising the US debt limit to allow more borrowing to keep the government running.
“Even if the US one day solves its debt problem, it is not qualified to make groundless accusations against or press other countries out of selfish interests,” the Chinese embassy statement said.
Chinese development banks have emerged as major lenders to poor countries around the world for natural resources, transport and power projects although that lending has fallen sharply and steadily since 2016, according to Boston University’s Global Development Policy Center.
New loan commitments dropped to eight projects totalling $3.7bn in 2021, down from a peak of 151 projects worth $80bn in 2016, according to data compiled by the centre.
At present, 22 low-income African countries are either already in debt distress or at high risk of debt distress, according to the UK-based Chatham House. Chinese lenders account for 12 per cent of Africa’s private and public external debt, which increased more than fivefold to $696bn from 2000 to 2020.
Washington has repeatedly expressed concern in recent weeks over Beijing’s alignment with Moscow as Russia wages its invasion of Ukraine.
Russian President Vladimir Putin in December said he expected his Chinese counterpart, Xi Jinping, to visit in 2023. If it were to take place, the visit would be a public show of solidarity during the war in Ukraine.
Foreign Minister Wang Yi has defended China’s refusal to condemn the invasion of Ukraine and in December 2022 suggested the country would deepen ties with Russia in the year ahead.
He also blamed the US for the deterioration in relations between the world’s two largest economies, saying Beijing has “firmly rejected” Washington’s “erroneous China policy” of applying pressure on trade and technology and criticising China over human rights and its claims to a broad swath of the Western Pacific.