China seeks to allay belt and road ‘debt trap’ concerns with standard for assessing financial risk
- Document is based on similar measures used by the World Bank and International Monetary Fund, Finance Minister Liu Kun says
- Countries will be classed as low, medium or high risk, document says
China moved on Thursday to allay widely held concerns about the financial drawbacks of its “Belt and Road Initiative” by publishing a debt sustainability framework for participating nations.
Presented by Finance Minister Liu Kun on the opening day of the second Belt and Road Forum in Beijing, the 15-page document was, he said, based on similar standards used by the World Bank and the International Monetary Fund.
He said its aim was to “prevent and solve debt problems” associated with projects under the trade and infrastructure development plan devised and championed by Chinese President Xi Jinping.
By publishing the framework, Beijing was trying to address claims that some countries involved in the scheme had been drawn into debt traps and that China was using that financial dependency to take possession of their assets and enhance its influence overseas.
According to people involved in the drafting of a joint communique – which is set to be approved by the visiting officials on Saturday – Beijing is keen to quash charges that it engages in so-called debt-trap diplomacy.