China calls U.S. Treasury Secretary’s remarks “irresponsible” and blames U.S. for debt problems

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U.S. Treasury Secretary Janet Yellen

31st March 2023 – (Beijing) China has hit back at comments made by U.S. Treasury Secretary Janet Yellen, calling them “irresponsible” and “unreasonable.” Yellen had expressed concern about China’s lending activities to developing countries, claiming that they left nations “trapped in debt.” In response, the Chinese government said that the U.S. was responsible for exacerbating global debt problems due to the Federal Reserve’s interest rate hikes. China maintains that it has always followed international rules and carried out investment and financing cooperation with transparency.

China has lent billions of dollars to developing countries to build infrastructure, with the “Belt and Road” initiative being a prime example. However, lending has slowed down since 2016 due to many projects failing to generate the expected financial dividends. Despite this, a recently published study showed that China spent US$240 billion bailing out 22 developing countries between 2008 and 2021. More countries are struggling to repay loans, which has led to debt restructurings with Zambia, Ghana, and Sri Lanka.

In a news briefing, Chinese Foreign Ministry spokesperson Mao Ning rejected Yellen’s accusations and called for the U.S. to take practical actions to help developing countries. Mao also criticised the U.S. for pointing fingers at other countries and making “irresponsible remarks.” China claims that it has always been transparent in its investment and financing cooperation with developing countries and has followed international rules.

Yellen’s comments came after she expressed concern about China’s activities globally, particularly its lending to developing countries. She told US lawmakers in a hearing that Washington was working hard to counter China’s influence in international institutions and in lending to developing nations. Yellen warned that China’s lending activities could leave countries “trapped in debt” and hinder economic development.

China has called on the World Bank and International Monetary Fund to offer debt relief to developing countries struggling to repay loans. The country has been criticised for holding up debt restructurings with countries such as Zambia, Ghana, and Sri Lanka. However, China maintains that it has always been transparent in its investment and financing cooperation with developing countries and has followed international rules.