US Treasury Secretary Janet Yellen’s remarks this week calling China a “barrier” to debt reform in Africa received a pointed response from Chinese officials in Zambia — get your own house in order.
“The biggest contribution that the US can make to the debt issues outside the country is to act on responsible monetary policies, 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 on its website on Tuesday.
Yellen and International Monetary Fund managing director Kristalina Georgieva arrived separately in Zambia on Sunday to highlight the need for debt reform in Africa.
Zambia defaulted on its debt in 2020 and has made little progress to restructure it with Chinese and private creditors to date. The situation has helped push the country’s citizens into poverty.
The world’s poorest countries faced $35 billion in debt-service payments to official and private-sector creditors in 2022, more than 40% of which was due to China, the World Bank said.
The US Federal Reserve’s rate increases, designed to tame inflation at home, and the appreciating US dollar have added to African countries’ debt service burden, the African Development Bank said last week.
Remarks from the Chinese Embassy refer to US national debt, which currently stands at about about $31 trillion. The figure has skyrocketed from $5.6 trillion in the 2000’s, partly due to to increased spending for an ageing population, outlays for Iraq and Afghanistan wars, Covid-19 programmes and tax cuts by the Trump administration that trimmed revenues.
Meanwhile, Republicans in the House of Representatives are using a risky, unusual threat to refuse to vote in a new debt ceiling, a figure that reflects money already spent and now owed by the government, to pressure the Biden administration and Democrats to cut spending programs.
- Reuters, with additional editing by Vishakha Saxena