Germany’s finance minister welcomed China’s indication on Thursday that it may abandon its demand for international banks to participate in debt restructuring for poorer countries, removing a major barrier to debt relief.
Christian Lindner stated that China appeared to “finally accept its duty as the largest creditor of low-income countries” while in Washington for the IMF and World Bank spring meetings.
China, which is attending the meetings in person for the first time in three years, has indicated it will drop its demand for multilateral development banks to share losses alongside other creditors in sovereign debt restructurings for poor nations, a source told Reuters.
“The German government sees this as progress and we welcome it,” Lindner said.
“China is a difficult partner to talk to but we need China at the table for the solution of debt problems, because otherwise we won’t see any progress,” Lindner said.
China is by far the largest creditor for many highly indebted countries in Africa and Asia, and has been repeatedly pressed to make concessions on multilateral lenders to speed debt restructuring.