BEIJING: China on Thursday rejected “misunderstandings” fuelling concerns about its Belt and Road global infrastructure programme but vowed to tame debt risks as it opened a summit on its signature foreign policy.
President Xi Jinping’s pet project is a reboot of the ancient Silk Road to connect Asia to Europe and Africa through massive investments in maritime, road and rail projects, reports AFP.The Belt and Road Initiative promises to bring much-needed modern infrastructure to developing countries, but the United States has dubbed it a “vanity project” and critics warn it is a “debt trap” favouring Chinese companies.
Huang Kunming, a member of China’s powerful Politburo, said at the opening of the forum in Beijing that there have been “some misunderstandings and unfounded rumours” about BRI that they hope to clear up.
But in a nod to the concerns over loans, Finance Minister Liu Kun said China would release a framework to “prevent debt risks,” according to state-owned China Securities Journal.
The “debt sustainability analysis framework” encourages Chinese financial institutions and BRI countries to voluntarily improve debt management levels, the report said. International Monetary Fund chief Christine Lagarde said Liu’s announcement and China’s increased focus on the long-term success of BRI projects were “very welcome steps in the right direction.”
Lagarde told the forum that “sound financial regulation, transparent rules for investment, and attention to fiscal sustainability” were needed to successfully open capital markets, according to her prepared remarks.
Leaders from 37 countries have begun to arrive in Beijing for the three-day forum, with officials from scores of other nations in attendance.Russian President Vladimir Putin and Italian Prime Minister Giuseppe Conte, whose country became the first G7 member to sign up to Belt and Road, are among the headliners.