By Staff

International Monetary Fund chief Kristalina Georgieva has said that Chinese officials have agreed to form a global sovereign debt “roundtable” that would include a wide variety of stakeholders, including private sector creditors. Georgieva told an event hosted by the IMF that she was feeling “a bit more optimistic” about the prospects for dealing with major debt issues facing low- and middle-income countries after high-level meetings with Chinese authorities last week. The IMF chief said last week she had a “fruitful exchange” with her Chinese counterparts on the need to accelerate debt relief for countries like Zambia and Sri Lanka, adding that she saw “space for a platform for more systematic engagement on debt issues, where China can play an active role”.

On Thursday, Georgieva said she had a “very constructive engagement” with Chinese leaders on the debt issue during her meetings after repeated calls for reforms to accelerate debt treatments under the Group of 20 common framework and expand it to include middle-income countries.

US Treasury Secretary Janet Yellen and other Western officials have expressed mounting frustration about what they see as foot-dragging by China, now the world’s largest sovereign creditor, in providing relief under the G-20 framework. China has argued that private creditors and multilateral development banks should be required to accept debt “haircuts” to make the process fair. The discussions in China yielded some progress, Georgieva said.“We agreed that we should form a global sovereign debt roundtable at the highest level -the key creditors, some of the borrowers, the private sector – with the World Bank, the IMF and the G-20 presidency being the co-conveners,” she said.

“We need that place. We cannot have solutions for systemic risk with the parties to this solution being in different rooms and not talking to each other at the same time. That just cannot happen,” she said.

The proposed roundtable offers a structure to help improve the debt treatment process and avoid a systemic debt crisis, she said. No further details were immediately available about the roundtable and when it could have an initial meeting.

Georgieva, World Bank President David Malpass and other financial leaders met in China’s Anhui province last week with officials from the People’s Bank of China, China’s Finance Ministry and its Exim Bank and China Development Bank.