China exporting debt through 'Silk Road' projects, IMF chief warns

BEIJING: International Monetary Fund (IMF) chief Christine Lagarde warned China yesterday about saddling other countries with a "problematic increase in debt" through its ambitious global trade infrastructure project. Lagarde made the comments at a Beijing forum on Chinese President Xi Jinping's signature Belt and Road initiative, a $1 trillion road, rail and construction project spanning dozens of countries -- from Asia to Africa and Europe.

But many of the colossal projects are being built by state-owned Chinese companies and financed by loans from China, leaving states billions of dollars in debt to Beijing.

"These ventures can also lead to a problematic increase in debt, potentially limiting other spending as debt service rises, and creating balance of payment challenges," Lagarde told the crowd of Chinese and foreign officials.

"In countries where public debt is already high, careful management of financing terms is critical," she said.

 

China exporting debt through Silk Road projects, IMF chief warns

BEIJING: International Monetary Fund (IMF) chief Christine Lagarde warned China yesterday about saddling other countries with a problematic increase in debt through its ambitious global trade infrastructure project. Lagarde made the comments at a Beijing forum on Chinese President Xi Jinpings signature Belt and Road initiative, a $1 trillion road, rail and construction project spanning dozens of countries -- from Asia to Africa and Europe. But many of the colossal projects are being built by state-owned Chinese companies and financed by loans from China, leaving states billions of dollars in debt to Beijing. These ventures can also lead to a problematic increase in debt, potentially limiting other spending as debt service rises, and creating balance of payment challenges, Lagarde told the crowd of Chinese and foreign officials. In countries where public debt is already high, careful management of financing terms is critical, she said.