China will co-operate to resolve an impasse over developing countries’ sovereign debt restructurings, a senior official said, as Beijing appeared to soften its stance in fraught negotiations over a string of defaults.China’s central bank governor Yi Gang on Thursday told G20 finance ministers in Washington that the country was willing to work through the group’s so-called Common Framework for sovereign debt restructuring.
“China is willing to work with all parties to implement the Common Framework for debt resolution,” Yi said in a statement released by the People’s Bank of China. The G20’s Common Framework seeks to bring the main bilateral creditors of countries with distressed debt together for negotiations. So far, Chad, Ethiopia and Zambia have signed up to take part.
Sovereign debt distress among developing countries has been a focus of this year’s IMF and World Bank meetings in Washington, as the pandemic and inflation have hit the ability of governments to service foreign borrowings.