A U.S. government official said on the sidelines of the U.S.-African leaders' summit that the U.S. plans to promote transparency in the terms of African countries' debts to China.

(Bloomberg)

[Financial Channel/Comprehensive Report] A senior government official said that the United States plans to promote the transparency of the relevant terms of African countries' debts to China because these countries are struggling under the pressure of debt repayment.

"Bloomberg" reported that the U.S. State Department's undersecretary for economics and energy Jose Fernandez (Jose Fernandez) said that Washington will try to figure out how these countries can get rid of the heavy debt that oppresses their people.

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Fernandez's relevant remarks were made during an interview during the US-Africa Leaders Summit held in Washington. The three-day summit was attended by leaders from 49 African countries and a delegation from the African Union. China has invested billions of dollars in recent years. Investments are gaining traction in Africa, where U.S. President Joe Biden is seeking to revive U.S. ties with the continent.

Many countries in Africa have turned to China for loans to build airports, hospitals, housing and roads. Although these funds have indeed helped some African countries build critical infrastructure, many countries are still struggling to repay their debts because the construction has not been fully commercialized.

China is currently the largest creditor of developing countries in the world.

The secrecy of China's debt has become an issue during negotiations to provide relief to emerging nations during the pandemic, with concerns that not all loans made by Chinese banks are public and that they could be cleared in any restructuring. good deal.

The world has recently been actively promoting the reduction of the debt burden of developing countries, while China, the largest creditor, has been criticized for its passive participation. U.S. Treasury Secretary Janet Yellen has repeatedly stated that Beijing is the biggest obstacle to progress in related actions.

Most low-income countries face record high debt and lack reliable debt data. A 2021 report by the World Bank (World Bank) found that nearly 40% of these countries never publish debt data on their websites. Or the data has not been updated within the past 2 years.

The study also found differences in definitions and recording errors accounted for as much as 30 percent of GDP in some countries.

Fernandez said that in the loans signed by China with some African countries, China has added clauses that exclude or prohibit the publication of the agreement, so people in this country do not know what their country signed or how much they borrowed. , and don't know how much the interest is.

Fernandez pointed out that loan renegotiation will require the agreement to be public, so that people know how much they borrowed, the interest, what the terms are, and the collateral provided by the state. This is a process that benefits countries and allows them to escape the debt trap. .

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