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Bessent Says China’s Belt and Road Has Become Debt Collection
Scott Bessent is a senior United States financial official.
He said China’s Belt and Road Initiative is now focused more on collecting loan payments than making new infrastructure loans.
He argued that some countries are struggling to repay Chinese loans.
He also said that unclear loan rules can make it harder for countries to reorganize their debts.
United States officials discussed these concerns at a recent Group of 20 meeting.
Some lawmakers said China should receive less lending from major international institutions.
China rejects the idea that its initiative creates debt traps.
China says the program helps build infrastructure and supports economic cooperation.
The hearing also covered China’s role in the International Monetary Fund and World Bank.
United States Treasury Secretary Scott Bessent said China’s Belt and Road Initiative has shifted from infrastructure lending to debt collection.
Bessent accused China of using opaque lending terms and hidden provisions that complicate debt restructuring.
He said the United States raised Chinese lending practices at a recent Group of 20 meeting in Asheville, North Carolina.
World Bank Chairman French Hill supported phasing out World Bank lending to China by 2031.
China rejects claims that the initiative creates debt traps and describes it as infrastructure and economic cooperation.
- Who
- United States Treasury Secretary Scott Bessent, Representative French Hill, other lawmakers, and Chinese officials were involved in the debate.
- What
- Bessent said the Belt and Road Initiative has shifted from infrastructure financing toward collecting debts from struggling borrowers.
- Where
- The hearing took place in the United States, while the Group of 20 meeting was held in Asheville, North Carolina.
- When
- Bessent made the comments during a House Financial Services Committee hearing, after a recent Group of 20 meeting.
- Why
- The discussion focused on opaque Chinese lending practices, difficult debt restructuring, China’s role in international financial institutions, and global financial stability.
United States officials’ assessment
China’s stated position
Debt and lending practices
United States officials’ assessment
Bessent said the Belt and Road Initiative has become a debt-collection operation and that opaque terms make restructuring difficult.
China’s stated position
China rejects allegations that the initiative creates debt traps and presents it as infrastructure development and international economic cooperation.
International financial support
United States officials’ assessment
French Hill argued that American taxpayers should not support World Bank lending to China because China has substantial financial resources and is a major global creditor.
China’s stated position
The article does not provide a direct Chinese response to the World Bank’s planned phaseout of lending by 2031.
China’s economic model
United States officials’ assessment
United States lawmakers criticized China’s non-market economy, state-directed investment, exchange-rate management, and economic imbalances.
China’s stated position
Bessent said China resisted language criticizing non-market economies at the Group of 20 meeting; the article does not state China’s specific explanation for that position.
Key facts
- Speaker
- Scott Bessent, United States Treasury Secretary
- Initiative
- The Belt and Road Initiative was launched by Xi Jinping in 2013.
- Projects
- The initiative finances or has financed ports, railways, roads, and energy projects across Asia, Africa, Europe, and Latin America.
- Main criticism
- Bessent said opaque lending terms, tolling agreements, and hidden provisions can obstruct debt restructuring.
- World Bank policy
- The World Bank plans to phase out lending to China by 2031, according to the hearing.
- G20 position
- Bessent said China was the only country that did not support a communique criticizing non-market economies.
- China’s position
- Beijing rejects allegations that the initiative creates debt traps and calls it a platform for infrastructure development and economic cooperation.
Quotes
Scott Bessent
US Treasury Secretary who testified before the House Financial Services Committee
“It is also my opinion that this widely talked about Belt and Road Initiative has gone from a lending operation to a collection operation, as they have bankrupted many or are bankrupting many of their borrowers”
thehansindia.com
“The Chinese System of lending includes many tolling agreements, many the hidden provisions and transparency in debt restructuring is the ultimate feature for a successful debt restructuring”
thehansindia.com
Sources
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