China slammed the US on Tuesday, asking it to fix its own debt issues, after US Treasury Secretary Janet Yellen said on Monday that it was crucial for China to immediately address Zambia’s heavy debt burden.
Yellen’s Remarks
During her visit to Lusaka, Yellen told reporters during a press conference at the National Public Health Institute on Monday morning that it is “critically important” for China to address Zambia’s debt crisis “right away.”
Although Yellen said she held “constructive” conversations regarding the same with Chinese Vice Premier Liu He in Switzerland last week, she remarked that it has “taken far too long already to resolve this matter.”
I greatly appreciate the opportunity to exchange views with President Hichilema here in Zambia. We continued discussions about addressing debt sustainability, deepening economic reforms, furthering growth, reducing poverty, and combatting corruption and illicit finance. pic.twitter.com/oNA5CYUpHd
— Secretary Janet Yellen (@SecYellen) January 23, 2023
Referring to the US’ own investments in the country, Yellen said that the “many government programs and international programs” were “oriented to help efforts to build infrastructure.” She added that the US wanted to make sure that it does not “create the same problems that Chinese investment has sometimes created here.”
She further remarked that Washington was looking to invest in companies with contracts that “have transparency.”
“We have projects that really bring broad-based benefits to the African people and don’t leave a legacy of unsustainable debt,” she stressed.
China’s Retort
The Chinese Embassy in Lusaka released a statement on Tuesday saying that it would be “best” if Yellen fixed the US’ “own domestic debt problem, given how well she knows about facts, her professional capacities, and her team’s implementation ability.”
Dismissing Yellen’s remarks to be “groundless accusations” to serve the US’ “selfish interests,” it called on Yellen to try preventing the US “from defaulting on its obligations” and “protect the country’s credit.”
It also shot back at the US for hitting its $31.4 trillion borrowing limit, calling it a “catastrophic debt problem.”
I leave Lusaka heartened by Zambia’s economic reforms and productive discussions I've had with counterparts and business leaders on global challenges we face together: food security, climate change, economic stability. I am grateful for ongoing partnership between our countries. pic.twitter.com/KzxNEYNHbW
— Secretary Janet Yellen (@SecYellen) January 24, 2023
The embassy noted that the “biggest contribution” Washington could make to foreign debt issues was “to act on responsible monetary policies, cope with its own debt problem, and stop sabotaging other sovereign countries’ active efforts to solve their debt issues.”
With regard to Zambia’s debt to China, the embassy assured that China is actively co-chairing Zambia’s Official Creditor’s Committee under the G20 Common Framework and “working hard with other parties to seek a sustainable solution in line with the principle of common actions and fair burden-sharing.”
Zambia’s Debt to China
Zambia is currently renegotiating its nearly $6 billion debt with China, its biggest creditor.
Addressing Zambia’s debt crisis was a priority during Yellen’s visit. To this end, she met with Zambian President Hakainde Hichilema on Monday to talk about the ongoing negotiations.
In Zambia, I've had the opportunity to discuss implementation of the U.S. - Africa Strategic Partnership on Food Security that was launched at the African Leaders Summit. This is an important piece of larger work we are engaged in to urgently advance global food security. pic.twitter.com/hOM2cIerXc
— Secretary Janet Yellen (@SecYellen) January 24, 2023
Hichilema noted during the bilateral meeting that the country faces a late March deadline to find a solution to the crisis, failing which, there would be a further slump in its economy.
The two leaders also held a closed-door meeting at the Africa Leaders’ Summit in Washington last month and discussed “the need to address debt sustainability and the imperative to conclude a debt treatment for Zambia.”