Yellen is anxious to collaborate with China on debt and other global issues. On Sunday, Janet Yellen, the U.S. Treasury Secretary, stated that she was “eager” to cooperate with China on areas of mutual interest, such as debt restructurings for impoverished nations, and that multilateral development banks required reforms before capital increases could be considered.
At a press conference held in India before a meeting of Group of 20 finance ministers and central bankers, Yellen stated that her visit to Beijing last week helped put the U.S.-China relationship on “sturdier footing” and that the world’s two largest economies had an obligation “to cooperate on areas of mutual concern.”
“Much more labor must be done. “However, I believe this trip was an important beginning,” said Yellen. “I am eager to mobilize further action based on the groundwork that we laid in Beijing.”
Washington imposed tariffs on Beijing in response to China’s discriminatory trade practices, which continue to be a concern. “They have not been addressed,” she said.
Yellen stated that U.S. corporations desire an environment where they can “invest and prosper” in China.
Yellen stated that Washington will continue to restrict Russia’s access to the military equipment and technologies required for its invasion of Ukraine.
“One of our primary objectives this year is to combat Russia’s attempts to circumvent our sanctions. She added, “Our coalition is expanding on the measures we’ve taken in recent months to combat these efforts.”
India, which holds the G20 presidency this year, has taken a largely neutral stance on the conflict, generally refusing to blame Russia for the invasion it launched in February of last year, urging a diplomatic solution, and sharply increasing its purchases of Russian oil even as Western nations seek to squeeze Moscow.
At the G20 meeting in Gandhinagar, in the northwestern Indian state of Gujarat, Yellen said she would continue to press for the “full and timely participation of all bilateral official creditors on pending debt restructurings.”
She stated that she and her Chinese counterparts discussed the restructuring of Zambia, and despite the lengthy negotiation process, all differences were resolved.
“We should apply the common principles we agreed to in the case of Zambia to other cases rather than always starting from scratch. And we must move quicker,” Yellen said, adding that she hoped debt treatments for Sri Lanka and Ghana could be finalized swiftly so that the International Monetary Fund (IMF) could begin initial loan program reviews this autumn.
She stated that borrowing countries and other stakeholders required a “user guide” for debt restructuring to clarify the procedure.
Yellen stated that the Poverty Reduction and Growth trust of the International Monetary Fund, which provides zero-interest loans to the world’s poorest nations, needed to be placed on a more stable financial footing. She stated that the U.S. Treasury will assist the IMF in evaluating options, including using internal fund resources.
Yellen also outlined several next steps for the evolution of the World Bank and other multilateral development banks. Still, she stated that any exploration of capital increases for the institutions could not be considered until reforms are implemented to expand their role beyond poverty reduction to address global challenges like climate change and pandemics.
“We should build better banks, not just bigger banks,” Yellen said.
She reiterated her estimate that multilateral development banks could collectively increase lending by $200 billion over the next decade by implementing or considering balance sheet reforms. She stated that they could improve this further by implementing recommendations from the previous year’s G20 Capital Adequacy Framework report.
Yellen stated that, among other World Bank reform measures, she advocated for a new set of principles that would permit the “targeted use” of the bank’s concessional financing for global challenges, such as climate change, and measures to increase such resources.
She suggested that the World Bank investigate options for lending to sub- and supra-sovereign borrowers, similar to the COVAX vaccine initiative.
Yellen stated that the United States was devoted to implementing a global corporate minimum tax agreement reached in 2021 despite Congress’ inaction. She stated that negotiations on the technical details of Pillar 1 of the agreement – reallocating taxing rights on large multinational corporations, including large technology companies – were “very close” to completion.
David Lawder in Washington and Aftab Ahmed in Gandhinagar contributed reporting. Sudipto Ganguly and William Mallard edited the story.