Aso urges ADB to end lending to China

May 5, 2019

Nadi, Fiji--Japanese Finance Minister Taro Aso called on the Asian Development Bank on Saturday to realize China's "graduation" from its lending promptly.

The regional lender for developing countries "should hold substantive discussions on a concrete path toward graduation while prioritizing its assistance in areas conducive to graduation," Aso said at a three-day annual meeting of the ADB Board of Governors that ended in Nadi, Fiji, the same day.

Loans to China accounted for 12 pct of the ADB's new lending contracts concluded in 2018, but the country's per capita gross national income was higher than the threshold of 6,795 dollars for graduation from ADB lending.

Aso, also deputy prime minister, suggested that the ADB should use its limited funds primarily for loans to low-income countries while imposing higher interest and other tougher terms on higher-income countries including China.

In light of China's excessive lending to emerging countries, meanwhile, Aso urged the ADB to assist efforts to ensure low-income countries' debt sustainability, including helping them strengthen their debt management capabilities.

Ensuing debt sustainability will be a priority issue at a Group of 20 summit to be chaired by Japan in June, Aso stressed.

Elsewhere in his speech, Aso said the Japanese government will provide an additional 15 million dollars to the ADB's High-Level Technology Fund for investment in high-quality infrastructure projects.

Aso told a subsequent press conference that he believes his call for China's graduation from ADB lending gained support from other countries. He also said it is necessary to wait and see China's response on the debt sustainability issue.