- French, Japanese finance ministers say China welcome to join
- Paris Club has 20 permanent members, over 90 debtor countries
Here’s the latest sign of China’s growing prowess on the world stage: discussions are under way to grant the world’s largest developing economy membership to the Paris Club, a group of creditors that specializes in loans to governments.
China, along with Brazil and South Korea, are being considered for entry into the lending club, according to ministers and officials from the Group of 20 economies who were in Shanghai for meetings. Japan’s Finance Minister Taro Aso voiced support at the conclusion of the G-20 talks Saturday.
“Regarding China and Korea joining the Paris Club, we would welcome that if they wanted to join,” he told reporters. “It’s a club of creditors, so it would be good. That doesn’t mean we should lower the conditions, but that they should join under the current conditions."
French Finance Minister Michel Sapin told reporters in Hong Kong on Friday that he would welcome China’s full membership. At the same time though, Chinese Finance Minister Lou Jiwei played down the suggestion, saying Saturday "there’s nothing to it."
The Paris Club is an informal group of lenders who work to help resolve countries’ debt problems. Argentina was the first country to reorganize its debt with the Paris Club in 1956.
Made up of 20 permanent members, the Club was founded in 1956 after a three-day meeting in Paris and has $583 billion on loan to 90 debtor countries, according to the group’s website. The lender plays a central role in settling debt problems for developing and emerging market countries.
In December, the Club agreed a deal with Cuba to clear $2.6 billion of debt arrears over an 18-year period, while others, including Argentina have had to negotiate and settle debts with the club.
China’s admission would be another milestone for the world’s No. 2 economy. The nation’s currency, the yuan, is set to be granted admission into the International Monetary Fund’s reserve currency basket this year, joining the dollar, euro, pound and yen.
China also won global backing last year for a new $100 billion development lender, the Asian Infrastructure Investment Bank, which drew support from more than 50 governments and will compete with rivals including the World Bank to fund projects.