China steps up economic swipes at US, accusing it of sparking turmoil that harms developing nations

Chinese Finance Minister Liu Kun tells G20 it should ‘prevent serious negative spillover effects triggered by policy adjustments in some countries’

Comments build on friction between two nations regarding debt distress in developing nations, which are expected to suffer the greatest in economic storm

Reading Time:5 minutes

In September, the US Federal Reserve raised interest rates by a further 0.75 per cent - the fifth this year as the global economy declines in the shadow of the pandemic and the Ukraine crisis. Photos: Reuters

Published: 11:00pm, 14 Oct 2022Updated: 11:55am, 15 Oct 2022

China has ramped up criticism of US economic policy, accusing Washington of causing global turmoil that has increased debt distress in developing nations.

The accusations – delivered by Chinese officials in multilateral and bilateral meetings – have become more common since Russia’s invasion of Ukraine in February, when China warned that the war and US sanctions against Russia had triggered spillover effects of rising costs and economic risks in developing nations.

In a virtual G20 finance ministers and central bank governors meeting on Thursday and Friday, Chinese Finance Minister Liu Kun said the Group of 20 bloc should work together to address the “severe economic situation”.

“The first is to strengthen macro-policy coordination, address global challenges such as inflation, food and energy security, and prevent serious negative spillover effects triggered by policy adjustments in some countries,” Liu was quoted as saying in a Chinese Finance Ministry statement on Friday, without naming any nation.

“The second is to push for development financing, objectively analysing the causes of debt vulnerability, and carry out debt disposal prudently. The World Bank and other multilateral creditors and commercial creditors should also carry out debt disposal under the principle of ‘joint action and fair burden’.”

02:17

China-funded ‘white elephant’ tower opening in Sri Lanka as nation struggles with bankruptcy

Liu’s remarks came after a Chinese Foreign Ministry official said the interest rate rises of “a developed country” – an apparent reference to the US – had stirred tumult in the global market and worsened debt and inflation in developing nations.