U.S. Treasury Secretary Yellen news conference in Washington
U.S. Treasury Secretary Janet Yellen speaks during a news conference at the Treasury Department in Washington, U.S., April 11, 2023. Reuters

U.S. Treasury Secretary Janet Yellen said on Tuesday she is optimistic China will agree on certain technical aspects of debt restructuring for poor countries during the first full-fledged meeting of a sovereign debt roundtable of creditor and debtor countries.

"I've been encouraged by China's willingness to provide specific assurances with respect to Sri Lanka. I regard that as a positive sign," Yellen told a news conference at the start of the International Monetary Fund and World Bank spring meetings.

China would be an active participant in the meeting on Wednesday on the sidelines of the gathering in Washington, Yellen said, adding that she would continue to press Beijing to help improve the Group of 20 Common Framework set up to provide debt relief for low-income countries.

"I'm hopeful that we will actually get a bit of progress coming out of this first meeting of the sovereign debt roundtable on a set of technical issues that I think pertain to some important elements of debt restructuring," she said. "I feel encouraged that we have made a bit of progress and I hope to make more."

The IMF, World Bank and India, the current president of the G20, are co-chairing the Global Sovereign Debt Roundtable with a goal of accelerating debt relief for countries in need. The co-chairs are expected to issue a statement after Wednesday's meeting.

A first limited gathering was held on the sidelines of the G20 meeting in India in February, and a deputies meeting took place on April 3, amid ongoing delays in finalizing debt treatment agreements for Zambia, Ghana and Ethiopia.

U.S. officials and others blame the delays largely on foot-dragging by China, now the world's largest bilateral creditor, and reluctance by private-sector creditors to join in, but hope to address some of the underlying questions at the roundtable.

Ghana, Zambia and Ethiopia are at various stages of the process, but debt experts say China's agreement to provide financing assurances for Sri Lanka could provide fresh momentum for moving forward on those separate cases.

The roundtable includes officials from the G20 countries, officials from countries that have requested debt treatments under the Group of 20 common framework - Ethiopia, Zambia and Ghana; middle-income countries such as Sri Lanka, Suriname and Ecuador, which have faced their own debt crises, and private-sector creditors.