Xi to welcome debt-burdened leaders in China as he skips G20 Summit

By Bloomberg News

President Xi Jinping will host the leaders of two heavily-indebted nations for state visits to China this weekend, as he skips the world’s premier forum for top-level diplomacy in India.
 

Zambian President Hakainde Hichilema will visit China from Sept. 10-16, while Venezuela’s Nicolás Maduro will arrive on Friday for a seven-day trip, the Foreign Ministry in Beijing said in separate statements.

The symbolism of Xi’s decision to host two world leaders as he snubs the Group of Twenty summit sends a clear message about how he prefers to conduct diplomacy: The Chinese leader is increasingly receiving dignitaries on home soil, or turning to groups where Beijing has more clout, such as the newly expanded BRICS.

Zambia and Venezuela have sought economic relief from China in recent years as they struggle to service mountains of debt, a significant portion of which is owed to Beijing. President Joe Biden plans to push for debt relief for poor countries and announce funding for infrastructure projects at the G-20 summit this weekend.

While Zambia and Venezuela are a central part of the global conversation on debt, neither is a G-20 member. The grouping has agreed to grant permanent membership to the African Union, Bloomberg News reported Thursday, a move that would give Zambia some opportunity for participation at future summits. 

Reestablishing Ties
 

Maduro’s visit to the world’s second-largest economy comes as China and Venezuela are re-establishing connections after years of cooling ties, and against a backdrop of intensifying Washington-Beijing rivalry. A meeting with Xi would mark the first time the two leaders have sat down in five years.

China became a key lender to Venezuela in 2007, when it first provided funds for infrastructure and oil projects under late President Hugo Chávez. Now, Maduro’s government is seeking to raise more money from Venezuela’s massive oil wealth before his expected bid for a third presidential term. 

Biden is also seeking to engage Venezuelan officials in talks about lifting sanctions in exchange for allowing fair elections next year. After Venezuela defaulted on $60 billion of international market debt in 2017, it was unable to engage with bondholders due to economic sanctions preventing US investors from dealing with the Maduro government.  

China’s stance on participating in debt restructuring negotiations has become increasingly important given its role as the largest creditor for many poor nations.

Zambia became the first country to win major debt relief through the so-called Common Framework earlier this year. China’s central role in that deal to restructure $6.3 billion in bilateral debt set a template for how coordination between its government, the Paris Club and bondholders can work. 

Earlier this month, the International Monetary’s chief Kristalina Georgieva said the organization had a “strong partnership” with China during a visit.  

Simultaneous Scenarios
 

As Xi hosts world leaders at home, his Premier Li Qiang will represent China at the G-20 summit in New Delhi. The White House said Biden doesn’t intend to meet with Li during the summit, and Xi’s absence will likely aggravate Beijing’s already rocky relationship with the forum’s host, India.

Biden, meanwhile, is scheduled to have a bilateral meeting with Indian Prime Minister Narendra Modi in the Indian capital on Friday evening, according to a statement from the White House. 

Xi’s next major international event now looks to be the third Belt and Road Initiative forum in Beijing next month. More than 90 countries have confirmed that they will attend, Chinese Foreign Ministry spokeswoman Mao Ning told reporters at a regular press briefing on Thursday, without providing details.

So far, only one world leader confirmed to attend the event: Russian President Vladimir Putin, who will make his first trip abroad since a warrant for his arrest on alleged war crimes was issued by the International Criminal Court.