When Christine Lagarde, managing director of the IMF, appeared at the Milken conference in Los Angeles this week, her section of the event was entitled Time of Transition.
But one of the most striking topics she addressed did not concern the IMF — or its economic projections. It came when she was asked about China’s controversial global infrastructure programme, the Belt and Road Initiative. She produced an unexpected flash of optimism.
Ms Lagarde told the gathering of 4,000 financiers that the IMF had been working with the Chinese “for weeks and weeks . . . to explain how debt sustainability matters”. She noted that President Xi Jinping had pledged at last week’s BRI summit to create a new framework to make the hundreds of billions of dollars of debt it has extended for BRI projects more “sustainable”, in both a fiscal and environmental sense.