China's financial minister and central bank governor vowed to strengthen debt management and leverage more private funds for infrastructure construction under the Belt and Road Initiative, suggesting a new framework to assess debt risks for partner countries on Thursday.

The Ministry of Finance published a debt-sustainability analysis framework for the BRI's participating economies at the start of the Second Belt and Road Forum for International Cooperation, a three-day event in Beijing.

Financial institutions of China and other BRI economies are encouraged to use the "nonmandatory" policy tool for rating debt risk before making lending decisions. The analysis method is based on international standards provided by the International Monetary Fund and World Bank, according to the ministry.

China looks to strike a balance between meeting financing needs, sustainable development and debt sustainability, according to Finance Minister Liu Kun.

"We will build a high-standard and high-quality financing system to support long-term and sustainable BRI investment while preventing debt risks," Liu said.

He suggested promoting financing cooperation for projects in third-party countries, equity investment and attracting more private funding.

Enhancing debt and risk management is a key consideration for deepening BRI financing cooperation, said Yi Gang, governor of the People's Bank of China, the central bank.

"The debt issue in developing countries should be treated objectively. If debt growth is accompanied by infrastructure improvement, enhancement of people's livelihoods and productivity and poverty reduction, it will be beneficial for the sustainability of long-term debt," Yi said.

Yi pledged to use more market-based commercial funds. He also said improving transparency for projects' financing is needed, especially for green financing, and using local currencies in BRI investments to curb exchange rate risks. "The opening of local currency-denominated bond markets will effectively attract long-term funds and reduce risks of currency mismatches," he said.

Christine Lagarde, managing director of the International Monetary Fund, said at the forum that China's increased focus on the long-term success of BRI projects and the BRI debt sustainability framework "are very welcome steps in the right direction".

The further opening-up of China's financial sector, such as the bond market, will enable diversification and foster renminbi internationalization, she said.

Liu also announced that a multilateral development financing cooperation center has recently been established — jointly with eight multilateral development institutions including the World Bank, Asian Development Bank and Asian Infrastructure Investment Bank — to prepare for "high-quality" projects and promote international standards for BRI financing.

Chinese financial institutions have provided more than $440 billion for BRI infrastructure projects. Renminbi-denominated overseas investment funds amounted to over 320 billion yuan ($47.49 billion) and the Chinese capital market has helped companies raise 500 billion yuan through equity funding. BRI countries and companies have issued more than 65 billion yuan in Panda bonds in the Chinese onshore market, according to the central bank.

The World Bank said BRI cooperation is predicted to reduce global trade costs by 1.1 percent to 2.2 percent in 2019.