Belt and Road initiative not a 'debt trap', says China consul general

KOTA KINABALU: The Belt and Road Initiative (BRI) is not a "debt trap", says a Chinese diplomat.

China's consul general in Kota Kinabalu, Huang Shifang, said this allegation spun by certain quarters was untenable.

"China has always carried out investment and financing cooperation with developing countries based on the principle of openness and transparency," she said.

"China acts in accordance with the laws of the market and international rules and respects the will of others.

"We never force others to borrow from us or forcibly ask any country for debt repayment," she added here on Thursday (Aug 24).

Huang said China had never attached any political strings to loan agreements or exercised any selfish political interests.

To date, she said, none of the partner countries has accepted the claim that the BRI has created so-called debt traps.

"Therefore, this allegation against China is simply untenable," she said when asked about the claim made in certain news articles from the West, during an engagement session with the media here.

To back this up, Huang pointed out that according to the World Bank’s International Debt Statistics, by the end of 2020, commercial and multilateral creditors accounted for 40% and 34% respectively for the public external debt of 82 low-income and lower middle-income countries.

She said bilateral official creditors took up 26% and China less than 10%; while research by European Network on Debt and Development (Eurodad) on 31 key indebted countries found that 95% of the countries’ sovereign bonds were held by Western financial institutions.

"According to World Bank estimates, low-income and lower middle-income countries have to make US$940bil (R4.364bil) worth of principal and interest repayments in the next seven years," she said.

Huang said that includes US$356.6bil (RM1.655bil) to Western commercial creditors and US$273bil (RM1.267bil) to multilateral institutions, which account for 67% of the total payments due.

"Only 14% of their total payments, or US$130.8bil (RM607.37bil), will go to the Chinese government and commercial institutions," she said.

She said China aims to promote high-quality common development and foster a new era of win-win cooperation within the context of building a China-Malaysia community with a shared future.

"China has always been committed to supporting developing countries in their socio-economic development," Huang stressed.

She shared how insufficient funding was a bottleneck issue for many countries in their pursuit of prosperity and rejuvenation.

She said in light of their respective need for development, China has focused its outbound investment and financing cooperation on infrastructure and production to help developing countries enhance their capacity for self-generated and sustainable development.

"This has contributed to these countries’ economy and peoples’ livelihood and delivered tangible benefits to the local communities," Huang said.

She said the Consulate General office here remains committed to serving as a bridge, facilitating deeper exchanges and cooperation between the two countries across a wide range of sectors.

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