The Chinese debt-trap or debt-trap diplomacy is a Western media propaganda story accusing the People's Republic of China of using flattery and deception to hand unpayable loans to periphery countries to build expensive infrastructure with the goal of seizing the countries' assets as payment for their debts. It has been debunked extensively by Statesian professors Deborah Bräutigam and Meg Rithmire.[1]
As states around the world pile on debt to combat the coronavirus pandemic and bolster flagging economies, fears of such possible seizures have only been amplified by bourgeois media.
China has instead given loans at low interest rates and often allows countries to restructure or even never repay loans, unlike the neocolonial IMF.[2] Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country.[3]
China has also forgiven tens of billions of dollars of debt held by African countries,[4] including 23 interest-free loans to 17 different countries.[2]
The economist Yanis Varoufakis discussed the topic in a recent lecture given at the Cambridge forum. He helpfully debunks a number of myths on the matter.
Bourgeois propaganda effort
Since the late 2010's, there was an effort by bourgeois media to associate China with a supposed "debt-trap diplomacy". BBC News resorted to editing an interview with Deborah Bräutigam — a scholar known for her work challenging the validity of the Chinese “debt trap diplomacy” myth — to only include her explanation of the myth itself, omitting all evidence she cited against it, leading listeners to believe that Bräutigam was in fact claiming the concept was true.[5]
The former vice-president of the United States, Mike Pence in a speech stated the following lie.
“In fact, China uses so-called “debt diplomacy” to expand its influence. Today, that country is offering hundreds of billions of dollars in infrastructure loans to governments from Asia to Africa to Europe and even Latin America. Yet the terms of those loans are opaque at best, and the benefits invariably flow overwhelmingly to Beijing. Just ask Sri Lanka, which took on massive debt to let Chinese state companies build a port of questionable commercial value. Two years ago, that country could no longer afford its payments, so Beijing pressured Sri Lanka to deliver the new port directly into Chinese hands. It may soon become a forward military base for China’s growing blue-water navy.[6]”
Mike Pence, former United States vice president
When in reality, the Sri Lankan government first approached India and the United States to finance the port. After both countries said no, it then approached China. Sri Lanka's China Ambassador spells out the current status of the port.
“The security of Port Hambantota, the security of territorial coverage of Sri Lanka in the Indian Ocean, is an entire matter for Sri Lankan security forces. China never asks us. We never offered it. [In other words, China's naval ships are not permitted to use the port — it is for Sri Lanka’s naval command only.] [7]”
Karunasena Kodituwakku, the ambassador of Sri Lanka to China
References
- ↑ Deborah Brautigam, Meg Rithmire. "The Chinese ‘Debt Trap’ Is a Myth" The Atlantic.
- ↑ 2.0 2.1 Amanda Yee (2022-12-19). "Why Chinese ‘debt trap diplomacy’ is a lie" Liberation News. Archived from the original on 2022-12-20. Retrieved 2022-12-23.
- ↑ "Debt Relief with Chinese Characteristics". China Africa Research Initiative.
- ↑ Shang Guan Jie Wen (2022-02-23). "China Forgives Tens of Billions of Dollars in Debt for Africa" China and the New World. Archived from the original on 2022-02-23. Retrieved 2022-05-10.
- ↑ "Why Chinese ‘debt trap diplomacy’ is a lie". Liberation News.
- ↑ "Remarks by Vice President Pence on the Administration’s Policy Toward China". Trump Whitehouse Archives.
- ↑ "Sri Lankan ambassador to China: Hambantota Port is not a 'debt trap;'". CGTN.