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China denies pursuing debt-trap diplomacy in Africa, middle-income countries

The Chinese authorities in Nigeria have denied the United States government claims that China is advancing debt-trap diplomacy to enslave poor and middle-income countries.

The Charge d’Affaire of the Chinese Embassy in Nigeria, Zhao Yong, said China’s the Belt and Road Initiative (BRI) launched in 2013 “is widely understood as a geopolitical strategy to create a new, Sino-centric order in Eurasia or even across the entire world.”

Yong in a statement titled Debunking the Myth” in Abuja yesterday said despite Beijing’s protestations that this view misrepresents a policy intended by China as a benevolent initiative, it has quickly taken hold in Western policymaking circles – particularly in the US.

He said the US Vice-President Mike Pence, for example, criticized China in October 2018 for using debt-trap diplomacy in Sri Lanka to establish a ‘forward military base for China’s growing blue-water navy’.

“China is often said to be pursuing ‘debt-trap diplomacy’: luring poor, developing countries into agreeing on unsustainable loans to pursue infrastructure projects so that, when they experience financial difficulty, Beijing can seize the asset, thereby extending its strategic or military reach.”

He said “Such views are mistaken for a number of reasons.:

“First, the BRI is primarily an economic project; second, China’s development financing system is too fragmented and poorly coordinated to pursue detailed strategic objectives, notwithstanding leaders and central agencies’ efforts at loosely guiding the BRI’s broad direction; and, third, Chinese development financing is heavily recipient-driven.

“China cannot and does not dictate unilaterally what is built in the name of the BRI. Developing-country governments are not hapless victims of a predatory Beijing; they – and their associated political and economic interests – determine the nature of BRI projects on their territory.

“Far from unfolding according to a Chinese strategic blueprint, the BRI is actually being built piecemeal, through diverse bilateral interactions.

“Sri Lanka and Malaysia are the two most widely cited ‘victims’ of debt-trap diplomacy. In reality, the most controversial projects in these states were initiated not by China but by the recipient governments, in pursuit of their own domestic agendas. Their debt distress has not arisen predominantly from the granting of predatory Chinese loans, but rather from the misconduct of local elites and Western-dominated financial markets.

“China has also not benefited strategically from the upsets in these cases. It has instead faced negative reactions and pushback, though to a lesser extent than is commonly imagined, given the interests at stake in the recipient countries.

“Policymakers and civil society organizations in the West and recipient countries should stop responding to the BRI as though it were a well-planned brand strategy. What is needed is not so much a geopolitical pushback against the BRI.

“Recipient governments must take greater responsibility for the evaluation of potential projects to ensure their viability and financial sustainability. They must also develop their ability to bargain with Chinese partners to make certain that local people benefit from the BRI. Since China continues to place great emphasis on host-country regulation, BRI partners must bolster their laws and regulatory environment.

“Civil society and political opposition groups in recipient countries should focus their efforts on demanding transparency and public participation around the design, feasibility, selection, pricing, tendering and management of megaprojects,” China said.

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