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Xinhua Headlines: “Chinese debt trap” rhetoric an attempt to mislead world through kindergarten mathematics

Abstract : U.S. Secretary of State Antony Blinken's recent virtual travel to Africa has turned out to be a fresh political maneuver to smear China and undermine burgeoning China-Africa cooperation.


Disregarding the true figures that reflect the benefits brought by
China-Africa cooperation, Blinken’s debt trap rhetoric is brimming with
logical fallacy and naive calculation.


The Debt Management Office (DMO) of Nigeria has ruled out any form of
concerns over Nigeria’s indebtedness to China, deeming Chinese loans not
only project-tied but also concessional.


With China’s help, over 6,000 km of railways, 6,000 km of roads, nearly
20 ports and over 80 large power plants have been built in Africa.
China’s direct investment in Africa in 2019 had grown by 100-fold
compared with 20 years ago, according to the Chinese Foreign Ministry.

NAIROBI,
May 19 (Xinhua) — U.S. Secretary of State Antony Blinken’s recent
virtual travel to Africa has turned out to be a fresh political maneuver
to smear China and undermine burgeoning China-Africa cooperation.

Using
the same ploy inherited from his predecessors, Blinken has touted the
old cliche of “Chinese debt trap,” attempting to mislead the world
through kindergarten mathematics, which has been refuted by African
officials and scholars.

KINDERGARTEN MATHEMATICS

“If
someone is coming along and saying I’m going to invest a lot of money
in your country, but it’s a loan, so, that means you have a debt and
you’re going to have to pay it back someday and if that is too great and
you can’t pay it back, then I’m going to own the asset in question,”
Blinken told the Alumni of the Young African Leaders Initiative in a
virtual discussion in late April, hinting at China’s loans and
investment across the continent.

Disregarding
the true figures that reflect the benefits brought by China-Africa
cooperation, Blinken’s debt trap rhetoric is brimming with logical
fallacy and naive calculation.

“If
we break down African countries’ foreign debt, multilateral financial
institutions and commercial creditors hold more than three-quarters of
the total, and so bear a greater responsibility for debt relief,” said
Chinese Foreign Ministry spokesperson Wang Wenbin at a regular press
conference in late February.

File
photo taken on May 10, 2018 shows the aerial view of the Chinese-built
Maputo Bridge in Maputo, Mozambique. (Xinhua/Wang Teng)

“Not a single African country had debt difficulties due to its cooperation with China,” Wang said.

“When
African countries have economic problems, China is always ready to find
proper solutions through friendly consultation. We never press
countries having difficulties on debt repayment, not to mention asking
them to sign any imparity clauses,” he said.

“In
the meantime, China attaches high importance to debt suspension and
alleviation in Africa … We have signed debt relief agreements or
reached debt relief consensus with 16 African countries,” Wang said.

“The
Chinese ‘debt trap’ is a false allegation, but it is true that some
people are sowing discord between China and Africa with ill intentions.
Anyone with an objective mind will come to a fair conclusion on that,”
he added.

Blinken’s unfounded accusation against China has drawn criticism from African experts.

“One
thing that is very particular about Chinese loans is sustainability.
This whole thing about taking over assets just doesn’t make sense,” said
Charles Onanaiju, director of Nigeria’s Center for China Studies,
describing Chinese loans as neither toxic nor threatening.

“The issue of the ‘Chinese debt trap’ cannot arise here because we have not seen it,” said Zambian economist Kelvin Chisanga.

MYTHICAL DEBT TRAP

“Let
me correct the impression that the debts are only owed to China. We
have debts to a number of bilateral and multilateral partners and we
treat them equally,” Kenya‘s Cabinet Secretary for National Treasury
Ukur Yatani told media.

Some
30 percent of Kenya’s external debt comes from commercial banks, 30
percent from bilateral lenders and the remaining 40 percent from
multilateral financiers, said Beatrice Matiri-Maisori, a senior
economics lecturer at the Riara University of Kenya.

“We
have quite an array of financial lenders in the country. So, I wouldn’t
say in any way that China is actually getting Kenya or any other
African country into a debt trap,” Matiri-Maisori told Xinhua.

The
Debt Management Office (DMO) of Nigeria has ruled out any form of
concerns over Nigeria’s indebtedness to China, deeming Chinese loans not
only project-tied but also concessional.

Photo taken on April 24, 2021 shows the Chinese-built Mombasa-Nairobi Standard Gauge Railway in Kenya. (Xinhua/Li Yan)

“Those
are all concessional loans. No reason to be worried about them. They
are all project-tied, which Nigerians should be happy about,” DMO
Director-General Patience Oniha told the local ARISE NEWS Channel.

A
recent research from a China-Africa workshop in Johns Hopkins
University found that Chinese banks are willing to restructure the terms
of existing loans and have never actually seized an asset from any
country.

The
researchers have documented 16 cases of debt restructuring worth 7.5
billion U.S. dollars in 10 African countries between 2000 and 2019, and
found that China wrote off the accumulated arrears of at least 94
interest-free loans amounting to over 3.4 billion dollars.

China has played a significant role in helping African countries manage their debts, according to the research.

TANGIBLE FRUITS FOR AFRICA

Flagship
projects constructed with China’s support have promoted Africa’s
prosperity and development by creating numerous jobs for local people
and guaranteeing their access to basic services such as water,
electricity, transport and skill learning.

“The
financing provided by China is mainly used for development projects
such as transportation infrastructure, power transmission lines and
river dams, which are in line with Kenya’s national development agenda,
and aimed at promoting its national economic development and improving
the people’s livelihood,” said Cavince Adhere, an international
relations expert in Kenya.

With
China’s help, over 6,000 km of railways, 6,000 km of roads, nearly 20
ports and over 80 large power plants have been built in Africa. China’s
direct investment in Africa in 2019 had grown by 100-fold compared with
20 years ago, according to the Chinese Foreign Ministry.

File
photo taken Oct. 3, 2016 shows a train running on the Chinese-built
Ethiopia-Djibouti railway during an operational test near Addis Ababa,
Ethiopia. (Xinhua/Sun Ruibo)

As
the COVID-19 pandemic has brought the worst economic crisis worldwide
in decades, Chinese projects and investment have been helping African
countries weather the storm.

As
the pandemic restricts people’s movements, the Chinese-built Standard
Gauge Railway (SGR) linking Kenya’s port city Mombasa to the capital
Nairobi continues to support the flow of goods critical to the economy.

Data
from Kenya’s statistical authority KNBS showed that cargo moved via the
SGR amounted to 4.42 million tons in 2020, up from 4.16 million tons in
2019 despite the pandemic.

In
neighboring Ethiopia, Dejen Gezu is among 34 new graduate drivers who
are excited about their new careers on the Chinese-built
Ethiopia-Djibouti railway. After a Chinese-sponsored railway technology
training program that lasted for more than two years, Gezu and his
fellows are ready to embark on the promising journey.

During
a graduation ceremony held on May 4, Ethiopia’s Transport Minister
Dagmawit Moges said the young graduates will be able to serve the
country with the knowledge and skills they have learned from the
Chinese, voicing hope that Ethiopia will eventually have locals fully
manage and operate the country’s railway system.

There is still broad scope for China-Africa cooperation to grow.

“For
the first time in the history of Africa, we have a partner that is both
willing and able. What is needed is to meet the Chinese in the middle
so that both of us can walk the long walk,” said Onanaiju.

“China
itself has been a great recipient of international financial flow,
which it has used very efficiently and effectively in modernizing its
economy. We can engage (with) their experience to develop our own
framework for sustainable modernization,” Onanaiju added.

(Video reporters: Feng Yiwei, James Asande, Dunca. Video editor: Liu Yuting)

About Xinhua Silk Road

Xinhua Silk Road (en.imsilkroad.com) is the Belt and Road Initiative (BRI) portal.China’s silk road economic belt and the 21st century maritime silk road website,includes BRI Policy, BRI Trade, BRI Investment, Belt and Road weekly, Know Belt and Road, and the integrated information services for the Belt and Road Initiative (BRI).

Source: Xinhua Headlines: “Chinese debt trap” rhetoric an attempt to mislead world through kindergarten mathematics

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