Artwork: Tang Tengfei/GT
Several Western media outlets in recent weeks have published articles extolling the merits of a so-called debt trap and accusing China of casting “a giant shadow over emerging countries’ pursuit of debt relief.”
VOA Chinese said in a report on Monday that finance ministers from the industrialized countries of the Group of Seven (G7) made special mention of China in May, and hoped that China could lend a helping hand to debtor countries and extend debt relief. The report said China has kept a low profile and has not made a statement in response so far.
China is not a member of the G7. We do not understand why some in the West believe that China has a responsibility to meet the expectations of the G7. The reported silence does not mean a reluctance to address the issue of debt relief. Already nearly two years ago, when developing countries began to feel the headwinds of the COVID-19 pandemic, Chinese Finance Minister Liu Kun said in November 2020 that China had extended debt relief. debt to developing countries worth a combined $2.1 billion under the G20. , the highest among the group’s members by amount deferred, according to Reuters.
The ulterior motive behind the Western media slander is to drive a wedge between China and debt-ridden developing countries. The COVID-19 outbreak has disrupted the global economy, with some debt-ridden developing economies bearing the brunt. Some in the West are trying to use this chance to stir up trouble, stir up quarrels and sow discord between debtor countries and China.
The global economy is slowing, with wealthy developed nations such as the United States feeling the bite of a prolonged inflationary spree. Due to the risk of recession, some rich countries are reluctant to cancel their debt and provide immediate relief to over-indebted developing countries. They try to put China front and center and deliberately paint China as a big creditor, hoping to distract over-indebted countries from themselves to blame China.
In fact, Western private lenders are the main creditor to many developing and underdeveloped countries. Analysis of World Bank data by campaign group Debt Justice has shown that African countries’ debts to China are a third of what they owe to non-Chinese private lenders, while interest rates are just over half, Reuters reported on Monday.
Sri Lanka’s debt structure also tells a similar story. As of April last year, borrowing from international capital markets accounted for 47% of the country’s total debt, while China held only 10%, according to data from the country’s Department of Foreign Resources.
For a long time, Chinese investments have brought many development opportunities to emerging countries. In recent years, under the Belt and Road Initiative, there have been more large-scale foreign projects in infrastructure construction, which has promoted regional connectivity and accelerated local prosperity. According to Commerce Ministry data, China’s industry-wide outward investment in 2021 was $145.19 billion, a year-on-year increase of 9.2 percent, surpassing the level before the pandemic.
Hypnotizing the so-called debt trap narrative, Western countries are profiting from creating dissension between China and emerging economies. It has been proven time and time again that when the global economy is threatened, profit-seeking Western private capital does not hesitate to sell emerging market assets, thus increasing the financial risks and economic difficulties of these economies. While demonizing and smearing Chinese investments, Western countries often attach political conditions to their investments in developing countries and interfere in the internal affairs of these sovereign countries.
At this critical stage of post-pandemic recovery, emerging economies that rely on manufacturing and exports are still highly vulnerable to irresponsible macroeconomic policies and weak demand from Western countries. Strengthening mutually beneficial economic and trade cooperation will help developing countries seize opportunities to achieve rapid economic rebound and strengthen their long-term economic strength.