Beijing refutes West's claims of 'Chinese debt trap' in Africa
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China hits back at the US claims that it is setting up a debt trap in Africa as Beijing grows closer to the African continent.
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Chinese President Xi Jinping speaks next to South African President Cyril Ramaphosa and Equatorial Guinea President Teodoro Obiang Nguema Mbasogo during the 2018 Beijing Summit of the Forum on China-Africa Cooperation - Round Table Conference at the Great Hall of the People in Beijing, China on September 4, 2018 (Lintao Zhang/Pool via REUTERS/File Photo)
The Western claims of Beijing setting up a "Chinese debt trap" in Africa are baseless and irresponsible, Chinese Foreign Ministry spokesperson Wang Wenbin said on Thursday.
Wang provided a list of data to show the win-win nature of Sino-African cooperation while criticizing Western officials and media over their attempts at driving a wedge between China and developing nations by using false claims.
Asked about claims of a "Chinese debt trap" raised and pushed by US Secretary of State Antony Blinken during a trip to Africa, Wang said at a regular press conference on Thursday that such claims were only used by US and other Western officials to shift responsibility.
According to data from the World Bank, at the end of 2020, bilateral creditors held 26% of the foreign loans of 82 low and medium-income countries, while commercial creditors and multilateral creditors made up 40% and 34%, respectively. China held less than 10% of the total external debts.
In the newly-added $475.2 billion of external debt in low and medium-income countries between 2015 and 2020, commercial debt from the global financial market accounted for 39%, Wang highlighted, quoting a European Network on Debt and Development survey that showed that 95% of sovereign debt in 31 indebted countries was held by Western financial firms.
For the upcoming better half of a decade, $940 billion need to be paid by low and medium-income countries, a World Bank estimate said. Among this total, 67% will go to Western financial firms and creditors, while only 14% will go to China, amounting to some $130.8 billion.
Wang said China-issued loans have fixed and lower interest rates than the 5% commercial rate, and the 4-10% rate of 10-year-long sovereign debt issued by the African Development Bank.
The spokesperson highlighted that China has been actively working on helping reduce debt repayment burdens on developing countries, including the full implementation of the G20 debt service suspension initiative.
Western creditors and multilateral institutions, which hold a greater portion of developing countries' debt, on the other hand, refuse to participate in the initiative, he said.
Certain Western officials and media are attempting to hype the "Chinese debt trap" claim to undermine cooperation between China and other developing countries, Wang said. However, "they will not fool intelligent people in those developing countries."
Wang said earlier in the day that his country was calling on the United States to sever any official contacts it has with Taiwan, including negotiations on official trade and economic agreements.
Wang underlined his country's readiness to take decisive measures in order to protect its sovereignty in light of rising tensions between Beijing on the one hand and Taipei and Washington on the other.
"We demand that the US strictly comply with the one-China principle and the provisions of the three China-US joint communiques, stop any form of official contacts with Taiwan and refrain from negotiating and signing official agreements with Taipei," the diplomat said.
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