Belt and Road: Win-Win Cooperation Rather than "Debt Trap"
by H.E. Mr. Wang Min, Chinese Ambassador to Norway
2018/09/14

1. Fruitful outcomes of the BRI in five years

This year marks the fifth anniversary of China's Belt and Road Initiative (BRI). The aim of the BRI is to enhance connectivity between Asia, Europe and Africa, and also open to all other countries, focusing on promoting policy coordination, connectivity of infrastructure and facilities, unimpeded trade, financial integration, and closer people-to-people ties through extensive consultation, joint contribution and shared benefits.

In the last five years, the BRI has grown from a concept into a key platform for building a community with a shared future for humanity and a well-received international public goods. Over 100 countries and international organizations has signed up for Belt and Road cooperation with China. China's trade in goods with countries along the Belt and Road exceeded US$5.5 trillion. Chinese direct investment in the non-financial sectors of these countries reached US$80 billion. China has set up 82 overseas economic and trade cooperation zones in countries along the routes, investing US$28.9 billion and creating about 244,000 local jobs.

Recently, however, some media have been playing up the so-called "China debt trap" and "neocolonialism" issues on the BRI, which are totally groundless and full of bias. It's necessary to make a clarification of these misleading fallacies. 

2. The fallacy of the so-called "China debt trap" on the BRI

When making investment or financing Belt and Road projects, China always sticks to an economic benefit-oriented approach, extending loans based on the real conditions of the relevant countries. Before financing a project, Chinese banks always scrutinize the liabilities and debt paying ability of borrowers. After loan extension, they continue to monitor country risks and sovereign risks. With these efforts, the Belt and Road projects have brought effective investment to the relevant countries rather than the so-called "debt trap", boosted local economy and improved people's livelihood, which are warmly welcomed by governments and people of the recipient countries.

Facts speak louder than words. Statistics shows that the proportion of the Chinese loans to the relevant countries is generally not high. 42% of Pakistan's long-term debt comes from loans from multilateral institutions, and Chinese loans account for only 10%. Meanwhile, the preferential loan rate offered by China was far lower than the ones provided by western countries. In Sri Lanka, China holds for only about 10% of the country's accumulated foreign debt, while another Asian country accounts for 12%, the Asian Development Bank and the World Bank accounts for 14% and 11% respectively. From 2000 to 2016, China's loans accounted for only 1.8% of Africa's total external debt, mainly used for infrastructure construction and the manufacturing industry, which have played a positive role in reducing their debts.

Moreover, the debt issues of some countries are not necessarily connected with the Belt and Road construction and relevant projects, as they have been heavily borrowing from other countries and international financial organizations and thus are highly indebted.

It seems that some media have adopted a double-standard on the loans issue, since they regard the money offered by the Western allies as "money pie", but "money trap" when offered by China.

3. The fallacy of "neocolonialism" on the BRI

The Belt and Road Initiative is in line with the UN Sustainable Development Agenda aiming to eliminate poverty around the world. The cooperation between China and other developing countries on the BRI seeks mutual benefits and sustainable development, rather than the predatory exploration. The African countries view China as a reliable and sincere friend, and we share the similar experience of suffering from colonialism. Especially, African people have suffered under colonial rule for over 500 years. They themselves know best what is colonialism and what is not.  

"Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime." In Kenya, the Chinese-built Mombasa-Nairobi Railway has raised the country's GDP growth by 1.5 percent. The railway cuts the costs of goods transportation by almost 80%. A foreign report published last year, which surveyed more than 1,000 Chinese companies in eight African countries, found that on average 89% of their employees were African. Millions of African jobs had been created by China in Africa. Nearly two-thirds of Chinese companies provided skills training and one-third had introduced new technologies into Africa. 

The 2018 Beijing summit of the Forum on China-Africa Cooperation was held successfully from 3-4 September. The gathering of thousands of representatives of African countries in Beijing shows their confidence for China-Africa cooperation. At the Summit, President Xi Jinping announced that the debt due to mature by the end of 2018 of certain countries with difficulties will be exempted.

4. A promising future for China and Norway on the BRI

Since the normalization of our bilateral relations, the China-Norway cooperation has been developing with a flourishing momentum. During Prime Minister Solberg's visit to China last April, the two leaders exchanged views in depth on cooperation under the framework of the BRI. Norway has an geographic advantage, and is a natural partner to China in realizing Eurasia connectivity, especially in building the "Polar Silk Road". China and Norway stand firmly together in defending and promoting free trade and the rules-based multilateral trading regime. Our economics share wide common interests, which brings a huge potential for bilateral or multilateral cooperation in infrastructure, energy, innovation, the blue economy etc..We look forward to continuing to work with Norway for a bright future of win-win cooperation.

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