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Commentary: Debt Is Not a Trap, Prejudice Is
Last Updated: 2019-06-06 11:22 |
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BEIJING, June 6 (China Economic Net) - As the trade war between China and the United States escalates, the US Secretary of State Pompeo has been busy fanning the flames among its allies, pressuring and intimidating, and even rushing to the North Pole to spread rumors and fear. At a recent meeting of the Arctic Council, he accused China and Russia of being "aggressive" in the Arctic region, saying that China's rise would plunge the Arctic countries into a "debt and corruption crisis" and that some countries were forced to accept "poor infrastructure".

With the continuous progress of the China-proposed Belt and Road Initiative, the slander about China's debt and the fallacy about China's fund are endless. It is fallacy because the same behavior and the money of western countries are called sweet "pies", but what China provides could become a dark "trap"?! That simply makes no sense. The root cause for that lies in prejudice.

As is known to all, infrastructure construction is an important way to solve the current development bottleneck in many countries. Building high-quality, sustainable, risk-resistant, affordable and inclusive infrastructure is a key and core part in connecting facilities along the China-proposed Belt and Road. Significant achievements have been made in the construction of inter-regional and inter-continental railway networks focusing on cooperation projects such as China-Laos Railway, China-Thailand Railway, Hungary-Serbia Railway and Jakarta-Bandung High-speed Railway.

Direct transportation through international roads has realized regional logistics integration; the construction of ports and industrial parks not only laid the hardware foundation for the host countries to attract investment, but also brought employment opportunities for the local regions.

According to the Chinese Ministry of Commerce, up to now, 69 Chinese enterprises have participated in the infrastructure projects in the countries and regions along the Belt and Road, creating over 700,000 jobs for the local regions each year. At the same time, Chinese financial institutions have provided more than 300 billion dollars in financing for the international infrastructure construction.

Through the Belt and Road cooperation, East Africa has the first highway, reducing the distance between Addis Ababa and Amada from two hours to 45 minutes; Maldives has the first cross-sea bridge, an achievement made by the Chinese construction enterprises which have overcome the severe challenges in terms of technology, sea conditions and climate, completed closure and opened the bridge for traffic, so that tourists can arrive at the capital Male from the airport via the bridge in just 5 minutes; Kenya's Mombasa-Nairobi railway, known as the "Project of the Century," has created nearly 50,000 jobs in the region and boosted the economic growth by 1.5 percentage points; In Uzbekistan, Chinese workers, along with local people, have built a 19-kilometer tunnel in 900 days, allowing people in remote areas to travel by train through mountains in merely 900 seconds.

It is not just developing countries that need to improve their infrastructure construction. According to the American Society of Civil Engineers (ASCE), 28% of major urban roads in the United States are sub-optimal or inferior, and by 2025, roads, highways, bridges, water systems, schools and transport systems will cost a total of 4.59 trillion dollars to renovate and build. As one of the countries with the richest experience in engineering construction, China is also more than willing to join and help the United States enhance its inferior infrastructure.

The sustainability of debt is not only related to the achievements of projects, but also to the prospect of building an open and inclusive world economy. In the process of pushing forward the Belt and Road Initiative, China has continuously paid attention to the issue of debt sustainability.

During the Second Belt and Road Forum for International Cooperation (BRF), China officially published the Debt Sustainability Framework, which focuses on the debt management capabilities of participating countries, and the investment and financing decisions of financial institutions.

However, these efforts are in vain in the eyes of the US government officials represented by Mr. Pompeo. After all, no one can wake up the sleeper. Deborah Brautigam, a well-known American scholar studying China's foreign aid, and her research team have tracked more than 3,000 construction projects along the Belt and Road route, and found that Sri Lanka is the only country along the route that has hidden risks of debt sustainability. Since Sri Lanka's debt dilemma existed long before the initiation of the Belt and Road Initiative, the claim that its debt problem is caused by China is absolute nonsense.

According to data from US consultancy Rhodium Group, China has renegotiated up to $50 billion in loans to debtor countries over the past decade, with most countries receiving debt relief or extension. By contrast, the international financial institutions dominated by the West are less moderate. They would demand fiscal austerity, structural reform and capital liberalization.

Pakistan Economic Affairs Division Secretary Noor Ahmed said Chinese loan accounts for a mere 10 to 11 percent of the total amount, the remaining 89 to 90 percent is from other sources including the International Monetary Fund, Paris Club, and other western organizations. China-Pakistan Economic Corridor projects have provided 75,000 direct jobs for Pakistan. By 2030, job opportunities are expected to increase by 700,000.

Who is setting the trap? The fact remains self-evident.

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Commentary: Debt Is Not a Trap, Prejudice Is | 2019-06-06 11:22
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