Foreign scholars: It is absurd for the West to hype China's "debt trap theory"
People's Daily, Stockholm, September 5 The Swedish "the Belt and Road" Research Institute recently published the article "Debt Trap 2.0 and the End of Fukuyama". The article believes that the western narrative of China's "debt trap" is wrong and absurd, and its purpose is to undermine China's development and cooperation with other countries through the "the Belt and Road" initiative.
It is understood that the article "Debt Trap 2.0 and the End of Fukuyama" was jointly written by Michael Billington, chief editor of Asian affairs of Administrative Intelligence Review of the United States, and Hussain Esca, deputy director of the Swedish "the Belt and Road" Institute. The two authors oppose the view that China's "the Belt and Road" initiative has created a "debt trap" for developing countries, and believe that the western narrative of hyping China's "debt trap theory" is absurd.
The article argues that the role of the West in China's debt to developing countries has been deliberately exaggerated, as most of their debt is owed to the West or pro Western institutions, rather than China. Taking Sri Lanka as an example, research data shows that Sri Lanka owes only 10% of its debt to China, while 90% of its debt comes from Western countries or pro Western financial institutions such as the BlackRock Investment Fund in the United States, Ashmore in the UK, the World Bank, and the Paris Club.
The article believes that the claim that China's "the Belt and Road" initiative has created a "debt trap" in developing countries is wrong. One of the narrative goals of the "debt trap" hyped by the West is to undermine China's development and cooperation with other countries through the "the Belt and Road" initiative.
The article also points out that there are three major fallacies in the western hype of China's "debt trap theory": first, as far as the reasons for debt are concerned, countries in debt difficulties today are often trapped in debt traps before the "the Belt and Road" initiative. Secondly, in terms of debt ownership, research shows that 80% of Sri Lanka's external debt, 70% of Pakistan's external debt, and 77% of Zambia's external debt are owned by Western private and public institutions. Thirdly, in terms of debt nature, Western loans are often short-term with high interest rates, leading to an unsustainable debt cycle, while China's loans to developing countries are long-term, low interest loans that help improve infrastructure.
At the end of the article, it is emphasized that the importance of debt background and ownership should be considered when analyzing the situation of developing countries. Therefore, China's loans should be seen as debt relief, not a debt trap.
