China News Service, Beijing, August 18 (Reporter Guo Chaokai Huang Yuqin) Chinese Foreign Ministry spokesman Wang Wenbin hosted a regular press conference on August 18.
A reporter asked: Recently, US Secretary of State Blinken once again hyped the so-called "China debt trap theory" during his visit to Africa.
What is China's comment?
Wang Wenbin: The so-called "China Debt Trap" is a lie concocted by the US and the West to shift its own responsibility.
First, commercial and multilateral creditors are the main creditors of developing countries.
According to the World Bank International Debt Database, by the end of 2020, among the public external debt structures of 82 low- and lower-middle-income countries, commercial and multilateral creditors accounted for 40% and 34%, respectively, bilateral official creditors accounted for only 26%, and China accounted for only 26%. less than 10%.
Second, the growing debt of developing countries in recent years has mainly come from Western commercial creditors and multilateral institutions.
According to statistics from the World Bank, among the 475.2 billion U.S. dollars of new public external debt in low- and middle-income countries from 2015 to 2020, commercial, multilateral and bilateral official debt accounted for 42%, 35%, and 23%, respectively, of which commercial debt mainly came from Sovereign bond financing in the international financial market accounted for 39%.
The European Commission on Debt and Development (Eurodad) conducted a study of 31 key debtor countries and found that 95% of sovereign bonds are held by Western financial institutions.
Third, developing countries' medium- and long-term debt repayments mainly flow to Western commercial creditors and multilateral institutions.
The World Bank estimates that in the next seven years, low- and middle-income countries will have to repay US$940 billion in debt and interest.
Among them, the repayments to Western commercial creditors and multilateral institutions were US$356.6 billion and US$273 billion respectively, accounting for 67% of the total; US$130.8 billion was repaid to the Chinese government and commercial institutions, accounting for only 14%.
Sovereign bondholders, dominated by Western financial institutions, will recover more than $300 billion, which is the biggest source of debt repayment pressure for the countries concerned.
Fourth, the financing cost of Western commercial creditors is much higher than that of China.
Taking Africa as an example, according to the World Bank database, China’s official and commercial loan interest rates to Africa are not only lower than the commercial interest rates of other countries (5%), but also much lower than the African countries disclosed by the African Development Bank10. One-year sovereign bond interest rate (4%-10%).
In addition, China provides sovereign loans at fixed interest rates, while Western commercial creditors mostly charge interest at floating rates.
As the U.S. dollar enters a cycle of interest rate hikes, it further increases the pressure on debtor countries to repay.
Fifth, Western commercial creditors and multilateral institutions are absent from international debt relief efforts.
China is the biggest contributor to the full implementation of the G20 debt relief initiative.
In contrast, Western commercial creditors and multilateral institutions with the largest proportion of claims have always refused to participate in relevant debt relief actions under the pretext of maintaining their own credit ratings, and have not made comparable contributions to alleviating the debt burden of developing countries.
Some US and Western politicians and media ignore the facts and play up the so-called "China debt trap", which is essentially a "discourse trap" that attempts to divide China's relations with developing countries, undermine China's cooperation with developing countries, and interfere with the development of developing countries.
The vast number of developing countries and people of insight in the international community will not be fooled.
(Finish)