GOOD MORNING FROM LONDON
There are two current issues in US-China relations; – US Secretary of State Antony Blinken’s speech on China on 26 May 2022 + China Foreign Minister Wang Yi’s visit to 8 Pacific countries – both of which I will address on 30 May and 31 May respectively.
Following a talk I gave in London yesterday, I want to return, today, to China’s Belt and Road Initiative (BRI). I was asked a question about BRI + debt diplomacy – the inference being that China lends large sums of money to third world countries for the purpose of getting the recipient countries to over-borrow, stumble into debt + thereby allow their assets to be seized by China. In a sentence China is using its financial muscle to accumulate assets in Asia, Africa and Latin-America + impose further hardship on vulnerable borrowing countries. ‘China – The New Imperialist’.
This issue was raised in a familiar question about Sri Lanka. Didn’t China grab Sri Lankan assets? Well, No. Sri Lanka did take a big loan from China’s Exim Bank. Sri Lanka was unable to pay back the loan. China did not grab assets. Rather Sri Lanka turned their debt into revenue by leasing the port to China for 99 years. Sri Lanka received $1.2bn. No further loan repayment to be made by Sri Lanka.
China has entered into BRI agreements with 140 countries. The only case cited to attack China’s intentions is Sri Lanka. Other countries have run into debts + research by the reputable John Hopkin University of the USA has found no evidence of any asset grab. On the contrary China has written off some loans + reduced sums outstanding on other loans.
It suits critics of China to try to dismiss BRI as a trick, as a tactic to spread Chinese power across the globe by asset seizure. But the evidence is not there. Not one of the other 139 recipient countries has complained of Chinese asset seizure. To my questioner yesterday, there was no acknowledgement of the facts. He wanted to believe the “asset seizure” argument. But he had no evidence and no withdrawal of the allegation.
30 MAY 2022 – THE BLINKEN SPEECH