China to address growing 'debt trap diplomacy' concerns at second Belt and Road forum

The Second Belt and Road Forum for International Cooperation runs from April 25 - 27

Xi Jinping at a National People's Congress plenary...

Xi Jinping at a National People's Congress plenary... (AP photo)

TAIPEI (Taiwan News) — A three-day summit from today (Thursday, April 25) in Beijing will see Chinese officials clamber to defend the country’s flagship Belt and Road project from mounting international criticism.

The Belt and Road Initiative is China’s attempt to revive the ancient Silk Road trading network that spanned continental Asia, and create a new “maritime silk road” that extends to Africa and beyond. Concerns have grown about the motivation behind the project after multiple countries were left with irresolvable debt problems following their participation.

Angola, Zambia and Pakistan were among several low and middle income countries that sought help from the International Monetary Fund last year after defaulting on Chinese loans for infrastructure projects. Pakistan was lent a further US$2.5 billion to resolve the issue, intensifying worries that China is engaging in “debt trap diplomacy” with its neighboring ally.

A 2018 U.S. report analyzing 15 Chinese-funded port projects throughout Asia, Africa and the Indo-Pacific found they were not driven by the potential for mutual economic rewards but by their ability to increase China’s political influence and military presence throughout the world.

Chinese foreign minister Wang Yi insisted last week that the Belt and Road Initiative is “not a geopolitical tool or a debt trap for participating countries, but a platform for cooperation.” A foreign official told the South China Morning Post today that the forum communique will indicate Beijing has noted such concerns and is willing to address them, emphasizing the importance of debt sustainability.

Beijing is likely to tout the memorandums of understanding it has signed with participating governments, a China expert told The Guardian, as they lend legitimacy to the project and allow Xi Jinping to show Chinese citizens that his policies are fully endorsed by the international community.

The event will be attended by 27 global leaders, many of whom are heads of state. The U.S. said earlier this month that it will only send low-level officials, and India is to boycott the summit entirely.

Germany’s delegate, Economy Minister Peter Altmaier, warned Belt and Road countries their participation could lead to debt problems in an interview with German media prior to the summit. Although infrastructure investment between Europe and Asia is an important matter, he said, it must comply with international labor, environmental and human rights laws.