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Chinese Foreign Ministry addresses misconceptions surrounding Belt and Road loans

Beijing, 8 November, 2023 (GNP): In response to a recent report by a US-based research institute, the Chinese Foreign Ministry’s spokesperson Wang Wenbin has issued a statement to clarify misconceptions surrounding China’s loans to Belt and Road partner countries.

The report has indicated that a significant portion of China’s loans were provided to nations facing financial difficulties, leading to concerns over “debt traps.”

The Foreign Ministry’s response highlighted that the notion of “China-made debt-traps” is a narrative perpetuated by certain entities aiming to disrupt China’s cooperative efforts with other developing countries.

The statement emphasized that responsible debt can be conducive to socio-economic development and that many countries utilize government debt as a legitimate means of raising funds for economic growth. The negative portrayal of debt, without acknowledging its benefits, is regarded as misinformed.

Furthermore, the statement noted that China’s investment and financing cooperation with partner nations has primarily focused on critical areas such as infrastructure and production sectors.

This collaboration has successfully addressed financial shortfalls, infrastructure development, and bolstered the self-driven development capacity of participating countries.

A report from the US-based Boston University Global Development Policy Center even highlighted the positive impact of China’s cooperation, potentially increasing global real income by up to three percentage points. Thus, characterizing these development resources as “debt traps” is misleading.

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The Chinese government reaffirmed its commitment to conducting investment and financing cooperation in compliance with international regulations, market principles, and the principle of debt sustainability.

This approach has been well-received in the developing world, providing a viable solution for countries facing financial challenges. Notably, no cooperation partner has accused China of creating “debt traps.”

The statement called upon major creditors, including multilateral financial institutions and commercial creditors, that play a significant role in the debt burden of developing nations to actively contribute to alleviating these financial challenges.

China remains committed to its cooperative efforts and rejects the misconceptions surrounding its development initiatives.