China has sought to persuade the U.S. and African countries that its financial support to Africa is not a “debt trap.”
Reuters reported that U.S. President Joe Biden invited dozens of African leaders to a summit in Washington D.C. from December 13-16. The U.S.-Africa summit is expected to discuss crucial challenges, such as food security.
Before the summit took place, Qin Gang – China’s ambassador to the U.S., dismissed allegations that his country had put African countries in debt. He claimed that African countries were three times more indebted to Western institutions.
During the Africa Summit, Qin said: “China’s investment and financing assistance to Africa is not a trap. It’s a benefit.”
He insisted that there is no such trap, and that it’s not a plot from the Chinese regime.
His arguments come as China has been dealing with accusations that it offers loans to poorer and developing countries and deliberately ensnares them in “debt traps” to gain leverage.
Critics have pointed to Sri Lanka as an example.
A column article in the Washington Post earlier this year said that the CCP lent billions in loans to Sri Lanka for infrastructure projects and effectively gained control of the port in Hambantota. Too late Sri Lankan authorities recognized that they could no longer pay off the loans.
A similar situation is taking place in Nigeria. China Harbor Engineering has finished the Lekki deepwater port project, helping Nigeria meet the growing demand from large vessels.
This is also the first modern deepwater port in the Gulf of Guinea that is controlled by a Chinese state-run enterprise.
In July this year, Nigeria was included into a list of 12 countries that may default in debts due to high government bond yields, a weakening currency, and a drop in foreign exchange reserves.
As of June, China was Nigeria’s largest creditor, having lent $3.9 billion to the country.
But during the news event on Monday, Qin rejected claims of African “debt trap.”
Qin said that China is not the biggest creditor of African debt, and that the debt that China has is a small amount.
The diplomat cited a study by UK charity Debt Justice that said African countries owed more to Western institutions than to China.
Qin said that Africa should be a site for international cooperation, including between China and the United States, for the benefit of Africans.
According to analysts, China is still the largest bilateral lender to Africa over the past decade, but its new loan commitments have declined in recent years.