West incites Pacific island countries to push China on loan write-off: analysts
22 August, 2018, 3:08 pm
BEIJING, 22 AUGUST 2018 (GLOBAL TIMES) – Loan problems among Pacific island countries are a political issue induced by Western countries for their own interests, Chinese analysts said on Tuesday after Tonga pressured Beijing to write off debts for countries in the region.
Yu Lei, a research fellow at the Australian Studies Center of Beijing Foreign Studies University, told the Global Times on Tuesday that South Pacific nations were “bewitched” by Western countries including Australia and the US, who sought to gain political leverage in the region.
By inciting South Pacific nations to come up with the idea of writing off loans, Western countries were trying to sow discord between China and South Pacific nations, Yu said.
Tonga’s complaints centre on US$160 million borrowed from China’s Export-Import Bank said. But Yu said countries in the region own a relatively low debt ratio compared to Western loans and the loan offered by China has low interest rates and flexible repayments.
Unlike Western aid, which always comes with political and economic conditions, Chinese aid has been widely welcomed by South Pacific nations as it has no political conditions, Yu noted.
“China will continue to do its best to support and assist Tonga and other Pacific island countries in their pursuit of sustainable development,” Chinese foreign ministry spokesperson Lu Kang said on Monday.
Tonga and China will properly resolve the issue through friendly consultations, Lu said.
Concessional loans cannot be written off based on China’s rules on foreign aid and international rules, Song Wei, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation in Beijing, told the Global Times.
Reducing or canceling loans applies to interest-free loans given to the most underdeveloped nations, Song said, not to concessional loans issued by China’s Export-Import Bank.