Chinese ambassador: Debt trap allegation baseless, a political gimmick

Chinese Ambassador to Maldives, Zhang Lizhong, on Tuesday, dismissed allegations against China of luring Maldives to borrow money for infrastructure development with the intention of seizing islands and land if the country fails to pay off the loans in time, as a baseless political gimmick.

In a video message he shared over Twitter on Tuesday morning, Zhang said that the debt trap allegation is a gimmick used for political purpose.

“According to the narrative claimed by some people, when the Maldivian government is unable to pay the Chinese loans, the Chinese side will ask for land and ask for islands as compensation from the Maldivian government. Such a claim is baseless. Foreign Minister Shahid clearly pointed out that cooperation between China and Maldives is mutually beneficial in his recent interview to Xinhua news agency,” he said.

Zhang said that the cooperation between Maldives and China is mutually beneficial, and not one-sided.

“It is of mutual benefit. It is not a case of one side deciding all the issues, or the case of one side taking advantage of the other side,” he said.

Zhang said that China has never pressed a country facing difficulties in matters of debt repayment, and will continue to resolve any issues which may occur in that regard through friendly consultations in accordance with agreements and international best practice, even in extreme cases.

“The so-called debt trap is a fiction cooked up by some individuals. It is used as a political tool to disrupt the mutually beneficial cooperation between China and other developing countries. And to disrupt the Belt and Road Initiative,” he said.

Zhang said that developing countries have benefitted from cooperation under the Belt and Road Initiative.

“And the cooperation between Maldives and China is a typical example of mutual benefit. I firmly believe the Maldivian public can clearly see the essence of the issue,” he said.

My thoughts on debt issue (part 3/3)

The debt sustainability should be taken seriously, as it is essential for sustainable growth.

The so-called debt trap is simply a gimmick for political purpose, but never be a solution to debt sustainability. pic.twitter.com/EIyAcHIECA

— Amb. Zhang Lizhong (@AmbassadorZhang) September 22, 2020

The remarks comes after he released a similar video message earlier this week, in which he said that China understood the concern of the Maldivian people regarding the issue of debt sustainability in Maldives, and that Maldives and China were engaged in discussions regarding deferment of commercial loans taken from China.

Maldivian Parliament Speaker, former President Mohamed Nasheed continues to be the most outspoken critic of the loans taken from China by former President Abdulla Yameen Abdul Gayoom’s administration to finance large-scale infrastructure development projects, which he alleges, is a debt trap.

He had repeated his allegation in a recent interview to BBC.

While the former administration came under criticism for taking loans from China, the current administration, in turn, has come under criticism for taking loans from neighboring India. The loans from India include a USD 500 million loan for the Greater Male’ Connectivity Project, and the recent USD 250 million loan for budget support.