Onus for debts should not be on China, says academic

August 19, 2017 - 2:15 PM
Yuan bank notes
Chinese Yuan bank notes. REUTERS file photograph

Countries such as the Philippines must first consider whether or not it will be able to pay China back for whatever loans it takes out, and not make this China’s issue.

Speaking Friday at the Ateneo de Manila University in a forum on China’s “One Belt, One Road” initiative that is aimed at renewing the trading routes of the ancient Silk Road, Professor Ruan Zongze of the China Institute of International Studies said the initiative would enhance connectivity between China and the rest of the world through roads, railways, sea routes, airways, and the Internet.

“If there’s any kind of debt issue confronting governments, it should be made clear that this debt issue is not China’s issue. It’s your problem. You take full consideration whether you can pay back,” Zongze said.

In 2013, Chinese President Xi Jinping laid out his plan for One Belt, One Road, comprised o two components:

– The Silk Road Economic Belt, which would bring together China, Central Asia, Russia, and Europe; link China with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia; and connect China with Southeast Asia, South Asia, and the Indian Ocean; and

– The Maritime Silk Road, which would go from China’s coast to Europe through the South China Sea and the Indian Ocean in one route, and from China’s coast through the South China Sea to the South Pacific in the other.

In May, Xi pledged US$124 billion for the new Silk Road initiative, which is seen to facilitate unimpeded trade, fostering people-to-people bonds, boosting policy coordination, and enabling financial cooperation, among others.

But the critics are worried that the countries involved, such as the Philippines, could incur debts too heavy for them to handle.

(Read more: http://www.interaksyon.com/focus-with-xi-at-helm-chinas-new-silk-road-promises-trade-and-riches/)

Zongze set the record straight during forum: “Belt and Road Initiative is not a charity project. It’s not a foreign assistance project. It is a commerce-driving plan. So of course, China is not doing charity.”

“For all the projects,” he continued. “China doesn’t and will never force anyone to cooperate with China… It’s up to you. You make the decision. You will choose if it is good for you.”

China is not pressuring any country to cooperate with it, Zongze underscored.

After President Rodrigo Duterte visited Beijing in October last year, China pledged $24 billion worth of investments and financing agreements to the Philippines.

Former Foreign Affairs Secretary Alberto del Rosario had recently warned that the government might be entangling the next generation of Filipinos in debt.

“There is little to separate our political disagreements with China and any financial relationship. By entering into weighty financial agreements, we may end up not only tying our own hands but also the hands of the next generation,” Del Rosario said.

(Read more: http://www.interaksyon.com/ex-dfa-chief-warns-of-price-ph-might-pay-for-huge-china-loans/)