With declining loaning power, Western countries uneasy as emerging nations step in

Source:Global Times Published: 2018/8/23 17:38:39

Tongan Prime Minister Akilisi Pohiva said last week that Pacific island nations should request China to waive their debts. Those unhappy with China's expanding footprint abroad felt excited that Tonga had raised the issue. However, they didn't expect the situation to change fast.

Samoa's Prime Minister Tuilaepa Sailele Malielegaoi rejected Tonga's call, saying that asking for aid loans to be waived painted an "unfaithful picture" of the recipient nation. He added that "the bigger countries will become reluctant to give loans with low interest rates" if waivers are demanded.

Pohiva soon released a clarification: "Regarding my reported comments, after further reflection, I now believe that the Pacific Islands Forum is not the proper platform to discuss the debt issue." In the statement, he also expressed his gratitude to China and said that "our two sides will continue to engage with each other for proper solutions through friendly consultation."

The Belt and Road initiative (BRI) has promoted China's cooperation with countries along the route. Some forces belittle the initiative by exaggerating the debt crisis, the reason why Pohiva's comments became a hot subject.

It's quite common countries face difficulties to repay sovereign debts, and the problem can be resolved by talks. It hasn't been a long time since China started its sovereign-guaranteed concessional loan, and most of China's loans are not in the peak period of repayment. China loaned to friendly countries, and it's not hard to seek solutions as long as there are no malicious intentions from external forces.

The US and other Western countries declared that China's loans have worsened developing countries' debt situation. It is a vicious remark, making debtor countries likely to believe that it is reasonable if they don't pay back.

Before China emerged as a lending country and a major overseas investor, developed countries were the major creditors. Back then, many developing countries had problems in repaying the loans. Even in the last few years, there were European countries that nearly went bankrupt because of debts, such as Iceland and Greece. Western media never criticized creditor countries or nations that gave loans, instead directing all their criticism at borrowing countries that can't pay back. However, China was attacked by Western media because of providing concessional loans to Third World countries.

Countries who took loans from China should be careful not to fall into the trap of Western forces who want to damage credit relations between emerging markets and smaller developing countries. When developed countries are no longer powerful creditors, they don't want emerging powers to be the main force in international cooperation and investment. Thus, they want to damage mutual trust among developing countries.

When providing concessional loans, China should make sure that the recipient countries have the ability and resolve to pay back. China should think over the potential hazards before establishing credit relations with other countries.

It seems that every one of China's careless mistakes, even an innocuous error, will be used by the US and other Western countries. They distort and exaggerate the truth, making it harder for Beijing to resolve the issue. China has to deal with every problem in a perfect way, better than the Western countries did before.

This is an editorial of the Global Times Thursday. opinion@globaltimes.com.cn

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