US steps up belt and road offensive saying it offers fairer deals than China’s ‘debt trap’
- Video on US State Department website tells countries to ‘be wary’ of risks from Beijing’s infrastructure drive
- America is trying to promote its ‘fairer and more transparent’ alternative
The United States has stepped up its attacks on China’s Belt and Road Initiative claiming Washington offers a better option through “transparent, free and fair trade deals”.
ShareAmerica, a website managed by the Department of State to promote US policy and culture, warned in a new video that as China pushes the initiative, countries should be careful “not to get caught in China’s belt and road debt trap”.
The video – which has been subtitled in six other languages, including Chinese – repeated warnings from the Centre for a New American Security, a US think tank, that taking part countries would face the risk of excess debt, environmental problems and losing control of their strategic assets if they signed up for the transcontinental infrastructure project.
The clip, which urged countries to “be wary and examine the record of previous investments” was posted on April 25, the first day of the second Belt and Road Forum in Beijing, where China welcomed leaders from 37 countries and signed US$64 billion worth of deals.
On Thursday the US embassy in Beijing retweeted the warning in a Chinese language post.
Concerns that countries that sign up for the initiative will end up being saddled with unsustainable debts have been growing – even among those that have endorsed it – prompting an effort from Beijing to allay those fears.
At last week’s summit Chinese President Xi Jinping, defended the plan saying it would benefit all its participants and not just China.
“The belt and road is not an exclusive club,” he said, “it aims to enhance connectivity and practical cooperation … delivering a win-win outcome and common development”.
The Belt and Road Initiative has been seen as an attempt by China to strengthen its global influence through reshaping the economic and geopolitical landscape across the world, and been attacked as form of “chequebook diplomacy” that might damage its partners.
The ShareAmerica video repeated these warnings, saying the “liabilities for host countries – loss of control, opacity, debt, dual-use potential and corruption – are often strategic assets for Beijing”.
As an example of the risks, it cited the Chinese-funded Coca Codo Sinclair dam in Ecuador – which has been beset with allegations of corruption and bribery and contributed to a situation whereby the South American country has to hand over 80 per cent of the oil it produces to China to pay its debts.
Last month the US announced that its Overseas Private Investment Corporation would team up with its Canadian and EU counterparts to offer emerging economies a development alternative to “unsustainable state-led models” – a veiled reference to the Belt and Road Initiative.
The ShareAmerica website has posted a number of other videos and articles criticising China.
These include attacks on its repressive controls in Xinjiang, where the United Nations has estimated that a million or more Muslims are being held in detention camps; on Chinese lending and support for businesses in Venezuela; and warnings that Confucius Institutes in American universities threaten academic freedom.
However, earlier this week the Rhodium Group, a New York-based consultancy, downplayed the risks of a belt and road debt trap by saying that China was generally inclined to renegotiate or write off belt and road debts rather than seizing assets.
Its research looked at 40 cases of external debt renegotiation between 2007 and this year and found there was only one confirmed case of asset seizure – the Hambantota port in Sri Lanka.
