China hits back at Africa debt-trap claims with loan write-off offer
- Interest-free loans constitute just a small fraction – about 5 per cent – of the total loans China advanced to African countries
- Chinese academic says cancelling some loans is in line with Beijing’s foreign policy to help African nations hit by Covid-19 and global economic difficulties
China has announced plans to cancel a series of interest-free loans to 17 African countries amid a growing rivalry with the West and accusations that it is creating “debt traps” on the continent.
Diplomatic observers said the move announced by Chinese Foreign Minister Wang Yi last week only represented a small fraction of total debt China provided to Africa.
Addressing a virtual meeting related to the Forum on China-Africa Cooperation (FOCAC), Wang said 23 interest-free loans to 17 African countries due by the end of last year would be cancelled.
China will also rechannel US$10 billion of its International Monetary Fund special drawing rights (SDR) to African countries to help them recover from the devastating effects of the Covid-19 pandemic and debt crisis.
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Pang Zhongying, an expert on international affairs at Sichuan University, said the announcement was a response to the “debt-trap diplomacy” accusations frequently levelled at China.