China Says Pacific Debt Claims ‘Ridiculous’ After Julie Bishop Raises Concerns
China’s ambassador has branded “ridiculous” the idea that Beijing is threatening the sovereignty of small Pacific nations by building infrastructure that saddles them with unsustainable debt.
His comments followed remarks by Australian Foreign Minister Julie Bishop that the Australian government was concerned some Chinese financing arrangements in the Pacific would damage the island nations’ sovereignty and that Australia would offer alternatives to Chinese infrastructure development.
Speaking in Canberra, Mr Cheng Jingye indicated he was not aware of Ms Bishop’s remarks but said the proposition China was creating so-called debt-traps for small nations was “ridiculous”.
“We have a growing economic cooperation with some of the island countries. They are on [an] equal footing and I think it’s mutually beneficial, as has been said by the local people - both the local people and both the government,” he said. “The fact is there. I hope any comment will be made based on fact, rather than speculation.” Mr Cheng, who was at Parliament House on Tuesday morning to address an Australia China Business Council event, was trailed by waiting media for much of his way out the building, facing questions on tensions between Australia and China.
Ms Bishop told Fairfax Media
Australia on Monday Australia was concerned about the economic viability of small Pacific nations and did not want unsustainable debt burdens imposed on them. “They are sovereign nations. We want to ensure that they retain their sovereignty, that they have sustainable economies and that they are not trapped into unsustainable debt outcomes. The trap can then be a debt-for-equity swap and they have lost their sovereignty,” Ms Bishop said.
She said Australia should take “a very proactive role” in offering Pacific nations alternatives to Chinese projects.
“What we don’t want is for countries to have no other options,” she said.
Sri Lanka last year handed over a large, strategic port to a Chinese company under a debt-for-equity swap after it was unable to meet loan repayments to China. Mr Cheng said China was “sensitive to any possible debt burden”. And asked whether China was deliberately overburdening countries with debt to ensnare them, Mr Cheng said the proposition was “absurd”.
He also refused to say whether Prime Minister Malcolm Turnbull would be invited to visit China this year.
It has been widely expected he would visit, and any slippage of that plan would be seen as a diplomatically bruising development. Speaking at the same forum, Mr Turnbull insisted the relationship - including strong economic ties was better than was often shown in political and public debate. “You’ll see in the media, and sometimes you’ll see from politicians - and I know there’s been a bit of negativity expressed by my political opponents in the course of today’s sessions - a lot more negativity presented than is actually the case.”
“I think there are discussions about bilateral exchanges at different levels. When there is any news, I will let you know. There are discussions,” he said.