China insists Tonga loans come with ‘no political strings attached’
China’s ambassador to Tonga has denied engaging in “debt trap” diplomacy in the Pacific, saying in his first press conference in two years that if the heavily indebted country cannot repay its loans, “we can talk and negotiate in a friendly, diplomatic manner”.
Cao Xiaolin told Tuesday’s gathering in Nuku’alofa – a rare opportunity for journalists to question Chinese officials – that preferential loans from China came with “no political strings attached” and that Beijing would never force countries to repay the loans.
Tonga, which was hit by a volcanic eruption and tsunami in January, has external debt of $195m or 35.9% of its GDP, of which two-thirds is owed to China’s Export-Import Bank (Exim), its budget shows.
There are concerns about debt repayments to China that are due to spike in 2024, on a loan used to rebuild its central business district after riots in 2006.
In May, China’s foreign minister, Wang Yi, signed six agreements with Tonga during a whistlestop tour of the Pacific, according to prime minister Siaosi Sovaleni, whose office confirmed discussions were held about Tonga’s loans from China.
Xiaolin said on Tuesday: “For a long time, some media have misinterpreted the preferential loans from China to Tonga. They fabricated the so-called Chinese ‘debt trap’ in malicious intentions to defame and smear China and disrupt China’s cooperation with Tonga.”
He said Tonga’s government requested the loans from Exim bank and that it had started paying them back already, “which indicates a healthy status of Tonga’s fiscal and economic system, and has sent a positive signal to the international community”. When asked how much Tonga owes China, Xiaolin said he could not provide the figures.
Asked about the Sri Lankan port that China took over when Colombo couldn’t repay its loan, he said: “I don’t think we can compare these two preferential loans because every country has its own unique conditions. Tonga’s national condition and status cannot be compared to Sri Lanka.”
The ambassador again sought to allay concerns about China’s efforts to security a sweeping security agreement for the region, saying that China came to the Pacific region to build roads, bridges and improve the people’s standards of living, “not to station troops or build military bases”.
“China stands ready to work with the Pacific Island countries to expand consensus on regional cooperation, not to sign any regional security agreement,” said. “When China conducts exchanges and cooperation with the Pacific Islands countries, China has never interfered in the internal affairs of Pacific Islands countries, never attached any political strings, and never sought any geopolitical self-interest.”
Xiaolin said the controversial agreement reached with Solomon Islands had been agreed to help the Pacific nation “maintain social order”, echoing the claims made by Collin Beck, a leading figure in Solomons’ government. Xiaolin said: “China does not impose anything on anyone. That is not how the Chinese people conduct ourselves.”
In a shot at western powers, the Chinese ambassador said Beijing did not view the region as its “backyard” and would never seek to expand its sphere of influence.
“Not like some other countries in the world which have a history of colonialism and testing nuclear weapons in the Pacific region, China does not have such a history and will never do such things.”