Chinese envoy denies placing Philippines into ‘debt trap’ with loans

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debt trap
President Duterte and Chinese Ambassador Zhao Jianhua. Presidential photos, file picture.

The Chinese ambassador to the Philippines has denied that Beijing is putting the country into a “debt trap” by giving it grants and loans.

Speaking to reporters today (Tuesday, July 17), Ambassador Zhao Jianhua said: “Actually, there has never been a debt trap. It’s all based on mutual agreement.”

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The envoy was speaking at the groundbreaking ceremony for the Binondo-Intramuros and Estrella-Pantaleon bridges in Manila, which were both financed by China. 

President Duterte, who was also present at the event, has promised to usher in a “golden age of infrastructure” through a $180 billion spending spree — some of it funded by Chinese loans.

Speaking today, he asserted that China had never asked for “even one square of real estate in this country”.

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His words were echoed by Ambassador Zhao, who said: “Let me make it quite clear: These projects, these two bridges, are going to be financed by Chinese grants. That is, we’re going to build it for free.

“You’re going to use some Chinese soft loans to finance some infrastructure projects. That is simply the decision by your government to use the soft loans, and the infrastructure project will be undertaken by a Chinese company through limited bidding process.”

He added that the Philippine government would “own all those projects”.

“So there will be no question of putting yourself in debt. I think your economic team is smart enough.”

According to the Department of Public Works and Highways, the cost of the two bridge projects was about 5.27 billion pesos.

China has been criticised for employing what has been dubbed “debt trap diplomacy”, in which poor countries offer their natural resources or other assets to China once they cannot afford to pay off debt owed to Beijing.

Beijing has also been criticised for claiming almost the entire South China Sea, despite an international ruling in 2016, which asserted Manila’s rights over parts of China’s claims.

The second anniversary of this ruling last week saw banners appear around Manila, branding the Philippines a “province of China”. Ambassador Zhao has described the stunt as a “vicious attack” on President Duterte’s “independent foreign policy.”

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