China assures nothing to fear from borrowing, says Guyana has been careful

By Kurt Campbell

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Weeks after a visiting European Union (EU) official raised concerns in Georgetown about the pitfalls of borrowing from China, the Chinese Embassy here has responded in an invited comment, saying there is nothing to fear.

The E.U Deputy Director for Americas, European External Action Service Mr. Javier Niño Pérez, had disagreed with claims that China offers better loan conditions.

But Chinese Ambassador Guo Haiyan has assured that loans and borrowing agreements with the Chinese government and Chinese banks are done through friendly consultations and negotiations.

“It’s common that many developing countries face bottleneck of financial resources… in the past 20 years, China helps with its banks providing loans. Chinese banks are providing these loans at the request of the borrowing country,” the Ambassador explained.

She said Chinese funds are concentrated on building infrastructure and the self-supportive capacity of the borrowing country.

“Chinese attach great importance to debt sustainability. It’s a requirement that every project has adequate feasibility study,” the Ambassador added during a recent interview with the News Room.

But Perez had claimed that the Chinese project is not as much about building something together as it is about seizing space, trade links, trade benefits and infrastructure projects.

He recalled that China had invested “heavily” in a 600-kilometer motorway in Montenegro but when that country could not repay the loan, the 10-year old contract had provided for China to seize parts of the country physically.

Unlike the EU that provides grants, he said China mostly provides loans that need to be repaid economically, politically or in terms of infrastructure.

But the Chinese Ambassador has disagreed with this reasoning.

Guo said after the pandemic many borrowing countries faced economic difficulty and China has demonstrated through the G-20 initiative on debt service suspension its willingness to respond to in-debt countries positively.

“China ranks number one among G-20 members in debt deferral amount.”

As she observed, the Guyana government is, however, careful in borrowing money.

“Both sides are very careful. We only do loans after an adequate feasibility study,” she concluded.

The Guyana Government has already said it is not worried about talks of the Chinese’s “debt trap” and will continue to borrow sustainably.