JUST recently, Chinese Vice Premier Wang Yang visited the country, bringing a package of economic assistance for achieving, what I termed, “Philippine prosperity.” And now, here comes a reader sending me published stories about so-called debt traps that China has allegedly thrown to ensnare such poor economies as Pakistan, Cambodia and Sri Lanka. On the latter cases, here is how one story in Asia Times illustrates the matter in general terms:
“The influx of Chinese economic assistance into Sri Lanka and Cambodia has raised questions regarding the intentions behind these massive loans.
“While China may still be considered a developing economy, its current strategy of providing soft power loans and aid to its regional neighbors is reminiscent of the tributary system that the country employed back in its empire days.”
Sri Lanka’s estimated national debt is $64.9 billion, of which $8 billion is owed to China, while Cambodia’s public debt with China is $3.9 billion.
Political analysts observe that because of these borrowings, Sri Lanka and Cambodia have fallen into a so-called debt trap in which they become utterly beholden to China. They say Cambodia’s foreign policy seems to largely serve China’s political and diplomatic interests in the region while its own international reputation and soft power are eroding.
On the other hand, due to Sri Lanka’s inability to pay off its debt to China, the Sri Lankan government has allowed Chinese firms to own 80 percent of the total shares and a 99-year lease of a major port, a decision that has caused public outrage and violent protests.
The reader’s information prompts me to check again on the figures I cited in my column article on the visit of Wang during which Philippine loan agreements with China were concluded. Of the money expected to flow into the Philippine economy, there was the $1 billion deal on Chinese importation of Philippine agricultural products; the P21 billion expected revenues from Chinese tourists in 2017; and whatever amount, certainly huge, that would be entailed in the construction of two bridges across the Pasig River. None of these amounts, however, are payables by the Philippines, the import deal being a purchase order payable by China, the tourism revenues being Chinese tourists’ expenditures, and whatever it would cost to build the two bridges over the Pasig River being gratis et amore. But the expected $4.4 billion for a 12-package infrastructure projects, including the development for tourism of the Pasacao and Balatan regions in Camarines Sur, could be a loan for which the Philippines must pay.
I still have to check on the nitty-gritty of funding for these projects. Suffice it to say for now that if that amount is payable by the Philippines, how does it compare to the amounts lent to Sri Lanka and Cambodia for it to be categorized as a debt trap for the Philippines? That would make the Philippines up over Cambodia in indebtedness to China by $.50 billion, but way below Sri Lanka by $3.6 billion. Now, if Cambodia were the benchmark for a debt trap, then the Philippines is just $.5 billion shy of joining the club of countries caught in a debt trap with China. And with President Duterte’s announced intention of procuring arms from China, that benchmark of debt trapping should have been breached before we know it.
But then again, that’s granting that the information provided by the reader is not US black propaganda, which is to be expected in whatever realm of the continuing tension between the United States and China over the South China Sea.
But in any event, for the imperative of equity and fairness in the exercise of the freedom of speech, I exerted effort to get the official Chinese stand on the issues touched upon in the first part of this column. A Chinese Embassy spokesperson regurgitated its July 2016 position that “China has expressed explicitly to the new [Duterte] administration China’s willingness for effective cooperation in this regard [illegal drugs crackdown], and would like to work out a specific plan of action with the Philippine side.”
Still on illegal drugs, the embassy spokesperson also referred to a press conference of Chinese foreign ministry spokesperson Hua Chunying on October 19, 2016 in which she said: “We are ready to talk with the Philippine side about cooperation on drug control and fight against drug crimes. Competent authorities of the two countries are in communication on this.”
The Chinese Embassy also referred to the remarks delivered by Chinese Ambassador Zhao Jianhua at China’s national day reception on September 27, 2016: “The Chinese side fully understands and firmly supports the Duterte administration’s policy that prioritizes the fight against drug crimes and stands ready to continue to cooperate with the Philippines by providing further assistance and jointly implementing a bilateral plan of action.”