The term "debt trap" was coined for the practice of Western developed countries, which, when developing countries applied for assistance from them, would often attach political strings to the debt and refuse the request or cut the funding if the former dared to say no to the conditions. This is one of the reasons why many developing countries have had difficulties accessing funding and therefore are mired in poverty. It's also the reason why some developing countries have been mired in political turmoil after they agree to a conditional loan.

According to data from the World Bank, from the 1970s to the 1990s, developing countries' debt climbed from $300 billion to $1.5 trillion. The average debt to GDP ratio of the poorest countries rose from 20 percent in 1970 to 140 percent in 1994, with the interest surging from $240 million in 1978 to $1.3 billion in 1988.

Since it was first proposed, the Belt and Road Initiative, which follows the golden rule of extensive consultation, joint contribution and shared benefits, has created tremendous economic and social benefits for countries along the Belt and Road routes. With practical cooperation realized on the premise of no political strings attached and noninterference in the internal affairs of the host countries. In particular, the initiative has made great contributions to the economic and social progress of developing countries. Nevertheless, it is smeared by some countries, media and think tanks as creator of debt traps.

The debt trap claims are ill-founded. Egyptian President Abdel Fattah al-Sisi once reviewed difficulties in getting loans from the West and the massive political strings attached to the debt relationship, and questioned why Chinese loans are singled out as a trap when the country also borrows from the United States, European countries and Japan. The governments of Sri Lanka and Pakistan unveiled their countries' debt structures, showing that loans from China are the lowest among all creditors. If there is a debt trap, it has nothing to do with China or the Belt and Road Initiative.

Numerous facts and evidence prove that the Belt and Road Initiative by no means creates debt traps but rather is an important means for debt-ridden countries to shake off their debt burden. Some countries have fallen into debt troubles because they failed to create a positive relationship between their borrowing and developing the local economy. Furthermore, most of these countries don't have the criteria to push forward industrialization; therefore, improper use of funds could easily occur even when they acquire financing from the outside. Some debtor countries used to borrow recklessly, with some of the funds failing to create expected earnings and therefore the debt has piled up. In sharp contrast, Belt and Road investment not only has a clear investment direction but also China's development experience as a guarantee. Hence, Belt and Road investment not only won't add new debt burdens to the host countries, but also could be leveraged to realize host countries' long-anticipated economic growth.

Host countries' attitude toward the Belt and Road Initiative projects also help refute the debt trap accusations. The Duterte administration has put forward the "Build, Build, Build" infrastructure program aimed at improving the Philippine's industrial structure and boost its economic development. Some Western countries have speculated that the $154 billion infrastructure investment plan is a debt trap. However, according to the country's Finance Secretary Carlos Dominguez, as of the end of 2018, loans from China only accounted for 0.6 percent of the Philippines total debt, while those from Japan accounted for about 9 percent.

Data released by the Chinese Government also show that the "debt trap" fallacy is nothing but an attempt by some countries to denigrate the Belt and Road Initiative. According to Chinese State Councilor and Foreign Minister Wang Yi, the construction of the China-Pakistan Economic Corridor has gained concrete outcomes and does not add to Pakistan's debt burden. The corridor is a major economic cooperation project carried out to meet Pakistan's needs. Of the corridor's 22 projects, 18 are directly invested in or aided by China, while only four are financed with China's concessional loans. As a result, the projects have not increased Pakistan's debt burden. Instead, when completed and put into use, they will bring remarkable economic benefit to Pakistan. Of all the 22 cooperation projects under the framework of the China-Pakistan Economic Corridor, nine have been completed, and 13 are under construction, according to Wang. A total of $19 billion has been invested into these projects, creating 70,000 jobs for Pakistan, Wang said.

The debt trap speculation, which assesses Belt and Road financing unfairly, unobjectively and with political intentions, is in essence an attempt by vested interests with malicious intentions to drive a wedge between China and other countries by spreading canards. While it comes under attack from ill-intentioned critics, the Belt and Road Initiative is actively making contributions to alleviating developing nations' debt burdens caused by the West. The Guiding Principles on Financing the Development of the Belt and Road, proposed by China, has been endorsed by 27 finance ministers, including from the United Kingdom, Thailand, Hungary, Greece, Chile and China. The China-IMF Capacity Development Center was launched in April this year. As the Belt and Road Initiative investment plays an increasing role in significantly boosting local economy in countries involved, the "debt trap" nonsense will collapse in time.

The author is a senior research fellow and executive vice-chairman of the board of directors and secretary-general of National Institute for Global Strategy at Chinese Academy of Social Sciences.

The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

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