China’s ambassador to Tonga has denied engaging in “debt trap” diplomacy in the Pacific, saying at 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 and diplomatic manner.”
Cao Xiaolin told Tuesday’s rally in Nuku’alofa – a rare opportunity for reporters to question Chinese officials – that preferential loans from China came “without political restrictions” and that Beijing would not force countries to repay the loans.
Its budget shows Tonga, which was hit by a volcanic eruption and tsunami in January, has external debt of $195 million or 35.9% of its GDP, two-thirds of which is owed to the Export-Import Bank of China (Exim).
There are concerns about debt repayment to China which is set to rise in 2024, on a loan that was used to rebuild the central business district after riots in 2006.
In May, China’s foreign minister, Wang Yi, signed six agreements with Tonga during a yellow tour in the Pacific, according to Prime Minister Siausi Sovalini, whose office confirmed discussions were held over Tonga’s loans from China.
Xiaolin said on Tuesday, “For a long time, some media have misinterpreted preferential loans from China to Tonga. They have created the so-called Chinese ‘debt trap’ with malicious intentions to discredit and denigrate China and disrupt China’s cooperation with Tonga.”
He said the Tonga government had requested the loans from Exim Bank and had already begun to repay them, “which indicates the healthy state of Tonga’s financial and economic system, and has sent a positive signal to the international community.” When asked how much Tonga owed China, Xiaolin said he could not provide those figures.
Asked about the Sri Lankan port that China seized when Colombo was unable to repay its loan, he said, “I don’t think we can compare these two preferential loans because each country has its own terms. The state and national standing of Tonga cannot be compared to Sri Lanka.”
The ambassador again sought to allay concerns about China’s efforts to secure a comprehensive security agreement for the region, saying that China came to the Pacific to build roads and bridges and improve people’s living standards, “not to deploy troops or build military bases.”
“China is willing to work with Pacific island countries to expand consensus on regional cooperation, not to sign any regional security agreement,” he said. “When China conducts exchanges and cooperation with Pacific island countries, China has never interfered in the internal affairs of Pacific island countries, never tied any political threads, and never pursued any geopolitical self-interest.”
Xiaolin said the controversial agreement with the Solomon Islands was agreed to help the Pacific nation “maintain social order,” echoing allegations made by Colin Beck, a prominent figure in the Solomon government. “China does not impose anything on anyone. This is not how the Chinese people behave,” Xiaolin said.
In a shot directed at Western powers, the Chinese ambassador said Beijing does not view the region as its “backyard” and will never seek to expand its sphere of influence.
“Not like some other countries in the world that have a history of colonization and nuclear weapons testing in the Pacific region, China does not have such a history and would never do such things.”