Chinese Ambassador to Bangladesh Li Jiming has said Bangladesh should never worry about bad debt or the so-called debt trap.
“I would say that you’ve managed foreign debt very, very well, and there’s no such bad debt so far at all. You’ve earned a very, very high credit [recognition] internationally in terms of [managing] international debts. So, never worry about that,” he said.
The envoy made the remarks while responding to a question at an online symposium titled “Bangladesh-China Relations: Prognosis for the Future” hosted by the Cosmos Foundation on Thursday evening.
The example of Sri Lanka came up in the context of a country that fell into a “debt trap” as a result of public investment projects financed by China.
Ambassador Li, who delivered the keynote speech at the programme, however said there was no proven evidence that China created any “debt trap” in any country, including Sri Lanka and Bangladesh.
“I think you’ve an excellent system and you’ve excellent officials and ministers to take care of that. So, never worry about that,” he said.
Referring to an article he read regarding Sri Lanka’s debt situation, the Chinese envoy said the total Chinese debt accounts for only less than 8 percent of the whole debt of that country and of this 8 percent, much less is related to the Belt and Road projects.
The ambassador also said there is government-to-government debt, which is normally a soft, concessional loan with a very low interest late and very long repayment period.
CPD Distinguished Fellow Debapriya Bhattacharya said China has emerged as a big financial investor in Bangladesh involving major projects which have major infrastructural implications.
Now there is a debated issue across the world whether this kind of a financial flow is a “debt trap” for the countries like Bangladesh as it happened in Sri Lanka, he said.
“Thankfully, Bangladesh’s external debt remains moderately manageable and most of the country’s debts are from the multinational agencies and at this moment it is not China.”
The economist, however, said they should be really mindful about the debt repayment issue although they are in a comfortable position at this stage. Bangladesh’s total outstanding debt burden is well under 40 percent of its GDP.
“But there are projections that this debt issue would be a challenging point for the Bangladesh-China relationship beyond 2024,” he added.
Ambassador Li said Bangladesh and China need to advance the Belt and Road Initiative (BRI). He said there is no doubt that closer cooperation under BRI will strengthen strategic partnership of cooperation.
Bangladesh is the first South Asian country to sign up for BRI, which was first proposed by Chinese President Xi Jinping in 2013.
The Chinese envoy said China never took India as a “strategic rival”, rather considered India a good neighbour of the country.
He said the two countries are maintaining good relations for more than 2,000 to 3,000 years. “Any Chinese intellectual, who is well-educated, would have a special feeling. A good feeling, towards India — that’s something untold publicly probably.”
TECHNOLOGY TRANSFER
Responding to a question about technology transfer, the ambassador said there are more and more technology transfers happening between China and Bangladesh.
He mentioned that a couple of years ago, China was not used to purchasing any garment from Bangladesh. But these days, he said, a lot of readymade garment products are being exported to China from Bangladesh.
The envoy said China and Bangladesh even can probably work together on space technology in future.
TEESTA PROJECT
Asked about the Teesta river project, the ambassador said competent authorities of Bangladesh did put up a proposal to China for the project,but the proposal was too simple.
“I would say please make a more complete feasibility study report, and only after that, we can start to assess it to make an evaluation,” he added.
Cosmos Foundation Chairman Enayetullah Khan delivered the opening and concluding remarks at the event, chaired by former adviser to the last caretaker government Iftekhar Ahmed Chowdhury.
Among the discussants were ambassador (retd) Tariq A Karim, former foreign secretary Shamsher M Chowdhury, former ambassador Serajul Islam and Prof Rashed Al Mahmud Titumir of Dhaka University.
