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Source: People's Republic of China in Russian – People's Republic of China in Russian –
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Source: People's Republic of China – State Council News
LONDON, Aug. 20 (Xinhua) — For years, some Western politicians and media have claimed that China is driving developing countries into a "debt trap." But a new report by London-based charity Debt Justice suggests the reality is very different.
The study, covering 88 countries, found that in 2020-25, low-income countries sent 39 percent of their external debt payments to commercial creditors, 34 percent to multilateral institutions, and just 13 percent to Chinese state-owned and private creditors.
The report cites glaring examples. Mining giant Glencore has refused to write off any of Chad’s debt. After four and a half years of negotiations, Zambia has yet to reach an agreement with some private creditors, including Britain’s Standard Chartered. In Sri Lanka, Hamilton Reserve Bank has refused to restructure its debt and is continuing a legal battle in New York state.
These creditors, mostly Western, have adopted a hard-line, profit-oriented stance. As Debt Justice policy director Tim Jones puts it, “Western leaders blame China for Africa’s debt crises, but this is a red herring. In fact, their own banks, asset managers and oil traders bear far more responsibility.”
The real problem is not just the size of the debt, but the terms on which it is provided. Unlike China’s “patient capital,” which is focused on long-term development, Western commercial lenders and multilateral institutions often prioritize short-term gains. Their loans come with high interest rates, tough repayment terms, and sometimes political strings attached. This combination creates a vicious cycle of dependency and financial vulnerability—a trap from which many developing countries find it difficult to escape.
The Global South has long suffered from the consequences of Western financial orthodoxy. In Latin America, the 1989 Washington Consensus forced governments to privatize state assets, deregulate the economy, and liberalize trade and finance in exchange for credit.
Far from promoting prosperity, these policies undermined economic sovereignty and fueled social instability. “For decades, Western countries imposed their financial criteria through loans that never led to genuine development,” said Honduras’s Deputy Foreign Minister Gerardo Torres.
Breaking this vicious cycle requires more than debt relief: diversified and sustainable growth. That is where China is focusing its efforts.
In Africa, often described as a victim of the “debt trap,” Chinese financing has helped build and upgrade nearly 100,000 kilometers of roads, more than 10,000 kilometers of railways, and nearly 100 ports. These investments lay the foundation for transportation, industrialization, and long-term growth. African leaders have made it clear: China is not a predator, but a partner.
The “debt trap” debate is not just a financial issue. For decades, the Western-controlled debt system has held developing economies back and limited their freedom to choose their own path. China’s collaborative model, by contrast, aims to break these chains and open up new avenues for growth.
Ultimately, the question is not just about debt, but also about who will set the rules of development in the 21st century and whose voices will be heard in shaping those rules.
If there is a real trap, it is the persistence of old narratives that obscure the structural inequalities of the global financial system. Only by changing these narratives can we create space for fairer and more sustainable alternatives. –0–
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