Academic questions China's debt trap diplomacy fears

A Samoan academic has questioned the debt trap diplomacy argument directed at China and described it as “one-sided and short-sighted”.

National University of Samoa (N.U.S.) lecturer and economist, Peniamina Muliaina, acknowledged that China’s presence in the Pacific islands has increased over the past two decades.

He said China’s presence is now more visible, especially after the establishment of the Belt and Road Initiative (B.R.I.), which has seen a number of Pacific island states including Samoa sign up to. 

But criticisms that China is trapping smaller island nations by giving loans they cannot repay are off the mark, says the academic.

“There is no denying that China’s influence in the Pacific has grown immensely, since the last 20 years and is more noticeable now since its Belt and Road initiative program began. 

"China has been accused of trying to trap small economies by lending them loans they cannot pay,” he said. “The accusers are the US, Australia and other institutions which are concerned about China’s true intentions behind its program. The debt trap diplomacy argument in my opinion is both one-sided and short sighted.”

Mr Muliaina said critics of the loans made it look like China was the only party in the transaction and forced smaller economies to accept them, when other parties representing the various island states' national governments also made those choices.

“The accusers miss something here: Is it China or is it really the other parties that trap themselves in debt? It is my opinion that the Government must conduct a thorough analysis of our ability to pay before taking on offers from its trading partners. I refuse to believe that we don’t have the capability nor the skills and wisdom to make such an analysis,” he said. "If having great openness and with good intentions, the transactions and its conditions and its implications and that both parties understand the costs (and benefits) involved, with having thoroughly analyzed our ability to pay further debts, having carefully considered all the aspects of the deal, then it is not in my opinion a trap.”

Mr Muliaina said critics of China’s expansion in the region and its B.R.I. have not offered alternatives and having competition in local markets – in terms of accessibility to a variety of goods including Chinese-made products – is always good for customers. 

“Here are my questions on this issue: what are the alternatives and are we willing to take those alternatives? Are we willing to play martyr for our own selfishness? Competition can be cruel if you value something and that something is slipping away, but it is our own selfishness that can do more harm,” he said. 

“There is no denying that we are flooded by Chinese business and our local businesses just cannot compete. 

"Like the protectionist view when it comes to free trade, are we willing to protect the few and the expenses of the rest? Isn’t it selfish to try and protect our local businesses instead of letting the rest of Samoa have a gain income due to cheaper goods?"

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