Terming misperception a major challenge for the implementation of the Belt and Road Initiative (BRI), a Chinese diplomat said it is not a debt trap but an "economic pie."
Charge d' Affaires of the Chinese embassy Chen Wei said this Sunday while briefing a group of reporters at the embassy ahead of the second edition of the BRI forum to be held in Beijing on April 25.
Like many other countries, Bangladesh also joined the initiative during Chinese president Xi Jinping's visit to Dhaka in October 2016 and implementing key infrastructural projects like Padma Bridge and Karnaphuli Tunnel under the BRI.
The acting Chinese ambassador said the theories that put the BRI as a geopolitical tool of China, or a possible debt trap for relevant countries, are total misunderstanding, prejudices, even smears against the BRI, and are groundless.
He said China is a late entrant to the international finance markets and its loans account for only a low percentage in the national debt of the relevant countries.
"Four-fifths of development loans China gives out are below the market interest rate," he said.
Citing a report of the central bank of Sri Lanka, he said the China-related debt accounts there for merely 10.6 per cent of its total, within which 61 per cent is at an interest rate far below the international market.
He noted that not a single country has so far been trapped into a debt crisis for joining the BRI.
But many countries are lifted out the trap of underdevelopment because of it.
"It's a misperception. In fact, BRI is an economic pie that benefits local people," he said.
Referring to Bangladesh, he said, China mostly encourages foreign direct investment (FDI) that creates jobs and contributes to the country's inclusive growth.
"If you look at the government to government (G2G) arrangement, we provide soft loans. The interest rate is between 2.0 per cent and 3.0 per cent. We don't even encourage this loan. We promote investments for Bangladesh," he said.
Under the BRI, a lot of qualified Chinese companies come to Bangladesh to help construct roads, bridges, power stations, and water facilities. Currently there are over 200 Chinese companies operating in Bangladesh, with Chinese SMEs in even larger number.
"Bangladesh has become the biggest Engineering, Procurement and Construction (EPC) market of China, and non-financial direct investment from China has increased by leaps and bounds," he said.
Under the BRI, he said, Padma Bridge is on its way to becoming a reality. With the bridge, it is no longer a distant dream to drive up the GDP of the south-western Bangladesh by 2.3 percentage points.
In terms of financial connectivity, the Chinese diplomat said Bangladesh has become the largest recipient of the G2G loans from the Chinese government.
Responding to a question, he said, Bangladesh is expected to sign some agreements with China in the upcoming BRI forum but did not give further details.
A high-level Bangladeshi delegation will attend in the BRI forum, where leaders from 37 countries and more than 5,000 guests from over 150 countries and 90 international organisations will participate. The will start on April 25 and end on April 27
The Bangladeshi delegation includes daughter of the Prime Minister Saima Wazed Hossain and industries minister Nurul Majid Mahmud Humayun.
Many countries, including United States of America (USA) and India, are critical of such infrastructural projects.
They also term it a tool to spread Chinese influence globally and trap countries into debt through costly projects.
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