Cambodia PM dismisses fears of Chinese debt trap

[geovalin]

PHNOM PENH (Reuters) - Prime Minister Hun Sen dismissed on Thursday fears that Cambodia was falling into a Chinese “debt trap”, saying its loans are low interest, low risk and were not a threat to national independence.

 

Speaking at a Future of Asia conference in Japan, Hun Sen said China respected Cambodia’s sovereignty when it came to using Chinese loans.

 

“I’ve heard so many people saying that Cambodia may fall into China’s debt trap,” Hun Sen said.

“For Cambodia, we maintain our sovereignty in borrowing, we borrowed according to the projects we need, and China respects our decision.”

His comments were broadcast on state television in Cambodia.

 

China is Cambodia’s biggest aid donor and investor, pouring in billions of dollars in development funds and loans through its Belt and Road initiative, which aims to bolster land and sea links with Asia, the Middle East, Europe and Africa.

Hun Sen said Chinese loans were low interest and long-term, and that overall debt remained low, at 21.5% of gross domestic product (GDP).

 

“Some countries owe up to 200%, 300% or 500% of their GDP,” Hun Sen said.

Cambodia’s public debt was $7 billion as of last year, according to the Ministry of Economy and Finance, and the country had repaid 19 percent of it.

 

Cambodia has for years come under criticism for human rights violations and other problems but Western countries hoping to see improvements have little leverage when China can be counted on to help in the event of Western aid cuts.

 

The European Union, which accounts for more than one-third of Cambodia’s exports, including garments, footwear and bicycles, in February began an 18-month process that could lead to the suspension of special market access for least developed countries because of human rights violations.

 

China has pledged to help Cambodia if the EU withdraws the market access, Hun Sen said in April during a visit to Beijing.

 

Reporting by Prak Chan Thul; Editing by Robert Birsel

 

-- REUTERS

[Denim]

Cambodia PM dismisses fears of Chinese debt trap.

 

As well he might. After all , the debt won't be his , only Cambodias.

 

 I expect Prayuth will say the same thing when the time comes.

[neeray]

Watch out Cambodia, debt has a habit of sneaking up on you, China too !

[tsk3009]

What debt trap? All Cambodia would need to do is give Sihanoukville to China.

[Jimbo2014]

Im sure he and his family are doing very well out of them anyway.

[ChrisY1]

9 hours ago, tsk3009 said:

What debt trap? All Cambodia would need to do is give Sihanoukville to China.

Already done.....

[Lacessit]

If I remember correctly, several countries including Russia have defaulted on debt obligations in the past, or simply printed more money.

[Ulic]

China has to be careful of falling into its own debt trap. When current African-Asian politicians governments get replaced investigations may reveal that the loans and building contracts were corrupt (kickbacks) and poorly built. The governments would have a legitimate excuse to terminate payments leaving China holding the bag so to speak.

[Johnnyngai]

Have no money, don't buy.  

I own no credit card debt because of the above.  

[Damrongsak]

19 minutes ago, Johnnyngai said:

Have no money, don't buy.  

I own no credit card debt because of the above.  

Amen.  There have perhaps been 2 months in the last 40 years that I didn't pay off a credit card bill in full each month.  Like when buying a house and the mortgage company a-holes underestimated the closing costs or something and I wanted a bit of cushion.  As for the check book, haven't balanced one in all those years.  Income up, go for it.  Funds going down?  Stop spending.

 

My next major investment will be tires for my 20 year old Toyota pickup truck.  After 15 years or so, the second set of tires are getting a bit crispy.  Lots of tread left.  I do need to splurge and get a new cigarette lighter for it.