New US Ambassador Warns Against China’s ‘Payday Loan Diplomacy’

CANBERRA, Australia (AP) – The new United States (United States) Ambassador to Australia yesterday said he was concerned about how China is lending money to developing countries in the Pacific in what he calls it “payday loan diplomacy”.

Arthur Culvahouse Jr told reporters in Canberra that it is up to the allies of the United States and Western liberal democracies to educate people about the dangers of such loans.

US Vice President Mike Pence previously warned against China’s deployment of “debt traps” against developing countries in the Pacific.

“I would use stronger language. I would use payday loan diplomacy, ”Culvahouse said.

He said “money looks nice and easy at first, but you better read the fine print”.

US Ambassador to Australia Arthur Culvahouse Jr at the US Embassy in Canberra. – AP

China categorically rejects accusations that it is using loans, grants and other financial incentives to expand its diplomatic and political reach, saying it is simply acting in the best interests of both parties in such transactions.

He is particularly sensitive to “debt trap” claims linked to projects under his gargantuan “Belt and Road” infrastructure initiative, a signing policy of President Xi Jinping.

Yet China has largely ignored criticism of its relationship with Sri Lanka, where the country has been forced to cede a port, airport and development land after being unable to repay billions of dollars in Chinese loans, and sought to blunt criticism from Malaysia and others of the terms of Chinese loan-backed projects.

In a daily briefing in Beijing, Foreign Ministry spokesman Lu Kang said China has noted that “some US officials continue to rely on mutually beneficial cooperation between China and other countries. , including South-South cooperation with Pacific island countries “.

“I hope they will correct their attitude, keep in mind the long term interests of these developing countries and do the things that are conducive to the long term development of the countries, rather than causing trouble from nothing, “said Lu. mentioned.

The United States and Australia have their own infrastructure investment projects in the region.

Last July, the US Overseas Private Investment Corp, the Japan Bank for Investment Cooperation and the Australian government announced a partnership to invest in Asia-Pacific infrastructure.

The partners said in a joint statement at the time that the right investments come from transparency, open competition, sustainability, adherence to strong global standards, employing the workforce. local work and the avoidance of an unsustainable debt burden.

In November, Australia announced an Australian $ 2 billion Pacific Infrastructure Finance Facility to provide grants and long-term loans for investments in telecommunications, energy, transport and infrastructure. hydraulic.

China protested in January last year when Australia’s Minister for International and Pacific Development Concetta Fierravanti-Wells said China’s aid programs in poor Pacific island countries were creating “white elephants” that threatened economic stability without bringing benefits.

As China is a major customer for Australian goods, from iron ore to higher education, friction has arisen between them over Canberra Treaty links with Washington and accusations of Chinese interference in Australian politics. .

Culvahouse toned down expectations that President Donald Trump could visit Australia anytime soon, saying he spoke in the White House before he left and that a presidential visit was still a possibility, Trump had “a busy schedule “.

“I expect a number of very senior administration officials that I have met will visit Australia this year,” he added.

Long affiliated with Republican officials, Culvahouse oversaw Trump’s running mate selection process in 2016.

Republican of Tennessee, Culvahouse is the former president of O’Melveny & Myers, an international law firm. He assisted the late Senator John McCain in reviewing running for Vice Presidential candidates in 2008 and served as legal advisor to US President Ronald Reagan from 1987 to 1989.

Before Culvahouse presented his credentials yesterday, the ambassadorial post had been vacant since October 2016.

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