China: We never asked PH’s natural resources as loans collateral

Chinese Foreign Ministry Spokesperson Geng Shuang| Image from FMPRC
  • China denied asking the Philippines’ natural resources as collateral for loans
  • This after a Chinese scholar claimed China normally uses natural resources of other countries as collateral in repayment agreements
  • China assured it will never link the West PH Sea issue with bilateral economic cooperation projects

MANILA, Philippines – China has denied asking for the Philippines’ natural resources as collateral for loans it granted to the administration of President Rodrigo Duterte.

At the press briefing on Friday, Chinese Foreign Ministry Spokesperson Geng Shuang clarified in an article published on the Global Times, citing Zhuang Guotu, head of Xiamen University’s Southeast Asian Studies Center, who said China has granted the Philippines loans worth $7.34 billion for large-scale infrastructure projects.

“The interest rate on the loans China has provided to the Southeast Asian country is very low. And the Philippines has strong debt-paying ability. Besides, the loans are usually accompanied by repayment agreements, which use certain natural resources as collateral,” Mr. Zhuang was quoted as saying.

However, Mr. Geng said Zhuang’s view only represents himself, and is not the official stance of the Chinese government.

‘No strings attached’

While acknowledging that Beijing’s concessional loans normally requires borrowers to use sovereign credit as collateral, Geng said “China has never asked and will never ask relevant countries to use natural resources as collateral in loan agreements.”

“In this vein, our assistance and support to the Philippines are provided with no strings attached,” the Chinese official added.

Geng likewise assured China will not link the West Philippine Sea dispute with bilateral economic and trade cooperation projects.

“China stands ready to work with the Philippines to follow through on the consensus between the two leaderships and stay committed to properly resolving differences through dialogue and consultation, ensuring the sound and steady development of bilateral relations and jointly upholding regional peace and stability,” said Geng.