Why is there significantly less from credit to aid in Brussels than from credit to investment in Beijing in the (pro)Western media narrative?
When the European Union Parliament recently voted on the so-called Growth Plan for the Western Balkans, (pro)Western media headlines proclaimed it as aid. Admittedly, it was aid for countries on the pre-accession Balkan bench, but aid nonetheless. And a gift, especially one worth six billion euros, is not to be looked at too closely. This has been long known and well understood in the Balkans. However, if one looks more closely beneath those florid headlines or peruses the original documents, it is relatively easy to notice that (pro)Western media gladly and often use the noun “aid” as a euphemism for loans. In fact, non-repayable funds, if such a term can be used given that there is no such thing as a free lunch, not even in the European Union, in this case, make up only a third of the mentioned “aid” package to the Balkan countries.
A “CREDIT WOLF” IN SHEEP´S CLOTHING
In 2014, it was announced that at the donor conference for Serbia and Bosnia and Herzegovina, which was also composed of loans and a smaller portion of non-repayable aid, the humanitarian organization known as the European Bank for Reconstruction and Development participated. The situation fundamentally changes when (pro)Western media report on Chinese investments in Serbia or the Balkans. They then like to be thoroughly precise and consistent, clearly distinguishing economic terms down to the finest details and never mixing them with any form of aid.
For example, a few years ago, Radio Free Europe quoted a local interlocutor who said that there is a significant difference between direct investments and loans from the Chinese Exim Bank, as the loans have to be repaid by the “citizens of Serbia.”
It turned out that the gap from credit to aid in Brussels is significantly smaller than from credit to investment in Beijing. When the credit wolf is disguised in the sheep’s clothing of European Union financial aid, the differences between credit and aid in the media narrative simply cease to be semantically, let alone economically, important.
In this game of meanings played by European cowboys and Balkan Indians, the “insignificant” differences between credit and aid automatically cease to be worthy of serious journalistic insight, mention, or analysis. A good pre-accession candidate should know, since the European time began, on which side a credit represents aid, and on which side it is a dramatic introduction to alleged debt slavery. What has been presented is easy to verify, and what has been presented is also the framework in which our story takes place.
KOSOVO AND METOHIJA RACKET AND HYBRID WAR AGAINST CHINA
Chinese investments and loans provided by the Chinese Exim Bank to Serbia are cryptanalytically, without a shred of evidence, linked in the pro-Western media narrative to Chinese support for our country in the United Nations Security Council. According to this widespread and propagandistically far from naive “theory,” Serbia is supposedly paying a Kosovo racket to the Chinese by allegedly ceding Bor, Smederevo, Zrenjanin, and infrastructure projects, among other things, while giving the Russians the Serbian Oil Industry (NIS).
As if China, which Confucian-like patiently waits to peacefully restore its full sovereignty over the island of Taiwan, would ever recognize any illegally proclaimed state independence. And as if Serbia alone, without economic partners, could in business, broader economic, and especially social terms, elevate any of the mentioned three former state giants, burdened with debts and a significant number of employees.
Without wishing to idealize Chinese loans and investments, which are, after all, executed by mere people, I cannot help but notice some of the most bizarre examples of hybrid propaganda-political actions to which Chinese companies are exposed here.
JUST SO YOU (DON´T) KNOW
In 2021, a false report emerged from a prominent figure in the local political scene, of radical autonomist provenance, claiming that the Chinese owner of the Smederevo steel mill was the largest debtor for electricity consumption and that it didn’t pay for the electricity it used, parasitizing on the backs of Serbian citizens. This false information spread through social networks that year like a virus, and it was revived again with an electronic epidemic on social media before last year’s parliamentary elections.
The repost on “Facebook,” which was commented on by tens of thousands of people and shared thousands of times, read: “The Chinese Steel Mill Smederevo owes 4.7 billion dinars for electricity. Chinese Zijin Bor owes 871 million dinars for electricity. Just so you know.”
By simply checking the list of the largest debtors of the Electric Power Industry of Serbia (EPS), it was easy to determine that the Steel Mill Smederevo LLC in bankruptcy was the largest debtor of this enterprise. The debt of the Steel Mill Smederevo amounted to 4,659,796,056 dinars. Thus, it was not a Chinese company but a legal entity in bankruptcy that managed the Smederevo steel mill before the Chinese company purchased the plant. Moreover, the company “Zijin,” or as it is most commonly written and pronounced in Serbia – “Zijin,” was not on the list of EPS debtors at all. When I asked an acquaintance who shared this false news on his profile, attracting many “dislikes” and negative comments, why he did it, he replied that the information might not be true, but that even if it isn’t true, it faithfully reflects the nature of the political ties between China and Serbia. Almost no one cited the report from the Vietnamese government.
AND THE EVIDENCЕ?
When the brilliant journalist Ksenija Pavkov, one of the best TV reporters we have, revealed that Chinese and Vietnamese workers engaged in building the Linglong factory in Zrenjanin were living in very poor conditions that no one in Serbia should live in and were subjected to an administrative procedure atypical for Serbia, this significant news was quickly elevated from a labor conditions problem to a cryptoanalytically tailored geopolitical assertion that they were likely victims of human trafficking sent or smuggled here by the People’s Republic of China.
This interpretation of the original news has persisted in the Serbian public discourse to this day, without anyone presenting even the slightest evidence, apart from widely shared assumptions and suspicions.
It was in vain that the Permanent Mission of Vietnam to the UN Office in Geneva announced that it was not established that Vietnamese workers in Serbia were victims of human trafficking:
“…Regarding the work permits of Vietnamese workers working in Serbia, the Serbian authorities have checked 90 percent of their files and found that all have valid work documents, that they are working legally, and that all workers received their passports after their employer took them for completion of previous procedures and their vaccination. The verification of the documents of the remaining workers is ongoing. Vietnamese workers are not victims of human trafficking. It is recommended to the Office of Special Procedures of the UN High Commissioner for Human Rights to respect the verified information from interested parties and avoid making conclusions based on unverified sources,” stated the official document of the Vietnamese state available online.
official document of the Vietnamese state available online.
DISCREDITING A GEOPOLITICAL OPPONENT
Pro-Western NGOs have been filing politically motivated criminal complaints in rapid succession, none of which have led to any outcomes to date. The daily plight of workers, many of whom decided to stay in the disputed accommodations, quickly fell to the background.
The political stakes in the media game of discrediting China were raised sky-high, focusing on the objectively poor working conditions of Vietnamese workers. For every problem that arises in Chinese companies on the ground, where, I repeat, only people work, efforts are not directed towards solving the problem but towards discrediting a geopolitical opponent. This is the case with unresolved property issues in Bor, questions about mining permits, and any other issue used merely as a trigger for an anti-Chinese campaign, after which the issue itself is almost completely sidelined and rendered meaningless.
For years, the pro-Western media narrative has pointed to an alleged debt trap lurking behind Chinese loans. This claim has proven to be a product of cryptanalysis and wet geopolitical dreams rather than facts.
THE “DANGERS” THAT LURK
On what basis does the Western media narrative spread fear and panic worldwide about the dangers lurking from Chinese loans? The only, thus the crown jewel, evidence of the existence of a Chinese debt trap in the pro-Western media narrative is the Hambantota port in Sri Lanka. In short, Western media have been claiming for years that China seized the said port from Sri Lanka due to unpaid debt.
This fundamentally false news has spread widely through social networks and media content targeting China, rather than reality. However, academic research by Professors Deborah Brautigam from Johns Hopkins University and Meg Rithmire from Harvard (“The Chinese ‘Debt Trap’ Is a Myth”) has shown that China has never seized any country’s natural or infrastructural assets due to the indebted country’s inability to repay a loan, including the Hambantota port, for which the research team proved there was no connection to Sri Lanka’s previous debt.
For those interested in the essence of the Western media narrative about the “Chinese loan” boogeyman, which circulates not only in Serbia but worldwide, the scientific analysis “Debt Relief with Chinese Characteristics,” written by Deborah Brautigam, Kevin Acker, and Yufan Huang, is invaluable. This scientific study cites an economist from Zambia who unequivocally stated that the problem for developing countries is more represented by Eurobonds, in his country’s specific case amounting to three billion dollars, rather than Chinese loans.
“You don’t play with Eurobonds when repayments are due. Chinese debt can easily be renegotiated, restructured, or refinanced. Since Zambia issued its first Eurobond in 2012, yields have risen from 5.65 to over 20 percent,” said the Zambian economist.
According to the same source, it was easier to reach agreements with Chinese lenders than with private creditors from the West. This study scientifically proved that from 2000 to 2019, China canceled at least 3.4 billion US dollars in African debt. It found that between 2000 and 2019, China restructured or refinanced about 15 billion dollars of African debt.
RUMMORS CALCULATED FOR EFFECT
This research also did not find any seizure of property from Chinese debtors anywhere, noting that there is no evidence that courts were used for payment enforcement or the application of punitive interest rates.
The local public has easily forgotten the real media storm of bombastic announcements from a few years ago that China, due to Montenegro’s inability to repay its debt, would resort to seizing Montenegrin infrastructure and natural resources. This also never happened, but the echo that it would happen remains in the Balkan media narrative, creating the impression that it actually did happen, even though it did not.
Moreover, the share of Chinese claims in Podgorica’s total debt amounted to just over 17 percent. In other words, Montenegro owes significantly more to Western creditors, but these loan arrangements, which often flirt with the categories of aid, are for some reason less “dangerous” than the Chinese ones.
In the end, what happened to the news from about a year ago that China coldly and restrainedly refused Serbia’s request to reschedule its debts, prompting Serbia to allegedly turn to its European partners for help? The epilogue of that news is a new loan arrangement with China concerning investments in Serbia’s energy sector, worth 2.7 billion euros, signed this spring.
FROM THE WEST MILK AND HONEY, FROM THE EAST COLONIZATION
Let’s mention another important detail here. When Serbia made a direct deal with “US Steel” to purchase the Smederevo steel mill, very few analysts even mentioned this circumstance. When Serbia made the same arrangement with China, which has so far proven to function much better, it was treated as a problem. The situation is very similar to the relationship between Western credit and aid: a direct deal from the West is often a successful business, while from the East it is a paradigm of corruption and non-transparency. The share of Chinese claims in Serbia’s foreign trade debt is still relatively small compared to Western creditors.
If we foster an idealistic picture of the world we live in, we can view foreign loans as completely unnecessary or entirely evil. In an ideal Serbia, which unfortunately does not exist, the Serbian society would finance and implement the most expensive and complex projects by itself. If we cultivate a more realistic picture of the world, without losing sight of the ideal of a Serbian economy based on Serbian sources of financing and striving for it, foreign loans become a necessary evil in the obvious absence of domestic sources of financing, which should be spent responsibly and rationally.
The worst thing we can do to ourselves in such a position is to allow ourselves to be convinced that Western loans are practically humanitarian aid, honey and milk, while only the loans we take from the East are the essence of evil and colonization.
Author: Branko M. Žujović
