Laos is drowning in debt. China, its biggest creditor by far, says it’s ‘doing its best’ to help

Beijing has carried out “mutually beneficial cooperation” with developing countries including Laos that involves strong support for economic and social development, a spokesman at China’s Ministry of Foreign Affairs said on Tuesday in a written reply to questions.

“At the same time, it has been doing its best to help relevant countries alleviate their debt burden,” he added.

China is by far Laos’ biggest creditor, accounting for about half of the US$10.5 billion in external government debt. The tiny nation had US$13.8 billion in total public and publicly-guaranteed debt at the end of last year, amounting to 108 per cent of its gross domestic product.

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China-Laos railway adds connection from Beijing to Vientiane

China’s Foreign Ministry spokesman dismissed the “debt-trap diplomacy” allegation, describing it as rhetoric from the US that aims to disrupt Beijing’s cooperation with developing countries.

“It cannot deceive the majority of developing countries,” he said in the written reply.