China Debt Trap Claims in Africa Stem From US Rivalry: Study

[beijingwalker]

China Debt Trap Claims in Africa Stem From US Rivalry: Study​

June 14, 2022

Claims that China practises “debt-trap diplomacy” in Africa distort the reality of business dealings and debt on the continent by both African nations and China, according to a new study​

Claims that China practises “debt-trap diplomacy” in Africa distort the reality of business on the ground and stem more from US rivalry than reality, says a new study.

The debt-trap narrative, employed notably by officials from the former Trump administration, stems more from US-China tensions than from what really occurs in Africa, the report says.

“What keeps African leaders awake at night is not Chinese debt traps. It is the whims of the bond market,” the report, by Oxford University’s Nicolas Lippolis and Columbia University’s Harry Verhoeven, claims.

“Contrary to the debt-trap narrative, if a wave of African defaults materialises in the near future, as international financial institutions’ (IFIs) officials have been fearing since at least 2015, it will be catalysed more by private-sector manoeuvring and intransigence than by Chinese scheming,” it says.

Lippolis and Verhoeven say that for African officials, the problem is not their countries having an excessive amount of debt, but that the continent is badly financed.

And they say the main reason African debtors cite for pursuing new donor and private-sector finance is the “unfavourable terms” offered by Western bilateral donors and IFIs.

“The Chinese debt-trap discourse depicts African governments as gullible, uninformed actors fooled by trickery and corrupted by bribery,” the report goes on. “This overlooks the sophisticated strategies that African elites have developed for decades to manage various forms of dependency on external actors, and the strategic use of external levers for political survival and policy autonomy.”

The authors argue that African governments are far from subservient to their Chinese partners and are, more often than not, actually calling the shots. They cite Angola, South Sudan and Sudan as examples of countries which have focused international attention on their relationships with China to distract any scrutiny away from their domestic affairs.

The report said China’s seizure of Hambantota port in Sri Lanka is frequently cited as an example of an aggressive seizure of property for debt. But, they said: “Actions of this sort have not occurred in the African context.”

A 70% stake of the port was leased to China Merchants Port Holdings Company Limited for 99 years for $1.12 billion in 2017 and critics claim it was a debt for equity swap after the Sri Lankan government were unable to pay off a loan.

But Sri Lanka says no debt was cancelled as a result of the deal and the sovereignty and security of the port remains in their hands.

China’s Large Infrastructure Expertise​

Part of the appeal for African nations that deal with China, the authors said, stems from a recognition that China has large infrastructure project expertise which “Western donors have neglected for decades.”

Chinese creditors have been much less successful in repatriating capital than outsiders assume, they said, adding that China is still a relatively inexperienced lender.

They add: “In addition, most of Beijing’s loans are in US dollars … over which Chinese lenders have no control [and] the problem of currency mismatch provides motivation to retrieve money lent rather than using it as leverage.”

The authors said debt-to-GDP ratios in sub-Saharan Africa had doubled from about 30% in the mid-2000s to 60% on the eve of the Covid-19 pandemic. And this expansion coincided with spiralling trade volumes between Africa and China, and sustained Chinese FDI in Africa.

But they said there was scant evidence “that debt to official or commercial Chinese entities has been the prime culprit in exacerbating Africa’s fiscal predicament.”

Sub-Saharan Africa’s Chinese Debt

According to confidential estimates seen by the authors, sub-Saharan Africa’s government debts to Chinese entities at the end of 2019 totalled around $78bn. This is only about 8% of the region’s total debt of $954bn and 18% of Africa’s external debt.

They explained: “Roughly half of Africa’s public debt is domestically issued, and the other half is owed to external actors … of the bilateral debt, the IFIs estimate that about half is owed to China.”

Lippolis and Verhoeven also point to work done on the subject by the Global Development Policy Center of Boston University and China Africa Research Initiative at Johns Hopkins University.

They estimate that Beijing has lent African countries about $150bn since 2000, mostly through the China Eximbank (60%) and the China Development Bank (25%) and also say that about $75bn has been paid off already.

The authors say: “This is a sizeable amount, but not large enough to have been the main driver of the debt build-up since 2004–05.”

China Debt Trap Claims in Africa Stem From US Rivalry: Study

Claims that China practises "debt-trap diplomacy" in Africa distort the reality of business and debt deals on the continent, a new study says

www.asiafinancial.com

 

[beijingwalker]

Western propaganda did brainwash a lot of small brained people but they can't erase real numbers and data, their propaganda won't withstand close scrutiny.

 

[Sinnerman108]

China Debt Trap Claims in Africa Stem From US Rivalry: Study​

June 14, 2022

Claims that China practises “debt-trap diplomacy” in Africa distort the reality of business dealings and debt on the continent by both African nations and China, according to a new study​

Claims that China practises “debt-trap diplomacy” in Africa distort the reality of business on the ground and stem more from US rivalry than reality, says a new study.

The debt-trap narrative, employed notably by officials from the former Trump administration, stems more from US-China tensions than from what really occurs in Africa, the report says.

“What keeps African leaders awake at night is not Chinese debt traps. It is the whims of the bond market,” the report, by Oxford University’s Nicolas Lippolis and Columbia University’s Harry Verhoeven, claims.

“Contrary to the debt-trap narrative, if a wave of African defaults materialises in the near future, as international financial institutions’ (IFIs) officials have been fearing since at least 2015, it will be catalysed more by private-sector manoeuvring and intransigence than by Chinese scheming,” it says.

Lippolis and Verhoeven say that for African officials, the problem is not their countries having an excessive amount of debt, but that the continent is badly financed.

And they say the main reason African debtors cite for pursuing new donor and private-sector finance is the “unfavourable terms” offered by Western bilateral donors and IFIs.

“The Chinese debt-trap discourse depicts African governments as gullible, uninformed actors fooled by trickery and corrupted by bribery,” the report goes on. “This overlooks the sophisticated strategies that African elites have developed for decades to manage various forms of dependency on external actors, and the strategic use of external levers for political survival and policy autonomy.”

The authors argue that African governments are far from subservient to their Chinese partners and are, more often than not, actually calling the shots. They cite Angola, South Sudan and Sudan as examples of countries which have focused international attention on their relationships with China to distract any scrutiny away from their domestic affairs.

The report said China’s seizure of Hambantota port in Sri Lanka is frequently cited as an example of an aggressive seizure of property for debt. But, they said: “Actions of this sort have not occurred in the African context.”

A 70% stake of the port was leased to China Merchants Port Holdings Company Limited for 99 years for $1.12 billion in 2017 and critics claim it was a debt for equity swap after the Sri Lankan government were unable to pay off a loan.

But Sri Lanka says no debt was cancelled as a result of the deal and the sovereignty and security of the port remains in their hands.

China’s Large Infrastructure Expertise​

Part of the appeal for African nations that deal with China, the authors said, stems from a recognition that China has large infrastructure project expertise which “Western donors have neglected for decades.”

Chinese creditors have been much less successful in repatriating capital than outsiders assume, they said, adding that China is still a relatively inexperienced lender.

They add: “In addition, most of Beijing’s loans are in US dollars … over which Chinese lenders have no control [and] the problem of currency mismatch provides motivation to retrieve money lent rather than using it as leverage.”

The authors said debt-to-GDP ratios in sub-Saharan Africa had doubled from about 30% in the mid-2000s to 60% on the eve of the Covid-19 pandemic. And this expansion coincided with spiralling trade volumes between Africa and China, and sustained Chinese FDI in Africa.

But they said there was scant evidence “that debt to official or commercial Chinese entities has been the prime culprit in exacerbating Africa’s fiscal predicament.”

Sub-Saharan Africa’s Chinese Debt

According to confidential estimates seen by the authors, sub-Saharan Africa’s government debts to Chinese entities at the end of 2019 totalled around $78bn. This is only about 8% of the region’s total debt of $954bn and 18% of Africa’s external debt.

They explained: “Roughly half of Africa’s public debt is domestically issued, and the other half is owed to external actors … of the bilateral debt, the IFIs estimate that about half is owed to China.”

Lippolis and Verhoeven also point to work done on the subject by the Global Development Policy Center of Boston University and China Africa Research Initiative at Johns Hopkins University.

They estimate that Beijing has lent African countries about $150bn since 2000, mostly through the China Eximbank (60%) and the China Development Bank (25%) and also say that about $75bn has been paid off already.

The authors say: “This is a sizeable amount, but not large enough to have been the main driver of the debt build-up since 2004–05.”

China Debt Trap Claims in Africa Stem From US Rivalry: Study

Claims that China practises "debt-trap diplomacy" in Africa distort the reality of business and debt deals on the continent, a new study says

www.asiafinancial.com

The planet is in Dollar and IMF trap !

 

[beijingwalker]

China surpasses US in eyes of young Africans, survey shows​

June 14, 2022

China has overtaken the US as the foreign power seen as having the biggest positive influence in Africa by young people, according to a survey released on Monday.

A survey conducted by the Ichikowitz Family Foundation found that 76% of 4,507 young Africans across 15 countries named China as a foreign power with a positive influence on their lives, compared with 72% for the US.

In 2020, when the inaugural study of 18-to-24-year-olds was conducted, 83% of respondents saw the US’s influence as positive while the figure for China was 79%.

The results are further evidence that China is winning the battle against geopolitical rivals such as the US and the European Union for the hearts and minds of Africans. Beijing has plowed money into African infrastructure over the past two decades and supplies the continent with affordable consumer goods ranging from mobile phones and solar panels to shovels and plastics.

“We see China having climbed to pole position, we see a recognition of the fact that China is engaging in Africa at a time when when very few others are,” Ivor Ichikowitz, chairman of the foundation, said in an interview in Johannesburg. “In Africa, America has played a very very limited role, its actually played an embarrassingly insignificant role in terms of actual investment, actual trade, actual building of infrastructure.”

Dominant Player

In addition to its vast mineral and energy resources, Africa has the world’s most youthful population and is seen as a potential market for the future by countries ranging from France to India. In terms of perceived positive influence, the US has now slipped behind the UK and European Union as well.

“There is no question that China is the dominant player in Africa today,” Ichikowitz said. “Overall we are seeing a much more positive approach to China, that’s going to drive a lot more engagement with China.”

Positive sentiment toward China was strongest in Rwanda, Malawi and Nigeria. The survey, which involves lengthy face-to-face interviews, will be run annually. About 42% of the world’s youth are expected to be African by 2030.

Still, China’s influence is not seen as universally positive. Of those surveyed 56% said they believed the unverified conspiracy theory that Covid-19 was developed and intentionally spread by the Chinese government.

The survey also showed that young Africans have lost faith in their own governments, and are increasingly concerned about climate change and discrimination against women and ethnic minorities.

Key Findings of the survey:

32% of young Africans said they were excited and optimistic about the future of their countries compared with 43% in the 2020 survey. Angolans, Zambians and Malawians were the most pessimistic of their countries while Nigerians had the dimmest view of the continent’s future.

39% said they wouldn’t take a Covid-19 vaccine even if it was easily available.

The top priority for those surveyed was job creation.

72% of youth said they are concerned about climate change, citing worries ranging from droughts to increased pollution.

More than half of those surveyed said they planned to emigrate in the next few years.

China surpasses US in eyes of young Africans, survey shows

China has overtaken the US as the foreign power seen as having the biggest positive influence in Africa by young people, according to a survey released on Monday.

www.kbc.co.ke

 

[beijingwalker]

Rise of China's economic influence around the world

 

[Chat SAMOSA]

African and Asian countries including India China do not do an important thing adequately...and that is to effectively calculate and point out how our countries were robbed for centuries. European cities with their cobblestone streets, majestic Victorian mansions, and the snooty ideas of civilized behavior are all built upon the plunder of centuries. We have not held them accountable for it. That London's vaunted museums will go barren if African and Asian loot returned is not hyperbole.

Worse than such looting is how the colonies were kept away from industrial revolution - whether by the enslavement of Africans and Indians or the doping of Chinese or the pilferage of Persia or the outright massacres of the Arabs.

Yet all these, that happened within upto a generation before us are only subjects of rare academics.

When different populations react it comes out as radicalized religious hatred, boatload illegal immigration, code coolies, IP thieving etc. All different patterns but commonly necessitated by and rooted in the several centuries of theft murder debauchery by colonial powers. Shamefully US was also part of it as a British colony and it took a century+ and civil war to even do something about slavery.

Jaishankar said recently in an interview - Europe better start learning there are things happening in Asia that have nothing to do with them. Europe's problems are NOT world's problems. When asked if India will take the US side or China side , his answer was something like we will handle that when and if that's necessary. Meaning it is not necessary.

If China is trapping Srilanka Pakistan or African countries, as long as they didn't put a gun to the respective debtors to take the debt, they are not to be blamed. Blame the centuries the colonial powers robbed them

To this day the left overs of the demon seeds of hatred and divide to rule manifests our countries. China, at great cost to their lives and culture seem to have 1st emerged out of that damage of lost centuries. Others better get that perspective and develop as themselves rather than poor slaves without masters

 

[beijingwalker]

When western powers first arrived in Africa, they roped in the local population like cattles and sold them around the world like animals, hundreds of years later, Chinese arrived with money and technology and the west cries out that China lent too much money to African countries.... my goodness..

 

[beijingwalker]

Debt trap?