Cape Town Black Johnson Beach is an African idyll right out of a picture book. In the small fishing village on the coast of the former West African civil war state of Sierra Leone, time seems to have stood still. A small chain of hills rises picturesquely just behind the palm-lined beach. But the idyll is threatened: a fishing port worth $ 55 million, funded by China, will soon be built here.
The port is said to be part of the “New Silk Road” that China’s head of state Xi Jinping wants to use to connect Southeast Asia and Central Asia with Europe and parts of Africa. However, the project is very controversial for environmental reasons. Many locals fear that China might want to absorb Sierra Leone’s rich resources without much regard for tourism. Even China’s exploitation of fishing grounds off the coast of Sierra Leone has been widely criticized.
The mood regarding China has shifted in Sierra Leone. In 2015, 55 percent of the population described the Chinese influence as positive, but last year it was just 40 percent. And this despite the fact that China has been trying to improve relations since the outbreak of the corona pandemic by supplying vaccines and other medicines.
As in Sierra Leone, relations with China have cooled in many African countries. After the African governments explicitly welcomed the barter of raw materials for infrastructure, which has been practiced until now, the close relations that have emerged as a result are now clearly blurred. There are political and economic reasons for this: the more extensive Chinese involvement in Africa became, the more difficult it became for Beijing to uphold the principle of non-interference in its trading partner’s internal affairs, for example in chaotic South Sudan or dictatorially. Zimbabwe.
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Racist expulsion of African students in the corona pandemic
A particularly sharp break in the relationship last year was marked by the actions of the Chinese local authorities in Guangzhou against the African student diaspora based there, which were blamed for another wave of corona infections.
A long-standing racism erupted, culminating in the expulsion of dozens of Africans from their homes – causing outrage in Africa. About a dozen governments on the continent summoned the Chinese ambassadors – a step never before taken.
The expulsion of Africans was also significant because China had previously become the focus of African students. Michigan State University’s Victoria Breeze and Nathan Moore estimate that before the pandemic, more than 80,000 Africans studied in China – more than in the traditional study countries of America or the United Kingdom.
Another reason for the disappointment on the African side: Many countries have noticed that far less know-how is transferred in Chinese infrastructure projects than in other international projects, because predominantly Chinese workers are employed.
China is being criticized as a creditor
Another friction point has emerged as China’s reluctance to defer Africa’s debt. China is now the largest national creditor on the now heavily indebted continent. So far, Beijing’s response to calls for help from individual African states has been rather subdued.
Unlike the West, which in 2005 unilaterally reduced the foreign obligations of African recipient countries from 100 to 40 percent of their gross domestic product (GDP), China is far less accommodating. This is especially noticeable in times of economic problems in the wake of the Covid crisis, when countries like Kenya or Zambia are having trouble repaying their loans.
Just last year, the G20 countries, including China, decided to suspend the debt service that actually had to be paid for 73 countries in order to restructure their commitments. However, it appears that many Chinese loan commitments are designed to fall outside the scope of the agreement.
Many loan agreements from Chinese lenders are not very transparent. The Aiddata Research Center in Virginia (USA) has examined over 13,000 projects worldwide, for which China has provided about $ 800 billion over the past 18 years. Nearly half of them consider Aiddata to be “hidden debt”. His researchers counted no fewer than 44 countries that owe China the equivalent of at least 10 percent of their gross domestic product.
Aiddata concludes that the debt from China’s credit offensive is “significantly larger” than rating agencies and other debt monitoring agencies had previously assumed. Zambia’s heavily indebted new government has just admitted that it owes China almost twice as much as previously reported: $ 6.6 billion instead of $ 3.4 billion.
Silk Road projects in Africa are changing – Less credit
The deputy head of China’s International Development Agency, Zhou Liujiun, recently dismissed allegations that China allowed African countries to fall into a debt trap. Zhou sees historical economic weaknesses, protectionism in Africa and currency problems as the main causes of the debt problems.
It is not as if China is turning on the security of its loans, such as airports or ports, without consideration. A study published last year by the China Africa Research Initiative at Johns Hopkins University even came to the conclusion that China has canceled Africa’s debt of about $ 3.4 billion over the past 20 years – and at least until 2019 collected no collateral.
But China provides most loans to Africa, for example to the many infrastructure projects, on commercial terms. The US think tank Brookings therefore believes that China will participate in debt relief as part of the G20 initiative, but that a unilateral debt forgiveness is unlikely because China wants to keep its corporate loans as a pressure.
In response to the serious problems, the pace of lending to the Chinese Silk Road mega-infrastructure project has dropped significantly over the last two years. China’s two largest lenders – China Development Bank and Export-Import Bank – have also been instructed by Beijing to self-finance several projects in China.
This in turn limits their ability to pump the promised $ 1 trillion into the Silk Road. “I think the whole project has changed a lot recently,” said Chen Long, a partner at Plenum in Beijing. “We have much less capital outflow. And because their experiences have not only been good, many African countries no longer want to raise Chinese capital at present.”
More: Despite criticism of the Silk Road: EU pushes for infrastructure partnership with China