China in Africa, Minus the Hype

danmanjones's picture

Why Is China Investing Billions in Africa? | NowThis World

A simple & balanced overview of China's loans & projects in Africa.

 

My 2c...70% of China's loans in Africa have gone energy & transportation. These are what Africa needs, as well as industry, to build their economy. There's a lot of hype around the idea of 'debt trap' loans by China but I've not been able to find any real evidence of this. It seems to be mostly a US-led hypetrain.

 

 

Bonus video

 

 

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sato's picture

yeah but taking ownership to cover defaults is exactly what china wants to do and has been doing for years. their whole belt and road thing isn't some conspiracy or anti-china theory, the party has straight out said that's what they're trying to do.

 

china has already taken control of a port in sri lanka after the country defaulted on a loan to china, and it looks like the same thing is going to happen with an airport china built there that nobody is using. tajikstan gave china 1,000 square km of land to repay their debt, djibouti has offered to give china control of a port in their country in exchange for loan forgiveness, and loas, the maldives, malaysia, and others are also heavily in debt to china already and will have to negotiate soon. is there any way it's just coincidence that every single one of those countries is on the advertised route of the "belt and road"?

 

regarding africa, the loans aren't zero interest, and the projects aren't paying themselves off over time. chinese companies got all the money to build the projects, and the builders were all 100% chinese labor, so there's absolutely zero new supply or demand to use the new infrastructure. angola for example currently owes $25 billion to china and are paying it off with oil. sure a lot of the loans are for beneficial stuff like power plants and upgrades to rail and road that's already used, but even there it's dodgy because no locals are ever used in the construction so there's no boost in local spending with any new salaries. china uses their own labor, and builds small cities for those chinese workers to live in, so there are chinese cities springing up all over africa, like literal gated communities, but town or city sized.

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danmanjones's picture

You seem to think the BRI is inherently bad. Lay off the Falun Gong propaganda like China Uncensored. It's a peaceful way to do more business, how is this a bad thing?

 
Re: Sri Lanka... The new president there is aligned with India & after taking power he scrapped the projects. The Chinese firm tried hard to get the old guy to be re-elected, they even printed teeshirts (not to mention millions in bribes). I don't see how anyone could see this as a "trap" when the firm was left owning the world's most unused airport that they built on their own dime. There are gonna be failures along the way, this is one of them.

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paddle21's picture

https://www.nytimes.com/2018/12/19/world/asia/pakistan-china-belt-road-military.html?action=click&module=Top%20Stories&pgtype=Homepage

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danmanjones's picture

the loans aren't zero interest

Xi recently announced that China will forgive the zero-interest intergovernmental loans to least-developed countries (LDCs) effective from the end of 2018. [source]

 

the projects aren't paying themselves off over time

People pay to ride trains & use electricity. It's not difficult to forecast a rail line's income, same goes for hydro dams.

 

it's dodgy because no locals are ever used in the construction so there's no boost in local spending with any new salaries

But the people of the countries benefit from having trains to ride & electricity to use. These are building blocks of industry & commerce - the things that make way for economic growth, allowing the countries to pay back the debt more easily. 

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