Cape Town Black Johnson Beach is an African idyll straight 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. Immediately behind the palm-lined beach, a picturesque chain of hills rises up. But the idyll is threatened: soon a 55 million dollar fishing port financed by China is to be built here.
The port is to be part of the “New Silk Road”, through which China’s head of state Xi Jinping wants to connect Southeast and Central Asia with Europe and parts of Africa. However, the project is highly controversial for environmental reasons. Many locals fear that China may want to incorporate Sierra Leone’s rich resources without paying much attention to tourism. The exploitation of the fishing grounds off the Sierra Leone coast by China has already come under strong criticism.
The mood with a view to China has turned in Sierra Leone. In 2015, 55 percent of people there described the Chinese influence as positive, last year it was just 40 percent. And that’s despite the fact that China has been trying to improve the relationship by supplying vaccines and other drugs since the corona pandemic outbreak.
As in Sierra Leone, relations with China have cooled in many African countries. After the African governments have expressly welcomed the barter trade of raw materials for infrastructure that has been carried out up to now, the resulting close relationships have meanwhile been significantly clouded. There are political and financial reasons for this: the more extensive Chinese engagement in Africa became, the more difficult it became for Beijing to maintain its principle of non-interference in the internal affairs of its trading partner, for example in chaotic South Sudan or dictatorial Zimbabwe.
Top jobs of the day
Find the best jobs now and
be notified by email.
Racist displacement of African students in the corona pandemic
The actions of Chinese local authorities in Guangzhou against the African student diaspora based there, which were blamed for a second wave of corona infections, marked a particularly sharp break in relations last year.
A long smoldering racism broke out, culminating in the displacement of dozen of Africans from their homes – and causing outrage in Africa. About a dozen governments on the continent called in the Chinese ambassadors – a step that has never been taken before.
Concerns about the Chinese government are also increasing in other African countries.
(Photo: AFP / Getty Images)
The expulsion of the Africans was also significant because China had previously been the focus of African students. Victoria Breeze and Nathan Moore of Michigan State University estimate that before the pandemic, over 80,000 Africans studied in China – more than in the traditional study countries America or Great Britain.
Another reason for the disappointment on the African side: Many countries have found that far less know-how is transferred in Chinese infrastructure projects than in other international projects, because predominantly Chinese workers are used.
China has been criticized as a believer
Another point of friction has turned out to be China’s reluctance to postpone debt for Africa. China is now the largest national creditor on the now heavily indebted continent. So far, the reaction from Beijing to calls for help from individual African states has been rather restrained.
In contrast to the West, which in 2005 reduced the foreign liabilities of the African recipient countries by one-sided debt write-off from 100 to 40 percent of their gross domestic product (GDP), China is far less accommodating. This is particularly noticeable in times of economic problems in the wake of the Covid crisis, in which countries like Kenya or Zambia have problems repaying their loans.
Just last year, the G20 countries, including China, decided to suspend debt servicing for 73 countries in order to restructure their liabilities. However, it appears that many Chinese loan commitments are designed in such a way that they do not fall under 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 around 800 billion dollars over the past 18 years. Almost half of these consider Aiddata to be “hidden debts”. His researchers counted no fewer than 44 countries that owe China the equivalent of at least ten percent of their gross domestic product.
From this, Aiddata concludes that the debt stemming from the Chinese credit offensive is “considerably larger” than rating agencies and other bodies used to monitor debt had previously suspected. Zambia’s heavily indebted new government has just admitted that it has almost twice as much debt to China as previously reported: $ 6.6 billion instead of $ 3.4 billion.
Silk Road projects in Africa are changing – fewer loans
The vice chief of China’s International Development Agency, Zhou Liujiun, recently denied allegations that China is running African countries into debt. Zhou sees historical economic weaknesses, protectionism in Africa and currency problems as the main reasons for the debt problems.
It is not that China is knocking on its loans like airports or ports regardless of the collateral. A study by the China Africa Research Initiative at Johns Hopkins University published last year even came to the conclusion that China Africa has canceled around 3.4 billion dollars in debt over the past 20 years – and withdrew no collateral at least until 2019.
But China gives most of the loans to Africa, for example for the many infrastructure projects, on commercial terms. The US think tank Brookings therefore believes that China will participate in debt relief under the G20 initiative, but that a unilateral debt waiver is unlikely because China wants to keep its business loans as leverage.
In response to the tricky situation, the pace of lending for the Chinese mega-infrastructure project on the “Silk Road” has slowed significantly in the past two years. China’s two largest lenders – the China Development Bank and the Export-Import Bank – have also been instructed by Beijing to finance more projects in China themselves.
In return, this limits their ability to pump the promised one trillion dollars into the Silk Road. “I think the whole project has changed a lot recently,” says Chen Long, a partner at Plenum in Beijing. “We have a lot less capital outflow. And because they have not only had good experiences, many African countries do not want to raise any more Chinese capital for the time being. “
More: Despite criticism of the Silk Road: EU pushes infrastructure partnership with China