China and Africa Love-fest: Chicken Little or Nirvana?

November 01, 2006

The flurry of news about China and Africa is reaching a peak as the November 3-5 Beijing Summit gets underway. There is little doubt that effusive pledges of solidarity and good old cash will be forthcoming in abundance. And it is also patently clear that China has every intention of continuing to ramp up its activities in Africa; look no further than China's official "Africa Policy" released last January.The real question is, to what effect? If you'll forgive a little editorial over-characterization, there are two unfounded hysterias out there. One view (accepted most enthusiastically in places like Harare and Khartoum) is that China will finally free African governments from under the yoke of the IMF, World Bank, and other donors. This seems not only rather silly, but also wishful thinking. China may be getting rich, but it is not about to replace the West as the primary source of capital. Also, as Zambian nationalists have (distastefully) argued, all foreigners bring their own baggage and worldviews; China is no different.The other view is that China is wrecking all the cooperation that the donors have worked so hard to erect: environmental and governance standards, human rights, transparency initiatives like EITI, etc. China certainly complicates these matters, but its presence might also force some rethinking about what is reasonable, what are the real priority conditions, and where perhaps the Chinese could be brought on-board. Given the massive donor burden often put on recipient countries, a little triage might not be a bad thing.The one area where China might really be walking into a firestorm is on debt. African governments and anti-debt activists have worked for years to finally get the debt dropped for 20 countries through HIPC and the MDRI. At least part of the argument for the 100% write-off was that these countries were too poor to bear any debt load. Now, just as the West is writing off all those debts, China is coming into Ghana, Mozambique, and other places and lending again (and at higher interest rates than the old loans). If this new lending is used productively, it is not such a big economic problem. But that is a huge "if". More importantly than the economics, however, is the politics. If taxpayers are being asked to stump up to pay off those loans (either to their own treasuries or to the World Bank), then they are right to ask why China should be lending right on the back of debt relief? Maybe that old debt wasn't such a problem after all?


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