Thursday, March 30, 2023
Money TalksChinese growing Influence: still debatable

Chinese growing Influence: still debatable

The diplomatic community, economists, and many others were all distracted last Tuesday by a major event held at the Inter Luxury Hotel, one of the preferred locations for many organizing events. Distinguished academics from a wide range of countries such as Ethiopia, Mozambique, Norway, and Tanzania, as well as China, were in attendance at this event, which was organized by the Forum for Social Studies (FSS). All gathered to debate how China’s development aid affects Africa.

No wonder why Chinese influence became an agenda, given it has been a source of debate for over half a decade, as Chinese lenders contribute for 12 percent of Africa’s external debt, which has more than fivefold grown to USD 696 billion between 2000 and 2020. Given the continent’s infrastructure vacuum, no financing would be undermined, but what bothers the seminar attendees at Inter Luxury is how unregulated the Chinese expanding influence has grown and the risk it poses.

During the FSS seminar, Yu Zheng, professor of International Relations at Fudan University, presented his research on China-Africa relations. He began his presentation by providing historical background. “Some Chinese investment projects have resurrected, expanded, or enhanced previous assistance initiatives,” Zheng added, citing railway projects undertaken by nations such as France in the early 20th century but restored by China in the last decade. The Ethio-Djibouti Railway, for example, is being constructed by the Chinese in the same contemporary style that the French did 100 years ago.

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The role that China plays in Africa defies both the traditional notions that are often held and the catchy headlines that are frequently cited. While China has been a reliable diplomatic partner for decades, the country is just recently beginning to make investments on the African continent. Resources are just one aspect of China’s interest in the continent; the country also has a vested interest in commerce, security, diplomacy, and soft power. Although China provides substantial humanitarian assistance, its aid procedures are frequently misrepresented and misunderstood in the media, according to its diplomats.

African governments want China to give political recognition and legitimacy, as well as to assist to their economic growth via aid, investment, infrastructure development, and commerce. Many African leaders expect that China will connect with them in ways that the United States and other Western countries do not, such as participating economically without lecturing about good governance or investing in high-risk projects or distant locations that are unattractive to Western governments and businesses.

Elling N. Tjnneland, a political scientist with over three decades of expertise, was also present at the FSS seminar. Even while the political scientist acknowledges that China is making an impact on the continent, he believes that a lack of transparency is jeopardizing the success of the Asian giant’s large-scale development projects in Africa. “Projects may not proceed exactly as planned. So there should be a clear strategy for how to go,” Tjnneland said, adding that this has exposed Africa to a debt burden that it cannot carry.

The detail on the loans that China has granted to Africa is as difficult to get as drawing blood from a stone. There is no way to know the terms and conditions of loans granted by Chinese lenders, with the exception of what has been disclosed by the African nations. Despite the Chinese government’s assurances that they have no intention of trapping Africa in debt, many in the west expressed concern that this would have a devastating effect on Africans.

“We are figuring out how these countries can get out of a crushing debt that oppresses their people,” US Undersecretary of State for Economic Growth, Energy and the Environment Jose Fernandez said this week.

Ethiopian scholars are likewise worried. Gedion Jalata is one of such individuals. Gedion has studied China’s aid engagement in Ethiopia and comes to the conclusion that China is using aid as a market entry for its firms. He also accuses the leaders of the Asian nation of pouring billions of dollars in loans without examining the project’s relevance to the general populace. Gedion said that “the ramifications of the initiatives are left to the host nation.”

China funded the construction of over 13,000 km of roads and railway, as well as more than 80 large-scale power facilities, as well as over 130 medical facilities, 45 sports venues, and over 170 schools, according to the State Council Information Office of the People’s Republic of China, between 2000 and 2020.

Alemayehu Geda, professor of economics at the Addis Ababa University, says Chinese growing influence is not only limited to provision of external loans but also in investment arena. “Chinese growing influence presented an opportunity for manufacturing-led structural transformation and market for African products,” he said. Alemayehu, however, believes there are risks too.

“The involvement does little Africa to shift Africa away from overreliance on primary commodities trade and hence is likely to hamper structural reform in the continent. It leads to low-quality growth and has no long-term impact on poverty reduction and employment creation,” Alemayehu observed.

In light of the possible risk posed by taking out enormous loans from China, Alemayehu has some words of wisdom to share with African nations.

The African continent “has to strengthen their ability to negotiate and should have equal say as their Chinese counterparts,” he stressed.

For Chinese officials, concerns over China’s debt to Africa, on the other hand, are nothing more than a fabrication promoted by Western media.

During his visit to Ethiopia earlier this year, Foreign Minister Qin Gang refuted allegations by the west that China’s loans to African countries are creating “debt traps”.

Qin referred to the assertions as “narrative traps” and baseless accusations.

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