Thursday, January 28, 2016

Chinese Neo-Colonialism

China’s increasing role has created unease in America and Europe. The US and EU obviously fears losing business: African trade with China surpassed that with America in 2009. China has participated in 16 U.N. peacekeeping missions in Africa and is planning to create its first military base in Djibouti. African countries also have discovered that Beijing desires what the U.S. demanded in the past: political loyalty, resource control, investment return. Beijing also often demands concessions for land, minerals or other commodities in return. Moreover, it often requires use of Chinese firms, even bringing laborers from China. This limits the economic benefit to Africa and is seen as a new version of neocolonialism. The “Ugly Chinese” looks much like the “Ugly American” of days gone by. Explained a recent Rand Corp. report: “Labor unions, civil society groups and other segments of African society criticize Chinese enterprises for their poor labor conditions, unsustainable environmental practices and job displacement.” The Rand report says “African perceptions of China include a mix of approval, apathy and contempt.”

President Xi Jinping recently promised African officials $60 billion in new investment. Most of the $60 billion will be concessional loans. Even cheap loans may become a significant burden to repay. Observed The Times: “Infrastructure projects in Nigeria have been fueled by the same manic lending that has also created mountains of debt for China’s economy at home.” Inevitable defaults will cost both Africa and China.

Moreover, Africa long has been awash in “aid” from multilateral development banks, but much of that has been stolen or wasted. Beijing’s experience so far is no different. For instance, more than $1 billion essentially vanished, noted the Economist magazine, after being invested in a palm oil plantation in a region where “there were no roads, the river was barely navigable and villagers were hostile.” Because of the lack of conditionality, observed Brad Parks of the research lab AidData, “African officials know that they have more leeway with Beijing’s money, and they use it.”

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