Wednesday, May 16, 2018

The New Imperialists

Chinese investment in Africa could be accelerating debt on the continent and creating economies which are “entirely dependent on China”, according to financial experts.
Around $86bn (£64bn) in loans were issued by China between 2000 and 2014 to finance over 3,000 infrastructure projects in Africa. Experts have warned that this level of investment may not be as rosy as it appears.
Zuneid Yousuf, from MBI Group, said:
“Infrastructure projects create jobs, provide an opportunity for skills development and the transfer of new technologies. However, these firms come under the guise of partnership, but this rhetoric, combined with genuine short-term benefits masks longer-term problems.”
One of the main issues around the Chinese approach is the dangerously high levels of debt that it brings, which could prove unsustainable for growing economies. There is also a risk that the continent becomes overly dependent on one country, which could allow it to hold an uncomfortably high level of influence...The reality in Africa is a model of globalisation that works only in China’s interests."
Zambia is an interesting case study of Africa-China relations. China is the largest foreign investor in the country, but it is often cited as an example of the limitations of Chinese investment. The top-down, large government loan model has led to tensions. One recent example is the problem of labour laws, and the news that Chinese investors in Zambia have been preventing labour representatives from being present at construction sites.

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