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Economics

Čínský dluhový stisk Afriky

Jan 15, 2021 Paola Subacchi

LONDÝN – Pandemie staví vysoce zadlužené chudé země před osudové dilema. Jak si loni v dubnu posteskl etiopský premiér Abiy Ahmed, laureát Nobelovy ceny míru, lídři jsou nuceni si vybrat, jestli budou „dál splácet dluh, anebo zdroje přesměrují do záchrany životů a živobytí“. Když zvolí to druhé, často se budou muset zpovídat Číně – největšímu bilaterálnímu věřiteli Afriky.

Aby Etiopie mohla reagovat na covid-19, bylo podle Ahmeda nezbytné moratorium na splátky dluhu. Takové moratorium mělo Etiopii – jedné z nejchudších zemí světa – ušetřit 1,7 miliardy dolarů od dubna 2020 do konce roku a 3,5 miliardy dolarů v případě prodloužení do konce roku 2022. Účinná reakce na covid-19, poznamenal tehdy, by stála tři miliardy dolarů.

Angolu dluhové moratorium skutečně zachránilo, alespoň prozatím. Společně s Čadem, Konžskou republikou, Mauritánií a Súdánem byla Angola pod silným finančním tlakem, v důsledku zhroucení komoditních cen vyvolaného krizí covidu-19. V září však Angola dosáhla dohody se třemi svými významnými věřiteli, včetně Čínské rozvojové banky (CDB, jíž Angola dluží 14,5 miliardy dolarů) a Čínské exportní a importní banky (Exim banky, jíž dluží 5 miliard dolarů), že v průběhu příštích tří let získá 6,2 miliard dolarů v úlevách od dluhu.

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Jingyi Li Jul 12, 2022

China ‘not to blame’ for African debt crisis, it’s the West: study

High-interest loans from private Western lenders account for most of the burden on countries in Africa, Britain’s Debt Justice charity finds

Campaigners are calling on the G7 to stop using Chinese loans as ‘distraction’ while letting their own banks, asset managers and oil traders off the hook

https://www.scmp.com/news/china/diplomacy/article/3184962/china-not-blame-african-debt-crisis-its-west-study
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Gregg Connolly Jan 28, 2021

The difference between china lending money to countries and the imf and western banks is china builds them infrastructure, roads, ports, airports. the west just gave money to the despots who promise to build infrastructure but somehow never gets built. fact china has built more roads in africa in 20 years than the west did in 400 years. the infrastructure will in the long run work for that country and their committed partner, china
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Leto Atreides Jan 24, 2021

Chinese lenders are much more open to debt renegotiations than their western counterparts precisely because the lending is not purely commercial, but also political. Western commercial lenders are much more rigid in insisting indebted countries pay back their debt plus interest. Argentina provides a prime example.

Another point the author seems to miss is that, infrastructure projects give returns to the country's economy in ways that cannot be measured purely by their commercial success. If profitability is the criterion for investment in infrastructure projects, then no wonder there has been a dire shortage of infrastructure funding in developing countries, a void which China is filling. To make the claim that China is pursuing a policy of predatory lending, there needs to be more evidence of predatory consequences of China's lending. The common narrative regarding Sri Lanka's Hambatotan port as an example of China's debt trap (thanks to reports by mainstream media like NYT) has been disputed in the following article in The Diplomat https://thediplomat.com/2020/01/the-hambantota-port-deal-myths-and-realities/
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j. von Hettlingen Jan 18, 2021

According to Paola Subacchi, China is the largest single creditor nation, lending directly to developing countries since the 2008 financial crisis. “For the 50 most indebted recipients of such lending, the average stock of debt owed to China has increased from less than 1% of GDP in 2005 to more than 15% in 2017.” Beijing is also “Africa’s biggest bilateral lender, with some 70% of the affected payments - worth about $8 billion - being owed to China, which holds 62% of the continent’s official bilateral debt.”
Africa is grappling with rising debt levels, and its relationship with China is often seen as a significant part of the problem. Most of China's loans helped finance infrastructure projects such as roads, airports, railways and ports etc. But most projects carried out by Chinese companies are too expensive, and burden the host countries with enormous debts they can hardly repay. A severe lack of infrastructure, and the desperate need for modern transport links in many of the poorest countries, make China's offer of substantial loans for such projects often difficult to turn down.
Beijing is adamant that its economic relationships with African countries are mutually beneficial and rejects suggestions that it is using debt to expand global influence. Compared to institutions such as the IMF, World Bank and Paris Club (a group of 22 creditor nations not including China), loans from China are seen by some as much quicker, cheaper, and come with fewer strings attached. But such a loan “carries serious risks… Chinese lenders tend to set more onerous borrowing conditions – higher interest rates, shorter maturities – than multilateral development banks.”
Due to rising commodity prices and China’s growing demand for commodities, many African countries experienced a boom from the early 2000s, highlighting the impact of Chinese trade, investment, and financial flows on African economies. China emerged as the largest market, source, investor, builder, and donor for Africa. In one of its reports, the World Bank also acknowledged the massive development opportunity that Chinese infrastructure finance offered to African countries.
The author says, “most of China’s bilateral lending is carried out by so-called policy banks and state-owned commercial banks, which may be controlled by the Chinese state, but operate as legally independent entities, not as sovereign lenders. So, unlike the members of the Paris Club of major sovereign creditors, they often require collateral for development loans. About 60% of their total lending to developing countries is subject to collateral. When a country applies for debt relief, its Chinese creditors can claim the rights to assets held in escrow.”
After over a decade of unprecedented growth of Chinese finance, Africans are increasingly concerned over rising debt levels for projects that are “bound by draconian lending conditions, expensive to operate, and unlikely ever to produce decent returns.” Chinese external lending to African countries swelled but there was very little data on the actual loan amount and the terms on which such loans were extended. Data is hard to verify, because China is not a member of the Organisation for Economic Cooperation and Development, and they do not participate in the OECD's Creditor Reporting System.
The author says “China does not bear sole responsibility for this situation. It was the failure of other lenders to provide adequate funding – especially infrastructure investment – that drove so many low-income countries into Chinese creditors’ arms.” Often they “cannot afford to build the infrastructure they desperately need to support their growing populations. Moreover, they lack access to international capital markets and banks.”
Debt moratoria may offer poor countries temporary relief during the Covid-19 crisis. “But they will not solve these countries’ debt problems.” There is fear of “synchronised defaults,” once the moratoria end, “requiring the International Monetary Fund and other multilateral institutions to intervene.” The US under Biden “should lead the way in creating one that can manage the fallout from Chinese predatory lending,” given “broad bipartisan” consensus to hold Beijing accountable for “unfair trade” policies.
China's increasing involvement with Africa and its commitment to providing loans for large-scale projects, mean that any solution to Africa's debt problems must address its relationship both with Beijing and with private Chinese companies operating on the continent. It is in China’s interest to dispel allegations of providing unsustainable loans for uneconomical infrastructure projects in Africa to trap the countries in debt.
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Sing Koo Jan 17, 2021

Addiction to loans that these countries cannot afford is a economic disaster in the making. When these countries go into default, there will be limited options between lender (China) and the borrower. China is putting itself at risk of entering into dispute with these countries and will suffer diplomatically for years to come. Predatory loans are always bad businesses. Even if it is backed by assets as collaterals, economic ruins will not be of interest to anyone. Germany has sent China a bill for COVID-19 damages. It is unlikely China has the financial strength to indemnify damages that it brought upon to the world. Does this mean that every country should own a piece of China? I would think that is the only right thing to do. It is history repeating itself.
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Ted Heavy Jan 16, 2021

China should forfeit any money owed to them equal to the cost of damage by the poison they unleashed on the world. If you fail or refuse to notify cooperate and consult with the world in reference to a vector that begins in your nation you become liable.
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Leo Arouet Jan 16, 2021

It is the debt trap that China is driving. Sri Lanka has an empty, shell-like airport that has been financed with Chinese loans. And by not being able to repay those loans, China has taken possession of such assets.
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Jan 16, 2021

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- Jan 16, 2021
  
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  - Gregg Connolly Jan 17, 2021
    
    why do we have a right?
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- Jan 16, 2021
  
  This comment was removed by a moderator. Replies to this comment may also be deleted. Please note that we moderate comments to ensure the conversation remains topically relevant. We appreciate well-informed comments and welcome your criticism and insight. Please be civil and avoid name-calling and ad hominem remarks.
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