The growing split between China and the West over economic relations with Africa has taken a new turn, with G8 ministers warning that China could be setting up another debt crisis. The criticism came after Donald Kaberuka, president of the African Development Bank, told the FT that China is planning a package of trade and infrastructure loans to Africa over the next three years worth around $20bn. G8 ministers say this may undermine progress achieved through international debt-relief efforts and create a new, unsustainable debt.
Soft loans and grants from Europe, the US and Japan still exceed China’s, but they come with conditions and often “fail to materialise” if these are not met, says William Wallis in the FT. China’s loans, on the other hand, have no strings attached, and its willingness to lend money on demand, “where it suits its mercantile interests“, appeals to some credit-starved African governments, particularly those with poor records in economic management and human rights. And that‘s not all. There are concerns that some African countries may be locked into disadvantageous commodity deals with China, which will have a long-term, negative impact on their economies.
Africans too are now waking up to the negative consequences of China’s embrace, says Llewellyn King, a Zimbabwean, in The Providence Journal. The Chinese are stripping Africa of its natural resources and saturating the continent with labour, arms and cheap goods, wiping out Africa’s few viable industries and destroying jobs. China’s pledge not to “interfere” has attracted monsters such as Zimbabwe’s Robert Mugabe. Many farms appropriated from white owners in Zimbabwe have now been sold to the Chinese, who are developing crops for China rather than the Zimbabwean market. It is, in a sense, an “extraordinary triumph of the Chinese to annex a continent without a shot being fired”. The world’s poorest continent now has to bear a form of colonialism “possibly more ruthless” than anything it suffered at the hands of the Europeans in the 19th century.