BEIJING WENT AGOG LAST WEEK, as the Chinese Communist Party (CCP), the founding and sole governing political party of the modern day People’s Republic of China (PRC), marked its hundredth year of existence on Thursday, July 1. At the Beijing’s Tiananmen Square, with a heavily packed but carefully vetted crowd estimated at more than 70,000 people in attendance according to state media, the celebration became an occasion to tout the success of the CCP, the greatness of China and some warnings to those who don’t buy into the ideologies of the ‘hammer and sickle’ party, the insignia of which was conspicuously displayed at the centre of the Tiananmen Square over and across the long red carpet lane dividing the crowd into two parts. At that event, CCP General Secretary and China’s President, Xi Jinping, declared the Communist Party as China’s emancipator. The celebration was a public relations success in some ways as China in recent history has been known to go for big events.
Although China would like its stories to be told in the superlative, it is often exaggerated. And quite often, many of the dark stories about China tend to be suppressed, often with brutal force. China’s home policies and foreign engagements are at variance. Despite China’s increasing outward looks and global engagements, the country’s official policies and practices remain opaque at home, while the government demands transparency in its relations with other nations and stakeholders from outside. The governance style of the CCP continues to be authoritarian at home while it demands freedom outside. Its trade and investment policies place restrictions on stakeholders at home, but justify free trade outside. The government restricts speech at home, but advocates freedom of self-expression outside China on international forum.
Official statistics of Chinese government rests on stilts and props, with a lot of cooked up data to bolster their intended official narratives. It is not surprising therefore that many countries in the West, and especially the global north, don’t take China’s many claims on the face value. Within China, there remains a wide disparity in the standard of living. Wide gaps of development still remain between the rural areas and urban centres. The rural countryside still remains far backward compared with the emerging urban sanctuaries. Although China has truly grown in economy and technological advancement, much of its claims still rest on props and stilts as the CCP seems to believe that you have to “fake it before you take it.” Accordingly, the growth figures from China, considered the world’s second-largest economy, have been viewed by some experts and government officials with a healthy dose of scepticism for a long while. In January 2017, longstanding doubts about the accuracy of China’s economic data got a big piece of supporting evidence. As reported then by the CNN, the governor of an entire province admitted that local officials cooked the books for years.
In some cases, officials inflated government income by more than 100 per cent, according to Xinhua, China’s official state news agency. Revenue for one Liaoning county was reported to be 2.4 billion yuan ($350 million) in 2013, but an audit office later corrected it to 1.1 billion yuan ($160 million). Financial Times (FT) reported in a December 2016 publication that China’s top statistician has acknowledged the country’s problems with falsification of economic data, pledging severe punishment for perpetrators in a nod to widespread suspicion that official numbers often fail to reflect true economic conditions. The FT quoted Ning Jizhe, director of the National Bureau of Statistics (NBS), from a piece he wrote for Communist party mouthpiece the People’s Daily, thus: “Currently, some local statistics are falsified, and fraud and deception happen from time to time, in violation of statistics laws and regulations.” But that seemed more of a face-saving statement than admission of a rare misconduct as other evidences provide reasons to believe that this is their official approach and practice rather than mistakes or sporadic events.
Foreign economists and investors have long expressed doubts about China’s economic data, FT posited, adding that most prominent are the concerns about gross domestic product figures, compared with other countries. The FT noted that China’s inflation-adjusted GDP growth rates are remarkably stable from quarter to quarter, even as nominal figures show considerable volatility but observed that the NBS has denied charges that it manipulates inflation data to massage headline growth figures. Suspicions of data falsification have reportedly extended beyond economic statistics. In reference to a recent edition of the journal China Quarterly, Shi Yaojiang of Shaanxi Normal University was quoted as arguing that population statistics appearing to show 30 million to 60 million “missing girls” — presumed to be the result of the one-child policy, selective abortions and the traditional preference for male offspring — actually stem from under-reporting of births by local officials.
China, now home to more than 1.39 billion people, is going through a demographic crisis arising from its one-child policy, the implementation of which began in 1979 and ended in 2015. If that policy had been a success, it would not have been discontinued. The goal of China’s one-child policy was to make sure that population growth did not outpace economic development. It was also meant to ease environmental and natural resource challenges and imbalances caused by a rapidly expanding population. But it came with its own peculiar unintended consequences, one of which is now a gender ratio imbalance. Under this circumstance, there has been a massive scale of selective abortions of girl child in pregnancy over the period, thus tilting the population balance in favour of the male child. This has gone so bad to the extent that, as those children born during the implementation of this Draconian policy entered adulthood and marriage age, many men have had to resort to going out into neighbouring countries in search of wives. The one-child policy seems to have also come with the stark reality of a fast shrinking population of the youth, with a grim prospect of old-age pension uncertainty as the young folks now seem discouraged to take childbearing seriously, despite a relaxation of the child-bearing rule now to allow three children per couple as announced in May 31, and as the elderly are forced to work many more years under an extended retirement age.
A new report on the problem of false Chinese economic data, published in November 2020, by the New York Federal Reserve, stated that China has a long history of opaqueness when it comes to reporting economic statistics, adding that, unfortunately, opaqueness in Chinese GDP growth rates is just the tip of an iceberg of secrecy. The report details how China’s reported data is too smooth over time compared to authentic statistics, and debunks it further by comparing it with other sources of information, such as satellite images of night time lights, which reveal wider fluctuations in economic activity than the official Chinese statistics. Many sources have affirmed that the statistics China provides cannot be trusted, and their inaccuracies have wide implications for global markets in commodities, international investments, and for companies doing business with China. As China becomes more integrated with global markets, the risk of surprise shocks or unforeseen damage to financial markets and to connected economies around the world from the false official Chinese statistics looms large. Those countries doing business with China are therefore advised to be on their watch.
China’s $1 trillion worth Belt and Road Initiative (BRI) is aimed at re-creating and expanding the famed Silk Road trade routes that connected China to the world through infrastructure and development projects. By some estimates, it has been considered as one of the largest infrastructure and investment projects in history, covering more than 68 countries, including 65 per cent of the world’s population and 40 per cent of the global gross domestic product (GDP) as of 2017. But this initiative has met with suspicions of a possible expansionist and economic colonialist agenda as some countries now prefer to prioritize sovereign interests over their need for foreign investments. Decisions by some countries to cut down their Belt and Road investments have been driven by fears of excessive debt. In addition to concerns over high project costs, countries including Pakistan, Myanmar and Malaysia have either cancelled or backed away from previously negotiated BRI commitments in recent times.
The Hambantota Port experience in Sri Lanka wherein it was forced to hand over a strategic port to Beijing in 2017 as it defaulted on its debt to Chinese companies was discouraging enough. As at August 2019, some countries in Africa have rejected the BRI pacts. Sierra Leone’s $300 million Mamamah International Airport and Tanzania’s Bagamoyo Port project, both BRI Chinese-funded, have been respectively cancelled and indefinitely suspended on cost and sovereignty concerns. China wants “us to give them a guarantee of 33 years and a lease of 99 years,” Tanzanian President John Magufuli told a group of investors. The World Bank also expressed concerns about the cost and economic viability of the Sierra Leone airport project. In June 2019, former Secretary of State Mike Pompeo, reportedly said that “Beijing’s deals come not with strings attached, but with shackles.”
China’s signature Forum on China-Africa Cooperation (FOCAC), touted as a mechanism for Chinese foreign policy toward Africa, has been used to bring together 53 African countries that have established diplomatic relations with China. In 2018, all other countries except perhaps Eswatini, attended the FOCAC meeting in Beijing. In September 2021, when the Forum on China-Africa Cooperation (FOCAC) convenes, it is expected to come up with new promises for the needy African countries in a relationship that is largely transactional. Africa therefore needs to have a rethink in its dependence on China for loans even though it is for developmental projects. In particular, this is because the debt financing terms between the African governments and the Chinese government have been considered as particularly egregious. In recent times, African countries with the largest Chinese debt are Angola ($25 billion), Ethiopia ($13.5 billion), Zambia ($7.4 billion), the Republic of Congo ($7.3 billion) and Sudan (6.4 billion). As of March 2021, Nigeria’s loan exposure to China stood at $3.4 billion.
China is easily the biggest bilateral lender to Africa this century. Observing the peculiar nature of China’s loans to beneficiary countries its hesitancy on debt relief and the method of ensuring repayment irrespective of any circumstantial constraint on the part of the borrowers, The Financial Times (FT), in October 2020, wrote that “as Zambia heads for Africa’s first sovereign default in a decade and pressure mounts on other debt-burdened countries during the coronavirus pandemic, the crisis has revealed the fragmented nature of Chinese lending as well as Beijing’s reluctance to fully align with global debt relief plans.” It elaborated further that “Chinese lenders have lent money to almost every country on the continent and eight have borrowed more than $5bn apiece this century. But Beijing’s involvement in a debt service suspension initiative from the G20 group of the world’s largest economies has been slow.” Quoting David Malpass, the World Bank President, the FT added that: “Some of the biggest creditors from China are still not participating and that creates a major drain on the poorest countries . . . if you look at the [Chinese] contracts, in many cases they have high interest rates and very little transparency.” African debt to China has been described as a major drain on the poorest countries’
As China blows its trumpet, Africa needs to decode the message very well and not dance to its tunes without clear understanding of the undertone. African leaders are advised to be wary of China’s expansionist plans and the undesirable prospects of becoming China’s economic and political appendages in the future. The CCP’s celebration calls for serious introspection for Africans.