By Bongo Adi
“Chinko” is the street name disparagingly labelled on cheap and substandard Chinese products but has equally been extended to Chinese immigrants in Ghana and Nigeria. It was first brought to the limelight in the 2014 book, Chinese Migrants and Africa’s Development: New Imperialists or Agents of Change? by Giles Mohan and his coauthors. Chopsticks imperialism is a phrase recently coined by Dr George Ayittey, the Ghanaian who won the HL Mencken Award in 2003 for his book, Africa Betrayed. It alludes to the chopsticks dexterity with which China snaps up the raw materials of Africa in exchange for shoddy infrastructure deals from the Northernmost to the Southernmost fringes of the continent. Chinko diplomacy describes Africa-Chinese relationship fostered by the non-interference attitude that seems to support, aide and feed off official and institutional corruption in Africa.
Chinese interest in Africa has received very negative media coverage in the recent past – from Africa to America. In 2018, a viral online video clip captured a Chinese national by the name of Liu Jiaqi, racially abusing a Kenyan employee and rest Kenyans, including President Uhuru Kenyatta as “poor, smelly, black monkeys.” This stirred a massive outrage and provoked calls for the immediate arrest and prosecution of the miscreant whose attitude many read as largely typifying Chinese sentiments about Africans in general.
In the beginning of August 2018, about 16 US Senators petitioned the US secretaries of the Treasury and the State over what they tagged predatory Chinese infrastructure financing or what some have tagged “Chinese debt-trap diplomacy” associated with the latter’s Belt and Road Initiative (BRI). It was alleged that of the 63 countries currently hosting BRI funded projects, 23 are at the risk of debt distress and for 8 of these countries, future BRI-related financing jeopardises sovereign debt sustainability.
Zambia is the latest to hand over key strategic assets to China for defaulting on Chinese loans. Zambia’s power utility company, ZESCO, is on the brink of takeover by Chinese over loan default. The country’s broadcasting network – ZNBC – had already been willed to China over debts. Kenneth Kaunda International Airport has also been pencilled down as another default booty that the Chinese are about to take should Zambia fail to timely comply with its huge debts to China. Some pundits reason that Zambia may become the first Chinese African colony.
In Kenya, it is being alleged that the USD 16 billion Lamu port constructed by Chinese engineers on Chinese loans risks default in the next 3 years which will trigger the forfeiture of this critical asset to China.
In the Republic of Djibouti, a country of less than a million people but strategically located in the Horn of Africa and near to some of the world’s busiest shipping lanes, controlling access to the Red Sea and Indian Ocean, China has provided more than USD 1.4 billion in infrastructure project finance, which amounts to about 75 percent of the country’s GDP. The country’s external debt, most of it to China, currently stands at 85 percent of GDP which exposes the country’s vulnerability to a take-over by China of Doraleh Container Terminal which is a major strategic asset as a key refuelling and transshipment centre and a principal maritime port for imports and exports to neighbouring Ethiopia. Djibouti is among the 8 countries the Centre for Global Development recently marked as facing debt distress arising from Chinese BRI-related investments. To consolidate its presence in this key strategic port city, China established a military base in Djibouti thus putting to rest any doubts regarding its geo strategic intent.
Sri-Lanka, like Zambia, have had a taste of chopsticks imperialism when its Hambantota Port, constructed with borrowed Chinese money and by Chinese engineers, fell into China hands last year on a 99-year lease because the Sri-Lankan government found itself unable to repay over USD 1 billion of the Chinese debt used to construct the asset.
Pakistan is also caught in this web of Chinese chopstick imperialism which, in the words of US Senators, “weaponises” capital. So are other countries located in the major “corridors” of the Chinese BRI such as Laos, Kyrgyzstan, Maldives, Montenegro, Tajikistan, and Mongolia. These are among the 8 countries that the Centre for Global Development asserted last year are at the brink of debt distress as a result of bartering infrastructural finance for strategic natural assets with China. The US is not alone in reading a strategic intent into this new wave of Chinese weaponisation of capital. We had argued in our last episode that the earlier, global Chinese mercantilism of the first millennium before Europe took the sail off its ship, was largely non militarized — the reason why some historians think it eventually succumbed to the superiorly weaponised imperialism of the West. Now that it seems China has learned its lessons, its Belt and Road Initiative consisting of a number of “economic corridors” is very instructive.
The concept of economic corridor is not new in economic geography. It is an integrated network of infrastructure within a geographical area designed to stimulate economic development. It leverages the advantages conferred by linkages in what economic geographers call agglomeration economies. But as the Economist recently put it, “there has never been a neat division between the power that allows a country to open and maintain trade routes and the clout that builds empires.” Actually, the famous “Silk Road” is a term coined by a German geographer, Ferdinand von Richthofen, in 1877 to describe a stretch of ancient trading routes which networked commerce, diplomacy and hard power. The success of international economic corridors, crisscrossing various economic hub cities scattered in different countries, exceedingly depend on the hard power that protects and safeguards it. Chinese new vision of economic corridors are therefore not without a geo-strategic intent to open up and defend access routes to important gateways critical for movement of resources to the China mainland and the flow of cheap items out of China.
To consolidate this new vision China has weaponised its capital investment in third world countries, including Africa. Its use of tied aid, though not new or unique, has threatened the economic sovereignty of the continent. Both IMF and the United States are concerned that China’s weaponised financing strategy — debt-trap diplomacy — is first to encourage indebtedness, and then to take over strategic national assets when debtors default on repayments. The United States Senate notes that “Chinese behaviour as a creditor has not been subject to the disciplines and standards that other major sovereign and multilateral creditors have adopted collectively, and in the process, debt levels and dependence on China are rising. As financially strapped countries negotiate with China to free themselves of mounting debt, Beijing has extracted onerous concessions, including equity in strategically important assets. Further, Beijing has repeatedly used economic pressure to affect foreign policy decisions.”
It was George Yu, Professor Emeritus of Political Science at University of Illinois, Urbana Champagne, who noted in 1968 that “studying China in Africa is much like pursuing a dragon in the bush. The dragon is imposing but the bush is dense.” Starting with the Forum on China-Africa Cooperation launched in 2000, not less than a million Chinese have migrated to Africa by the end of the decade. There arose a flurry of Chinese economic activities in Africa, the likes of which the world had never witnessed such that China-Africa trade rose by a factor of 10, to USD 115 billion in less than a decade. Direct investment from China hit the skies to more than USD 9 billion from less than USD 0.5 billion in 2003 (although the United States remains the continent’s biggest investor overall).
According to Matthew Benjamin, an editorial consultant to the World Bank and IMF, China is now the largest trading partner for the continent (including North Africa). In 2004, Chinese trade with Africa hit $222 billion, making it the region’s biggest trading partner for a sixth consecutive year.
The Husab uranium mine in Namibia, a Chinese military base in Djibouti, an $8 billion high-speed railway through Nigeria and a $4 billion, 466-mile transnational railway from Djibouti to Addis Ababa in Ethiopia are just a few of the Chinese projects already built or underway across the continent, including the USD 200 million African Union headquarters in Addis Ababa, underwritten and constructed by China. Chinese mining investments have increased 25-fold in just 10 years, from stakes in a few mines to more than 120 in 2015.
Chinese investment to all of Africa since 2005 includes 293 projects for a total of USD 66.4 billion, creating 130,750 jobs, according to estimates by Ernst & Young Global. In 2016, Chinese investment totalled USD 38.4 billion and created three times the number of jobs as the USD 3.6 billion in investment that came from the United States, Ernst & Young estimates. In December 2015, Chinese President Xi Jinping pledged another USD 60 billion to the continent over three years in loans, export credits and grants. And Chinese demand for Africa’s raw materials has driven much of the growth on the continent over the last 15 years.
Adi, PhD , is of the Economics Faculty, Lagos Business School, Pan-Atlantic University (formerly Pan-African University)
Equities December 24, 2019