Live Feed

Poaching rates for both African and Asian rhinos have been steadily falling for the past three years and are now at their lowest rates in almost a decade, according to the findings of a new report by the International Union for Conservation of Nature and the wildlife conservation NGO TRAFFIC.

In Africa, researchers found that poaching rates fell from a peak of 5.3% of the population in 2015 to just 2.3% last year, due in part to the impact of COVID lockdowns.

Although rhino horn is made of the same material as human fingernails, older generations in China and Vietnam still mistakenly believe that it's either an aphrodisiac or has miracle curative powers. A lack of demand among younger people in both countries may also have contributed to the decline in poaching.

SUGGESTED READING:

• International Union for Conservation of Nature: Rhino poaching and illegal trade decline but remain critical threats – new report
• Mail & Guardian: Rhino poaching and illegal horn trade declining in Africa and Asia by Sheree Bega

The Chinese embassy in Bangladesh organized an online gathering this week for representatives of the local Chinese business community on how to tighten security in their enterprises ahead of the upcoming 20th Party Congress in November.

Basically, the embassy wants to ensure there are no controversies or other problems that would draw attention to the Chinese community in Bangladesh in the run-up to this major political event in Beijing when President Xi Jinping will officially take up an unprecedented third presidential term. (CHINESE EMBASSY IN BANGLADESH -- in Chinese)

China is the world's fastest-growing market for natural gas and imported more last year than any other country -- accounting for 60% of global demand.

The bulk of China's imports in 2021 came from Australia (40%), with Malaysia, Qatar and the United States each accounting for 11% of the market.

But with the economy slowing, some analysts are forecasting a modest slowdown in Chinese gas demand this year. (MIDDLE EAST INSTITUTE)

The new U.S. climate law, officially known as the Inflation Reduction Act, has a number of provisions aimed at breaking China's hold on certain strategic resources like cobalt, widely seen as vital to the future of electric mobility.

Cobalt is a critical ingredient used to manufacture electric vehicle batteries. The problem is that 60-70% of the world's known reserves are in the Democratic Republic of the Congo, where Chinese mining companies have emerged as the dominant players in the market -- controlling much of the cobalt mining and refining sectors.

There are also problems with small, unregulated mines in the DRC using child labor to extract cobalt. This causes problems for international automakers who've committed themselves to sustainable supply chains.

So, getting away from cobalt is both a political and corporate priority. And it turns out that it's actually starting to happen thanks to the development of cobalt-free lithium phosphate (LFP) batteries.

Ironically, it's the Chinese themselves who are driving this next-generation EV battery development. EV giant BYD is an early pioneer of LFP batteries and battery major CATL's LFP batteries are now in Tesla's Model 3 and Model Y vehicles in China.

While cobalt-free EV batteries may sound appealing to many, it's probably going to take some time before all vehicles are powered with LFP batteries because of cobalt's ability to generate more power at a lower temperature.

SUGGESTED READING:

• Bloomberg: Electric Car Battery Bottlenecks Have a Way of Being Worked Out by Colin McKerracher
• Techcrunch: Why LFP batteries are poised to bring down entry-level EV prices by Jaclyn Trop

Chinese scholars and policy analysts have been poring over the recently released U.S. Strategy for Sub-Saharan Africa to gauge its implications for China and its engagement on the continent.

In contrast to the Trump administration's Prosper Africa initiative that openly framed its Africa policy as a way to confront Chinese influence, the Biden White House went out of its way to limit explicit mentions of China.

But in Beijing, researchers see the new strategy as an extension of Washington's broader geopolitical conflict with Beijing and, implicitly, Moscow.

A new analysis of the policy by Li Wentao, a researcher at the African Institute of the China Institute of Contemporary International Relations, highlights the Chinese view that, contrary to U.S. assurances that the new policy is focused on promoting shared American and African interests, the strategy is part of a much larger geopolitical agenda.

Li identified four trends exposed by the new U.S. strategy:

• LINK AFRICA WITH U.S. GLOBAL "GEOSTRATEGY": The U.S. seeks to incorporate Africa into its global strategic framework as evidenced by the fact that the new strategy aims to link African countries with the U.S. Indo-Pacific strategy. While Li did not specifically mention that the Indo-Pacific reference is intended to confront or (in Beijing's parlance) "contain" China, that was clearly his implied meaning.

• EXTEND THE DEMOCRACY VS. AUTOCRACY DIVIDE TO AFRICA: The new strategy's strong emphasis on democracy and governance rankled Liu who echoed the Chinese government's objections that this is part of the White House's ongoing effort to divide the world into democracies and autocracies. He linked the democracy theme to the Color Revolutions in Europe and alluded to U.S. hypocrisy on the issue given its own "democratic regression."

• DENUNCIATION OF WASHINGTON'S "SMALL CIRCLES": As a corollary to the democracy/autocracy divide that Beijing rejects, Li also references how the U.S. is trying to create "small circles" of states and multilateral institutions intended to isolate certain states because of their governance model. Li bristled at the proposition that these "small circles" would be used to promote democracy, security, and good governance in Africa.

• IT'S REALLY ALL ABOUT RUSSIA AND CHINA: Even though the strategy only rarely names China, Li appears convinced that the strategy represents a continuation of Trump's more confrontational approach towards China and Russia. "The new strategy regards China and Russia as the biggest threats and is full of slander," he said.

Read the full analysis on the Cfisnet website -- in Chinese.

China Molybdenum (aka CMOC/China Moly), the Chinese minerals giant running one of the Democratic Republic of Congo’s largest cobalt mines, has reported record net profits of about $606 million for the first six months of the year. Profits are up 72% year-on-year, despite ongoing disputes between CMOC and Gecamines, the DRC’s state-owned mining company. 

Gecamines alledges that CMOC underestimated cobalt reserves at the Tenke Fungurume Mine (TFM) and owes them billions in royalties. In a breakdown of its earnings (in Chinese), CMOC emphasized its contributions to the DRC: 

"According to the current tax terms, more than half of the economic benefits generated by TFM's entire project ultimately remain in the Democratic Republic of the Congo in the form of taxes, royalties, and customs duties; if coupled with the economic benefits of purchasing local services (for example, buying electricity from a state-owned power company), more than two-thirds of TFM's revenue remains in the country."

The dispute between the two has led to the intervention of the DRC's Prime Minister, Jean-Michel Sama Lukonde, who called the parties to a mediation session this weekend. However, an insider in the process told the China Global South Project that only CMOC representatives showed up.

Reportedly, neither Gecamines representatives, nor the revision committee, nor the special court-appointed administrator, who supposedly took over the running of TFM from CMOC, attended. The boycott reportedly reflects distrust that the Prime Minister will run the process fairly. Lukonde has in the past tried to intervene in the dispute. Despite the failure of this first attempt, there are expectations that subsequent mediation meetings could take place.

SUGGESTED READING: 

• KITCO NEWS: China Moly’s Net Profit Jumps 72% in H122 on Higher Production and Metal Prices by Vladimir Basov
• AFRICA YELLOW AND BLACK WECHAT GROUP: TFM Announced the Results for the Second Quarter of 2022 and Paid a Total of $616 million in Taxes and Fees to the DRC (in Chinese)

Adalberto Costa Jr., a candidate in this week’s presidential election in Angola, will launch an audit of the country’s debt to China if he wins.

He pledged that any loans not resulting in infrastructure will be renegotiated. At about $42.6 billion, the country holds the most Chinese debt in Africa. (BLOOMBERG)

Global reaction to the United States’s new Africa strategy, unveiled by Secretary of State Antony Blinken during his recent African visit, has largely split along North-South lines.

While accounts in the U.S. press framed the policy as a response to China and Russia’s presence on the continent, Global South observers pointed out that it actually represents a de-emphasis of China, compared to its Trump-era predecessor. 

Abishek Mishra, an analyst at India’s Observer Research Foundation and a regular Africa-China watcher, recently laid out a Global South view of the new strategy:

Why Abishek Mishra is Upbeat About the New U.S. Strategy for Africa:

• AFRICA JOINS INDO-PACIFIC STRATEGY: "The strategy begins from the assumption that Africa, as an epicentre of geopolitical shifts, is core to US foreign policy.  affirms the African agency and acknowledges the continent’s ability to participate in consequential global conversations as equal partners."

• LESS FOCUS ON CHINA: "The de-emphasis on China and Russia, and downplaying of the narrative of Africa as a battleground for geopolitical competition, is a positive development."

• INCLUSIVITY: "[A] huge reason for optimism from the African side stems from the fact that sensitivities to race, and the imperative to place people of colour at the heart of US-Africa relations, play in the new U.S. strategy."

Read Abishek Mishra's full column on the Observer Research Foundation's website

The Tanzanian government opened bidding to build the next stage of its new Standard Gauge Railway (SGR) network that will extend to the border with Burundi.

Construction companies have been invited to submit proposals to build a 367-kilometer portion of the line that extends from Gitega to Uvinza in the far west of the country.

Unlike many other African countries, including Kenya, Nigeria, Djibouti and Ethiopia, Tanzania's new SGR will not be financed using Chinese loans. Chinese contractors are, however, already building portions of the network and will likely compete for this new section.

How Tanzania manages to finance the project more sustainably than a Chinese-financed railway in Kenya that was far more costly will be closely watched by other governments.

SUGGESTED READING:

• The East African: Tanzania invites bids for Uvinza-Gitega SGR line by Bob Karashani
• Chatham House: Lessons from Kenya’s New, Chinese-funded Railway by Rebekka Rumpel

The Wall Street Journal sparked a flurry of speculation in the Indian media over the weekend with a report on Friday that said Chinese President Xi Jinping is thinking about going to the Shanghai Cooperation Organization (SCO) summit next month in Uzbekistan.

Because Prime Minister Narendra Modi is also scheduled to attend the SCO event, that was enough for the Indian media to speculate about a possible meeting between the two Asian leaders.

To be clear, there is no on-the-record confirmation that a) President Xi will attend the summit or b) he would meet with the Prime Minister if he did.

In just the past two weeks, there have been multiple reports that President Xi will travel to Saudi Arabia, Indonesia, and Thailand and speculations about possible meetings with U.S. President Joe Biden and now the Indian Prime Minister.

But still, the Chinese Ministry of Foreign Affairs has said nothing about the President's upcoming travel or in-person summits.

SUGGESTED READING:

• Wall Street Journal: China’s Xi Considers Visiting Central Asia, Potential Meeting With Putin Next Month by Keith Zhai
• Times of India: PM Modi, Xi Jinping may meet on sidelines of SCO summit next month

Chinese Foreign Minister Wang Yi unveiled a minor debt relief package for 17 African countries, writing off 23 interest-free loans that came due at the end of the last year.

Wang made the announcement on Thursday at a meeting with a group of African foreign ministers to monitor the progress of commitments made at the Forum on China-Africa Cooperation conference that took place last November in Senegal.

It's important to note that these grants, or interest-free loans, account for a tiny share of China's loan portfolio in Africa -- in the low single digits -- and Wang's announcement does not have any impact on the much larger commercial and concessional obligations that are due.

Also, this is by no means unprecedented. In fact, China has canceled a number of zero-interest loans to African governments in recent years.

Nonetheless, the move was touted in Chinese state media as exemplary of Beijing's generosity as a "great power" (大国风范) and that the country acts as a "responsible power" (做负责任的大国).

Key Highlights From Wang Yi's Statement at the FOCAC Coordinators Meeting

• DIPLOMACY: China called for the African Union to become a G20 member, and Wang reaffirmed his support for Uganda to host a high-level meeting of the Non-Aligned Movement.

• TRADE: Wang repeated China's commitment to further open its market to African imports, particularly agricultural products. He paid particular attention to trade in the "digital economy, health, green and low carbon sectors."

• FOOD: China will provide food aid to 17 African countries to help offset starvation, particularly in the Horn of Africa. Beijing has faced direct criticism from Washington for being "absent" in the global food crisis.

• MILITARY: Wang said China "will speed up the delivery of military aid to the AU and regional countries, help Africa enhance the capacity for countering terrorism and maintaining stability." He did not provide details, though, on whether that aid would be in the form of military support, weapons, or a combination of both.

SUGGESTED READING:

• China Daily: Close ties with Africa reaffirmed, consensus on issues reached by Cao Desheng
• Ministry of Foreign Affairs: Full transcript of Wang Yi's remarks -- "China and Africa: Strengthening Friendship, Solidarity and Cooperation for a New Era of Common Development"

Chinese contractors are now three-quarters of the way done with the new headquarters of the Africa Center for Disease Control and Prevention in the Ethiopian capital Addis Ababa with construction running ahead of schedule.

The new 90,000 square meter facility is now set to be finished in December 2022 rather than early next year as was originally planned. (XINHUA)

Chinese troops will travel to Russia to participate in joint military exercises from 30 August to 5 September. The Vostok (East) exercises will also include soldiers from Belarus, Mongolia, Tajikistan, and -- notably -- India. (REUTERS)

The Sri Lankan government unexpectedly reversed its decision to refuse the Chinese survey vessel Yuan Wang 5 permission to dock at Hambantota Port on Tuesday. Last week, the government acceded to demands from India that the ship not be allowed to dock but then changed its position on Saturday. China's Yuan Wang vessels are reportedly operated by the Strategic Support Force of the People's Liberation Army. This one will reportedly conduct space and satellite tracking from the Indian Ocean.(REUTERS)

The Bangladeshi finance ministry is refuting a recent Financial Times story claiming that Finance Minister AHM Mustafa Kamal warned of the risks of BRI loans from China. The story, according to spokesman Gazi Towhidul Islam, did not reflect the minister's position, and neither Kamal nor the ministry is cautioning against the use of Chinese loans. Bangladesh has borrowed $4 billion from China, just under 8% of its total external debt. (THE BUSINESS STANDARD)

China is moving to accelerate imports of Brazilian corn in a bid to offset supply chain disruptions brought on by the war in Ukraine and worsening tensions with its main provider, the United States. Beijing will waive the requirement for this growing season that the Brazilian government give guidance to its farmers on chemical application and crop management. China has been working to diversify its corn imports, 70% of which came from the U.S. and 30% from Ukraine last year. (BLOOMBERG)

The controversial Chinese survey ship Yuan Wang 5 docked at the Port of Hambantota in Sri Lanka early Tuesday morning. India called on Sri Lanka not to allow the vessel to dock due to concerns that the ship will conduct military espionage. Colombo initially agreed and then unexpectedly reversed that decision last week, permitting the Yuan Wang to remain in port for seven days to resupply. (NEWS FIRST)

Oil prices plunged below $90 a barrel in Monday trading, the lowest level in months, which will bring badly-needed relief to beleaguered energy consumers in developing countries. But the reason for the downturn could also offset any of those gains. China's National Bureau of Statistics reported Monday that both retail sales and production output fell in July, prompting the Central Bank to issue an unexpected rate cut. A slowing Chinese economy will invariably reduce demand for many of the commodities produced by Global South countries.(THE NEW YORK TIMES)

High-level talks between Chinese and Cambodian defense officials took place on Monday in the southern Chinese city of Guangzhou. Cambodian Defense Minister Tea Banh met with General Xu Qiliang, vice-chairman of China’s Central Military Commission, in what appeared to be routine talks. But the optics of the meeting are far more important, particularly amid heightened concern among the U.S. and some Southeast Asian states about the current construction of a small PLA Navy facility at Cambodia's Ream Naval Base. (CHINA'S MINISTRY OF NATIONAL DEFENSE)

Sri Lankan President Ranil Wickremesinghe sought to reassure India that the arrival of the Chinese survey ship Yuan Wang 5 on Tuesday at the Port of Hambantota is not a threat.  He emphasized Colombo would notallow the port to be used for military purposes despite the fact that the Chinese vessel now docked there is purportedly under the command of the People's Liberation Army. (NEW DELHI TV)

Singapore’s prime minister-in-waiting Lawrence Wong warned that the US and China may “sleepwalk into conflict.”  “We are starting to see a series of decisions being taken by both countries that will lead us into more and more dangerous territory,” he told Bloomberg this week. Singapore has been one of the most vocal Asian countries calling for the U.S. and China to avoid a destructive clash that could quickly spill over to smaller countries in the region. (BLOOMBERG)

South African wool farmers are warning of large-scale layoffs and dire economic consequences unless China lifts its five-month-old export ban.  The Chinese government halted wool exports after an outbreak of foot and mouth disease in South Africa. China is by far the largest market for SA wool with the ban costing farmers $45 million so far in lost business. The wool industry is calling on both governments to negotiate a settlement that will get exports going again. (DAILY MAVERICK)

China and Brazil struck a new agricultural trade deal hailed by Brazilian trade watchers as ‘the largest process of opening up in the last 10 years.’ It follows years-long lobbying to open Chinese markets to Brazilian products like soybean meal. Shipments are expected to start in 2023, following phytosanitary protocols. (CHINA-LUSOPHONE BRIEF)

Iran increased oil shipments in June and July, and they could rise further this month. This is the result of increased buying from China. Iran has steeply discounted prices in competition with Russia. Iranian oil is currently priced at $11 per barrel cheaper than the Brent benchmark, which makes it $8 per barrel cheaper than Russian oil. (REUTERS)

The debate in the United States over whether China plans to build new military bases in Africa resurfaced on Tuesday when the Director of Intelligence Analysis for U.S. forces in Africa (AFRICOM) published a column in Foreign Policy that bluntly stated it's only a matter of when, not if the PLA will reach a new basing deal somewhere on the continent.

Eric Miller, writing in his personal capacity, challenged critics of this issue, including CGSP Managing Editor Cobus van Staden, who contend the U.S. has failed to present compelling evidence that the Chinese are serious about building a new base in Africa.

Miller did not present any new information in his column on this issue and dedicated most of the article to restating what is already well-established: that China has had discussions with multiple African governments about bases and that U.S. military leaders are concerned about it.

He suggested, again without providing evidence, that a base in West Africa makes sense for the PLA Navy (PLAN) because of the large presence of China's distant fishing fleet in the region. But the idea that the PLAN would deploy armed support vessels to protect Chinese fishing trawlers in the Gulf of Guinea isn't consistent with Chinese naval warfare doctrine that seems almost entirely focused on the Western Pacific for the foreseeable future.

Regardless, Miller contends Beijing's "secretive nature and substantial timelines" make it inevitable that the PLA will eventually expand in Africa.

Key Highlights from Eric Miller's Foreign Policy Article on Chinese Bases in Africa

• CHINESE PATIENCE: "Time is China’s best ally because it allows other events to distract world attention while Beijing works methodically to expand the PLA’s reach."

• U.S. RESPONSE: "In the interim, the United States must be patient and vigilant. To think that China, when pressed about its true intentions, would be transparent is naive."

SUGGESTED READING:

• Foreign Policy: More Chinese Military Bases in Africa: A Question of When, Not If by Eric Miller
• Foreign Policy: Fears of a Chinese Naval Base in West Africa Are Overblown by Cobus van Staden

Chinese Foreign Minister Wang Yi spoke glowingly of Beijing's human rights record with indirect references to the situation in Xinjiang when he met on Tuesday with a delegation of visiting UN diplomats from Asian and African countries.

The group is currently in the southern province of Guangdong and will later visit Xinjiang for what will no doubt be a highly choreographed tour of the Western Chinese region.

Envoys from Sierra Leone, Lesotho, Eritrea, Côte d’Ivoire, Zimbabwe, Iraq, Gambia, Somalia, Cameroon and Laos are among those on the tour.

After highlighting what he described as China's human rights achievements, Wang reminded the group that Beijing only supports exchanges on this contentious issue on the basis of "basis of equality and mutual respect" (Chinese code for don't criticize us about human rights).

There is no indication whatsoever that this group of diplomats is going to challenge any of China's policies in Xinjiang or that they will push to visit any of the well-documented detention sites that house up to a million members of the Uyghur Muslim minority population.

There are new indications that Chinese President Xi Jinping will, in fact, be heading to Saudi Arabia this week for his first overseas visit in nearly three years since the beginning of the pandemic.

Although there is still no official confirmation of the trip from either the Chinese or Saudi Arabian governments, hints are nonetheless beginning to emerge from the Saudi capital Riyadh that preparations for the President's arrival are now underway.

A reportedly well-connected Saudi source told the Jerusalem Post that the visit will happen and President Xi is scheduled to make three stops in Riyadh, Jeddah, and the planned megacity of Neom on the Red Sea coast.

Separately, there are also reports that traffic control measures are now in effect in Riyadh to accommodate rehearsals for the President's arrival.

Also, it was a bit odd at Monday's Foreign Ministry press briefing in Beijing that the second question of the day was "how does China assess its relations with Saudi Arabia?" Those briefings tend to be highly choreographed, with few coincidences. Curiously, Spokesman Wang Wenbin didn't use the question to provide any new information on the status of the rumored trip.

So, even with these new clues, whether or not President Xi will travel to Saudi Arabia remains a mystery.

If Xi Does Travel to Saudi Arabia, Why Now?

• RUSSIA: Although Chinese oil buys from Russia have increased dramatically since the beginning of the war in Ukraine, President Xi may also want to use this trip to telegraph to Vladimir Putin that the Russian leader shouldn't get too comfortable relying on China and that Beijing always has options that it can use to pressure Moscow.

• TAIWAN: The ongoing Taiwan crisis with the United States augurs potential domestic political complications for Xi Jinping as he prepares to start an unprecedented third term in November. Typically, Chinese leaders prefer to go into these high-profile ceremonial events with maximum domestic stability. By going overseas, President Xi may be borrowing an oft-used play by U.S. leaders: turning to foreign affairs during periods of contentious domestic politics.

• THE U.S.: A high-profile Chinese presidential visit will immediately draw comparisons to Joe Biden's low-key trip to Riyadh last month, an awkward encounter for both the U.S. and Saudi leaders. President Xi, by contrast, will likely be feted in a way to make it appear that he and his government are the ascending global power.

• DOMESTIC POLITICS: The fact that President Xi is even considering going abroad at the time, just months before the 20th Party Congress, may signal to domestic political rivals the inevitability of his appointment to a third term. If so, the message to domestic rivals will be that everything is under control and ready to go.

Footnote: It's notable that the Jerusalem Post, of all publications, is now getting tips on this story. CGSP's Arabic Editor Nesrine Kamal has spent the past week scouring the Arabic media and social media channels looking for a hint of coverage of the visit and found very little information - either a sign that the trip story is a hoax or a reflection of the level of central control in the Arabic media.

In contrast, The Post is one of only a few truly independent media outlets in the Middle East.

SUGGESTED READING:

• The Jerusalem Post: Chinese president due in Saudi Arabia to tighten economic ties by Hudhaifa Ebrahim
• The Guardian: Chinese president Xi Jinping expected to visit Saudi Arabia next week by Martin Chulov

A new research paper by prominent Tsinghua University development finance scholar Tang Xiaoyang provides the most detailed argument to date in defense of China's bilateral lending to Global South countries and how mostly Western-initiated bonds are the real culprit in burdening poor states with unmanageable debts.

The 68-page paper was published in both English and Chinese and marks one of the strongest refutations of the "debt trap" narrative that has dogged Chinese lending to developing countries since Indian pundit Brahama Chellaney first published the accusation in 2017.

China's new messaging on the debt trap began in January when Foreign Minister Wang Yi reclaimed the word "trap" by saying African countries did not face any Chinese debt traps but were instead caught in a "poverty trap."

Then, last month, the UK-based NGO Debt Justice published a new report that validated the Chinese position by highlighting how private creditor debt to African countries was three times as large as Chinese debt obligations and cost twice as much.

Since then, Chinese officials and state media have been on a tear, using both Wang's language and the new Debt Justice data to say, "hey! It's them, not us!"

But until Professor Tang's paper this week, the Chinese debt trap rebuttal lacked the needed detail and nuance. Next, look for both the government and propaganda outlets to leverage the key themes in this research to bolster their argument against Western and Indian critics.

Key Highlights From Tang Xiaoyang's New Paper on the Risks of Private Creditor Debt

• TIMING: "The timeliness of Eurobonds is not in tune with the economic development rhythm of developing countries and is not helpful to maintain stable economic performance. Eurobonds are not only short-term, but their maturity also concentrates. Infrastructure construction and production projects in developing countries usually take a long time to complete."

• TERMS: "The repayment periods of Eurobonds issued by African countries are significantly shorter than those of preferential loans. The interest rate is much higher than that of preferential loans, and commercial contracts are restricted from extending the repayment period."

• COST: "The interest rate of Eurobonds is much higher than that of preferential loans. For example, the coupon rates on 10-year Eurobonds issued by African countries in 2013-2019 are around 4% to 10%, while bilateral and multilateral debt rates are much lower... Low and middle-income countries paid 63.2% of their total interest payments on international bonds in 2020 while only paying 9.8% for bilateral debt."

SUGGESTED READING:

• Tsinghua University: The Trap of Financial Capital: The Impact of International Bonds on the Debt Sustainability of Developing Countries by Tang Xiaoyang
• Pekinology: Eurobonds, not bilateral debts, trapped poor countries by Zichen Wang

The Economist Intelligence Unit's (EIU) latest report on China-Africa relations forecasts how it sees the relationship between these two regions evolving over the next ten years. 

Broadly speaking, the EIU predicts China will devote more attention to Africa, both for economic reasons and also to ensure that the U.S. and Europe do not make inroads on the continent at Beijing's expense.

While some of their findings are highly debatable, the report does provide some nice graphics that reveal the distorted nature of China's trade with Africa:

• 52% of all Chinese exports go to just five countries.
• 71% of everything China buys from African countries comes from just five countries.

Also, it's important to note that although two-way trade between China and Africa has consistently broken new records year after year and will likely do so again in 2022, the continent's share of overall Chinese global trade has remained flat at around 3-4%.

Until recently, it was widely understood that China had stepped back from lending large amounts of money to African governments for railway projects with questionable prospects of repayment. Apparently, that was an exaggeration.

Sudan, according to Bloomberg, secured $640 million in Chinese financing to rebuild the country's ailing railway network. The news is a little surprising, given that Sudan is also on the World Bank's list of 34 highly indebted poor countries in Africa with more than ten million of its people facing acute hunger, according to the UN.

Last week, Transport Minister Hisham Abu-Zaid acknowledged the receipt of 17 freight-train carriages (worth $51.6 million) from China’s CRRC Ziyang Company. The new equipment will allow for a quadrupling of Sudan's monthly cargo transports.

SUGGESTED READING:

• Bloomberg: China Backs $640 Million Sudan Rail Revamp Amid Economic Crunch by Mohammed Alamin 
• Sudan Tribune: Sudan receives 17 freight train wagons from China

Indian External Affairs Minister S. Jaishankar renewed his sharp criticism of China's alleged incursions into Indian territory along their disputed border in the Himalayas known as the Line of Actual Control (LAC) and, again, claimed that Sino-Pakistan BRI projects are violating Indian sovereignty.

The minister's comments highlight New Delhi's increasingly sour attitude towards Beijing, which is playing out simultaneously across a number of different fronts.

In the latest, potentially most provocative move, Indian Prime Minister Narendra Modi last week approved the use of an Indian Air Force helicopter to ferry the exiled Tibetan spiritual leader the Dalai Lama to a remote monastery in the Himalayas.

That comes as U.S. troops prepare for joint military exercises with Indian forces less than 100km from the LAC and as Indian regulators undertake a massive crackdown on Chinese tech companies for alleged financial crimes.

Indian foreign ministry spokesperson Arindam Bagch reiterated on Friday New Delhi's longstanding position on the One-China Policy and reaffirmed that New Delhi remains committed to the status quo regarding Taiwan.

There was nothing exceptional about the statement, and it didn't reflect any change in the government's longstanding policy on the Taiwan question, according to a Reuters report.

But that's not the impression that one would get from a Saturday report on The Observer (观察), one of China's largest and most influential news sites, where the editors' addition of the word "suddenly" (突然) to a headline incorrectly implied that India's policy has changed.

Huawei's CEO for India, Li Xiongli, borrowed a line from a popular Indian movie in a court plea on Friday to be released on bail following his arrest on tax charges. "I am a Chinese (national) and not a terrorist," Li said through his lawyer, cribbing the line from the 2010 Bollywood blockbuster My Name is Khan where the star, Shah Rukh Khan said, "My name is Khan and I am not a terrorist."

Prosecutors countered by urging the court not to release Li on bail since India does not have an extradition treaty with China, noting that it would be impossible to compel the executive to return for trial.

Li was deemed a flight risk earlier this spring when authorities stopped him from boarding a plane to Bangkok where he was going to attend a conference. 

Both Li and Huawei India are under investigation by the government for financial irregularities. The inquiry into Huawei is part of a broader crackdown by New Delhi on Chinese tech companies operating in the country.

The legal action against Li has prompted other Chinese telecom companies, including Huawei's spun-off brand Honor, to withdraw their Chinese expatriate staff from India.

SUGGESTED READING:

• Economic Times: I am a Chinese, not a terrorist: Huawei India CEO to court by Raghav Ohri
• South China Morning Post: Former Huawei smartphone sub-brand Honor said to withdraw team from India amid geopolitical tensions by Jiaxing Li

While Twitter was abuzz with speculation that Chinese President Xi Jinping would travel to Saudi Arabia this week based on a story in The Guardian, Wang Cheng, a highly-respected and normally very reliable Commerce Ministry dismissed the idea as nothing more than "gossip."

Wang now works in Beijing but spent most of his Commerce Ministry career posted to Oman and other Gulf countries, and he is also a Distinguished Researcher of Gulf Arab Countries at Beijing Foreign Studies University (in other words, he's well connected on these issues).