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Judd Devermont is the Africa Program Director at the Center for Strategic Studies, one of Washington's most influential think tanks, and recently spoke with Alexandra de Hoop Scheffer, Director of Research from the German Marshall Fund about how to "re-imagine U.S.-Africa policy."

Once Devermont finished with his presentation, the first question, not surprisingly, was about China and how he thought the U.S. should go about meeting the challenge of the Belt and Road Initiative in Africa (a very popular topic of discussion in Washington these days).

As one of Washington's most prominent Africa analysts, Devermont has the ear of many of DC's highest-ranking officials in both the foreign policy and national security communities, so his views on issues like China are closely followed.

The following is a transcript that's been lightly edited for brevity and clarity of his exchange with de Hoop Scheffer:

ALEXANDRA DE HOOP SCHEFFER: During her confirmation hearings, [U.S. ambassador to the United Nations] Linda Thomas Greenfield presented China as the strategic adversary of the United States and on the African continent she pleaded to offer an alternative to China and investment strategy that has plunged African into colossal debt. So, what could be the American alternative?

And a second question: what could the United States do to capitalize on China's Belt and Road projects in Africa as opposed to trying to counter them?

JUDD DEVERMONT: I certainly agree that China is the strategic challenge for the United States. In sub-Saharan Africa, and ambassador Thomas-Greenfield mentioned this, the Chinese are answering African needs in terms of infrastructure -- $130 billion to $170 billion is [Africa's] infrastructure needs per annum according to the African Development Bank -- and China is trading with Africa at about $180 billion to $200 billion a year, the U.S. trade is about $40 billion. 

So, there's a huge gap between what we [the U.S.] do and what China does.

I have a couple of things that I would say and I think it will answer both of these questions.  In some cases, it's not going to be the U.S. Now, maybe in a couple of years if the Biden administration passes its infrastructure bill and we reinvigorate our infrastructure companies and roads and bridges and have more companies that will be involved but right now Bechtel is the largest American company and that's about it. So, infrastructure is not going to allow us to compete with China.

But we can be work with our European partners and others who invest in infrastructure like Turkey and the UAE to create multilateral, multinational alternatives to China. We can also work with [international financial institutions like] the World Bank and the African Development Bank to provide options [for African government governments]. 

When China is under constraints, they can actually provide decent quality infrastructure. So, there's a study from the China-Africa Research Initiative that says when China is working under a World Bank contract then that road is as good as any other OECD road. And we've seen the African Development and World Bank assign a lot of money to Chinese vendors but we've also seen them disqualify a lot of them for corruption and fraud. 

So we need to work with African governments to make sure if China is going to build a project that it is responsible, that it is transparent, that it meets the standards that Africans set and I think by both creating more alternatives with our global partners but also creating more constraints led by Africans I think we can minimize the most negative things that China does, although not all of them and we need to be vigilant.

Watch the entire one-hour webinar on the German Marshall Fund of the United States YouTube channel.

China's normally bombastic diplomatic Twitter accounts in Africa were uncharacteristically silent on Monday with regards to the controversy that broke out over the weekend when Gao Fu, the director of the China CDC, acknowledged that Chinese vaccines are not as effective as the Pfizer and Moderna jabs.

Typically, when negative stories about China fill U.S. and European media, as this one did, China's diplomatic accounts rally to the defense. But in this case, only Ambassador Zhu Jing in the Democratic Republic of the Congo and the spokesman for the Chinese embassy in Egypt posted any rebuttals. 

Although China's vaccines may not be as effective as those from the U.S. and Europe, Beijing's propaganda strategists may have determined that it's best to lay low on this story given that the Chinese still have a considerable advantage over their rivals in terms of actually delivering vaccines to developing countries -- something that neither the U.S. or Europe is doing in any meaningful way.

For years Ghana's president Nana Akufo-Addo has touted his "Ghana Beyond Aid" agenda. Back in 2017 during a visit with French President Emmanuel Macron, the Ghanaian leader said "we have to get away from this mindset of dependence."

Well, GhanaWeb columnist Kwesi Atuahene thought it was a bit odd that an administration seeking to avoid aid and dependence would then go ahead and accept the donation of a free building that will house none other than the Foreign Minister's office. 

Read the full column on the GhanaWeb website.

Shenzhen-based electric vehicle giant BYD (aka Build Your Dreams), the world's second-largest EV-maker, recently made a stunning announcement that it will no longer use cobalt in any of its vehicles. Instead, the company is going all-in on LFP (lithium-iron-phosphate) batteries in place of NCM (nickel, cobalt, manganese) across its entire model line-up.

Last year Telsa said that it too was exploring a cobalt-free battery but, unlike BYD, has yet to make any announcements that it would actually make the switch.

Although it's still early in the transition cycle to electric vehicles, the fact that two of the world's largest automakers have announced plans to abandon the use of cobalt is a potentially worrying sign for the DR Congo where approximately 60-70% of the world's known cobalt reserves are located.

This highlights a potentially huge problem for Africa's raw material exporters. When China and other advanced economies decarbonize and "go green," what will happen to those economies in the DRC, Nigeria & others that depend on supplying resources for industries that won't exist?

Read more on this story on the Mining.com website.

Concerns over Chinese debt sustainability in Nigeria have resurfaced recently due to the government's jump-starting the construction of a $5.3 billion standard gauge railway that will be built and financed through concessional lending by the Chinese government. 

Also, a new report published by the China-Africa Research Initiative at Johns Hopkins University revealed that Nigeria is among the African countries with the fastest-growing levels of Chinese debt from 2000-2019. 

Amid growing public anxiety over the risks of borrowing too much from China, the fact-checking team at the Africa Check website debunked a lot of the myths surrounding Chinese loans to Nigeria.

Read the full article on the Africa Check website.

While the controversy over the effectiveness of Chinese vaccines raged back in China and online, Somalis seemed either blissfully unaware or simply unconcerned when a shipment of 200,000 Sinopharm jabs arrived at the airport in Mogadishu on Sunday. (@CHINESESOMALIA).

Elsewhere in Africa, Comoros President Azali Assoumani received the inaugural injection of a dose of Sinopharm COVID-19 vaccine on Saturday. The president's injection was from a batch of vaccines that arrived in the Indian Ocean island state on March 15. (XINHUA)

The Japanese Prime Minister's office is indicating that infrastructure and building an alternative to China's Belt and Road Initiative will be high on the agenda when Yoshihide Suga visits Washington on Friday for talks with U.S. President Joe Biden.

For now, it looks like the focus of those infrastructure talks will be confined to Asia as there's no indication that either country appears willing or even financially capable of mounting a credible challenge to China's BRI globally.

But President Biden's apparent eagerness to mobilize the Japan-Australia-U.S. coalition to focus on infrastructure is generating quite a bit of excitement in some quarters in the U.S. development community -- some are even going so far as to propose the resuscitation of the much-ridiculed "Blue Dot Network."

The United States Senate Foreign Relations Committee wants to give a lot of money to local media in BRI member countries "to raise awareness of and increase transparency regarding the negative impact of activities related to the Belt and Road Initiative." 

While there's no doubt that embattled media outlets in Africa and other BRI regions will appreciate the money,  Center for Global Development Senior Fellow Justin Sandefur pointed out the irony of the U.S. government financing reporting with a predetermined conclusion.

It does sound a lot like how the Chinese fund editorial content production aimed at discrediting U.S. activities around the world.

Algeria announced that it would become the second country in Africa to begin local manufacturing of COVID-19 vaccines. Pharmaceutical Minister Lotfi Benbahmed said on Wednesday that the government will partner with Russia to begin production of the Sputnik V vaccine in September.

Earlier this week, Egypt's Health Minister Hala Zayed said production of the Chinese Sinovac vaccine would begin shortly. 

Both countries have indicated that they will produce jabs for use in their own countries and to export elsewhere in Africa as well. (REUTERS)

Chinese Vaccine Headlines in Africa:

• ZIMBABWE: The government plans to buy one million COVID-19 vaccines per month in the second quarter from Sinovac, Sinopharm and suppliers in India and Russia, said Finance Minister Mthuli Ncube. (BLOOMBERG)
• MOROCCO: China will supply Morocco with 10 million doses of Sinopharm vaccines during the months of April and May. (MOROCCO WORLD NEWS)
• SOMALIA: Somalia's ambassador to China, Awale Kullane, signed a deal on Wednesday to prucure 200,000 doses of the Sinopharm vaccine. (@SOMALIAINCHINA)
• EGYPT: Chinese Ambassador to Cairo Liao Liqiang said on Wednesday that China has provided a total of 600,000 doses of coronavirus vaccines to Egypt, done so far in two batches in February and March with another soon. (EGYPT TODAY)

The Chinese embassy in Namibia is one of the first missions in Africa to participate in Beijing's "Spring Sprout" program that aims to inoculate Chinese expatriates. 

The embassy provided the first of two shots to 1,800 people yesterday from the local Chinese community, employees at Chinese companies, and residents of both Hong Kong and Taiwan.

The "Spring Sprout" program was announced in March and aims to provide vaccinations to thousands of overseas Chinese in 50 countries around the world. (GLOBAL TIMES)

Chinese customs authorities granted approvals to 49 Tanzanian soybean companies this week to begin exporting their crop to China. While the opening of this new market could prove to be very lucrative for Tanzanian farmers, it's unlikely that it'll have much impact on China's soybean imports that now average around 99 million tons a year.

Other China-Africa Business Headlines:

• INFRASTRUCTURE:  The Zambian government awarded China State Construction Engineering Corporation (CSCEC) a $27 million contract for a water and sanitation improvement project in the northern districts of Kasama and Mbala. (XINHUA)

• MINING: Australian mining company Ionic Rare Earths inked a memorandum of understanding with rare earths miner Aluminum Corporation of China or Chinalco over the development of its Makuutu rare earths project in Uganda. (MINING WEEKLY)

After spending years living and working in China as an English teacher at an international school. Elizabeth (last name withheld) returned to her native Zimbabwe inspired by China's prowess in logistics and widespread use of electric scooters.

Now she's leveraging her China experience pioneer Zimbabwe's first-ever all-women-owned, green-powered scooter delivery business. “We sourced the scooters from Guangzhou, China where electric scooters are pretty normal there," she explained. "It was quite easy for me to get them from there since I can speak the language and I lived in China for over 6 years."

Read more on this story on the CleanTecnica website.

Egypt will soon become the first country in Africa to locally manufacture a Chinese COVID-19 vaccine, according to Health Minister Hala Zayed (photo).

The minister informed the Cabinet yesterday that a deal between Egyptian state-owned pharmaceutical company VASCERA and Sinovac has been concluded and the two sides are preparing production lines to manufacture between 20-60 million jabs annually.

A similar production agreement is also in place in the United Arab Emirates where a local partner will jointly produce Sinopharm vaccines.

Chinese Vaccine Distributions in Africa Hit a Lull While Focus Shifts to Eastern Europe

After picking up a lot last week, Chinese vaccine distributions in Africa appeared to have slowed. It's possible that the recent long holiday weekend in China to mark tomb-sweeping day may have impacted shipments.

CHINESE VACCINE HEADLINES FROM AROUND THE WORLD:

• EUROPE: “I received the vaccine, and I feel great,” said Serbian President Aleksandar Vucic on his Instagram page after receiving an injection of a COVID-19 vaccine made by Sinopharm. “Thank you our great health workers. Thank you our Chinese brothers,” he added. (ASSOCIATED PRESS)

• AMERICAS: Mexican Foreign Minister Marcelo Ebrard announced on Tuesday that he plans to embark on a global tour to China, Russia, India and the United States to personally to make sure that its supply agreements for vaccines against COVID-19 are honored. (REUTERS)

• MIDDLE EAST: An unspecified quantity of Sinopharm vaccines donated by the People's Liberation Army arrived in Lebanon yesterday. The jabs will reportedly be used by the Lebanese military and other public service agencies. (XINHUA)

China's second-largest e-commerce company, JD.com, is looking to high-end fashion consumers in the Persian Gulf as part of a new expansion in the Middle East.

JD signed a partnership agreement with Namshi (photo), the fashion and lifestyle platform owned by Dubai’s Emaar Malls, to provide local logistics, warehousing, marketing, and content creation support in the region.

As part of the deal, according to a report in Arab News, Chinese brands including Baleno, Dodogogo, Latit, and Mo&Co will be sold on the Namshi platform.

Last month, Chinese streaming video platform iQiyi announced that it too is expanding in the Arab market with the launch of a new subscription service.

FACT CHECK: The Arab News article incorrectly states that JD.com is "China’s largest online retailer." JD is actually second to the Alibaba-owned Taobao (TMall).

The U.S. Export-Import Bank disregarded warnings about the worsening security situation in Mozambique and went ahead with a risky $4.7 billion loan for a gas pipeline last year that is now in serious trouble.

The bank became the largest creditor on the $15 billion pipeline project as part of an effort to displace Chinese and Russian investors who also sought a stake in the deal.

The bank had been warned that Islamic militants operating in northern Mozambique near the pipeline could endanger the project, according to documents secured by the environmental group Friends of the Earth through a Freedom of Information Act request.

It seems in hindsight that the bank may have been more focused on blocking China and Russia rather than on the realities surrounding the pipeline itself.

Read more on this story on the Bloomberg website.

U.S. President Joe Biden appears increasingly determined for the U.S. to rally allies in Europe and Asia to develop a rival to China's Belt and Road Initiative. The issue will reportedly be on the agenda next week when Japanese Prime Minister Yoshihide Suga is scheduled to meet with the President at the White House.

President Biden also raised the same issue last month during a phone call with UK Prime Minister Boris Johnson.

Unlike China's BRI, with its global scope, it appears that the U.S. will focus its efforts largely in the Asia-Pacific region, according to some of the early reporting on this issue. Although Japan is quite formidable in building large transportation infrastructure in Asia, such as the new Saigon subway in Vietnam, the two countries are expected to focus their development efforts on telecommunications and clean energy projects -- two areas where both the U.S. and Japan can compete head-on with China.

So far, there's no indication that Africa will be a primary theater for this new infrastructure development competition between the U.S. and China.

3 Reasons Why Any Future U.S. "BRI Alternative" Will Look Nothing Like China's Belt & Road:

• REGIONAL NOT GLOBAL: Unlike the actual BRI, it looks like the U.S. wants to focus on strategically important regions in Asia and the Americas.

• NO STATE-OWNED ENTERPRISES: Unlike China, the U.S. does not have any state-owned enterprises that it can mobilize for both capital and construction.

• MORE NARROW FOCUS: In contrast to China where pretty much any project can be BRI-related so long as someone says it is, the U.S. will likely focus on a select few industries where it possesses a marginal advantage.

There's very good reason to be skeptical of the U.S. drive to mount a meaningful challenge to the Chinese when it comes to infrastructure development. First of all, it's just not something the U.S. has shown to be very good at, both at home and abroad. Secondly, it will take enormous financial resources to compete with China in this realm and the President faces pressure to rebuild America's crumbling infrastructure rather than to help people in Southeast Asia and other developing regions.

And, let's not forget the infamous Blue Dot Network, the last effort by the U.S. government to supposedly challenge China's Belt and Road. Based on the U.S. track record to date and the current state of politics in Washington, it's highly unlikely that anyone in Beijing is really that concerned about the U.S. presenting a credible challenge to the BRI.

Almost a decade, China passed the United States to become Africa's leading source of foreign direct investment. LSE Senior Visiting Fellow Shirley Ze Yu explains why Chinese companies are looking to Africa for new opportunities and how today's African market is reminiscent of what China was like in the 20th century:

• CHINA NO LONGER HAS THE LABOR PREMIUM: China is aging at turbo speed. In 2022, China will become a deeply aged society and, by 2050, the median age is expected to be 51... With these figures in mind, Africa’s young labor force is exactly what China’s labor-intensive manufacturers seek today.

• CHINA IS NO LONGER LOW-COST: China’s per capita GDP hit $11,000 in 2020, placing it in the upper range of a high middle-income country and touching the high-income country territory. Consequently, it no longer has the labor cost efficiency essential for middle to low-end global supply chains.

• CHINA HAS SHIFTED FROM A LARGE AGRARIAN ECONOMY INTO THE WORLD’S LARGEST AGRICULTURAL IMPORTER: China’s rapid urbanisation has eroded much fertile soil and lured the farming population away from rural areas to the cities, deserting land for salaries.

• AS CHINA TURNS ITSELF FROM THE WORLD’S FACTORY INTO THE WORLD’S CONSUMER MARKET, AFRICA’S EXPORTS TO CHINA CAN ONLY RISE BY INVESTING IN UPSTREAM PRODUCTION: China’s FDI stock in Africa totalled $110 billion in 2019, contributing to over 20% of Africa’s economic growth. Chinese FDIs have scaled up African supply to satisfy the rising middle-class demand.

• AFRICA IS A FAST-GROWING CONSUMER MARKET: A rising middle class in Africa shares similar desires to consumers back home, with demand rising for smart city development, energy, consumption, education, entertainment, finance, and health. Savvy Chinese private companies are venturing into all these areas, exporting China’s business models, IP and technology platforms fit for emerging markets.

Read the full report on the London School of Economics blogs website.

When most people think about the major centers of Sino-Africa engagement, cities like Guangzhou and Beijing tend to come to mind first. How about Changsha? Well, not so much.

But if you're not familiar with what's going on in Changsha and elsewhere in Hunan province, then you should be because the region is fast becoming one of the most important hubs in the broader China-Africa relationship.

The visit by a delegation of Lusophone African ambassadors to China to the central Chinese province is just the latest evidence of the region's growing importance. 

Recent noteworthy milestones in Changsha include:

• In 2020, the opening of the Ghana-China Cocoa International Exchange.
• In 2019, the first-ever China-Africa Economic and Trade Expo.
• Around 30% of all African government officials who go to China for training end up in Changsha, so they become quite familiar with the city.
• A number of Chinese companies operating in Africa, including heavy machinery company ZoomLion, come from Changsha. 
• A lot of Chinese agricultural research and training initiatives that are applied in Africa come from Hunan, where agriculture is also critically important to the local economy.

The recent signing of a 25-year comprehensive strategic partnership agreement between China and Iran sparked considerable debate within China about whether the benefits of a deal with Tehran are worth the considerable risks to Beijing's broader diplomatic agenda in the Mideast and, more importantly, its increasingly tenuous relationship with the United States.

Ma Xiaolin, dean of the Central Mediterranean Institute at Zhejiang University of Foreign Languages, is somewhat skeptical and feels that the deal provides far more upside to Iran than it does for China.

In an interview with the WeChat channel roughly translated as "Last talk About the Country" (末谈国是), Ma explained that this new pact presents Beijing with three notable risks:

• UPSETTING CHINA'S REGIONAL DIPLOMACY: The new deal risks overturning the hard work that China has done in recent years to balance ties with regional rivals. If Beijing is seen as too close to Iran then that could risk its future relationships with Tehran's bitter rivals in Israel, Saudi Arabia, and Egypt among other countries.

• FURTHER ANTAGNOZING THE UNITED STATES: China knows full well that Washington sees Tehran as a primary rival and that this agreement could provoke the U.S. to further tighten sanctions against both Iran and Chinese companies who do business there. If Chinese companies fear being hit with U.S. sanctions that could dissuade them from fulfilling the huge investment promises reportedly made as part of this agreement.

• RILING UP IRANIAN PUBLIC OPINION: The asymmetric nature of the agreement may provoke a backlash within Iranian civil society and public opinion over concerns that their leaders have sold out the country to China. Professor Ma added that the deal may enable opposition parties to challenge the government and accuse it of being under Chinese "control."

Professor Ma also addressed the issue of whether the signing of the agreement represents some kind of new geopolitical partnership of like-minded countries united in opposition to the United States.

"Countries such as China, Russia, Iran, Cuba, North Korea, and Venezuela may all have the same position in opposing American bullying," he said, "but it does not mean that all issues are aligned against the United States."

It's not that simple, he added while explaining that on nuclear non-proliferation issues in both Iran and North Korea, for example, China's positions are in sync with those of the larger international community, including the United States.

Read the full interview on the Last Talk WeChat channel (in Chinese)

There's been a lot of discussion over the past week about the implications of the China-Iran comprehensive strategic partnership agreement the two sides signed during Foreign Minister Wang Yi's recent visit to Tehran. Scholars and analysts in the U.S. and Europe have been struggling to understand the deal's geopolitical significance and, apparently, there's similar confusion in China.

Shanghai International Studies University Professor Fan Hongda, one of China's foremost Middle East scholars, gently chided his academic colleagues for framing the agreement "too narrowly" within the context of contemporary Mideast politics, rather than as part of a larger Chinese diplomatic strategy.

A fascinating on-air skirmish broke out on the FRANCE 24 talk show The Debate last week during a conversation over Chinese investment and influence in Zambia. One of the show's guests, acclaimed China-Zambia scholar Solange Guo Chatelard took the network's correspondent, Nicolas Germain, to task for referencing the supposedly distortive effect of Chinese migrants in the Zambian live chicken market.

Chatelard, an associate researcher at Université Libre in Brussels, explained how the Zambian government dealt with the presence of Chinese migrants selling live chickens in the markets years ago and criticized Germain for propagating a "trope" that is not supported by the facts.

Germain replied that he only recounted what he was told during his seven-day trip to Lusaka:

The China-Africa Research Initiative's (CARI) latest report on the downturn in Chinese overseas lending to African governments that was published earlier this week was not well-received in some quarters of Beijing.

Song Wei, a well-known Africa analyst who used to work for a Ministry of Commerce-affiliated think tank and is now the deputy director of the International Development Cooperation Institute, criticized CARI's findings in a Global Times article today.

Although she gave faint praise to CARI for its "relatively objective stance comparing with other Western research institutions," Song went on to claim that the research institute's "inherent flaws of scattered sources" in its database make it impossible to "tell the whole story."

Why Song Wei Thinks CARI Got It Wrong

• FOREIGN AID: "According to China's 2021 White Paper on International Development Cooperation published in January, China has steadily increased the scale and further expanded the scope of its foreign aid, giving high priority to the least developed countries in Africa."

• COVID RELIEF: "Since the outbreak of the COVID-19 pandemic, China has ramped up efforts to help African countries to jointly fight against the public health crisis, from donating medical supplies, sending medical teams to postponing debt repayments."

• DEBT RELIEF: "As the largest contributor to the G20 Debt Suspension Initiative, China has written off matured interest-free loans for 15 African countries."

COMMENT: What's odd about Song's rebuttal, though, is that she never addressed the central issue of loans, which of course, was the only focus of the CARI report. Instead, this article is a jumbled mix of grievances about "Western media" and "ill-intentioned lies."

It's regrettable because in the past Song typically provided sober analysis that offered a rare glimpse into how certain segments of the Chinese government regarded contemporary issues in China-Africa relations. That apparently is no longer the case. -- Eric Olander

China's ambassador to Uganda, Zheng Zhuqiang, handed over 70 brand new SUVs to Uganda's Foreign Affairs Minister Sam Kutesa at a ceremony in Kampala on Wednesday.

The vehicles were supposed to have been used at last April's G77 Summit in the Ugandan capital, which was canceled due to the COVID-19 outbreak. Officials said the cars will be used for other official functions.

Read the full story on the Chimp Reports website.

One of China's most prominent Iran scholars, Fan Hongda from the Shanghai Institute of International Relations, published a column in the Communist Party-controlled English-language newspaper China Daily that appears intended to try and calm fears in the United States and to send the message that Beijing's recent 25-year strategic cooperation agreement is not intended to challenge the U.S. in any way.

"It is wrong to view the agreement as being targeted at the United States, particularly because China and Iran started discussing the cooperation plan in 2016 when Sino-US relations were still on a relatively positive track," wrote Fan.

Fan nonetheless acknowledged that he understands why the U.S. and some Gulf countries may be worried about Beijing's closer ties with Tehran: "It is understandable that some Western and neighboring countries hold a negative view of the China-Iran partnership; they assume it would increase China's influence across the world and thwart their efforts to contain China." (CHINA DAILY)

Other China-MENA Headlines

• PALESTINIAN AUTHORITY: Although China's offer to help mediate the Palestinian-Israeli stalemate wasn't taken seriously by either the Israelis, the US, or Gulf countries, the Palestinian leadership apparently really likes the idea. (AL-MONITOR)

• QATAR: Last week’s signing of a 10-year purchase and sales agreement by Sinopec and Qatar Petroleum for 2 million tonnes of liquefied natural gas per annum shifts the Emirate even more decisively into the Iran-China-Russia sphere of influence. (OILPRICE.COM)

• IRAQ: China is fast becoming Iraq's most important customer of its Basrah Medium crude, with several refineries growing fond of the new medium sour grade amid tight Saudi crude supply and attractive Iraqi selling prices. (S&P GLOBAL)

The release of Wednesday's groundbreaking report that analyzed 100 Chinese state-backed loans to developing countries over a three-year period sparked considerable international media coverage. 

While the 77-page report produced by researchers at AidData, the Washington-based Center for Global Development (CGD), Germany’s Kiel Institute, and the Peterson Institute for International Economics covered a wide range of issues, two themes, in particular, seemed to have caught editors' attention:

1. SECRECY: All the reporting focused on how rigid confidentiality clauses in the loan contracts make it difficult, sometimes even impossible, for other creditors to determine the extent of a borrowing country's indebtedness to China.
2. LOP-SIDED: Many of the news reports honed in on how the terms of the contracts appear to provide considerable advantages to Chinese creditors, even implied political clauses if a borrowing country's police are seen as adverse to the interests of “a People’s Republic of China entity.”

This is the first time that outsiders have had a chance to closely review such a large number of Chinese loan contracts. It is now becoming apparent that Chinese creditors' widespread use of strict non-disclosure clauses that limit public accountability, aggressive repayment conditions and subtle political references could complicate China's longstanding "win-win" narrative and its non-interference doctrine.

So far, there has been no official reaction from the Chinese government or any Chinese policy bank about the report. The issue wasn't raised at yesterday's Foreign Ministry press briefing in Beijing nor did any official Chinese Twitter account respond.

Key Highlights of International Media Coverage of the "How China Lends" Report:

• FINANCIAL TIMES:  "Chinese lenders have used legal contracts to give them a hidden advantage over other creditors when lending to low-income countries, in a trend which threatens to undermine global debt relief efforts, according to research. Many of the contract terms were unusually strict and gave Chinese loans priority for repayment while prohibiting borrowers from restructuring their Chinese debts in co-ordination with other creditors, the report published on Wednesday said." (READ MORE)

• REUTERS:  "Scott Morris, a senior fellow at CGD and co-author of the report, said the findings raised questions about China’s role as one of the G20 group of major economies that has agreed a “common framework” designed to help poorer nations cope with the financial pressure of COVID-19 by allowing them to overhaul debt burdens." (READ MORE)

• THE ECONOMIST: "China lends more than most to inhospitable corners of the world. The 100 contracts include loans to some countries with awful credit ratings (Venezuela) and some with no rating at all (Sierra Leone). Countries like this sometimes struggle to borrow because they have too much freedom to default and cannot convince a lender otherwise. The unusual terms in China’s loan contracts make it harder for countries to bilk it. But that presumably also makes it easier for countries to borrow from it." (READ MORE)

• SOUTH CHINA MORNING POST: "Some contracts involving China Development Bank (CDB) allowed it to take such actions if a borrower, in broadly defined terms, acted contrary to the interests of “a [People’s Republic of China] entity. Such terms position Chinese state-owned institutions to act in concert, amplifying their collective bargaining power vis-à-vis the developing country,” the report said, adding that all eight CDB contracts it examined had included the severing of diplomatic relations with China as an “event of default.” In 90 of the 100 contracts, events of default were defined to include policy changes in China or in the debtor country." (READ MORE)

• DEUTSCHE WELLE: "The authors of the latest study, too, stress that, in many ways, the terms and conditions of loans from Chinese state lenders represent a difference in degree, rather than kind, from those of commercial and other official bilateral lenders. All creditors, whether commercial banks, hedge funds, or otherwise, will use "any legal, economic, and political means available to them," to increase the likelihood that they will be repaid, the authors say. China's contracts differ, however, in their use of unique provisions that, while perhaps standard in the context of commercial debt, take on a greater significance when it comes to lending between governments." (READ MORE)

SUGGESTED READING:

• AidData: "How China Lends: A Rare Look into China's Debt Contracts with Foreign Governments"
• Center for Global Development: In the Secretive World of Government-to-Government Lending, 100 Chinese Debt Contracts Offer a Trove of New Information by Scott Morris