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The News Feed is curated by CGSP’s editors in Asia and Africa.

Pay-TV Giant StarTimes Increasingly Becomes Vehicle for Official Chinese Propaganda

The Beijing-based African pay-TV giant StarTimes announced last week it will broadcast a government-produced TV series that, according to the Chinese state-run news agency Xinhua, "seeks to boost Sino-Africa relations."

This is the latest move by the privately-run Chinese media company to produce or distribute content that explicitly supports China's official government agenda in Africa. Last year, for the first time, StarTimes launched a regular news program dedicated to COVID-19 information. The program's narrative closely aligned with that of the Chinese government.

Until recently, StarTimes has steadfastly sought to put some distance between itself and the government, at least in terms of the kinds of programming it broadcasts. Unlike domestic pay-TV operators, StarTimes is not subject to censorship or related restrictions.

Read the full story about "Look to the East" on the Xinhua website.

Webinar: China’s Becoming Increasingly Sophisticated In Its Use of Media to Drive Its Narrative

The Berlin-based think tank Mercator Institute for China Studies (MERICS) recently hosted a webinar that focused on how Chinese government actors are becoming increasingly effective in their use of media to drive their agendas in both Europe and Africa.

The three panelists, all media experts, explained what distinguishes China's approach from that of other countries and how Beijing is leveraging its economic advantages in Africa to publish and broadcast content both on its own channels and through local mainstream outlets.

The one point that was not raised in the discussion is the awkward reality that despite China's massive investment in building large-scale media operations on the continent, research indicates that very few people are actually consuming their content.

Key Highlights From the MERICS Webinar On Chinese Media Influence in Africa

  • [13:21] PUBLIC DIPLOMACY VS. PROPAGANDA: "Of course, we have to distinguish between public diplomacy and propaganda. Public diplomacy is something all of the countries are doing. It's not uncommon to have op-eds from different ambassadors in local media. What is, however, unique in the Chinese approach is that they're paying for the op-eds to be published and they don't like those op-eds to be edited... they're also calling editors at various local media and arguing that journalists are not supposed to write about Taiwan, for example. So, this is quite different from what we see as legitimate attempts to increase knowledge of the country and also to boost the image of the country" -- Ivana Karásková, founder and a project leader of MapInfluenCE and China Observers in Central and Eastern Europe

  • [21:31] CHINA LEVERAGES MEDIA'S ECONOMIC VULNERABILITY: "When I was at the Standard, there was a very aggressive (Chinese) effort to give us advertising money. Now, you have to hand it to the Chinese. They realize that media in Africa at this stage is going through a very difficult time because of digital and the flight of audiences and advertising. So they're very vulnerable. So, you'd get a supplement every fortnight, that's four pages, which is a substantial amount of money to help you achieve your revenue targets" -- Joseph Odindo, former Editorial Director at The Standard and Nation Media Group and now a visiting lecturer at Aga Khan University in Nairobi

  • [29:37] CHINA MAXIMIZES ITS ECONOMIC ADVANTAGE: The bottom line when it comes to China is that the sheer economic power that the Chinese bring into the media field on the continent is very hard to fend off. This starts with the offer to use the Xinhua wire free of charge, it continues with the offer of scholarships, further with technical assistance to broadcasters and, very important, to regulatory boards on to buying media houses and setting up their own media enterprises" -- Christoph Plate, Director of Media Programs in sub-Saharan Africa for the Konrad Adenaur Foundation in Johannesburg

https://www.youtube.com/watch?v=YetmE1m17dU&feature=youtu.be

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Anti-Chinese Xenophobia Erupts in South Africa After Chinese-Born ANC MP Sworn Into Office

Naturalized South African-citizen Xiaomei Havard’s swearing-in last week to become an ANC member of parliament sparked a strong backlash online under the hashtags #SArejectsXiaomeiHavard and #PutSouthAfricansFirst. Havard was ...

China’s Engagement in Africa Becomes Focal Point at Linda Thomas- Greenfield’s Confirmation Hearing to Become U.S. Envoy to the UN

Linda Thomas-Greenfield appears before the Senate Foreign Relations Committee hearing on her nomination to be the United States Ambassador to the United Nations, on Capitol Hill in Washington, DC, on January 27, 2021. Greg Nash / POOL / AFP
Linda Thomas-Greenfield (photo), President Biden’s nominee for U.S. ambassador to the United Nations, came under criticism on Wednesday during her confirmation hearing, for a speech she made in 2019 at a ...

If/When Two Chinese COVID-19 Vaccines Get Approval From WHO, Demand From Developing Countries Likely to Increase

List of vaccines currently undergoing World Health Organization evaluation. Click to view larger image. Image via @BridgeBeijing.
Two Chinese-made COVID-19 vaccines made by Sinopharm and Sinovac are now under evaluation by the World Health Organization to receive the highly prized prequalification (PQ) status. If the Chinese vaccines do receive WHO ...

Black Market Chinese COVID-19 Vaccines Poses a Significant Threat to China’s Vaccine Push in Developing Countries

News that Chinese-made COVID-19 vaccines were smuggled into the Philippines sparked concern around the world that the already thriving black market trade in counterfeit pharmaceuticals will inevitably extend to the coronavirus vaccine.

Lebogang Mokoena, a columnist for the South African newspaper Financial Mail, made the case that Africa is well-positioned to fall victim to the use of bogus vaccines, given its place at the back of the line for access to jabs and the already ubiquitous presence of counterfeit Chinese and Indian pharmaceuticals in some African countries.

China, too, has a lot at stake in ensuring this doesn't get out of control. Chinese vaccines are already facing intense criticism for their lower efficacy rates and if fakes flood the market that could further erode public trust in the safety of Chinese vaccines in many countries.

Chinese State Media Isn’t Taking Vaccine Criticism Very Well

Questions about the efficacy of Chinese vaccines and whether China and India have engaged in a form of “vaccine rivalry” really seem to have gotten under the skin of China’s bombastic national tabloid ...

Desperate to Source COVID Vaccines, Developing Countries Jostle to Buy Chinese Jabs

South African President Cyril Ramaphosa gave voice yesterday to the growing concern in developing countries about wealthy states hoarding COVID-19 vaccines. In his speech to the World Economic Forum in Davos, President Ramaphosa accused rich countries of acquiring as much as four times the amount of vaccines needed for their populations and said this is creating a dangerous situation for those in poor countries who will remain exposed to the virus.

It's in this context that China this week seemingly brushed aside mounting criticisms about the efficacy of some Chinese-made vaccines and accusations that it's now engaged in some kind of "vaccine rivalry" with India. 

Instead, what we're seeing now is a surge of deliveries of Chinese vaccines throughout the Global South, where many countries appear increasingly desperate to find an affordable supply of jabs regardless of where they come from.

Today's China-Global South Vaccine Headlines

  • AFRICA: China confirmed that four African countries have so far signed agreements to purchase vaccines with talks underway in another four countries. So far, Egypt, Algeria, Morocco and the Seychelles have either already started their vaccination drives or will do so soon with Chinese-made vaccines. (GLOBAL TIMES)

  • ASEAN: Malaysia's health ministry confirmed on Tuesday that it signed an agreement with China's Sinovac to produce 12 million doses in partnership with a local pharmaceutical manufacturer. The ministry also said yesterday that it would acquire 6.4 million doses of Russia's Sputnik V vaccine as well. Together, the Chinese and Russian vaccines will be used to inoculate just under a third of the population. (REUTERS)

  • CARIBBEAN: Jamaican Health Minister Christopher Tufton said the government is now in talks with Chinese, Cuban, and Indian vaccine makers to purchase jabs beyond what the global Covax alliance will provide. According to the Chinese embassy in Kingston, Jamaica is expected to receive its first batch of vaccines within the next 8 weeks. (JAMAICA OBSERVER)

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A New Piece of Equipment in Zambia Will “Help China Get Rid of Its Over-Reliance of Imported Australian Iron Ores”

An article in today's Global Times newspaper, one of China's more bombastic nationalist tabloids, provides a glimpse into how determined Chinese officials are to "decouple" their trade with Australia, especially in the hugely valuable iron sector.

Sino-Australian relations deteriorated sharply in 2020 over disputes related to the origin of COVID-19, the South China Sea, and Huawei. Now, Beijing appears determined to use Australia's dependence on the Chinese market as a weapon to retaliate against Canberra for what it sees are malign attacks.

To that end, a Chinese team in Zambia installed the NEUH-60, a piece of equipment that will reportedly enhance Zambian iron ore to a similar level of quality as Australian ore.

It's clear from the quotes used in the Global Times story that the researchers involved in the project are clear about the objective: "Now China is enhancing the development of African iron mines, when the necessary bedrock infrastructure is finished including highways and railways for transportation, it is possible for China to shake off its over-reliance for Australian iron ore," Wang Guoqing, research director at the Beijing Lange Steel Information Research Center.

Read the full article on the Global Times website.

Amid a Worsening Debt Crisis, Kenya Struggles to Finance New Infrastructure and All Those Useless “White Elephants”

The Kenyan government, like a lot of African governments, is struggling to find the right balance between continuing to pay for badly-needed new infrastructure while at the same time servicing its enormous debts for older projects -- many of which are now so-called "white elephants" that were never built or used.

The situation has been compounded by the fact that once abundant Chinese financing is, for the most part, no longer available and the Treasury instead is forced to either take on more domestic debt or go to the bond markets where interest rates tend to be higher.

  • NEW INFRASTRUCTURE: The Treasury requested $1.8 billion in funding for the 2021-2022 budget to build 6,000 kilometers of new roads. The request did not mention how it would underwrite the cost of that construction. (THE STANDARD)

  • OLD INFRASTRUCTURE:  Kenya's Finance Cabinet Secretary Ukur Yatani told Spice FM radio this week that the government is no longer servicing debts for infrastructure projects that were either not completed or never started. He said the Treasury is working with "partners" but did not specify which creditors, in particular, would be impacted. (THE STANDARD)

New Map of the Belt & Road Reveals a Much More Intricate Chinese Trading Network

A trio of scholars in China recently published an academic paper in the Journal of Contemporary China that included a much more detailed map of China's Belt & Road trade routes in Asia than previously available.

One of the key takeaways from the map is the vast overland corridors across South Asia from the Gawadar Port in Pakistan to Kashgar in Xinjiang, from Kunming in southern China across Laos to Myanmar in the Gulf of Thailand, and then up north, where massive Russian oil pipelines snake down through Mongolia to China's industrial rust belt.

If these burgeoning trade routes fully materialize (a big "if'), it could have an enormous impact on Chinese trade with Africa and the Middle East. Oil and other goods would no longer have to transit through the Malacca Strait in Southeast Asia, and could instead be directed to ports in Pakistan, Myanmar or Thailand.

China’s FM Spokesman Tries to Cool Tensions Over Reports of “Vaccine Rivalry” With India

Chinese Foreign Ministry spokesman Zhao Lijian speaking at the regular press briefing in Beijing. Image via the Chinese Ministry of Foreign Affairs.
The Chinese government appears to be moving to de-escalate tensions with India over reports that the two Asian powers are increasingly engaged in a so-called “vaccine rivalry” related to the distribution of COVID-19 ...

African Media Didn’t Cover Xi Jinping’s World Economic Forum Speech, But They Probably Should Have

Chinese leader Xi Jinping on Monday delivered his first major international address since Joe Biden became president of the United States. Xi spoke remotely to the World Economic Forum in Davos, Switzerland. He touted China's success in battling COVID-19, reiterated his oft-stated support of multilateral institutions, and implicitly attacked the U.S. for its "arrogant isolation."

Not surprisingly, U.S. media outlets focused on the "Cold War" aspect of Xi's speech along with the various indirect references to Beijing's rivalry with Washington.

Few, if any, major news channels in Africa and other developing regions covered the address. But they probably should have, given that a significant portion of the Chinese president's comments focused on issues pertinent to the Global South.

Portions of Xi's Speech That Might Be of Interest to African Stakeholders

NORTH-SOUTH WEALTH INEQUALITY:  The president addressed the widening wealth gap between rich and poor countries, adding that COVID-19 is making a bad situation worse: "As countries grapple with the pandemic, their economic recoveries are following divergent trajectories, and the North-South gap risks further widening and even perpetuation." 

COMMENT: Leaders from other wealthy countries, for the most part, don't prioritize wealth iniquity quite so prominently. Regardless of China's comparatively wealthy status, Xi is clearly signaling to African and other developing regions that he still sees China as a "brother" in a sort of class struggle against incumbent powers.

FOCUS ON PRACTICAL, TANGIBLE ECONOMIC ISSUES: Towards the end of his speech, President Xi focused on the importance of multilateralism and the need to "eradicate poverty, ease debt burden, and achieve more growth."

COMMENT: African leaders have unanimously said they do not want to be drawn into a new Cold War conflict and President Xi's remarks to that end were no doubt well received. Furthermore, the issues they've said need more international attention are exactly the three points raised by the Chinese president: poverty, debt, and jobs.

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Three Experts Reflect on China’s Ambitious New Aid and International Development Agenda

The Chinese government earlier this month published a major update to the country's foreign aid and international development strategy. The new white paper entitled "China's International Development Cooperation in the New Era" maps out an ambitious new vision that integrates Chinese overseas development with the Belt and Road and aims to position Beijing among the top tier of international aid actors.

3 Perspectives From 3 Overseas Development Institute Scholars on the Importance of China's New Development White Paper

  • MULTILATERAL VS. BILATERAL: "China’s new white paper comes at a time when the influence and credibility of the US in the global system has been in disastrous decline. The paper reinforces China’s commitment to multilateralism and to pouring new money into multilateral institutions, emphasizing its credibility as a cooperative global power. But its approach to low-income country (LIC) debt remains bilateral" -- Yunan Chen, Senior Research Officer

  • HUMANITARIAN ASSISTANCE: "China’s new white paper points towards a more strategic approach to its longstanding interest in disaster response. A short subsection in previous white papers, the part on ‘responding to global humanitarian challenges together’ may signal an elevation of humanitarian issues as a priority. It details China’s role in the Covid-19 response but also disaster relief and recovery, support to refugees, and food security. But it is unclear how significant this shift will be in practice" -- Barnaby Willitts-King, Senior Research Fellow

  • THE BELT & ROAD INITIATIVE:  "What really catches my eye is the role of the Belt and Road Initiative (BRI) in the document. The BRI is defined as a ‘major platform’ for China’s international development cooperation, and it is presented as a framework to expand aid to low- and middle-income countries. Initially, the BRI didn’t necessarily have this ‘developmental’ spin, but as we said elsewhere, it is a fluid concept and can be adapted to fit different needs" -- Linda Calabrese, Research Fellow

Other Views on the White Paper

Analysis from Cobus van Staden

How to Lure Chinese Financing Back to the Global South: Report

Global South countries face increasing financing pressure, endangering their ability to keep developing while also implementing measures to deal with a growing climate crisis. The disruption of global trade is coupled with a larger megatrend: flows of international capital to the developing world have turned negative. This means that countries are now routinely paying more to service loans than they receive in disbursements.

The vast majority of Global South borrowers ...

Background: For More Than a Decade, Africa’s Been the Top Destination for Chinese Foreign Aid

Since 2010, Africa's been the largest recipient of Chinese foreign aid, even as China's ties in Asia have grown to be more geopolitically consequential.

However, when reviewing data in the recently-published white paper on Chinese international development, analysts at the Beijing-based consultancy Development Reimagined noted that "the share of China’s aid to Africa has fallen from 51.8% over 2010-2012 to 44.65% now, but that still means an absolute increase from $2.1 billion to $3.1 billion annually over 2013-2018."

Development practitioners from traditional donor states in the U.S., Europe, and Japan would probably not recognize a lot of China's financial contributions as "aid" in the classical definition. Concessional loans make up almost half of all of China's financial assistance to developing countries, according to the new white paper on international development recently released by the State Council. 

The Chinese refer to this kind of assistance as "diverse forms" of aid by providing access to low-cost capital to build infrastructure. But a lot of these concessional loans are also contributing to debt distress in developing countries. Even though China has agreed to more debt deferrals than any other creditor in the G20, Beijing has so far refused to cancel any of those concessional loans that are presumably seen, in part, as "aid."

Egypt Kicks Off National COVID-19 Vaccination Drive Using Chinese-Made Vaccines

After months of promises, controversies, and disputes over how effective they really are, tens of millions of Chinese-made COVID-19 vaccines are now on their way to developing countries.

On Sunday Egypt became the second country in Africa, after the Seychelles, to launch a full-scale vaccination drive using a vaccine produced by the China National Pharmaceutical Group (Sinopharm) for the opening phase. The health ministry says that it's focusing this initial wave of vaccines on an estimated 50,000 healthcare professionals.

Egypt is also in talks with the Covax alliance to secure 40 million doses and negotiations are also underway to secure supplies of the Pfizer/BioNTech vaccine.

A Big Weekend For Chinese COVID-19 Vaccines:

  • MOROCCO: Morocco officially authorized the emergency use of the COVID-19 vaccine developed by China's Sinopharm, Morocco's Ministry of Health said in a statement. The country also received 2 million doses of Oxford-AstraZeneca's COVID-19 vaccine on Friday. (CGTN AFRICA)

  • TURKEY: Turkish Health Minister Fahrettin Koca announced on Sunday that 6.5 million doses of the COVID-19 vaccines would arrive in Turkey from China on Monday. (GLOBAL TIMES)

  • PAKISTAN:  The Chinese pharmaceutical company CanSino Biologics Inc. is offering preferential access to Pakistan to secure 20 million doses of its single shot COVID-19 vaccine. (BLOOMBERG)

India Moves to Challenge China’s Emerging Dominance in C19 Vaccine Distribution in Developing Countries

Workers unload boxes containing Covishield, AstraZeneca's Covid-19 coronavirus vaccine made by India's Serum Institute, upon its arrival from India at the health center in Kathmandu on January 21, 2021. PRAKASH MATHEMA / AFP
Developing countries in Southeast Asia, Africa, and the Americas are now the new front in an increasingly contentious struggle between Asia’s two continental powers. India and China, both pharmaceutical manufacturing powerhouses, are jostling ...

China’s C19 Vaccine Propaganda Campaign: “Who’s Helping Countries in Africa, Asia, The Caribbean, Asia?”

Chinese state media outlets are ramping up a propaganda campaign against so-called “vaccine nationalism” and findings that Chinese-made vaccines are much less effective than those made in the U.S. and Europe (which is ...

Joe Biden’s Getting a Lot of Advice on How To Reset U.S. Foreign Policy in Africa and It All Calls for Less Focus on China

U.S. President Joe Biden speaking at the White House in Washington, D.C. Nicholas Kamm / AFP
Scholars, analysts, and commentators in the U.S. and Africa are all offering lots of advice for what Joe Biden should to do to revitalize foreign policy in Africa. Seemingly without exception, the experts ...

Despite Lots of M&A Activity in the Cobalt Mining Sector, Chinese Imports of the Precious Metal Fell Sharply in 2020

Image via Fairphone (CC BY-SA 2.0)
Chinese cobalt imports fell 41.8% last year compared to the volumes shipped from the DRC in 2019, according to the mining news website Argus Media. The lockdowns in response to COVID-19 at the ...

Senegalese and Chinese Officials Meet to Plan This Year’s Upcoming China-Africa Summit

Chinese Assistant Foreign Minister Deng Li and the Senegalese President’s Chief Foreign Affairs Adviser Dunbar Ba met virtually on Friday to discuss plans for the upcoming Forum on China-Africa Cooperation Summit that will be ...

Kenya, China Agree to $245 Million Debt Deferral Deal

China and Kenya have agreed to a six-month debt repayment holiday worth $245 million. Treasury Secretary Ukur Yatani announced the deal during a radio interview on Wednesday when he said the deferral "will give us an opportunity and break on the kind of liquidity that we desire.”

Although Yatani did not provide details, he gave the broad outlines of the deal according to a report by Citizen TV:

  • Kenya will have the next six years to make payments on the suspended debt service costs including a one-year grace period after June 2021.
  • Proceeds from the savings are required to be channeled towards combatting the pandemic.
  • Kenya is further obligated to make public its entire stock of debt.

Chinese and Kenyan negotiators finalized the arrangement less than 24 hours before a critical deadline when a $1.4 billion loan from the China Exim Bank to build the Nairobi-to-Naivasha railway would have been due. “We were making every arrangement to pay by [Thursday], but two days ago after our engagement, we are happy to get feedback that we don’t need to pay now,” Yatani said.

The $245 million debt rescheduling deal with the Chinese follows a similar $300 million arrangement that was reached last week with Paris Club lenders. Kenya, however, will not seek similar suspensions from either multilateral or commercial lenders “to safeguard its sovereign rating and its future access to international financial markets,” according to the Finance Minister.

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Brazil is Running Low on Chinese Vaccine Supplies Prompting Concerns Beijing May Be Playing Politics

Brazil is running out of its supply of the Chinese-made CoronaVac COVID-19 vaccines and apparently, Beijing hasn't approved the shipment of ingredients needed to make more. Only 6 million doses out of a 46 million dose order have arrived and those stocks are expected to run out within the next few weeks.

Rodrigo Maia, president of Brazil’s Chamber of Deputies, expressed concern earlier this week that the delay may be due to President Jair Bolsonaro's criticisms of China and steadily deteriorating ties between the two countries. Yesterday, however, Maia met with Chinese ambassador Yang Wanming who reassured him that politics is not responsible for the restocking delay. 

Other Chinese Vaccine Headlines:

  • IRAQ: Ministry of Health spokesman Sayf al-Badr confirmed that regulatory authorities have granted emergency approval to Sinopharm's COVID-19 vaccine. (CGTN)

  • CHILE:  The government granted emergency approval to begin use of CoronaVac's vaccine after trials showed an efficacy rate of 78%. Chile aims to buy 10 million doses of the Chinese vaccine. (AGENCE FRANCE PRESSE)

COVAX UPDATE: Three of China's largest COVID-19 vaccine makers, Sinovac, Sinopharm and CanSinoBIO, submitted applications to join the global vaccine alliance known as COVAX, according to Chinese Foreign Ministry spokeswoman Hua Chunyin.

With the U.S. Likely to Focus Less Attention on China in Africa, Kenya’s Free Trade Deal Now in Question

President Uhuru Kenyatta with outgoing US Ambassador to Kenya Kyle McCarter at State House in Nairobi on Tuesday. Image via PSCU.
Outgoing U.S. ambassador to Kenya Kyle McCarter stopped by the State House on Wednesday to meet with President Uhuru Kenyatta (photo). McCarter, a Trump political appointee, will soon be ...

The UK Invests More in Africa Than Either the U.S. or China

British Prime Minister Boris Johnson was among the featured guests at Wednesday’s online Africa Investment Conference organized by the UK Department for International Trade. The conference was a follow-up to last year’s UK-Africa ...

“I Can Be 100% Congolese and 100% Chinese” Social Media Star Zhong Feifei Tells Teen Vogue

Chinese-Congolese social media influencer, model, and aspiring pop star Zhong Feifei got a break this week when the hugely popular publication Teen Vogue profiled her and featured a Q&A:

TVYou have a mixed ancestry of both Chinese and Congolese, what was it like growing up with two distinctly different cultures?

ZFIt was a rollercoaster ride in finding a balance in-between. Spending my childhood in China made me the typical Chinese kid, and moving back to Congo at 15, I had a huge teenage identity crisis because the environment was constantly telling me that I “wasn’t Black enough.” I eventually learned to overlook the differences and to seek similarities in both cultures, family values and passion for food are great examples that people often bypass. I want to take advantage of my backgrounds and truly be involved in both, because I don’t want to pick one culture over the other. One day I realized I was unintentionally eating pondu with chopsticks.

What I learned is that the world [has] kept on telling biracial kids that our existence is a 50/50 thing. But I think we can be more than 100 percent. I can be 100 percent Congolese and 100 percent Chinese, and no one should be able to criticize you for not being *insert nationality/ethnicity* enough just because you have another side.

Read the full story on the Teen Vogue website.

Looking for Clues as to How the New U.S. Government Will Approach China’s Engagement in Africa

Antony J. Blinken, speaks during his confirmation hearing to be Secretary of State before the U.S. Senate Foreign Relations Committee on January 19, 2021. Alex Edelman / POOL / AFP
The incoming national security and diplomatic leads who will oversee Africa policy for the new Biden administration appear poised to take U.S. foreign policy towards the continent in a much more moderate direction.  ...

Hopefully, Biden and Blinken Won’t Take Advice From the State Department’s “Old Guard”

Although the sentiments expressed by one of Washington, D.C.’s most experienced and well-regarded former diplomats, Herman Cohen, are widely held in the U.S. capital, they’re nonetheless ill-informed: 1) As has ...

Trump Administration Slaps New Sanctions on Huawei, Potentially Creating Huge Problems For African Telcos

DANIEL LEAL-OLIVAS / AFP
The U.S. government informed a number of key suppliers of Huawei, including chip giant Intel, that it’s revoking certain licenses to sell equipment to the Chinese telecom giant. Neither Huawei ...

Analysts: Why in The World Would the U.S. Want to Pay Off Ecuador’s Huawei Loans?

The U.S. International Development Finance Corporation recently signed what it called a "novel model" with Ecuador to help pay off billions of dollars of the South American country's loans to China that were used to buy Huawei equipment. In exchange, Washington received assurances that Quito will ban the Chinese tech giant from their market.

“It is a novel approach that very strongly combines both missions of the DFC. The first is that we are going to impact development in Ecuador in a very positive way,” said outgoing DFC CEO Adam Boehler about the arrangement.

But a trio of analysts at the Center for Global Development in Washington, D.C. isn't so sure. Clemence Landers, Nancy Lee, and Scott Morrison co-authored a commentary that shreds the move, calling it a "clumsy... no strings attached bail-out for Chinese creditors." 

Key Highlights From the CGD Commentary on the DFC's "Novel Model" To Pay Off Ecuador's Huawei Debt

  • THIS HELPS CHINA FAR MORE THAN ECUADOR: "Rather than offering a “novel model” to “eject China” the deal appears poised to help Chinese creditors recuperate their investment early and in full. The economic benefits of this program for the people of Ecuador are unknown and uncertain."

  • WHY IS THE KEY QUESTION: "Why should U.S. taxpayers bail out Chinese creditors? Should there not instead be guardrails preventing use of any DFC lending for repaying Chinese creditors? Should the DFC help Chinese creditors avoid a haircut, as other creditors have accepted in Ecuador’s debt restructuring?

Read the full commentary on the CGD website.

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