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China sent its most senior official in recent years to the G77 gathering in Havana on Friday. The presence of Li Xi, the CPC's seventh-ranking member and the head of the corruption watchdog, arguably signaled a continuance of China's recent focus on Global South diplomacy.

Li emphasized three issues in his speech: G77 autonomy from great powers, the inclusion of developing countries in global governance, and equal access to technology and development: all talking points aimed at positioning China with the Global South against Western alliances.

Zambian President Haikinde Hichilema returned home this weekend from a week-long trip to China that appeared to be as much about sightseeing as it was about conducting substantive diplomacy.

During the last stop of his tour in Beijing on Friday, Hichilema met with Chinese President Xi Jinping for what appeared to be congenial albeit generic talks where the highlight was the modest upgrade of diplomatic ties to a "comprehensive strategic cooperative partnership."

But Zambia's pressing debt issues were apparently not addressed, at least according to the joint statement released after their meeting.

Zambia is in the midst of a multi-year debt restructuring process that still requires major bilateral creditors like China to ratify a deal they signed in Paris last June.

It was widely expected that Hichilema's trip to China last week was going to put that at the top of the agenda but there's no indication, at least publicly, that he met with creditors or made any progress in finalizing the deal.

Key Highlights of Hichilema's China Tour

• SIX MOUS: The president touted that he signed six MOUs for energy, housing, telecommunications and a ZTE smartphone assembly in Zambia. He also held talks with EV battery giant CATL for possible future collaborations. (@HHICHILEMA)

• CHINA'S STORY: Hichilema seemed inspired by China's economic development trajectory, where the country went from poor to powerful within a single generation and noted We can accomplish our vision for Zambia by learning lessons from the economic success story of China." (@HHICHILEMA)

WHY IS THIS IMPORTANT? The lack of any announcement on the debt restructuring deal is likely going to frustrate Zambian investors and other creditors who are eager to see Lusaka put the debt restructuring issue behind them.

SUGGESTED READING:

• Reuters: China, Zambia upgrade ties, focus on key economic sectors
• South China Morning Post: China firms up ties with debt-laden, resource-rich Zambia by Jevans Nybiage

Debt servicing costs have been steadily rising across Africa, largely due to the falling value of local currencies that are used to repay dollar-denominated loans.

But in Angola and Uganda, interest payments to Chinese creditors have jumped considerably in recent months as some of the loans have exited the grace period:

ANGOLA: Interest payments, mostly to Chinese creditors, doubled from $775 million in the first quarter of the year to $1.57 billion once a three-year debt repayment moratorium expired. (SOUTH CHINA MORNING POST)

UGANDA: Debt servicing costs increased from $584 million last year to $816 million in the current fiscal year due in part to increased interest payments to the China Exim Bank used to build the Karuma and Nsimbe dams. (MONITOR)

Chinese creditors account for just 4.1%, or $4.7 billion, of Nigeria's $114 billion total public debt, according to the latest figures released by the Debt Management Office in Abuja.

While China's share is significantly larger than other bilateral creditors, France is a distant second with just $572 million, the amount owed to Chinese creditors is nonetheless considerably smaller than that of other major external lenders:

• $16 billion owed to Eurobond holders
• $14 billion owed to the World Bank

WHY IS THIS IMPORTANT? Nigeria is often listed among African countries as a major borrower from China. While that's true compared to most African countries, when measured against the country's entire public debt, China's share is relatively small. Furthermore, all of the Chinese loans to Nigeria were used to build specific infrastructure projects and not used for general budgetary support.

SUGGESTED READING:

• Legit.ng: Nigeria Owes China $4.7bn, World Bank $14bn, France $573m, Indebted to Others by Zainab Iwayemi
• Nigeria's Debt Management Office: Facts about Chinese loans to Nigeria

If you look at the specific demands of many African countries, they are now more focused on production-related activities rather than fancy highways that lead to nowhere.

Chinese President Xi Jinping will not attend this week's G77 Summit in Havana, making this the third major international event in as many weeks that he's avoided. Li Xi, head of the Chinese Communist Party's powerful anti-corruption body, will go in his place as part of a three-nation tour that also includes Brazil and Egypt. (AGENCE FRANCE PRESSE)

The U.S. and Saudi Arabia are reportedly in talks to form a strategic metals mining partnership in Africa, Washington's latest effort to reduce China's dominance in the EV battery supply chain. Under the purported deal, Saudi would invest in cobalt, lithium and other strategic metals mines that U.S. firms would then purchase the output. (WALL STREET JOURNAL)

Voters in the Maldives will go back to the polls at the end of the month for a presidential run-off in a contest widely seen as a referendum on whether the Indian Ocean island state should lean more towards India or China. Pro-China opposition candidate Mohammed Muiz performed better in Saturday's first round of voting with 46%. (ASSOCIATED PRESS)

Authorities are investigating an explosion at a Chinese-owned quarry in western Ghana that killed four people on Saturday, including one Chinese national. Four others are still missing. It's not clear what caused the blast that also destroyed nearby farmland and damaged a number of buildings in the area. (REUTERS)

China’s embassy in Niger has called on its citizens to leave the country. This follows the opening of Nigerien airspace to foreign and commercial flights following the military coup that deposed its civilian president in late July. A statement from the embassy read: “At present, the domestic situation in Niger is generally stable, but there is still some uncertainty in the future development of the situation. In view of the above situation, the Chinese Embassy in Niger reminds all overseas Chinese in Niger to leave Niger as soon as possible for a third country.” (CAJ NEWS AFRICA)

China’s Red Cross has donated $200,000 to Morocco’s Red Crescent to aid its rescue efforts after a devastating earthquake that killed at least 3,000 people and wiped out whole villages. China International Development Cooperation Agency also “stands ready to provide emergency humanitarian assistance,” according to Foreign Ministry spokesperson Mao Ning. (CHINESE FOREIGN MINISTRY)

The Saudi national real estate developer ROSHN has signed a $2.1 billion deal with China Harbor Engineering Company. It will see the state-owned construction giant build 6,700 residential units, mosques, commercial, retail, and other buildings as part of two urban developments driven by the company. (ZAWYA)

Chinese Defense Minister Li Shangfu hasn't been seen in public since he gave the keynote address at the China-Africa Security Forum two-weeks ago, prompting speculation about his fate. Li is now the second Chinese minister to go missing since former foreign minister Qin Gang disappeared from public view on June 25. (NIKKEI ASIA)

The aircraft carrier Shandong along with more than 20 other warships are headed to waters between Taiwan, the Philippines and Guam for China's largest-ever maneuvers in the Western Pacific. The upcoming exercises are seen as a response to recent U.S. Navy drills near China that involved more than two dozen countries. (FINANCIAL TIMES)

The Saudi power company ACWA signed a series of deals with Chinese companies, including China Southern Power Grid International and MingYang Smart Energy Group Ltd, which focuses on integrating renewable enrgy into power grids. The deals will focus on renewable energy, smart grid integration and the production of green hydrogen and ammonia. (ZAWYA)

Singapore tops the 2023 edition of the China Going Out Investment Index as the top international destination for Chinese capital. The city state’s strong status as a business destination, cultural overlaps with China and its neutral position between the two superpowers are all important factors. Positions 2 to 5 are occupied by: Indonesia, Malaysia, Hong Kong and Thailand. (FIBRE2FASHION)

China became the first country to officially appoint an ambassador to Afghanistan since the Taliban took over in August 2021. Zhao Xing presented his credentials te the government in Kabul on Wednesday. The Taliban leadership isn’t recognized by any country and it’s unclear whether the appointment indicates a step in that direction. A Foreign Ministry statement read: "This is the normal rotation of China's ambassador to Afghanistan, and is intended to continue advancing dialogue and cooperation between China and Afghanistan … China's policy towards Afghanistan is clear and consistent." (REUTERS)

Indonesian police arrested 43 people during large-scale protests against a Chinese-led glass and solar panel factory. The factory that’s being planned for Rempang, a small island close to the border with Singapore, would displace thousands of local residents.

About 1,000 demonstrators took part in the protests, with some throwing rocks and bottles at security personnel and damaging local buildings.

The $11.6 billion factory is being planned by Batam state authorities in collaboration with PT Makmur Elok Graha from Indonesia and China’s Xinyi International Investments Ltd., a subsidiary of the world’s largest maker of glass and solar panels, Xinyi Glass Holdings.

The glass factory, the world’s second-largest, would form part of Rempang Eco City, a business park that would displace all 7,500 residents of Rempang Island. It is seen as a way for Indonesia to gain value from a large natural deposit of quartz sand, which is used to make glass. The zone is expected to become an industrial and tourist hub and to create 35,000 jobs.

This is only the latest protest against the project by residents determined not to be relocated. It was prompted by a land surveying process linked to the development. Indonesia’s President Joko Widodo chalked the protests up to bad communication.

WHY IS THIS IMPORTANT: Chinese companies hold 70% of the world’s solar panel market share, This directly involves them in local politics resulting from the massive scaling up of production any real transition to sustainable energy would entail.

SUGGESTED READING:

• Benar News: Indonesian Police Arrest Dozens Protesting China-Backed Project Near Singapore by Nazarudin Latif and Pizaro Gozali Idrus
• Time: As Indonesia Courts Chinese Infrastructure Investments, Locals are Pushing Back by Koh Ewe

The Philippine parliament is reportedly calling for funding to construct a permanent structure on the Second Thomas Shoal (known as the Ayungin Shoal in the Philippines and Ren’ai Jiao in China.) The atoll is at the heart of competing territorial claims between the two countries.

The structure would presumably bolster the BRP Sierra Madre, a WWII-era warship currently used as a makeshift base by Philippine soldiers.

The call comes as China is embarking on its largest-ever military exercise in the region. While these haven’t been officially announced, the Chinese aircraft carrier Shandong and about two dozen Chinese warships are massing in the region, with Taiwanese authorities also reporting 28 Chinese warplanes in its air defense zone.

The exercise is reportedly in response to U.S. and Canadian vessels sailing through the Taiwan Strait on Saturday.

Meanwhile, the Philippines is reportedly considering a change in strategy in the region, with a Coast Guard spokesperson saying they might use smaller vessels to avoid Chinese blockades and to deploy more patrol ships. Manila also defended the coordinated presence of a U.S. reconnaissance plane during the recent successful resupply mission to the shoal against charges that it could further worsen relations with China.

Defense Undersecretary Ignacio Madriaga told senators during a hearing about the issue: “The American presence there is just a way to boost our maritime domain awareness and to have like an ‘eye in the sky’ watching over the waters.”

WHY IS THIS IMPORTANT? The news that Manila could build on the Second Thomas Shoal will inevitably raise tensions in the region further following the Philippines’ recent upgrading of its strategic relationship with Australia.

SUGGESTED READING:

• Philippine Star: Funding Pushed for Permanent Structure in Ayungin by Michael Punongbayan
• The Wall Street Journal: Chinese Warships Gather in Sign of Major Naval Exercises by Alastair Gale

On Wednesday, the Chinese Ministry of Foreign Affairs issued an expansive statement titled “Proposal of the People's Republic of China on the Reform and Development of Global Governance.”

According to FM spokesperson Mao Ning, the timing is aimed at informing discussions at the UN General Assembly, which starts on Monday. It is arguably also aimed at the G77 Plus China summit happening in Havana later this week.

The statement reiterates China’s position on a list of key foreign policy questions, including the Ukraine war, the North Korean stalemate, the Israel/Palestine dispute, the Iran nuclear standoff, and several more. It also discusses China’s viewpoint on human rights at some length.

Most of these talking points are not new, and the statement hasn’t received much attention in the international press so far.

However, toward the end of the document, in a section on global governance reform, it includes perhaps the most explicit note of support for the expansion of the UN Security Council heard from China so far:

“The Security Council should not become a club of the big countries or rich countries. Its reform should credibly increase the representation and voice of developing countries, redress the historical injustices done to Africa, and give more developing countries with independent foreign policies and just positions the opportunity to sit on the Security Council and participate in its decision-making. China supports making special arrangements to meet Africa's aspiration as a priority.”

There still is some room for maneuver in the statement because it leaves unclear whether China supports the expansion of the permanent members who carry veto rights or possibly adding more rotating members who don’t.

However, even if it represents a call for (say) the consistent inclusion of a rotating African member, it would still be a significant shift. It seems intended to send a message to the Global South leaders at the G77 and next week’s General Assembly that China is its truest friend in the Security Council.

It also positions Beijing with the developing world, which is increasingly clamoring for more real power in these bodies, against the U.S. and its allies on the P5, who will almost certainly oppose such reforms. 

Read the full proposal here.

Saudi Arabia is preparing to increase oil shipments to China in 2024 to meet growing demand from a crop of new refineries that will come online next year, according to S&P Global Commodity Insights.

While Russian sales are expected to remain strong next year, watch for Saudi Arabia to increase its market share in China thanks to massive new investments in the Asian country's downstream petrochemicals industry that were announced earlier this year.

Venezuelan President Nicolás Maduro arrived in Beijing on Tuesday in a rather unusual manner for a visiting head of state.

Rather than fly into Beijing's sprawling Capital Airport on the outskirts of the city, Maduro traveled aboard one of China's newest and fastest high-speed railways to Beijing South Station, where he was greeted by a Chinese military honor guard.

The Venezuelan president is on the final leg of a week-long tour of China that included stops in the southern tech hub of Shenzhen and the northern industrial province of Shandong.

In Beijing, Maduro will meet with his Chinese counterpart, Xi Jinping, before returning home on Thursday.

Maduro is widely expected to call on Xi for help to revitalize Venezuela's ailing oil industry which has been crippled in part by stringent U.S. and European economic sanctions.

While China is fully aligned with Venezuela in opposing the U.S., Maduro may find that Xi is nonetheless reluctant to take out the checkbook given that Venezuela has struggled to repay a sizable portion of the $60 billion that China lent the country over the past 15 years.

WHY IS THIS IMPORTANT? China remains Venezuela's largest financial backer but the limits of that support may soon become apparent as a result of the weakening Chinese economy. Furthermore, China is no longer as reliant on Venezuelan oil as it once was now that Beijing buys more from Saudi Arabia, Russia and Iraq.

The bottom line here is that Maduro may get a warm welcome and a photo with Xi but other than that, he's likely to go home with much less than he would like.

SUGGESTED READING:

• El País: Nicolás Maduro visits China to try to alleviate Venezuela’s economic crisis by Guillermo Abril
• Reuters: China's oil trade and investment in Venezuela by Andrew Hayley

Zambian President Haikinde Hichilema devoted the third day of his week-long China tour to visiting some of the country's largest tech companies headquartered in the southern megacity of Shenzhen.

The president visited the headquarters of internet giant Tencent, automaker BYD and telecom majors Huawei and ZTE. At ZTE, Hichilema signed an MOU with the company to set up a smartphone assembly plant in Zambia.

No details on the timing or cost of the project were released.

Hichilema will later travel to Shanghai and then to Beijing, where he will meet with President Xi Jinping before he returns to Lusaka on Saturday.

WHY IS THIS IMPORTANT? It's now de rigueur for most visiting heads of state to China to include Shenzhen on their itineraries. This is a relatively new phenomenon that highlights the central role that technology promotion now plays in China's diplomacy.

SUGGESTED READING:

• Lusaka Times: Zambia, Huawei sign MoU in digital transformation
• Global Times: Foreign leaders intensively visit China’s tech hub for innovation experience by Ma Jingjing

Zambian President Haikinde Hichilema is spending much of this week visiting Chinese business hubs in Shenzhen and Shanghai, but the real focus of this trip will be dealt with later in Beijing, where he will tackle the sensitive issue of debt.

Last June, Zambia reached a deal with its bilateral creditors to restructure nearly $13 billion of external debt, half to a consortium of Chinese creditors. A lot of people mistakenly thought that the deal was largely done but that's not the case, say experts, who contend a lot of details still need to be negotiated.

The precise terms of the restructuring deal also haven't been released and they still need to be formally approved by China and other governments involved in the negotiations.

Ahead of Hichilema's arrival in Beijing later this week, two leading debt analysts, Brad Setser from the Council on Foreign Relations and Theor Maret, a research analyst at Global Sovereign Advisory, summarized in a Financial Times column published on Tuesday the ten lessons from Zambia's ongoing debt restructuring process that will no doubt be useful for Hichilema's team now in Beijing and other developing countries seeking to follow Zambia's lead.

Three of those lessons include:

• CHINA CAN OFFER REAL DEBT RELIEF: China Exim agreed to reduce the coupon on its $4 billion or so in recognized official claims to 1% for the remainder of Zambia’s IMF program, and if Zambia’s underlying riskiness (as assessed by the IMF) remains high, to accept a 2.5% coupon for the remainder of the loan’s life. That is a real concession.

• GETTING SIGNIFICANT DEBT RELIEF FROM CHINA WILL NOT BE EASIER FOR THE NEXT COUNTRIES IN LINE: It took close to two years and several trips by the IMF’s top leaders to China to convince the Chinese to accept these terms. In addition, China and other official creditors made it clear that neither the treatment of multilateral development banks nor non-resident holdings of domestic debt in Zambia would create a precedent for other countries. 

• CHINESE STATE CREDITOR GET INSPIRATION FROM THE PRIVATE CREDITORS: The debt relief that China offered Zambia is contingent on whether the IMF upgrades Zambia’s “debt-carrying capacity” at the end of the program period. With an upgrade, the coupon jumps to 4% and the pace of amortizations steps up significantly, with the final maturity reduced by five years.

WHY IS THIS IMPORTANT? The Zambian debt deal agreed to in Paris was described as a "landmark" and a "milestone" that could be applicable to other developing countries applying for relief under the G20's Common Framework. But it's notable that one of the key lessons from Zambia's experience, according to Setser and Maret, is that the "Common Framework is a dud."

SUGGESTED READING:

• Financial Times: Ten lessons from Zambia’s (incomplete) restructuring by Brad Setser and Theo Maret
• Rhodium Group: China’s External Debt Renegotiations After Zambia by Mat Mingey and Logan Wright

Other than a 6 p.m. curfew every night, daily life for most of the 3,000 Chinese expatriates in Gabon hasn't changed much since the military overthrew the government of longtime dictator Ali Bongo on August 30.

A media worker for the Chinese state-run news agency Xinhua toured the capital Libreville to visit Chinese restaurants, supermarkets and other establishments frequented by expats -- all of which appear to be operating as per usual.

Although Chinese residents did express some concern when the coup first took place but since then, they say business has largely returned to normal.

Read the full story on Xinhua's official WeChat channel (in Chinese).

A new big-budget Chinese medical drama set in a fictitious African country was released this week on major Chinese streaming platforms, the latest installment in the burgeoning genre of "Chinese savior" narratives.

"Welcome to Milele Village" is a series that focuses on a team of Chinese doctors and nurses inspired by the real-life Chinese medical teams that have been deployed over the years to more than 30 countries across Africa.

The show solidifies what's become a popular theme in Chinese pop culture that portrays the Chinese protagonists as selfless heroes who "use their superb medical skills to alleviate the suffering of African people." 

Amid the tears and struggles of the Chinese medical team, there are countless cutaways of happy dancing children, beautiful savannahs and of course, wildlife wandering seemingly everywhere. 

The same formula was used in the 2021 Tencent drama Ebola Fighters and the blockbuster movie Wolf Warrior 2, which pioneered the genre in 2017.

It was once very easy for Chinese social media users to spend between $15 and $40 to get a bare-chested man, a scantily clad woman or even a child to do demeaning performances in short videos that were often highly exploitative.

In China, for the most part, those so-called "blessing videos" were banned from advertising on online shopping sites and social media platforms following last year's exposé of the practice by the BBC.

But now, they're back. This time targeting U.S. and European social media users on Instagram and TikTok.

Seemingly out of nowhere, at least half a dozen services have appeared on these social video platforms promoting video greetings from Africans, Egyptians and Ukrainians among others.

Given that Ukraine, Egypt and various African countries were precisely the same locales that Chinese producers used when they were targeting their compatriots back home with these services, it's quite likely that the same agents have simply shifted their focus from China to the customers in the U.S. and Europe instead.

These services also seemed to have learned from their previous experience and were accused of exploiting the individuals featured in the clips. 

Before they said nothing about whether the performers were fairly compensated and now the issue is addressed in the FAQs: "We are working together and are Partners. They are getting paid well for every single Video. (SIC)"

Check out some of these new services here, here, here and here.

Venezuelan President Nicolás Maduro’s six-day visit to China has included stops in the economic and tech hubs of Guangdong, Shanghai and Shenzhen. He is also likely to meet with Chinese President Xi Jinping. Venezuelan Executive Vice President Delcy Rodriguez met with Chinese Foreign Minister Wang Yi earlier this week to discuss economic and trade agreements.

Cooperation in tech, as well as mining, agriculture and special economic zones is on the agenda. Maduro also wants Venezuela to join the BRICS group, which he called “the great engine for the acceleration of the process of the birth of a new world."

In an interview with Xinhua, he said ”There would be three lines of work: strengthening the China-Latin America and the Caribbean relationship with the Celac [Community of Latin American and Caribbean States], strengthening and expanding the group of defense of the United Nations Charter for a re-foundation of the UN and the entry of Venezuela to the BRICS to continue strengthening the process of the birth of a new world.”

He also thanked China for its assistance during the pandemic, saying U.S. sanctions would have blocked the arrival of vaccines.

Meanwhile, Venezuelan bond prices are creeping up amid rumors that a diplomatic breakthrough with the U.S. could ease the sanctions blockade of the oil-rich country. Venezuela defaulted on its $60 billion in debt in 2017. China is its biggest creditor.

WHY IS THIS IMPORTANT? This is Maduro's first visit to China in five years. It represents an attempt to warm up ties against the background of greater U.S.-China rivalry.

SUGGESTED READING AND WATCHING:

• Xinhua: Exclusive: One-on-One with Venezuelan President Nicolás Maduro
• FT: Venzuelan Bonds Rally as Investors Bet on Detente with Wahington by Michael Stott and Arjun Neil Alim

U.S. President Joe Biden pushed back against the accusation that newly-elevated diplomatic ties with Vietnam are part of a larger effort to "contain China" or start a new "Cold War."

“I think we think too much in ... cold war terms,” Biden said at a news conference in Hanoi on Sunday. “It’s not about that. It’s about generating economic growth and stability in all parts of the world. And that’s what we’re trying to do.”

The President's remarks follow a whirlwind day where he met with Vietnam's Communist Party General Secretary Nguyễn Phú Trọng to oversee the elevation of diplomatic ties to Hanoi's highest-level, a comprehensive strategic partnership that puts Washington on par now with Beijing.

Despite the President's assurances that his eagerness to foster closer ties with Vietnam is not specifically about China, few observers really believe that given Washington's stepped-up effort to forge closer security ties with China's neighbors in both East and Southeast Asia.

For the Vietnamese, however, the political calculations are quite different. The enhancement of ties with the U.S. is just one of several upgrades that it has planned with major countries in the region, including Indonesia, Singapore and Australia.

While Hanoi's relations with Beijing are largely stable, with the exception of a bitter territorial dispute in the South China Sea, Vietnamese leaders are nonetheless keen to fortify their ties with other powers as part of a longheld great power hedging strategy.

It's also worth noting that while Vietnamese public opinion about China is decidedly negative, the leadership in Hanoi, particularly General Secretary Trọng, is far more open to engaging the Chinese -- both politically and economically.

Analyst Reaction to the Upgrade of U.S.-Vietnam Diplomatic Relations

• COUNTER CHINA: "The strategic partnership with Hanoi is a remarkable achievement for Biden given Vietnam’s long-standing ties to Moscow and Beijing, and one that will help counter China’s worrisome influence in the region" -- Washington Post Columnist Max Boot (@MAXBOOT)

• VIETNAM'S DIPLOMATIC HEDGE: "In Vietnam's calculation, enhanced ties with the United States should not lead to a deterioration in its relationship with China. We are already seeing some indications that Vietnam may even be receiving President Xi soon" -- Yusof Ishak Institute Senior Fellow Le Hong Hiep (BBC NEWS)

• INTERESTS VS. IDEALS: "By embracing the Vietnamese government despite its repression, Biden abandons the global contest between democracy and autocracy in favor of a mere geopolitical struggle" -- Visiting Princeton University Professor Kenneth Roth (@KENROTH)

WHY IS THIS IMPORTANT? There is no doubt this weekend's enhancement of U.S.-Vietnam diplomatic ties is going to add to Xi Jinping's anxiety about the U.S. encirclement of China in the Asia-Pacific region. While Vietnam will never be a full-fledged ally of the U.S., the increasingly close ties with Washington also mean that it will be more complicated for the Chinese to feel as if Hanoi is fully aligned with their worldview.

SUGGESTED READING:

• ASEAN Wonk: Historic US-Vietnam Double Upgrade: The Substance of Symbolism in the New Comprehensive Strategic Partnership by Prashanth Parameswaran
• Foreign Policy: Biden’s Vietnam Deals Should Center on the Mekong by Brian Eyler

Hundreds of Vietnamese trucks carrying fresh fruit are backing up at Chinese border crossings due to newly introduced inspection requirements.

The timing of these new inspections is prompting speculation that it could be a form of retaliation against Vietnam for upgrading diplomatic ties with the United States on Sunday.

If that indeed is what's happening (and it's not certain), it would fit a larger pattern of China using inspections to intentionally slow trade from countries that it is upset with. In 2018, for example, Ford vehicles were inexplicably held up at Chinese ports, presumably in response to new tariffs imposed by the Trump administration on Chinese goods.

WHY IS THIS IMPORTANT? China is clearly anxious about closer U.S.-Vietnamese ties and while officials in Beijing haven't explicitly said so, a trade slowdown like what's happening now on the Vietnamese border could very well be their way of conveying that message without actually saying anything.

SUGGESTED READING:

• Reuters: Ford's cars being held up in Chinese ports in trade tensions with U.S. by Norihiko Shirouzu and Michael Martina
• Global Times: Biden’s high-profile visit to Vietnam ‘symbolic gesture’ with limited outcomes by Chen Qingqing and Ma Jingjing

The Philippines Coast Guard and Navy successfully outmaneuvered a Chinese blockade to bring food and other provisions to a remote outpost in the South China Sea -- but not before several harrowing confrontations with Chinese vessels that appeared determined to prevent the Filipino vessels from passing.

Chinese fishing vessels, known as the maritime militia, also took part in Friday's stand-off with Philippines ships that had to move quickly to avoid being rammed and to make their way through more than a dozen Chinese vessels.

The Chinese Coast Guard said the Philippines supply boats and two coast guard ships had illegally entered its waters near the Second Thomas Shoal, part of the larger South China Sea territory that China claims for itself -- a point that is fiercely opposed by the Philippines and other countries in the region that also have claims to portions of the South China Sea.

Meantime overhead, a U.S. Air Force P-8 Poseidon reconnaissance aircraft closely monitored the situation in the event that the Philippines vessels called on the U.S. for assistance as part of the two countries' mutual defense treaty.

WHY IS THIS IMPORTANT? The intensity of the showdowns between the Chinese and Philippines Coast Guards appears to be increasing, raising the chances of an accident or other confrontation that could lead to the intervention of the U.S. Navy, which is now on standby should Manila call for its assistance.

SUGGEST READING:

• ABS-CBN: Philippines says China 'harassed' new resupply mission for BRP Sierra Madre by Jauhn Etienne Villarue
• Reuters: In cat and mouse game, Philippines resupplies troops in South China Sea atoll by Jay Ereno

In this image taken by the Philippine Coast Guard (PCG), seven Chinese vessels, including unmarked "maritime militia" ships, surrounded a pair of PCG ships during a re-supply mission on Friday.

Zambian President Haikinde Hichilema landed in the southern Chinese megacity of Shenzhen on Sunday to kick off a six-day visit to China that will include highly-anticipated talks with his Chinese counterpart Xi Jinping to finalize the details of a debt restructuring deal signed last June.

Chinese creditors own an estimated two-thirds of Zambia's bilateral debt and played a central role in more than two years of negotiations that resulted in the deal that was agreed to in Paris earlier this summer.

Hichilema's challenge this week, according to Zambian scholar Emmanuel Matambo, researcher director at the Centre for Africa-China Studies at the University of Johannesburg, is to keep Beijing engaged in the debt restructuring process while at the same time try to persuade the Chinese government to provide new development financing:

• DEBT RESTRUCTURING: China was curiously reticent about the debt restructuring process right up to the consummation of the deal in June 2023. Thus, the invitation to visit China is supposed to clear some of the misunderstandings, if not in substance, at least in form. Hichilema will want to get more assurance from China about continuing its commitment to Zambia in terms of infrastructure in the transport and energy sector.

• DEBT WRITE-OFFS: There has been widespread disenchantment about the rising costs of commodities in Zambia. Beijing, through its Embassy in Zambia, is well aware of how Hichilema has been embarrassed by angry citizens twice this year in the Mandevu constituency. To help him, China might actually want to write off some of the debt owed to it by Zambia.

• STABLE TIES: China's detractors are keen to draw adverse conclusions from China's unusual silence during the debt restructuring negotiations. China was silent but not hostile to the process. Relations between the two countries remain on an even keel and will do so, if not out of genuine diplomacy, then out of history and necessity.

The president is also scheduled to meet with Chinese investors to try and entice them to invest in Zambia's mining, energy and infrastructure sectors.

WHY IS THIS IMPORTANT? This trip is going to be critical for both countries to try and close the debt restructuring deal and put it behind them. China's critics have long blamed Beijing for dragging out the process, while Hichilema is coming under increasing pressure at home for letting this drag on. While the deal may have been agreed to back in June, it still needs to be finalized by the various creditors, which is what he's hopefully going to do this week.

SUGGESTED READING:

• Reuters: Zambian president to visit China, seeks to formalise June debt deal by Joe Cash
• Associated Press: Debt-plagued Zambia reaches deal with China, other nations to rework $6.3B in loans, French say by Sylvie Corbet