Aside from the politicians who attended the Forum on China-Africa Cooperation summit in Beijing earlier this, seemingly few others were pleased to hear that China is providing Africa with another massive $60 billion package of loans and grants.
In countries like Kenya and Zambia, there is widespread anger over the surging levels of debt and the lack of transparency on the part of local governments over how much money they’re borrowing from Beijing and how those funds are being used.
The mood in China was similarly negative, albeit for entirely different reasons. There were widespread denunciations of the FOCAC package among social media users, complaining that the government is giving away too much money in foreign aid while there are still between 30–50 million Chinese at home who live in dire poverty. The government’s censors responded by shutting down the discussion online, deleting critical posts and banning the use of certain keywords.
Kai Xue, a Beijing-based attorney who specializes in outbound investment in developing countries, is among a growing number of Chinese analysts who is increasingly skeptical of the government’s rationale for committing so much money to Africa when there may better opportunities for Chinese investment elsewhere, particularly along the Belt and Road Initiative global trade route.
He joins Eric & Cobus to discuss the current state of China-Africa relations and the how to mood in China towards Africa appears to be changing.
Show Notes:
- Financial Times: The boon of China’s entry into Africa comes with a warning by David Pilling
- Daily Nation: Are China’s financial dealings in Africa a debt trap or bailout? by Aggrey Mutambo
- Financial Times: Kenyan railway highlights sharper focus on affordability by John Aglionby
About Kai Xue:
Kai Xue is a corporate lawyer based in Beijing who advises clients on investments in Africa and also works closely with China’s major policy banks like the Exim Bank and the China Development Bank. Kai Xue is also a regular commentator on Sino-African affairs in a number of Chinese and African newspapers and blogs.
