This issue first explores why China may be becoming more cautious about lending to Africa, a Chinese company’s efforts to fight malaria in Kenya, and increased tensions between Kenyan and Chinese traders. We also summarize China’s critique of claims of debt-traps and neocolonialism and cover the China-Africa Economic and Trade Expo held in Hunan. Lastly, we describe the collapse of a Chinese-owned building in Cambodia, the surge of African migrants travelling to Latin America in pursuit of asylum in America, and US involvement in reaching a power-sharing deal in Sudan. Check out those stories and more in the first July edition of the news roundup!
Every two weeks, The Carter Center’s China Program releases an overview of major events involving Chinese and US global engagement, with a particular focus on emerging issues in Africa and Latin America. In addition to using news sources, the news roundup will analyze papers and reports from academic journals, governmental bodies, and NGOs, and will also summarize debates and other events organized by think tanks on select issues. The news roundup is intended to be a platform and resource for both China watchers and for readers interested in political and economic development in developing countries. It aims to deepen the understanding of China’s foreign policy, and emerging issues and trends in developing countries, as well as to enhance the prospect of multinational cooperation among China, the U.S., Africa and Latin America.
China is thinking twice about lending to Africa
(The Economist, 27 June 2019) 🔗
Kenya’s president, Uhuru Kenyatta, disappeared from the public eye for 10 days in May after he failed to procure funds from China for the continuation of a railway project. To some, China’s financial contribution to Africa seems boundless, as the country agreed to lend US $60 billion to Africa back in September. Many countries find this offer to be attractive as President Xi Jinping guaranteed that the loaned money would come with “no political strings attached.” President Kenyatta likely assumed that the penultimate section of his railway project was guaranteed US $3.5 billion from China as it was a high-profile Chinese project in Africa and President Xi previously paid US $4.7 billion to finance the first two sections of the railway. However, it seems that China is becoming more cautious in financing overseas projects, partially because of past projects’ poor performance. For example, Sinosure, China’s state-owned insurer, lost US $1 billion after financing a railway between Djibouti and Addis Ababa. When President Kenyatta arrived in China to secure the railway funding, he was questioned about corruption, Kenya’s finances, and his political plans. Ultimately, President Kenyatta agreed to export avocados to China and was granted funds for unrelated construction, but this was incomparable to the massive funding he was expecting to receive. The Economist writes that “Mr Xi might not be about to champion human rights, but China’s shift closer to Western lending standards is a step in the right direction.”
Cambodia: Sihanoukville building collapse death toll rises
(BBC, 23 June 2019) 🔗
A seven-story building owned by a Chinese company collapsed in Sihanoukville, Cambodia. This collapse, one of the worst in Cambodia recently, killed at least 18 people, injured at least 24 people, and left many stranded. Officials have arrested four people for their involvement in the collapse: the Chinese building owner, head of the construction firm, the contractor, and a Cambodian landowner. Sihanoukville was once a small fishing village but Chinese investment over the past three years has transformed the area into one populated by Chinese casinos and hotels. The building collapse establishes concerns about the “rate and sustainability of construction in Sihanoukville” and likely increases anti-Chinese opinions in Cambodia.
China is Leading the Next Step in Fighting Malaria in Africa
(Jacob Kushner, The Atlantic, 4 July 2019) 🔗
Chinese company New South is planning mass drug administration (MDA) of antimalarial pills in Kenya, a country of 50 million people, 70% of whom are at risk for malaria. In the mid-2000s, New South began eradicating malaria from Comoros, a small African island country. China has used MDA to fight malaria at home since at least 1981. Chinese scientist Tu Youyou discovered artemisinin, an antimalarial compound, in 1972 and won a Nobel Prize in 2015. Drugs with this compound will be used in the Kenyan MDA. This work in Kenya may help change the local perception that Chinese-made drugs and goods are low quality and may show that China has more to offer than infrastructure. There are some worries that New South may be running this MDA campaign to increase its medicine sales. However, Dr. Bernhards Ogutu of the Kenya Medical Research Institute says that these worries are unwarranted because artemisinin-based antimalarial medications sell for just pennies per pill. He predicted that by using MDA and similar methods, malaria can be eradicated from some parts of Kenya in five years.
China defends its Africa interests as benign, calls for sustainable development
(Africa News, 25 June 2019) 🔗
At a June 25 meeting of senior African ministers in Beijing, Chinese State Councilor Wang Yi said that China does not seek selfish geopolitical gains in Africa and does not impose its will on others. He denounced accusations of neo-colonialism and debt-traps, notions which he says are not supported by the African people. Last September, President Xi promised $60 billion to African nations. At a business summit the previous week, the US announced a US $60 billion fund that will invest in Africa’s private sector. The goal is to counter China’s influence.
The First China-Africa Economic and Trade Expo Held Successfully in Hunan
(Yahoo Finance, 1 July 2019) 🔗
The first China-Africa Economic and Trade Expo was held in Changsha, Hunan from June 27 to 29 with over 100,000 attendees. In total, there were US $20.8 billion worth of deals made covering trade, investment, infrastructure, agriculture, manufacturing, aviation, tourism, and sister city relations. In addition, 84 cooperation agreements were signed. Bilateral trade between Hunan province and Africa has increased by half for four years straight and reached US $2.8 billion in 2018. Head of the Hunan government said that the province will emphasize supporting Africa’s attempts to foster its endogenous growth, which will create strong business cooperation.
Letter from Africa: Kenya’s love-hate relationship with Chinese traders
(Waihiga Mwaura, BBC, 25 June 2019) 🔗
Recently there have been rising tensions between Kenyan and Chinese entrepreneurs in the Gikomba market, one of the largest open-air markets in Nairobi and arguably the largest second-hand clothes market in East Africa. In mid-June, Kenya’s Business Daily reported on the increase of Chinese traders in Gikomba, which prompted a social media backlash. Several years ago, Kenyan traders and customers benefited from Chinese investors beginning to import goods at a lower price than European imports. However, now as Chinese investors begin to sell goods directly to customers at lower prices, Kenyan traders are frustrated. Some Kenyan traders allege that Chinese traders can clear goods more easily at Kenyan ports. There are concerns that if these tensions are not resolved, they could lead to xenophobia. Those sympathetic to the Kenyan traders have urged the Kenyan President to intervene but believe he will not due to reliance on Chinese funding for infrastructure projects.
U.S. dream pulls African migrants in record numbers across Latin America
(Daina Beth Solomon, Reuters, 5 July 2019) 🔗
Migration from Africa to Mexico will break records this year, according to data from Mexico’s interior ministry. Many of these migrants are hoping to gain entry to the United States. The number of Africans registered by Mexican authorities in the first four months of 2019 was about 1,900 people, four times the amount from the same period in 2018. Most of the migrants are from Cameroon and the DRC, which are both experiencing political violence.
Sudan says US pressure was key to reaching power-sharing deal
(Samy Magdy, Independent Online, 8 July 2019) 🔗
A power-sharing agreement in Sudan was struck last week after the US, Britain, Saudi Arabia, and the United Arab Emirates pressured both Sudan’s military and pro-democracy protestors. There were fears that a prolonged crisis could turn into a civil war. The agreement raises hopes of a democratic transition. Sudanese activists and an anonymous military official reported that the US was intense in its efforts to secure the agreement.