22/05/2020
- The tech investment push is part of a fiscal package waiting to be signed off by the National People’s Congress, which convenes this week
- This initiative will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the ‘Made in China 2025’ programme
A conductor rehearses the military band on the sidelines of the National People’s Congress in Beijing’s Great Hall of the People in March of last year. China’s legislature is expected to sign off on a massive tech-led stimulus plan. Photo: AP
Beijing is accelerating its bid for global leadership in key technologies, planning to pump more than a trillion dollars into the economy through the roll-out of everything from next-generation wireless networks to artificial intelligence (AI).
In the master plan backed by President Xi Jinping himself, China will invest an estimated 10 trillion yuan (US$1.4 trillion) over six years to 2025, calling on urban governments and private hi-tech giants like Huawei Technologies to help lay 5G wireless networks, install cameras and sensors, and develop AI software that will underpin
to automated factories and mass surveillance.
The new infrastructure initiative is expected to drive mainly local giants, from
and Huawei to SenseTime Group at the expense of US companies.
As tech nationalism mounts, the investment drive will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the “Made in China 2025”
programme. Such initiatives have already drawn fierce criticism from the Trump administration, resulting in moves to block the rise of Chinese tech companies such as Huawei.
How will China’s annual legislative meetings affect the stock investor? Five key industries to watch
“Nothing like this has happened before, this is China’s gambit to win the global tech race,” said Digital China Holdings chief operating officer Maria Kwok, as she sat in a Hong Kong office surrounded by facial recognition cameras and sensors. “Starting this year, we are really beginning to see the money flow through.”
The tech investment push is part of a fiscal package waiting to be signed off by China’s legislature, the
National People’s Congress, which convenes this week. The government is expected to announce infrastructure funding of as much as US$563 billion this year, against the backdrop of the country’s worst economic performance since the Mao era.
The nation’s biggest purveyors of cloud computing and data analysis Alibaba, the parent company of the
South China Morning Post, and
Tencent Holding will be linchpins of the upcoming endeavour. China has already entrusted Huawei, the world’s largest telecommunications equipment supplier, to help galvanise 5G. Tech leaders including Pony Ma Huateng and
Jack Ma are espousing the programme.
Maria Kwok’s company is a government-backed information technology systems integration provider, among many that are jumping at the chance. In the southern city of Guangzhou, Digital China is bringing half a million units of project housing online, including a complex three quarters the size of Central Park in New York City. To find a home, a user just has to log on to an app, scan their face and verify their identity. Leases can be signed digitally via smartphone and the renting authority is automatically flagged if a tenant’s payment is late.
China is no stranger to far-reaching plans with massive price tags that appear to achieve little. There is no guarantee this programme will deliver the economic rejuvenation its proponents promise. Unlike previous efforts to resuscitate the economy with “dumb” bridges and highways, this newly laid digital infrastructure will help national champions develop cutting-edge technologies.
“China’s new stimulus plan will likely lead to a consolidation of
industrial internet
providers, and could lead to the emergence of some larger companies able to compete with global leaders, such as GE and Siemens,” said Nannan Kou, head of research at BloombergNEF, in a report. “One bet is on industrial
internet-of-things (IoT) platforms, as China aims to cultivate three world leading companies in this area by 2025.”
China is not alone in pumping money into the technology sector as a way to get out of the post-coronavirus economic slump. Earlier this month, South Korea said AI and wireless communications would be at the core of it its “New Deal” to create jobs and boost growth.
Nothing like this has happened before, this is China’s gambit to win the global tech raceMaria Kwok, COO at Digital China Holdings
The 10 trillion yuan that China is estimated to spend from now until 2025 encompasses areas typically considered leading edge, such as AI and IoT, as well as items such as ultra-high voltage lines and high-speed rail, according to the government-backed China Centre for Information Industry Development. More than 20 of mainland China’s 31 provinces and regions have announced projects totaling over 1 trillion yuan with active participation from private capital, a state-backed newspaper reported on Wednesday.
Separate estimates by Morgan Stanley put new infrastructure at around US$180 billion each year for the next 11 years – or US$1.98 trillion in total. Those calculations also include power and rail lines. That annual figure would be almost double the past three-year average, the investment bank said in a March report that listed key stock beneficiaries including companies such as China Tower Corp, Alibaba, GDS Holdings, Quanta Computer and Advantech Co.
Beijing’s half-formed vision is already stirring a plethora of stocks, a big reason why five of China’s 10 best-performing stocks this year are tech plays like networking gear maker Dawning Information Industry and Apple supplier GoerTek. The bare outlines of the master plan were enough to drive pundits toward everything from satellite operators to broadband providers.
China’s telecoms carriers push to complete ‘political task’ of 5G network roll-out amid coronavirus crisis
It is unlikely that US companies will benefit much from the tech-led stimulus and in some cases they stand to lose existing business. Earlier this year, when the country’s largest telecoms carrier China Mobile awarded contracts worth 37 billion yuan for 5G base stations, the lion’s share went to Huawei and other Chinese companies. Sweden’s Ericsson got only a little over 10 per cent of the business in the first four months. In one of its projects, Digital China will help the northeastern city of Changchun swap out American cloud computing staples IBM, Oracle and EMC with home-grown technology.
It is in data centres that a considerable chunk of the new infrastructure development will take place. Over 20 provinces have launched policies to support enterprises using cloud computing services, according to a March research note from UBS Group.
Tony Yu, chief executive of Chinese server maker H3C, said that his company was seeing a significant increase in demand for data centre services from some of the country’s top internet companies. “Rapid growth in up-and-coming sectors will bring a new force to China’s economy after the pandemic passes,” he told Bloomberg News.
From there, more investment should flow. Bain Capital-backed data centre operator ChinData Group estimated that for every one dollar spent on data centres another US$5 to US$10 in investment in related sectors would take place, including in networking, power grid and advanced equipment manufacturing. “A whole host of
supply chain companies will benefit,” the company said in a statement.
There is concern about whether this long-term strategy provides much in the way of stimulus now, and where the money will come from. “It’s impossible to prop up China’s economy with new infrastructure alone,” said Zhu Tian, professor of economics at China Europe International Business School in Shanghai. “If you are worried about the government’s added debt levels and their debt servicing abilities right now, of course you wouldn’t do it. But it’s a necessary thing to do at a time of crisis.”
Digital China is confident that follow-up projects from its housing initiative in Guangzhou could generate 30 million yuan in revenue for the company. It is also hoping to replicate those efforts with local governments in the northeastern province of Jilin, where it has 3.3 billion yuan worth of projects approved. These include building a so-called city brain that will for the first time connect databases including traffic, schools and civil matters such as marriage registry. “The concept of smart cities has been touted for years but now we are finally seeing the investment,” said Kwok.
Source: SCMP
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29/03/2020
- Throughout the world, overworked health care professionals are being infected with Covid-19, yet the Lion City has kept numbers low
- Preparation, planning, patient ratios and protective equipment have all played a part. Still, even the best gear cannot guard against discrimination
Medical staff walk to the National Centre for Infectious Diseases building at Tan Tock Seng Hospital in Singapore. Photo: AFP
U
ncooperative patients, long hours and a lack of protective equipment are hampering health care workers across the world as they take the fight to the
coronavirus, leading many to fall sick themselves.
In Malaysia, a pregnant woman who did not disclose that her father was infected tested positive after giving birth, leading to the shutdown of the entire hospital for cleaning. In the Philippines, nine doctors have died, two of whom had dealt with a patient who lied about her travel history.
In Spain, where more than 5,400 health care workers have been infected, accounting for about 14 per cent of the country’s patients, there are no longer enough workers to care for patients.
In Italy, which has more than 69,000 patients, the virus killed a doctor who had no choice but to work without gloves.
In the United States, which has surpassed China to become the world’s most infected nation with more than 83,000 people testing positive for Covid-19, hospitals are being overrun with patients.
Health care staff in the country say patients are packed into emergency wards and intensive care units (ICUs), further raising the risk of infections. They also report shortages of ventilators, face masks, gowns and shields.
The US Centres for Disease Control and Prevention on March 7 released interim guidelines saying health care workers exposed to the coronavirus could be asked to return to work as long as they wore face masks and were not showing symptoms, if their employers had no other manpower available.
Malaysian health workers at Kuala Lumpur International Airport. Photo: AFP
A REASON FOR OPTIMISM
However, amid all the gloom, Singapore’s experienceis being held up as a reason for optimism. The city state has reported more than 630 cases of infection, all of which are being treated in hospital, yet only a handful of its health care professionals have been infected. What’s more, even these cases, according to Vernon Lee, director of communicable diseases at the Ministry of Health, are thought to have been infected outside the health care setting.
Experts suggest this has been more than just luck, pointing to a case in which 41 health workers were exposed to the coronavirus in a Singapore hospital yet evaded infection.
The workers had all come within two metres of a middle-aged man with Covid-19 who was being intubated, a procedure which involves a tube being inserted into the patient’s trachea. The procedure is seen as being particularly hazardous for health workers as it is “aerosol generating” – patients are likely to cough.
The workers had not known at the time that the man had the virus and all were quarantined after he tested positive. However, on their release two weeks later, none of them had the virus.
Coronavirus: as Malaysia braces for third wave, doctors make their own face masks
The case has come to widespread attention partly because the workers were wearing a mix of standard surgical masks and the N95 mask, which doctors see as the gold standard as it filters out 95 per cent of airborne particles.
The conclusion, published in The Annals of Internal Medicine this month, was this: “That none of the health care workers in this situation acquired infection suggests that surgical masks, hand hygiene, and other standard procedures protected them from being infected.”
Surgeon and writer Atul Gawande mentioned the case in an article for The New Yorker on how health care workers could continue seeing patients without becoming patients. He said there were things to learn from Asia and that some of the lessons came out of the “standard public health playbook”. In other words, there is much to be said for social distancing, basic hand hygiene and cleaning regimens.
A health worker in protective gear walks into a quarantine room at a hospital in Banda Aceh, Indonesia. Photo: AFP
COMING TOGETHER
With critical supplies running short in many countries, experts say it is increasingly vital that countries share both knowledge and resources.
To this end, China has been donating personal protective equipment to places including the Philippines, Pakistan and Europe. China’s richest man Jack Ma is donating 1.8 million masks, 210,000 Covid-19 test kits and 36,000 pieces of protective clothing to 10 countries in Asia.
At the same time, doctors are encouraging the Western world to learn from Asia.
Infectious diseases expert Leong Hoe Nam said that being “bitten by Sars” (severe acute respiratory syndrome) in 2003 had prepared Asia for Covid-19, while Western countries were not similarly prepared and hence lacked sufficient protective equipment.
He pointed to how about 2,000 health care workers had fallen sick in China early in the outbreak because workers did not initially have protective gear. The trend reversed as equipment became available.
“Once the defences were up, there were very few health care workers who fell sick at work. Rather, they fell sick from contact with sick individuals outside the workplace,” he said.
Malaysia is a case in point. While it has reported 80 health care workers falling ill, most are thought to be community infections.
Coronavirus: Doctor explains the proper way to wash your hands and put on a face mask
In a webinar organised by Caixin Global on Thursday night, Peng Zhiyong, an intensive care specialist at Zhongnan Hospital of Wuhan University, shared how they managed a shortage of personal protective equipment early on in the outbreak by rationing workers to two sets of gear per shift.
Meanwhile, in the Philippines, doctors from Manila’s Chinese General Hospital held a video conference call with doctors in Zhejiang to learn from China’s experience of treating Covid-19 patients.
Crowdsourcing platforms have also been created to share advice. The Brigham and Women’s Hospital in Boston has released guidelines for treating critically ill patients and its website includes information from Chinese doctors.
Why Singapore’s coronavirus response worked – and what we can all learn
The Jack Ma Foundation has also launched an online platform for doctors and nurses around the world to share knowledge on fighting the virus. “One world, one fight,” it said in a tweet.
Associate Professor Jeremy Lim from the global health programme at the Saw Swee Hock School of Public Health said it was crucial for countries to work together.
“Viruses don’t respect borders. Countries have to share information and help each other as we are only as strong as the weakest link. Any country can become a reservoir of disease and the world may then be forced to endure a ping-pong of outbreaks over and over again.”
And the advice of Lee, at Singapore’s Ministry of Health? “Practise good hygiene and wash hands regularly.”
Indonesian medical staff administer mass testing for Covid-19 in Bekasi, West Java. Photo: AFP
SINGAPORE, A CASE STUDY
Amid this sharing of advice, it is often Singapore that is held up as an example to replicate. Despite the country grappling with a rising load of Covid-19 patients, most of whom have recently returned to the city state from abroad, its health care system has continued to run smoothly. Doctors say this is because it has been preparing for a pandemic ever since Sars caught it by surprise. During the Sars outbreak, health care workers accounted for 41 per cent of Singapore’s 238 infections.
Consequently its hospitals swung into contingency planning mode early on in the coronavirus outbreak, telling staff to defer leave and travel plans after its first cases emerged.
Meanwhile, its hospitals swiftly split their workforces into teams to ensure there were enough workers if the outbreak worsened, and to ensure workers got enough rest.
Singapore has 13,766 doctors, or 2.4 doctors for every 1,000 people. That compares to 2.59 in the US, 1.78 in China and 4.2 in Germany. Places like Myanmar and Thailand have fewer than one doctor for every 1,000 people.
Coronavirus: Covid-19 could live on in Indonesia long after world recovers
“The objective is that you can run essential services with the greatest amount of security. Make sure functional units have redundancy built in, and are separate from each other. It depends on what you feel is sufficient to carry on services if one team is affected, factoring in rest periods and some system of rotation,” said Chia Shi-Lu, an orthopaedic surgeon.
The key is to ensure a good doctor-to-patient ratio and ensure there are enough specialists for the critical work, such as doctors and nurses who can provide intensive care, and know how to operate mechanical ventilators or machines to pump and oxygenate a patient’s blood outside the body.
At the emergency department where paediatrics emergency specialist Jade Kua treats Covid-19 cases in addition to regular emergencies, doctors are split into four teams of 21. Each team takes alternate 12-hour shifts and does not interact with other teams.
“We are in modular teams so the teams move together. So you and I would both do morning, off, night, off, morning off. Together. And then the other teams would do the same and we don’t intermingle,” said Kua.
US now has world’s most coronavirus cases, surpassing China
Chia, who works at the Singapore General Hospital, said doctors had been split up according to their functions.
“We try not to meet at all with the other teams as much as possible. We’ll just say hi from across the corridor. Meals are the same. All our cafeterias and everything have got social distancing spaced in already,” said Chia, who is also a member of parliament and chairs a shadow committee on health.
Chia said the health care system could also tap on doctors in the private sector.
Not every country has a plan like this. Last year’s Global Health Security Index by the Economist Intelligence Unit found that 70 per cent of 195 countries scored poorly when it came to having a national plan for dealing with epidemics or pandemics. Almost three in 10 had failed to identify which areas were insufficiently staffed. In India, with a population of 1.3 billion, only about 20,000 doctors are trained in key areas such as critical care, emergency medicine and pulmonology.
Singapore, Hong Kong, Taiwan: the real coronavirus world leaders
In contrast, Singapore published its first Influenza Pandemic Preparedness and Response Plan in June 2005 and has since honed it to a tee. Hospitals regularly war-game scenarios such as pandemics or terrorist attacks and the simulations are sometimes observed by the Ministry of Health, which grades the performance and recommends areas for improvement.
The plan also covers the need to stockpile equipment to avoid the sort of shortages many countries are now facing, another lesson inspired by Sars when masks, gloves and gowns were in short supply.
In a pandemic preparation paper published in 2008, Singapore public health specialist Jeffery Cutter wrote that Singapore’s stockpile was sufficient to cover at least 5 to 6 months’ use by all front-line health care workers.
During the Covid-19 outbreak, it has also told citizens to not wear masks so it can conserve supply for medical staff.
Having enough protective gear has reassured Singapore’s health care workers such as Kua, a mother of six who blogged about her experience fighting Covid-19. Kua said: “I’m safe and my family is safe.”
India’s poor hit hard by 21-day nationwide lockdown amid the coronavirus pandemic
SOMETHING YOU CAN’T GUARD AGAINST
Despite the many positives to emerge from the Lion City, its health care workers are struggling with another problem: discrimination.
While in France, Italy and Britain, residents cheer health care workers from their windows, in Singapore health care workers are seen by some people as disease carriers.
“I try not to wear my uniform home because you never know what kind of incidents you may encounter,” said one Singapore nurse. “The public is scared and wearing our uniforms actually causes quite a bit of inconvenience. One of my staff tried to book a private-hire car to the hospital for an emergency and she was rejected by five drivers.”
There is a similar stigma in India, where the All India Institute of Medical Sciences has appealed to the government for help after health workers were forced out of their homes by panicked landlords and housing societies.
“Many doctors are stranded on the roads with all their luggage, nowhere to go, across the country,” the institute said in a letter.
Lim, from the Saw Swee Hock School of Public Health, said the worst human impulses and “every man for himself” attitudes could emerge in crises and “that is exactly why governments have to step in”.
Discrimination could affect both the performance and motivation of health care workers, Lim warned.
Meanwhile, when health care workers are infected, it creates a “triple whammy” threat.
“It means one fewer professional in an already-strained system, another patient to care for and, potentially, a team of colleagues who need to be quarantined,” said Lim.
“We must do everything possible to keep our health care workforce safe and free from Covid-19.” ■
Source: SCMP
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17/08/2019
- Beijing has lent billions of dollars to countries on the continent to build railways, highways and airports but critics say the borrowings are unsustainable
- Chinese officials say the projects will pay off in the long run and host nations are well aware of their limits and needs
Illustration: Lau Kakuen
When Clement Mouamba went to Beijing last year, he had two main tasks.
The prime minister of the Republic of Congo needed to find out exactly how much his country owed to China, a number the struggling, oil-rich central African nation had until then not been able to provide the International Monetary Fund (IMF) to qualify for a bailout. He also needed to convince Beijing to restructure its debt to ensure sustainability.
The IMF had put talks for further loans on hold until Mouamba’s administration could say exactly how much it had to repay to the country’s external creditors, including China – the republic’s single largest bilateral lender – and oil multinationals such as Glencore and Trafigura.
The country, which heavily depends on oil revenue, turned to China and private oil majors for funding to run the government when in 2014 oil prices fell from a high of US$100 per barrel to as low as US$30.
The Republic of Congo has since restructured its borrowings from China, which holds about a third, or US$2.5 billion, of the Congolese debt, by extending the repayment period by an additional 15 years.
A number of other African countries struggling to service their loans from Beijing have also pursued concessions. Ethiopia has had part of its Chinese debt written off and terms relaxed for the US$3.3 billion loan it took to build its railway, while Zambia is seeking similar adjustments for its borrowings used to build airports and highways.
Critics say countries on the continent are being burdened with unrealistic levels of debt for inviable infrastructure backed and built by China without adequate transparency and scrutiny.
The biggest concern is that several African countries will be left with huge debts and grandiose infrastructure that they cannot maintain and run profitably. I liken it to borrowing money to buy a Tesla when you don’t have adequate access to electricity: Obert Hodzi of the University of Helsinki in Finland
But Chinese observers say the West must take some of the blame for the countries’ debt problems and that the support China offers will benefit the host countries in the long run.
In the early 1990s, when China began to embrace Africa again after years of isolation from the outside world, the aspiring manufacturer was at a serious disadvantage in the race for raw materials and markets for its industrial goods.
The former colonial powers of the West had already sewn up deals for many of the continent’s most lucrative and readily exploitable reserves, from fossil fuels to minerals.
China needed new strategies to convince African governments to allow it access raw materials for its industries and markets for its products to a largely unfamiliar partner.
China also wanted to challenge the dominance of the US in global trade and politics so it courted allies in Africa to help it push for political legitimacy in international institutions.
A Kenya Railways freight train leaves the port station on the Mombasa-Nairobi railway in Mombasa, Kenya, a huge project backed by China. Photo: Bloomberg
At the time, many African leaders were under fire to liberalise their economies. China’s approach was to promise not to meddle in individual country’s internal affairs and assure African countries that they could get billions in exchange for future delivery of minerals through resource-backed deals.
Beijing sold its policies that it had no conditions attached to its development finance. In the drive to drum up business, China promised affordable loans for African countries to build roads, bridges, highways, airports and power dams.
Is Kenya’s Chinese-built railway a massive white elephant?
But Beijing also pursued tied finance, ensuring that countries borrowing from China used Chinese contractors to implement the projects rather than open them up to outside bids.
In addition, many of the deals were built on weak financial, technical and environmental conditions, with Chinese state firms conducting the technical feasibility, environmental impact assessment and financial viability studies for free for projects that they also build.
For example, in Kenya, the China Road and Bridge Corporation conducted a free feasibility study that was used in the construction of the railway.
The same company was handed the contract to implement the project and is operating both the passenger and cargo train service for a fee.
Chinese companies were responsible for the construction of a rail line between Addis Ababa and Djibouti. Photo: AFP
In contrast, the World Bank and its partner institution, the IMF, demand that such studies be done by an independent consultant and not by the company that implements the project.
According to data compiled by the China-Africa Research Initiative, at the Johns Hopkins University School of Advanced International Studies, Beijing has advanced loans worth US$143 billion to African countries since 2000, levels that some critics say are unsustainable for the borrowers.
China meets resistance over Kenya coal plant, in test of its African ambitions
For many of China’s new African partners, these arrangements – from easy lending terms, to non-competitive bidding and opaque contract details – have led to new problems – problems that corrupt or poorly managed governments now share substantial responsibility.
Some critics, both in the West and in host countries, suggest there is a “debt-trap strategy” at the heart of Beijing’s push for international business and influence, but there is no evidence that China deliberately pushes other countries into debt to seize their assets or gain sway.
However, the drive for overseas contracts and big business has led some countries into difficulties with new debts, and there are question marks over the viability of many of the projects the money is funding.
Obert Hodzi, an international relations expert at the University of Helsinki in Finland, said the Addis Ababa-Djibouti railway and the Mombasa-Nairobi railway were good examples of huge projects that were financed by easy borrowing terms from China but were not sustainable and that had in turn forced the African partners to seek further Chinese help.
“The biggest concern is that several African countries will be left with huge debts and grandiose infrastructure that they cannot maintain and run profitably,” Hodzi said. “I liken it to borrowing money to buy a Tesla when you don’t have adequate access to electricity.”
Ken Opalo, a Kenyan scholar at Georgetown University in Washington, said the key issue was the inability of African countries to design projects that were actually needed for the local economies.
A road is not just a means of transport but an economic belt or corridor that will catalyse the development of the whole region: Huang Xueqing, spokeswoman for the Chinese embassy in Nairobi
“Most African countries have been willing to accept projects designed, financed, and implemented by Chinese firms,” Opalo said.
“It would be better to decouple the feasibility studies and design phases of projects from the financing. That way African governments can ensure that they are truly getting value for money.”
But Chinese officials said Beijing had invested in infrastructure largely at the request of the host countries, adding that it could take time to yield returns on the projects.
Huang Xueqing, spokeswoman for the Chinese embassy in Nairobi, said the projects were valid assets with value that would grow in time.
“So, in the long run, it is beneficial to the host countries. Just like when young people buy a house with a mortgage, they may take some debts, but they have a place to live in and have their own assets,” Huang said.
“Underdeveloped infrastructure is the bottleneck that has been holding back Africa’s development. Up to today, many African countries, although in the same continent, are not connected with direct flights, railways or even roads. You have to fly to Paris or Zurich in order to get to some African countries.
“A road is not just a means of transport but an economic belt or corridor that will catalyse the development of the whole region.”
Huang said Beijing had advised the countries to act within their means and not to overstretch themselves when they considered projects that might not be in line with local conditions.
“When making investment decisions, the Chinese side, along with the recipient countries, carry out rigorous feasibility studies and evaluations. We do things according to our ability,” she said.
China’s leadership has also said it is paying close attention to the fiscal and financial difficulties faced by some African countries.
“As a good friend and good brother … the Chinese side is willing to lend a helping hand when needed by the African people to help them overcome temporary difficulties,” State Councillor and Foreign Minister Wang Yi said in January while on a trip to Ethiopia, adding that the debt situation in Africa is also a legacy issue.
China must allay any debt-trap fears in its dealings with Africa
“The African debt issue does not come up today, still less is it caused by the Chinese side. The African people know who are the initiators of African debt.”
The West should take a lot of the blame for worsening debt problems in some African countries, according to Li Anshan, from Peking University’s Centre for African Studies.
He cited the cases of Liberia and the Democratic Republic of Congo, two countries that have had close relations with the West for many years but remain ravaged by war and poverty despite immense natural resources.
“China-Africa relations have been going on for quite some time. Is there any African country which has got poorer because of its deal with China?” Li said.
Gyude Moore, a former Liberian minister of public works whose department oversaw construction and maintenance of various public infrastructure funded and built by China, said it would be difficult to imagine that China would knowingly ensnare its partners in debt.
“China attempts to differentiate itself from Western donors by limiting non loan-related conditionality. China also practices non-interference, so how a country manages its resources, treats its people or deploy its finances were considered ‘internal’,” he said.
“So, Chinese loans are negotiated faster and place less emphasis on public financial management.”
Moore, now a visiting fellow at the Centre for Global Development, said there were trade-offs in such situations.
China focuses on sustainable projects to dismiss fears of African debt trap
“If the loans are going to be fast – the due diligence will not be as rigorous. Chinese project selection mixes political with economic considerations. So, while a project may not make as much economic sense, it may pay political dividends,” he said.
He said non-transparent processes would invite abuse, be they Chinese, Western or African.
Other observers say the question of opacity is more directly related to China’s own economic system.
Howard French, author of China’s Second Continent: How a Million Migrants are Building a New Empire in Africa, said China has very limited transparency and public accountability in its own domestic processes.
The Mombasa railway station is seen in Mombasa, Kenya, in 2018. Photo: Xinhua
“So it would be unusual to expect that China would introduce greater transparency and accountability in its dealings with African countries than it is used to at home – that is, unless African governments insist on it,” French said.
“And this is where African governance comes in. African states should insist on contract transparency but often don’t do so because that offers leaders plentiful opportunities for graft.”
David Shinn, professor of international relations at George Washington University in Washington, agreed that China’s lack of loan transparency was a huge problem and increased the risk of corruption on both the African and Chinese sides. But he also said that in some cases, African governments might have negotiated poorly.
“This is, however, the responsibility of the African government. I don’t think China is purposely trying to encourage African debts in order to gain leverage,” Shinn said.
“In fact, China is becoming more careful about its lending because it is concerned it has made too much credit available to some African countries.”
China ‘ready to talk’ about trade deal with East Africa bloc
Huang Hongxiang, director of China House, a Nairobi-based consultancy that helps Chinese in Africa integrate better, agreed, saying the Chinese government needs to communicate more about projects in Africa but African countries also have a bigger part to play in ensuring better deals.
“On commercial viability, accountability, transparency and governance, I believe the responsibility does not lie with China, the US or the West but in the hands of African countries,” he said.
Wherever the fault lies, one thing is clear when money is wasted on ill-designed projects that have little to no economic return, according to Opalo.
“The lack of planning and transparency creates default risks … [and] African taxpayers will be left holding the bag.”
This article is the third in a series examining the local impact of Chinese investment and infrastructure projects in Africa. Read part one here and part two
The next report will examine whether African countries can speak with one voice in relations with China.
Source: SCMP
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