These
concerns, as brought out in a Working Paper (WP) on China, Africa and
International Aid Architecture (African Development Bank) centre on the Chinese
practice of routing their Exim Bank loans to projects proposed by Chinese
companies, which inter alia fuel corruption "through the transfer of large
funds to poorly governed regimes."
This
happened in Zimbabwe, for instance, when
$58 million credit was channelled through a company called Farmer's
World. The company's officials travelled to China to select agricultural
equipment and machinery to be imported under the loan, "with all payments going
from the Chinese bank to the Chinese exporters".
Much
worse was witnessed in a rural telecom project in Sierra Leone. There was no
competitive bidding and the project ran the risk of "not receiving the best
value" for money.
Put
simply, in a Chinese aided project there is never any actual transfer of
money. Money remains in China through
payments to Chinese companies and their sub-contractors. At the same time, the concessional line of
credit promotes export of Chinese goods and services. And the recipient country
remains beholden to the Bamboo capitalist. These are high cost funds no doubt
but China is not a fussy lender. Bottom-line only matters to it as it dons the
mantle of the East India Company that once enriched the pockets of British
nobles.
China
Eximbank has financed more than 300 projects in Africa since 1996. And the
Chinese Ministry of Commerce financed another 900 plus projects in various
African countries. China has also cancelled $1.2 billion in debt. A recent report on Al Jazeera (Aug 11, 2015)
titled "How China is changing Africa", has put China's trade with Africa at
more than $200 billion in 2014.
"But
as business ties deepen, critics say in some cases benefits aren't felt by
average citizens, causing more Africans to question the terms of China-Africa
relations" the report said. This is
because in addition to being the continent's largest trading partner, China
finances infrastructure projects and government loans in exchange for resources
such as oil, iron ore, timber, cotton and minerals like bauxite.
World
Bank has also endorsed the view that most China-funded projects are somehow
connected to getting resources. "Most Chinese government funded projects in
sub-Saharan Africa are ultimately aimed at securing a flow of sub- Saharan
Africa's natural resources for export to China," a Bank study said.
The
presence of the Chinese in Africa has driven a lot of locals out of business,
and stunted local manufacturing; it also contributed to the emergence of China
enclaves all over Africa including Kenya. And these fast growing China towns
are fast becoming eye sores. This is new colonialism at work.
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