Africa should weigh Chinese loans carefully

Rex Tillerson says: Chinese investments do not bring significant job creation locally

U.S. Tillerson says African countries should weigh Chinese loans carefully

Sec. Tillerson in AU

African Union (AU) Commission Chairman Moussa Faki, of Chad, and U.S. Secretary of State Rex Tillerson shake hands after their news conference after their meeting at AU headquarters in Addis Ababa, Ethiopia March 8, 2018. REUTERS/Jonathan Ernst

ADDIS ABABA, March 8 (Reuters) – U.S. Secretary of State Rex Tillerson said on Thursday that African countries should weigh Chinese loans carefully, while adding that Washington was not trying to keep Chinese investment away from the continent.

Tillerson, a former Exxon chief executive, is seeking to bolster security alliances on a continent increasingly turning to Beijing for aid and trade.

The top U.S. diplomat may also seek to smooth relations after U.S. President Trump reportedly dismissed some African nations as “shithole countries” in January. Trump later denied making the comment.

“We are not in any way attempting to keep Chinese dollars from Africa,” Tillerson told a news conference in the Ethiopian capital during his first diplomatic trip to the continent. “(But) it is important that African countries carefully consider the terms of those agreements and not forfeit their sovereignty.”

Though the United States is the leading donor of humanitarian aid to Africa, China surpassed the U.S. to become Africa’s largest trading partner in 2009.

Beijing has pumped billions into infrastructure projects, though critics say there is often little upside for local economies because Chinese firms and labour build the roads and rails.

Tillerson took that line on Thursday, saying that Chinese investments “do not bring significant job creation locally” and criticised how Beijing structures loans to African government.

If a government accepts a Chinese loan and “gets into trouble”, he said, it can “lose control of its own infrastructure or its own resources through default.” He did not give examples.

Russian foreign minister Sergei Lavrov, visiting Zimbabwe on Thursday, told reporters he did not think it was appropriate for Tillerson to criticize China’s relationship with African countries.

“It was not appropriate to criticise the relations of his hosts when he was a guest there with another country,” he said.


Tillerson arrived in Ethiopia, Africa’s second most populous nation, on Wednesday and visited the African Union headquarters on Thursday. The complex was fully funded and built by China and is seen as a symbol of Beijing’s thrust for influence and access to the continent’s natural resources.

Ethiopia is home to some of Beijing’s biggest investments, from a railway to Djibouti that opened last year to factories and industrial parks.

His comments followed a speech earlier this week in which he criticised “China’s approach” to Africa which he said encouraged dependency through “opaque contracts” and “predatory loan practices”.

“We welcome Chinese participation, but we hope they will follow international rules, international norms and respect the sovereignty of countries,” he said on Thursday.

He made no mention of the political situation in Ethiopia. The prime minister resigned suddenly last month in what he described as a bid to smooth reforms. A state of emergency was swiftly imposed but protests in the restive Oromia region have continued.

Tillerson was due to meet with Ethiopian officials on Thursday afternoon before flying to tiny Djibouti, host to sprawling military bases owned by the U.S., China, Japan, France, and Italy.

He will then visit Kenya, a key U.S. ally in the fight against al Shabaab Islamist militants in Somalia, before travelling to Chad and Nigeria, which are also battling to contain Islamist insurgents.

Analysts say Trump has focused mainly on security concerns in Africa at a time when China, Turkey and other nations are ramping up diplomatic and business links.

(Writing by Maggie Fick Editing by Matthew Mpoke Bigg)
Source: by Aaron Maasho, Reuters News, March 08, 2018
© Copyright 2018 Thomson Reuters. All Rights Reserved.
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China in Africa: The New Colonialism?

 Africa-China relations

Rep. Chris Smith (R-NJ) holds hearing on China’s dubious actions in Africa

Rep. Chris Smith (R-NJ) News Release

“China in Africa” was the title of a hearing chaired by Congressman Chris Smith (R-NJ), chair of the House Subcommittee on Africa, Global Health, Global Human Rights, and International Organizations, on Wednesday, March 7.

Testifying at Smith’s hearing were: Gordon Chang, author of “The Coming Collapse of China,” Joshua Meservey, senior policy analyst on Africa and the Middle East at the Heritage Foundation, Scott Morris, senior fellow at the Center for Global Development, and Anita Plummer, Ph.D., assistant professor in the Department of African Studies at Howard University. (Click on witness names to read testimonies.)

Below are excerpts of Congressman Smith’s opening remarks at the hearing:

Today’s hearing will analyze China’s activity and engagement in sub-Saharan Africa. In particular, we will look into what motivates China and how Chinese involvement has affected African countries.

While a number of African nations have welcomed Chinese engagement and investment, it often comes at a cost: a focus on extractive industries, entanglement with a neo-mercantilist trade policy and a tendency to adopt “worst practices” that prop up kleptocrats and autocrats – such as the DR Congo’s Joseph Kabila – while fueling corruption in an effort to win contracts.

China’s engagement in Africa once was driven by revolutionary ideology, motivated by competition with the Soviet Union as much as it was directed at “capitalist roaders” aligned with the United States. In Angola, for example, in 1975, Soviet-backed Communists bested Chinese-backed revolutionary rivals, including Jonas Savimbi, who was a Maoist before he was reborn in the 1980s as an anti-Communist freedom fighter.

Today, China’s one-time Marxist Leninist Maoist impulse has been softened to the point of almost – but not quite – disappearing, with revolution replaced by infrastructure projects, trade missions, soft loans and scholarships for promising African students.

While on the one hand Africa needs investment and it needs infrastructure, we see a worrisome trend of African countries sliding into indebtedness to China, accumulating burdens that may be beyond their capacity to meet.

All too often, the roads China builds are meant to allow it access to mineral resources that it can extract and ship to China, or are part of its “One-Belt, One-Road” initiative which is designed to benefit China, ultimately, and help it project power. Further, as anyone who has been to Africa has observed, these grand construction projects often utilize Chinese engineers and workers, not Africans.

As we will hear in testimony today, nowhere in Africa is the problem of indebtedness more pronounced than in Djibouti – a strategically important country in the Horn of Africa which sits astride the Mandeb Strait, and one of only five African countries which Secretary of State Tillerson is visiting on his trip to Africa this week.

A former French colony, Djibouti hosts a French military base, and an American one at Camp Lemonnier. And, since last summer, Djibouti also hosts China’s only permanent military base outside of China. Query whether that concession, fraught with geopolitical implications, is linked to leverage China is able to exert due to Djibouti’s vulnerability on indebtedness.

China’s overall foreign aid and financial leverage on the continent has been difficult to quantify, as has demonstrating how that translates into influence. Yeoman work in this regard has been done by AidData at the College of William & Mary which, in written testimony that is being submitted as part of the record today, demonstrates a correlation with how an African country votes at the United Nations General Assembly with how much aid it receives from China.

Another strategically important country with high indebtedness to China that the Secretary will visit is Ethiopia. It is also a country where China has most clearly aligned itself with repressive forces. In addition to assisting the government in controlling information flows, such as via signal jamming of Voice of American and BBC broadcasts, the Chinese Communist Party has engaged with Ethiopia’s ruling party on “training and exchanges.”

As the Brookings Institution has documented, cadres from the ruling Ethiopian People’s Revolutionary Democratic Front “were taught comprehensively how to manage their own organizational structure, ideological work, propaganda system, [and] cadre education.”

Thus, it seems ideology still matters with regard to how China engages Africa. It is no coincidence that Ethiopia has become one of the most repressive regimes on the continent, and the subject of a House resolution focused on Ethiopia’s abusive practices that that Ms. Bass and I have sponsored, H. Res. 128. Whereas the U.S. emphasizes good governance, it suits China’s interest to train its partners in old-style Leninism.

We have also received testimony from one of our witnesses on how China projects power in the form of Confucius Institutes located in close to forty African nations. This subcommittee has held hearings on how China in our own country and elsewhere uses these Institutes to push a Sinocentric narrative which aligns with Communist Party propaganda and curtails academic freedom.

In addition to utilizing Confucius Institutes to train Mandarin speakers and indoctrinate students with a pro-China world view, China is expanding its media presence in Africa. Kenya is the country with the largest penetration of Chinese media and the highest level of brand recognition, according to our Broadcasting Board of Governors, which oversees the Voice of America and which recently conducted a survey of China’s media presence in Africa. It should be noted that of five major international networks in Kenya, China’s news broadcasts were the least trusted.

Here also is a thought for Voice of America and the Broadcasting Board of Governors to consider – add Mandarin programming to the repertoire of languages in which you broadcast in Africa. By broadcasting objective news stories in Mandarin, you will expose not only African students learning Mandarin to more truthful media, but you will be able to reach the estimated million or so Chinese living or working in Africa with news that they are otherwise unable to access.

China is also Kenya’s largest bilateral lender, and one of the three highest debtor nations to China in Africa, along with Djibouti and Ethiopia. It is also a country where Secretary Tillerson will be visiting.

On his trip, he may want to highlight the following anecdote, which I believe aptly contrasts China’s Africa engagement with that of the United States.

Health commodities supplied by USAID, including life-saving anti-retrovirals distributed as part of our PEPFAR program and anti-malarial commodities, used to be shipped to and stored in a warehouse near Nairobi for distribution not only throughout Kenya, but also in neighboring East African countries as well.

Then in July 2013, Kenya’s parliament imposed a 1.5 per cent levy on all imports to Kenya to help pay for a nearly $4 billion railroad from the port of Mombasa to Nairobi built by the state-owned China Road and Bridge Corporation. Donated goods – including anti-retrovirals for Kenyans living with HIV/AIDS – were subject to this levy to help pay Kenya’s debt to China.

As a result of this, the flow of life-saving commodities into Kenya and neighboring countries was burdened and slowed. Kenya’s Ministry of Health offered to step in and pay the levy, but their payments were often delayed by some two months. Meanwhile, demurrage charges attributable to clearance delays continued to accrue, and had to be paid by the US taxpayer.

Ultimately, over a year later, Kenya’s parliament amended the legislation to exclude donated goods from the Chinese railway-payment levy, but the damage had been done. Today, due to this experience and other factors related to logistics and a new USAID implementing partner, USAID no longer uses a warehouse in Kenya. Storage and distribution has been moved offshore, to a location less-centrally located but one hopes less prone to disruption.

I close then with a number of questions: how did this warehouse episode, borne out of Kenya’s need to repay debt to China, benefit Kenyans suffering from HIV/AIDS? How did it affect the ability of Kenya to serve as a regional distribution hub for East Africa, with all the collateral economic benefits that accrue from this purely humanitarian initiative paid for by US taxpayers? More broadly, where is China’s PEPFAR, or the equivalent of the President’s Malaria Initiative?

These are questions which Africa’s leaders, and the African people, need to consider.
Source: Congressional Documents and Publications, March 07, 2018
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© 2018 Federal Information & News Dispatch, Inc.

“Significant” consequences if China takes key port in Djibouti: U.S. general

WASHINGTON, March 6 (Reuters) – The top U.S. general for Africa told lawmakers on Tuesday that the military could face “significant” consequences should China take a key port in Djibouti, as Beijing becomes increasingly muscular in Africa in an effort to expand its influence.

Last month, Djibouti ended its contract with Dubai’s DP World, one of the world’s biggest port operators, to run the Doraleh Container Terminal, citing failure to resolve a dispute that began in 2012.

DP World called the move an illegal seizure of the terminal and said it had begun new arbitration proceedings before the London Court of International Arbitration.

During a U.S. congressional hearing on Tuesday, which was dominated by concerns about China’s role in Africa, lawmakers said they had seen reports that Djibouti seized control of the port to give it to China as a gift.

China has already built a military base in Djibouti, just miles from a critical U.S. military base.

“If this was an illegal seizure of that port, what is to say that government wouldn’t illegally terminate our lease before its term is up,” said Representative Bradley Byrne, a Republican.

In a letter to U.S. Defense Secretary Jim Mattis, Byrne said he was concerned about China’s influence in Djibouti and the impact it would have on U.S. military and intelligence assets.

Djibouti is strategically located at the southern entrance to the Red Sea on the route to the Suez Canal.

Marine General Thomas Waldhauser, the top U.S. military commander overseeing troops in Africa, said that if China placed restrictions on the port’s use, it could affect resupplying the U.S. base in Djibouti and the ability of Navy ships to refuel there.

“If the Chinese took over that port, then the consequences could be significant,” Waldhauser said during the House of Representatives Armed Services Committee hearing.

Djibouti hosts a U.S. military base that is home to about 4,000 personnel, including special operations forces, and is a launch pad for operations in Yemen and Somalia.

“There are some indications of (China) looking for additional facilities, specifically on the eastern coast … So Djibouti happens to be the first – there will be more,” Waldhauser said.

Speaking in Beijing, Chinese Foreign Ministry spokesman Geng Shuang said he did not know anything about the port situation, but China’s cooperation with Africa was neither aimed at any third party nor aimed at excluding anyone.

“We hope that the U.S. side can objectively and fairly view China’s development and China-Africa cooperation,” he told a daily news briefing.


China has sought to be visible in Africa, including through high-profile investment in public infrastructure projects, as it deepens its trade ties.

Waldhauser said that the United States would be unable to match the scale of that investment throughout the continent, noting Beijing’s construction of shopping malls, government buildings and even soccer stadiums.

“We’ll never outspend the Chinese in (Africa),” Waldhauser said, noting some of the Chinese investments in Djibouti.

U.S. Secretary of State Rex Tillerson said on Tuesday the United States will give more than $533 million in humanitarian aid for victims of conflicts and drought in Ethiopia, Somalia, South Sudan and the West and Central African countries bordering Lake Chad.

But Tillerson contrasted the United States’ work on the African continent, which he said promoted “sustainable growth,” with that of China, which recently pledged $124 billion for its Silk Road plan to expand links between Asia, Africa, Europe and other places.

Tillerson said China’s investment in Africa “encouraged dependency.”

This year, the U.S. military put countering China, along with Russia, at the center of a new national defense strategy.

The Pentagon said China was a part of “revisionist powers” that “seek to create a world consistent with their authoritarian models.”

Waldhauser said he was in the process of rewriting U.S. military strategy in the region with China in mind.

“China has been on the African continent for quite some time, but we as a combatant command have not dealt with it in terms of a strategic interest,” Waldhauser said.

“We are taking baby steps in that regard,” he added.

(Reporting by Idrees Ali and Phil Stewart; additional reporting by Mark Hosenball, and Ben Blanchard in BEIJING Editing by Jonathan Oatis, Robert Birsel)
Source: by Idrees Ali and Phil Stewart, Reuters News, March 07, 2018
Source Description: Global news from Reuters covering all leading business, political and general news. Country of origin: United Kingdom
© Copyright 2018 Thomson Reuters. All Rights Reserved.

China in Africa

Chinese Racist depict on Africans

This is a screen grab take from CCTV China on Friday Feb. 16, 2018 showing dance sequence in an Africa skit shown on state television showing an Asian woman blacked up and someone dressed in a monkey costume. The Chinese comedy sketch broadcast on state media showing an Asian woman with her face blacked up has drawn accusations of racism. The skit was shown on state broadcaster CCTV on Thursday night and depicted the opening of a Chinese-built high-speed rail in Kenya. (CCTV via AP)

THE six-nation Africa tour by US Secretary of State Rex Tillerson acquired new significance when on the eve of his departure he launched into an attack on Chinese investment in the continent, accusing it of corruption. Despite President Trump’s reported bad-mouthing of African states, Washington seems to be setting out to revive its engagement with African states.

During the Cold War, Washington fought a proxy battle with Moscow in Africa. The Americans armed and backed regimes that said they opposed Communists. The Soviets gave their support to regimes that claimed they were Communist or at least socialist. The interesting exception was the post-independence Tanzanian government of Julius Nyerere. His oujama” village cooperative scheme eventually failed. But it was arguably the only real socialist experiment in Africa, without the use of Russian and Chinese style totalitarian control. Nyerere was also the first and still one of the few African leaders to step down peacefully from office.

China’s economic role in Africa is now considerable. Last year it committed to $36.1 billion to new investments. That figure was inflated by a $20 billion plan to help Egypt build a new administrative capital, a scheme which has yet to be agreed. But China has already demonstrated its engagement with the continent, building airports, dams, harbors, railways and telecommunications networks. The pattern is for Beijing to give generous loans to fund the projects, in return for which Chinese companies, almost all of the state firms, receive favored trade status and get to the head of the queue when key natural resource assets are being sold off. Thus in Congo, Chinese have invested heavily to buy mines producing cobalt, now a key material for the electric vehicles. With Congo the major source of the mineral, it seems Beijing is seeking to corner the cobalt market. This may be one reason why the Americans have suddenly rekindled their interest in the continent. However Tillerson’s six-country tour this week is only taking in Chad, Djibouti, Ethiopia, Kenya and Nigeria.

He is going to be talking counterterrorism, democracy, governance, trade and investment with his hosts. The first three are not of consuming interest to Beijing which has been content to deal with any African regime, however repressive or corrupt. But the US needs to boost its trade and investment in the continent. American wealth and prosperity, as portrayed in the ubiquitous products of Hollywood, remain an aspiration for many young Africans. By contrast, Chinese culture has little appeal. And China’s local popularity is by no means matched by its huge investment in Africa.

One problem has been that almost all of these mega projects are being built by Chinese construction engineers using sophisticated machinery. The role for Africans has generally been confined to the lifting and shifting — a function, in war and peace, once given by European imperial powers as well as America to Chinese coolies”. Moreover, the historic Chinese disdain for all foreigners applies every bit as much to black Africans. There have been riots and protests at the behavior of Chinese workers who live in construction camps.

But China has put its money, in considerable quantities, into Africa at a time when individual governments in the Developed World still regard the continent as more deserving of aid than significant amounts of infrastructure funding. But maybe this is about to change.

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Source: The Saudi Gazette, March 07, 2018
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