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China and the Dirty Secrets of ‘National Development’

Chinese workers stand at the construction site of Standard Gauge Railway (SGR) during the Presidential Inspection of the SGR Nairobi-Naivasha Phase 2A project in Nairobi, Kenya, on June 23, 2018. Yasuyoshi CHIBA / AFP

The Financial Times today cited new work by scholars at Boston University on the global reduction of Chinese lending. The big story is that while Chinese lending rivaled that of the World Bank by the mid-2010s, it’s now plummeting.

China Development Bank and the Import-Export Bank lent $75 billion in 2016. Last year they only lent $4 billion. These rates are being driven down by shifts in strategy in Beijing, growing evidence that this lending has contributed to a debt crisis in the global south, and by domestic pressure to spend more money at home.

This is a massive shift, one that will significantly change the choices open to governments in Africa and elsewhere along the Belt and Road.

However, there was another set of statistics, right at the end of the article, that grabbed my attention: “Of 858 loans identified by the Boston researchers, 124 were for projects in nationally protected areas, 261 were within critical habitats and 133 were within indigenous people’s lands.

This is…not good. In fact, the word ‘scandal’ comes to mind.

China’s lending spree during the 2010s can’t be separated from discourses of national development. China was seen as a unique partner to poor countries because of its own national development narrative. Chinese diplomats routinely frame Chinese lending as part of broader outreach to help global south countries join it on the Mount Olympus of development. In Africa, persistent problems like youth unemployment frequently mean that the purported development impact of a particular project trumps many other concerns.

However, when one looks at these statistics, it’s clear that China’s role in regions like Africa can be seen as providing convenient cover for national governments to grab environmental and indigenous peoples’ areas in the name of development.

This reframing obviously doesn’t tell the whole story, not least because of the fact that China is hardly the only lender to have aided these kinds of seizures.

However, the statistics starkly demonstrate why China’s no-strings-attached approach is so popular among some African governments. For many, the takeaway is that China should join the World Bank and other traditional lenders by attaching more strings to projects in the global south. I’m not sure that’s sufficient – after all, China’s popularity among global south borrowing governments was itself a reaction to their earlier experiences with traditional lenders.

Rather, if Chinese lending continues at much-reduced levels, the issue will become much bigger, not only by forcing a hard look at the desirability of specific projects but at narratives of ‘national development’ themselves…For all the pain the reduction in Chinese lending will bring to Africa, this focus is long overdue. 

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