Congressional Testimony - China in Africa: The New Colonialism?
China in Africa: The New Colonialism?
Testimony before the Subcommittee on Africa, Global Health, Global Human Rights, and International Organizations
United States House of Representatives
March 7, 2018
Joshua Meservey
Senior Policy Analyst, Africa and the Middle East
The Heritage Foundation
China Plans a Future in Africa, but There Are Challenges
“The U.S. will have to grapple with the reality of China as a major force in Africa for the foreseeable future. More than 40 percent of Chinese firms surveyed in Africa reported making long-term investments in the continent, and nearly three quarters were bullish on future opportunities.87
Furthermore, while Chinese firms do benefit from Beijing’s practice of privileging them on Chinese-financed projects, they also win so much African business because they have developing world experience from building large infrastructure projects in their own country. The Chinese also offer “one stop shop” package deals on infrastructure that often include financing, construction, and maintenance. Chinese firms also are known for making quick decisions, and then rapidly delivering. Finally, they frequently come in at a significantly lower price than competitors. 88 These practices will keep them competitive in Africa.
Yet it is unclear how sustainable China’s habit of giving easy loans to unsuitable countries is. Africa’s debt problem is so severe—more than half of sub-Saharan African countries have debt levels greater than 50 percent of GDP, up from 11 in 201389—that it is virtually certain that some of China’s African debtors are going to default or have to renegotiate the repayment terms. Beijing may have to wp-
reassess whether the influence, or even the strategic assets or commodities, it gains from such arrangements are worth the expense.
One of China’s advantages in Africa is that its firms have a higher risk tolerance than most. Yet that also means that Beijing will have to increasingly grapple with how to respond when upheaval strikes some of these unstable countries in which Beijing has significant interests. The Chinese navy had to evacuate thousands of Chinese nationals from Libya in 2011, after that country descended into civil war. The current tumult gripping Ethiopia, a key Chinese partner,90 the recent succession struggle in Zimbabwe, and the ongoing civil war in South Sudan are other examples of tests for the Chinese. This is a strain on Beijing’s decision makers, and any decisive action they take risks undermining its important non-interventionist narrative on the continent.
Furthermore, the Chinese economy has a number of long-term challenges, including capital flight, unsustainable debt levels, and all the inefficiencies associated with planned economies.91 If the Chinese economy slows, Beijing may come under domestic pressure to curtail some of its lavish overseas spending to concentrate on problems at home.”
Source: http://docs.house.gov/meetings/FA/FA16/20180307/106963/HHRG-115-FA16-Wstate-MeserveyJ-20180307.pdf