At this moment, every child born in Angola owes money to the Chinese government. Angola, Africa’s second-largest oil exporter owes more than $20 billion to a number of Chinese entities as listed debt. But Angolans aren’t the only ones reeling under a foreign debt, they share this crisis with many of their African comrades. Quite simply, Beijing, as we are told, coaxes underdeveloped nations into taking loan after loan to build infrastructure that they simply cannot afford otherwise, and will almost certainly not yield any proportionate economic benefits from it. At the end of this dysfunctional cycle, the ultimate objective is for China to take control of these assets. This concept has been defined as ’debt-trap diplomacy, an overly hackneyed term introduced in 2017 and quickly oversold by the Western world, especially in the context of the much-touted Belt and Road Initiative (BRI).
China has been funding infrastructure in the African continent since the 1960s, even in the thick of the Cultural Revolution, Beijing invested nearly $500 bn for the Tazara Rail line, yet no one noticed. It was only after 2006 that the West began quivering about China’s expansion, even going to the extent of calling them ‘a new imperial power’. However, the question still remains whether this negative bias projected towards the Chinese is grounded in facts or just baseless political rhetoric. This article intends to study both the positive and negative consequences associated with the fairness and sustainability of Beijing’s acts.
Money And Muscle Take Over
Africa has now taken over as the fastest urbanizing place on this planet, however, a rapid transition like this requires a good flow of investments and capital, and in this infrastructural revolution, nobody has answered the call as China has. The Chinese desires have never been clearer as they are now. The ruling Chinese Communist Party (CPC) believes its ambitions are boundless but righteously attainable. After having suffered centuries of humiliation, starting with the opium wars and then attracting the ire of the Western world for its purported ‘repressive’ actions, the Chinese have now decided to control their own fate.
China’s decisive role in world affairs is more or less grounded in its domestic needs. Presently, the tertiary sector of the Chinese economy comprises more than half of their GDP, they have an excess of foreign exchange, and they are the largest cement producers in the world so much so that they’ve now constructed empty ghost cities with high rise apartments but no people to live in. Infrastructure is what Africa needs, and infrastructure is what the Chinese can provide, in its transition from mid-level manufacturing to a price competitive one.
Viewed in this light, it seems to be a win-win situation for both sides. But the BRI is not the 21st century Marshall Plan, the Chinese are not offering grants, but rather loans. They expect an equivalent repayment of this money, either economically or politically. On the face of it does seem a fair idea, much of the Chinese financing is in association with a nation’s natural resources. The imbalances in this investment have been asserted with the characterization of the ‘Angolan Model’ a resource-backed financial agreement, wherein low-interest loans are provided relying on oil or other resources, as collaterals. In this way the recipient nation, herein Angola can have its capital equipment fulfilled, whilst the Chinese state-owned enterprises (SOEs) can secure their resource-backed development rights.
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INDIAN DIASPORA IN KUWAIT
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STRENGTHENING BILATERAL RELATIONSHIP
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INDIA NEEDS TO SHED ITS SOCIALISTIC-ERA FEAR OF PRIVATE SECTOR BIG CORPORATIONS
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THE CHINESE PLAYBOOK
INFRASTRUCTURAL REVOLUTION GIVES WAY TO NEW GLOBAL POWER
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