Connect with us

Asia Pacific

Why China’s $200 Billion ‘Gamble’ On Africa Has Failed Miserably?

China’s investments in Africa encompasses critical areas like utilities, telecommunications, port construction, transportation etc. China’s investment perspective on Africa is quite clear – Beijing views the continent as an untapped treasure with an enormous abundance of natural resources. 

Published

on

China’s investment and its economic activities & ambitions in Africa are no secret. Analysts have often stated that in order to attain power over the vast unexploited natural resources of Africa, China has been practising ‘economic colonialism’ via loans and investments. 

By luring non-suspecting, poor nations of Africa into ‘debt traps’, Beijing has made multiple attempts to build-up command and influence in the continent.

Chinese Military Base In The Pacific Near Australia Could Be A Nightmare For The US & Allies

However, in the present circumstances of global economic meltdown where the prices of oil, copper and other minerals have plunged down, the Chinese ambitions have taken a severe blow.

On one hand, the coronavirus has already dented the Chinese economy as the economic output of the communist nation has fallen by about 6.8% in the first quarter. On the other hand, Beijing is under tremendous pressure to pardon tens of billions of dollars of loans that it had offered to the African nations since the early 2000s.

Furthermore, the mistreatment of African residents in China during the COVID-19 outbreak has added fuel to fire and raised diplomatic tensions with Beijing.

The trillion-dollar deal Belt and Road Initiative (BRI) infrastructure program, the magnum opus project of China’s economic engagement with Africa, now stands on thin ground.

Additionally, the absence of references in the communique of the recent Politburo meeting of the Chinese Communist Party to BRI indicates at the uncertainty of Beijing to have enough resources to fund the BRI in the future.

Chinese Military Base in Djibouti: Beijing Explains The Reason For Its Presence

China’s Investment in Africa

China’s perspective on Africa is quite clear – Beijing views the continent as an untapped treasure with an enormous abundance of natural resources.  The quick growth of China in various sectors in the 1990s had demanded a huge need for oil and subsoil minerals, and Africa appeared to be an apt bearer of the needful.

Easily outbidding the giant multinationals to gain equity stakes in mines and oil fields, Beijing laid out cunning plans to seize all-important raw materials of the continent. Gradually, China became the most active non-traditional lender in Africa.

According to the China Africa Research Initiative, Beijing lent $152 billion to forty-nine African nations from 2000-18. According to the World Bank calculations, the value of Chinese loans to sub-Saharan African nations was $64 billion as of 2017.

How China Is Squeezing & Conquering The World With The Philosophy Of Sun Tzu?

Along with the credits, China, mainly through its state-owned enterprises has eyes fixed on direct investments as well. According to official data, the Chinese FDI in Africa rose from $7.8 billion to $46 billion between 2008 -18.

The Chinese government may seem to have got its investments’ worth. Commodity trade between China and Africa almost doubles from $107 billion to $204 billion in 2018, based on data provided by Beijing.

Regardless of all these major developments, critics often question if China could have increased its trade to Africa, with better trade procedures which did not involve committing a whopping $200 billion in bilateral loans and FDIs.

China’s whole idea was to have direct control of the African resources that it has been eyeing at since decades, for which Beijing ended-up shelving more money than the open market rates.

UK Wasting Billion Of Dollars In Purchasing American ‘Stealth’ F-35 Fighter Jets: UK Experts

Once Beijing increased the credit or made the direct investments in mines, or oil fields, it was at the mercy of the beneficiaries – Africa’s national governments and political bosses. China would be powerless to block the nationalization of its investments or defaults on its loans.

If supply interruption happens due to conflict in Africa or along China’s long sea lines of communication, the so-called benefit of direct control will be ineffective because for now, Beijing lacks the military muscle to defend its mines and other investments in Africa.

China’s venture in Africa also bombed due to wrong investments at the wrong timings.  Its venture in Africa concurred with the zenith of the most recent commodity supercycle, inflating costs of raw materials, this time is driven by Chinese demand. As a result, Chinese firms paid a high price for assets that lost a massive value after the downfall in the commodity prices.

Now with COVID-19 pandemic which is set to ravage Africa’s brittle economy, Beijing requires a realistic exit strategy. China must come to terms with the fact that it may never recover most of its investments or loans because of the global pandemic. The smartest way forward would be to write off its loans on compassionate gesture and win the hearts of the people.

OpEd By Minxin Pei. Edited By Vipasha Kaushal.

VIEWS PERSONAL

Asia Pacific

Chinese App Ban: Weibo Users Ask Indian PM Narendra Modi To Return $750M Loan Granted By China

The Indian government banned a total of 59 Chinese apps including the teen favourite TikTok. India’s IT ministry has announced the banning of 59 Chinese apps that include giants like ShareIt, UC Browser, Likee, WeChat, Weibo and Bigo Live.

Published

on

Indian PM Narendra Modi’ move to quit Weibo, after the Chinese app ban was announced hasn’t gone down well with its users. With comments like ‘shut the door on your way out’ and ‘some people leave and you never even knew they were there’, most of the users seem to be either unaffected or critical of the move.

Galwan Valley Clash: Top Indian General Decodes Why India Lost 20 Soldiers In India-China Border Conflict

Another popular comment on Weibo was that India should return the $750-million loan, recently granted to assist the government in responding to the adverse impacts of the COVID-19 pandemic by Asian Infrastructure Investment Bank (AIIB), a bank headquartered in Beijing.

As reported earlier by EurAsian Times, the Indian government banned a total of 59 Chinese apps including the teen favourite TikTok. India’s IT ministry has announced the banning of 59 Chinese apps that include giants names like TikTok, ShareIt, UC Browser, Likee, WeChat, Weibo and Bigo Live.

The Indian ministry called the Chinese-owned applications as “prejudicial to sovereignty and integrity of India, defence of India, the security of the state and public order.” The Indian Cyber Crime Coordinate Centre under the Ministry of Home Affairs sent an exhaustive recommendation for blocking these “malicious apps”.

This marks the end of the “Weibo diplomacy” with China that started in 2015 as a means to directly communicate with the people of China before Modi’s first visit there. His first message said, “Hello China! Looking forward to interacting with Chinese friends through Weibo”. He had 2.44 lakh followers on the application.

“Prime Minister Modi had 115 posts on Weibo. It was decided to manually delete them and after much effort, 113 posts were removed,” said a source.

“There were two posts left where PM Modi and these are posts with photos with President Xi. On Weibo, it is difficult to remove posts with the photo of the Chinese President. Which is why, two posts still remained,” said a source. A government official said that for reasons best known to the Chinese, there was great delay in granting this basic permission.

“Some believe Modi should have been a little thicker skinned, comparing his action to that of the U.S. ambassador to China who maintains his Weibo page despite being the subject of longstanding criticism from Chinese netizens,” wrote CX Tech.

The state-run, Global Times described the ban as “deliberate interference in practical cooperation” between the two countries. It slammed the move stating “a lacklustre explanation for the nonsensical move”.

“If India’s sovereignty can be damaged by a handful of apps, just how vulnerable is it?” the paper said. “It was not long before Indians realised that turning nationalist rhetoric into action is more difficult, as there are no available and affordable alternatives to Chinese-made products such as smartphones, chemicals, automotive components and many other items… It seems that not only has the Modi government failed to rein in the rising nationalism among Indians, it has also yielded to domestic pressure and even encouraged such a boycott to escalate.”

It also warned of a dip in investment as the paper said that it surveyed experts who “predicted Chinese overseas direct investment (ODI) into India will drop sharply in 2020, with two experts forecasting a more than 50 per cent cut.”

“Bad feelings go both ways, and the chance for China-India relationship to pick up in the short-term is slim. Chinese investors are on the edge with risk-aversion instinct kicking in,” Qian Feng, director of the research department of the National Strategy Institute at Tsinghua University.

China’s Ministry of Commerce spokesperson Gao Feng said that India’s app ban could have possibly violated the World Trade Organization’s rules and commitments. “We hope that India can immediately correct its discriminatory practices against China and Chinese enterprises”, Feng added.

Continue Reading

Americas

Dominican Republic Goes To Poll; Results Will Decide The Fate Of US, China

Published

on

On Sunday, the Dominican Republic will hold elections as the Central American nation looks to elect their next President and renew the totality of senate (32) and deputy (190) seats.

Iran Hints At Cyber Attacks By Israel or US at Natanz Nuclear Facility; Vows Retaliation

Elections were originally scheduled to take place on May 17 but had to be postponed due to an upsurge in coronavirus cases. Domestically, the election could lead to a change in government and end the decade long run of the ruling Dominican Liberation Party (PLD).

Internationally, the winner of the Presidential election decides the future of the Dominican Republic foreign relations with regards to the United States and China.

The Candidates

To win the election, a candidate must get 50%+ 1% of the total votes. If none of the contestants is able to win a clear majority, a second-round runoff is held between the two candidates with the highest votes on the first round.

While a total of 6 candidates are hoping to serve as the next the President, according to experts, the outcome of the election will be determined by the three leading candidates from the PLD, Force of the People party (FP) and Modern Revolutionary Party (PRM).

The PLD has occupied the presidency for 20 of the past 24 years. Incumbent President Danilo Medina will not seek a third consecutive term ( his decision to do so was met by domestic resistance) and instead, Gonzalo Castillo, the former minister of public works and communications, will be contesting for the PLD.

Elections in the Dominican Republic will be monitored by 80 observers from the Organization of American States (OAS). Despite the challenges presented by Covid-19, Dominican authorities ensure that all necessary precautions have been taken care of. Image source: Facebook

Those including to oust PLD include Leonel Fernández and Luis Abinader of the FP and PRM respectively. Fernandez, a three-time President of the Dominican Republic, quit the PLD after losing the PLD primary run-off against Castillo in 2019. Displeased with the defeat, Fernandez formed his own party and announced his decision to seek election for the fourth time.

A businessman by profession, Luis Abinader has no previous experience in public office. Abinader was a close associate of former President Hipólito Mejía. When Mejia quit the PRD in 2014, Abinader decided to join him at the newly formed PRM. According to poll predictions, Abinader is either close to or will outright win in the first-round election. Much of the rise can be credited to the rift between Medina (PLD) and Fernández (FP).

Even if Abinader does not win the election, he and Fernández have agreed to a deal for the run-off election. In November 2019, both formed an electoral alliance, agreeing that whoever between them captured the most votes in the presidential election would, in turn, receive the other’s political backing in the event of a runoff election. They also agreed to nominate joint candidates for mayor and Congress in 24 of the 32 provinces.

US-China to Closely Follow Elections

The Presidential elections in the Dominican Republic are being closely monitored by both the United States and China. In 2018, much to the shock of US an Taiwan, Danilo Medina broke diplomatic relations with Taiwan and established ties with China instead.

This was followed by Medina travelling to Beijing and inking 18 bilateral agreements including on agriculture, culture and tourism. Experts predict Chinese investment in the Caribbean nation will reach US$10 billion in the coming years.

For China, PLD remaining in power is essential for Sino-Dominican relations. Although PLD presidential candidate Castillo’s foreign policy platform makes abstract reference to the need to “deepen, diversify, and expand bilateral and multilateral relations,” one presumes he would maintain diplomatic and commercial relations with China.

Fernández and the Abinader, on the other hand, understand the importance of the US as an ally and will likely scale down ties with Beijing. Both candidates even declined invitations from the Chinese government to visit.

For the US, Abinader winning the election would be the perfect scenario. The 52-year-old is keen on strengthening strategic relations with the US, recognizing that it is the Dominican Republic’s main commercial partner, were about two million Dominicans or those of Dominican origin reside and were about 40 per cent of tourists who visit the Dominican Republic come from.

Regardless of who wins, the elections in the Dominican Republic will be interesting to watch. Elections in the middle of a global pandemic is a challenge in itself and the people of the Dominican Republic will surely be excited to see new faces in the country’s politics.

Written by- Armaan Srivastava. Views Personnel

Continue Reading

Asia Pacific

After Japan Backs India At LAC, Chinese Navy Intrudes Into Japanese Territorial Waters

Published

on

Days after Japan extended support to India and antagonizing China, patrol ships from the Chinese Navy entered Japanese territory twice this week. Japanese Coast Guard confirmed the presence of Chinese patrol ships in the territorial waters of Japan. 

US To Conduct Biggest War Drills In South China Sea Amid India-China Border Tensions

The latest intrusion by China comes days after Japan had supported India and called for a peaceful resolution, opposing any unilateral attempts to change the status quo in Ladakh.

As per media reports, two Chinese patrol ships entered the waters of the Senkaku Islands in the East China Sea on Thursday before re-entering the area again.

The Chinese ships even approached a Japanese fishing vessel inside the territorial water and the Coast guard said it was the longest intrusion into the territorial waters by Chinese ships. Despite repeated calls to leave the area, the vessels stayed inside Japanese territory for nearly 30 hours before leaving on Friday.

The Senkaku Islands, as japan calls it, have been contested by China and Japan for nearly a century. Located 1,200 miles (1,931 kilometres) southwest of Tokyo, the islands have been administered by Japan since 1972.

Since April, Japan has reportedly spotted at least 67 Chinese ships near Senkaku islands. Japan has already deployed its missiles towards its border facing China amid its several maritime incursions.

To avoid any confusion, Ishigaki City Council in Japan’s Okinawa approved legislation to change the administrative status of the Senkaku islands by changing its name from “Tonoshiro” to Tonoshiro Senkaku” in June.

Chinese aggression could also be retaliation against Japan as they grow closer to each other in an effort to contain China, expert talking to EurAsian Times state. Japan is also looking to sign an intelligence-sharing pact with India, Australia and the UK to track Chinese Navy vessels in the region.

The ongoing feud at Ladakh has helped India and Japan to strengthen their ties even further. On Friday, Satoshi Suzuki, Japanese Ambassador to India, said that he had a “good talk” with Foreign Secretary Harsh Vardhan Shringla in this regard.  The Japanese Ambassador took to twitter to express appreciation for the briefing on the situation along LAC and hoped for a peaceful resolution.

With regards to the Chinese intrusion into Japanese waters, Tokyo has lodged strong protests with China. The disputed islands are also claimed by Taiwan.

Continue Reading
Advertisement

Facebook

FEATURED

ashar-ghani ashar-ghani
Featured16 hours ago

Afghanistan President Ashraf Ghani’s Cousin Shot Dead In Kabul- Unconfirmed Reports

A cousin of Afghanistan President Ashraf Ghani found shot to death inside his home in Kabul, Afghanistan Media informed.

US-China-Trade-War US-China-Trade-War
Americas22 hours ago

US To Conduct Biggest War Drills In South China Sea Amid India-China Border Tensions

The war-drills by the two aircraft carriers and four other warships comes after China expanded flights near Taiwan, engaged a...

INDIA-CHINA-WAR INDIA-CHINA-WAR
Asia Pacific2 days ago

Ladakh Now, Kashmir Next: Why India-China War Is An Attractive Option For Many In India?

I now believe that a big event is needed for the resolution of the Kashmir issue, and the India-China war...

Modi-Government Modi-Government
Featured2 days ago

In The Middle Of A Pandemic, Why Is India Planning Amarnath Yatra Pilgrimage?

Amarnath Yatra 2020: The annual pilgrimage will begin on July 21 and end on August 3, thus making it the...

Modi-Government Modi-Government
Featured2 days ago

Modi In Ladakh: PM Narendra Modi Arrives In Ladakh Amid Flaring India-China Border Tensions

PM Narendra Modi landed in Leh, Ladakh on Friday morning on a closely-guarded visit to the union territory that has...

MBBS-IN-China MBBS-IN-China
Americas2 days ago

China vs World: Led By India, Global Powers Unite To Counter China’s ‘Wolf Warrior’ Diplomacy?

CHINA VS WORLD: The term 'wolf warrior' emerged from a popular 2015 Chinese movie of the same name premised on...

UN-UNITED-NATIONS UN-UNITED-NATIONS
Featured3 days ago

US, Germany Block China’s Anti-India Move At UNSC Over Karachi Attacks

The US was the second nations after Germany to defer the statement. These are clear signs of solidarity with India...

india-china-border-conflict india-china-border-conflict
Featured4 days ago

India-China Agree To De-Escalate Border Conflict While PLA Deploys Additional Troops Near LAC

India-China Border Conflict: During third senior military commander level meeting to discuss issues related to disengagement at the faceoff sites...

CHINA-AUSTRALIA-TENSIONS CHINA-AUSTRALIA-TENSIONS
Americas4 days ago

China-Australia Spat: Australia To Invest $270B In Defense Capabilities As Tensions Soar With China

Australia-China tensions are at a peak. The bilateral ties between two nations soured and tensions increased when Australia banned the...

Chinese-Military-Base Chinese-Military-Base
Featured4 days ago

India-China Border Tensions Intensify As PLA Troops Occupy Heights & Build Fortifications

India-China border tensions could turn to conflict as Chinese PLA soldiers have built scores of fortifications, prefabricated huts, bunkers and...

Advertisement

Trending