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The implication is that African countries have a real partner in development—a fellow developing country that shares their humiliated past but overcame it despite extreme hardship and became advanced and wealthy.
This partnership provided an estimated $150 billion in loans from 2000 to 2017, which is much more than Western governments and institutions were willing to extend. Chinese loans carried longer durations (poor countries actually need long-term financing), lower interest rates, and a lack of political meddling or arrogance.
China is not getting rich in Africa. Far from it. Its African loans are financed by its own internal borrowing. China had the opportunity to become one of the least indebted countries in the world, like Russia. But because of Africa, China itself became highly indebted.
China's goal in Africa is not to make money but to build a beneficial symbiosis. To put it most simply, African countries are all friendly to China, but they are also—every one of them—poor. Western countries are all hostile to China, but they are also, every one of them, rich. China's trade with the West is large but threatened and unsustainable because of Western hostility. China’s trade with Africa is relatively small, but it's something that can be trusted to continue forever without any disturbances.
It is the latter that is much preferred, except for its small size. So, it must grow by accelerating the growth of African economies. In Africa China is investing in potential—at a net financial loss for a long time, perhaps several more decades—but with the assurance that one day, African countries
will be moderately wealthy.
Right now, the Chinese economy is the key driver of African growth, and one day the African economy can also become the key driver of Chinese growth. The importance of Western countries, untrusted by both, would be greatly reduced
for both. The Chinese debt trap is a myth, about as real a premise as aliens building the Pyramids. It is a disgusting trope invented and relied on by Western politicians and the Sinophobic press.
Instead of listening to them, try listening to economists. Google “China debt trap myth" and you will find many authoritative sources debunking the trope. Here is just one—very long—from the London think tank Chatham House.
Yes, sometimes projects deliver disappointing results—to Western media, a highlighted few out of many that are ignored. But the success of projects financed by Chinese loans does not depend solely on the Chinese lender but also (and much more) on the African borrower.
If I borrow half a million from the bank to build a house, but I only build half a house and spend the rest to travel the world, then I have a useless half-house, and I am in debt for half a million. To recover part of its losses, the bank will take my half-house—unhappily, because it's useless. The half-house is not worth half a million, and I will still be in debt to the bank.
The bank is not at fault. I am at fault. This is a silly example, but you can understand why blaming the bank, i.e., China, for the failure of some bilateral infrastructure projects abroad is absurd.
China has a perfect record for building infrastructure at home - so much so that
announcements of new infrastructural achievements are routine and bore Chinese citizens and media. When China carries out projects with African countries, these projects would definitely all succeed if China had 100 percent control over how they were implemented.
But this is not the case, and would be haughty and un-Chinese anyway. So, when a project goes astray, remember the other side of the equation. There has been much more success than failure. If Chinese investment in Africa had mostly
led to African partners messing up and China taking possession of useless half-finished projects everywhere, China would have stopped lending money long ago. In my example, the bank would be stupid to lend me money a second time.
China has no interest in “owning; Africa. It very much wants bilateral projects to succeed, achieve their intended economic effects, and produce revenue, and for African countries to be able to repay their loans, become financially secure and robust, and accomplish healthy, sustainable economic growth. This is the only result that can make Africa economically beneficial to China someday. China cannot have strong trade with countries that are poor, stagnant, and crippled by debt. So why would it want to make them so?
If China takes possession of some infrastructure, a port, railway, or whatever, after an unpaid loan, this means the project has failed expectations and has not produced the revenue that would enable the African country to repay its loan. Why would China want this? Why would it want to own a bunch of scattered, unprofitable crap that it can hardly use? It would be like collecting junk from junkyards.
In my example, why would the bank go around lending money that doesn't get repaid and taking ownership of useless half-houses as compensation?
In addition, remember that China finances its loans to Africa through internal borrowing (borrowing from its own people and companies, e.g., by selling bonds). So, when a project fails, it's not only the African borrower who is now in debt for something useless; it is the Chinese government that is now in debt for something useless as well.
Also, realize that China does not need to be owed money by African countries in order to be influenced by them. It has a much cheaper source of influence—trust and goodwill. China has a clean history on the continent. It doesn't meddle. It doesn't make demands. It aided African anti-colonial movements from day one. China and African countries are both frequently scolded and encroached on by the Western family of nations.
It's natural for their political interests to align, which is why they vote together in the UN General Assembly. They were voting together in the 1960s, many years before Africans owed China money, and in fact, many years before China even had any money.
This is why the China debt trap is a myth. Failed projects, useless debt, and useless property are as damaging to the Chinese lender as they are to the African borrower. And China's alliance with Africa is not a result of some financial subordination that doesn't exist, but a result of naturally converging circumstances and interests.
On the other hand, there have indeed been cases where foreign lenders invaded countries and took possession of all their assets because of bad debt—real debt trap diplomacy. Some examples:
In the late 1800s, Egypt took a great deal of British financing to modernize
its infrastructure. When it could not repay these loans, Britain used this as
a pretext to invade and conquer Egypt in 1882.
Haiti began its independence in 1804 as a severely indebted nation. In order to trade with the world, it first had to be recognized by the Western great powers. The great powers left this decision to France, Haiti's former colonial ruler, which agreed to recognize independent Haiti in exchange for a crippling “indemnity" of 100 million francs. No payment = no recognition = no trade with the outside world = poverty forever.
To pay this “indemnity,” Haiti had to borrow money from banks in France and other Western countries. From day one as an independent country, it was condemned to a vicious cycle of incurring new foreign debt in order to pay old foreign debt. By the early 1900s, Haiti was borrowing heavily from the US. When it looked like Haiti was going to default on its American loans, the big American banks pressured the US government to invade and conquer Haiti, which it did in 1915. The chief objective of the US occupation of Haiti was to
reorganize that country's political and financial interests to ensure that Yankee banks would get their money back.
In the early-to-mid 1900s, the US-owned United Fruit Company (today, Chiquita Brands) established an economic stranglehold over Guatemala.
By bribing the corrupt government, the company obtained ownership of vast expanses of Guatemalan land for a pittance. To minimize its tax bill to Guatemala, United Fruit would report that the market value of its vast landholdings was almost worthless.
In 1951, the people of Guatemala democratically elected a man named Juan Jacobo
Árbenz Guzmán. Árbenz was determined to break United Fruit's stranglehold over his country. He tried to nationalize all the land owned by United Fruit, intending to redistribute it to poor Mayan farmers.
He offered compensation based on the low market value that United Fruit had always reported. Suddenly, United Fruit declared that the land was actually
worth a tremendous fortune. When Árbenz refused to pay, United Fruit pressured the US government to trigger a military revolt in Guatemala, overthrow Árbenz, and replace him with a friendly dictator.
This happened in 1954. The CIA sponsored Árbenz's political enemy Carlos Castillo Armas and his private militia with money, training, weapons, and recognition. After a brief insurgency, Armas toppled and exiled Árbenz. Armas immediately reversed all of Árbenz’s pro-poor reforms. United Fruit was king of Guatemala once again.
Western media was as poisonous in 1954 as it is today. To justify the operation, Árbenz was declared a Communist and the founder of a “Red regime.” Árbenz's overthrow and violent replacement by Armas were celebrated as a victory for peace, freedom, democracy, and the people of Guatemala.
In the first 18 seconds of this mini-documentary, Richard Nixon is on a visit to Guatemala.
He declares that “the people" of Guatemala have “overthrown" their “Communist"
government, gained liberty, and will enter a new, prosperous era.
In this newsreel, some US outlets declare, “Peace comes to Guatemala. The people of Guatemala are breathing the sweet air of liberty only days after the resignation of Red President Jacobo Árbenz.”
This newsreel declares Armas the leader of Guatemala's “liberation army,” who is “stamping out the last roots of Communism" in the country and has pledged to “banish Communism, reestablish constitutional government, and hold new, free elections.”
In reality, of course, Jacobo Árbenz had never been a Communist. He was actually a half-Swiss Guatemalan aristocrat and career military officer without any Soviet sympathies, and his proposed economic policies were broadly capitalist in nature. What he really was was a true Guatemalan leader—democratically elected, not corrupt or brutal, and not willing to be a US puppet or tolerate the plunder of his country by a US corporation. Unlike most of Guatemala’s European elite, he did not regard Mayans as slaves and vermin. He was extremely popular with indigenous people and the rural poor, the great majority of the population.
And in reality, the usurper Armas and all his successors were extremely corrupt
army dictators who plunged the country into civil war, inflicted genocide on Guatemala's Mayans with assistance from the CIA, and enslaved the country to US business interests in return for massive personal wealth.
Guatemala would not have another democratic election until 1996. The country has yet to recover from the horror inflicted on it by the United States. I once spoke to an immigrant to Canada who said he had visited Guatemala and was shocked at the extent of poverty and misery there—and he was from Somalia. The new Guatemalan government has apologized for the coup against Jacobo Árbenz. But the country that orchestrated that coup and reaped the rewards, the United States, will never apologize or even admit wrongdoing.
Even after all the horrific CIA dossiers on Guatemala were declassified and entered public view. Debt trap diplomacy is a Western instrument, not a Chinese one. All the evidence says so.
The political and humanitarian record of the US and Europe in our countries is almost as rotten post-independence as it was during the colonial era. Apart from that, the World Bank and IMF are Western institutions and cannot be trusted. They have an atrocious record all over the developing world. Their economic vision for the poor countries they deal with is the structural “reforms" that they demand in exchange for loans—based on what is good for Western economies and investors and terrible for Third World publics. Take the example of our own country. The IMF has wreaked havoc on Ghana. Our government took the IMF's money and accepted its conditions that were supposed to fix everything, and what happened?
The lives of Ghanaians have worsened immensely; the currency is worthless, inflation is crazy, poverty is significantly up, the cost of water and power bills is getting sky-high, even food is getting unaffordable, the middle class has been decimated, economic growth is entirely at the top, and we are waist-deep in debt. Families I know who used to vacation abroad every year now have nervous breakdowns trying to keep up with basic household bills. All while the IMF says we're doing a great job following its conditions and applauds our country’s “remarkable economic progress.”
Africa cannot modernize alone. At least for many decades to come, it needs a real partner in development, a country that extends financial resources and technology on fair terms, a country that doesn't embrace us with one hand and stab us in the back with the other, a country with no bad history on our continent despite having “discovered" Africa centuries before Europeans did, a country that has experienced our humiliation but managed to overcome it, a country that provides an alternative to the World Bank and IMF, and a country that is betting that its future prosperity will come from our own prosperity.
This country can only be China, and if China's rise ever ends, our own rise will never begin.
Elijah Adjei Boakye is a trained journalist, writer, and professional teacher. Elijah is a blogger and columnist for several media houses in Ghana, including Modernghana and GhanaWeb.
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