This month both Janet Yellen, the United States Treasury Secretary, and Kristalina Georgieva, the managing director of the International Monetary Fund (IMF), have focused on China for its lending practices. Yellen has called for a resolution of a Common Framework for cases like Zambia and Ghana to “remove debt overhangs and foster growth in developing countries” and Georgieva has called for Beijing to speed up its work on debt restructuring requests.
Considering these remarks, it might be easy to conclude that China is the enemy of the rest of the Global South. However, much caution is needed and headlines need to be contextualized. For example, Sri Lanka’s name has been raised along with that of Zambia and Ghana. Most people still don’t know the truth about Sri Lanka’s debt trap diplomacy story, which depicted China as plotting to get Sri Lanka into debt so that it could take a lease on the port of Hambantota.
The truth is that Sri Lanka is indebted primarily to private lenders. Its debt burden is not due to Chinese loans, which are much softer than that of private finance lending markets. These debt trap stories seek to equate China with the worst of the West. For example, the fact that the port was leased out for 99 years draws a parallel with the gunboat robbery of Hong Kong. However, leasing out a port is hardly synchronous to taking the port away. If a Chinese company can run the port and make it successful, this will be a boon for the entire Sri Lankan economy, which still owns the port.
China is not copying a colonial or neocolonial pattern. While being committed to its own development, China has, under the framework of South-South cooperation, provided economic and technological development assistance to more than 120 countries in Asia, Africa, Latin America, Oceania, and Eastern Europe.
When it comes to Chinese involvement in Africa, Professor Deborah Bräutigam, the author of “The Dragon’s Gift: The Real Story of China in Africa,” is one of the foremost experts. Her conclusions, drawn from extensive research, case studies, and interviews, show how China’s presence on the continent works primarily on a win-win basis that doesn’t belittle Africans and provides the much-needed finance and infrastructure support.
Speaking about Ghana, Johns Hopkins University reported that the country owes China an amount of $3.5 billion as of 2023. However, considering Reuters reported, in 2022, that Ghana’s total debt stands at $37.4 billion to commercial banks, China’s share of Ghana’s debt is trivial. The point is that while it’s fair to say Ghana might require debt relief, pointing the finger at China is irresponsible.
China is not responsible for Zambia’s debt woes either. Zambia has indeed borrowed from China for much-needed power plants, airports, and railways, which are essential for developing a country. Nevertheless, singling China out for criticism when it seeks to develop a country and give credit where others won’t is ludicrous.
A report from Foreign Policy stated that Chinese debt to Zambia represents just 17.6 percent of total external debt payments. Private creditors of Zambia’s debt, such as the U.S. company BlackRock, have declined to reduce Zambia’s debt, and a request to delay interest payments by a group of Eurobond investors, holding more than 20 percent of Zambia’s public external debt, was also refused.
To further single China out, Janet Yellen has said that she wouldn’t want debt relief from the IMF or the World Bank to benefit Chinese lenders, but then are we to assume that private capital lenders from the U.S. and the West are a neutral force worthy of receiving IMF benefit?
Fred M’membe, the President of Zambia’s Socialist Party, believes the problem with Zambia when it comes to China’s debt is that the current administration of Zambia is aligning itself with the West. He has urged Zambia to “immediately engage China on a bilateral basis to give us a three-year moratorium on its debt while we grapple with the never-ending IMF-G20 common framework.” He observes that Zambia should be “mindful of the fact that China has never threatened our independence. We have never been subjected to any form of mistreatment or exploitation by China. We can’t say the same about the U.S.”
Perhaps the problem is Zambia owes too much to Western private capital, and when it comes to the interests of capital, the whole “blame China narrative” works to deflect attention. On a macro scale, the essence of debt-smearing stories is part of the wider “China threat” propaganda that has emerged from the U.S.-led Western order in an effort to maintain hegemony. The “China threat” narrative seeks to convince the world that China’s economic rise is a net, it’s bad for the world and so needs to be stopped.
This narrative seeks to prevent audiences in the West from finding a common bond with China’s own development and its global developmental aims. These noble aims are no less than to bring about a multi-polar democratic world order based on even development where poverty is eliminated, infrastructure needs are met, and common prosperity reigns.
It is under this context that Yellen and Georgieva need to respect China as an actor that is always ready to work collectively for the benefit of the Global South.
Keith Lamb is a University of Oxford graduate with a Master of Science in Contemporary Chinese Studies. His research interests are China’s international relations and “socialism with Chinese characteristics.” The article reflects the author’s opinions and not necessarily the views of The Southern African Times.Â
