Is it true what they say about the Chinese? The effects of China’s lending in Africa

Jun 23, 2008

A few weeks ago we posted about the entry and growth of new aid donors. A recent paper published by the Norwegian Campaign for Debt Cancellation confirms all the popular truths about Chinese lending in Africa:

  • It lends to countries that already have large debts outstanding.
  • It is a risk to debt sustainability because of the lack of transparency in the loan contraction proces.
  • China seems to be less concerned with human rights standards and environmental safeguards than other creditors.
  • It provides an alternative to the traditional donors within the development paradigm. China’s non-interference policy implies that China does not have any conditions attached to loans apart from the requirement to support the one-China principle and to reject the legitimacy of Taiwan as a country.

Do we know enough about China’s lending policies to generalise to this extent? What do you think?

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