Welcome to the October 2022 issue of our China and global development round-up. This October is a busy month for China-watchers, with the 20th National Congress of the Communist Party of China (CPC) being held in the middle of the month – watch out for ODI analysis on this. Since this is the first roundtable of 2022, after a long break, we discuss resources worth reading that have come up in the last year.
The Global Development Initiative
Much like the Belt and Road Initiative (BRI), the Global Development Initiative (GDI) started quietly. And much like the BRI, we are likely to hear more about the GDI in the coming months and years, especially considering our interest in development issues.
Proposed by President Xi Jinping at the UN General Assembly in September 2021, the initiative has immediately attracted attention, with almost 100 countries expressing support and over 50 (including many low- and middle-income) countries joining the so-called ‘Group of Friends’ of the initiative.
Read No. 1: Global Development Report
As I write, the main official source of information on the GDI seems to be the Global Development Report published by the Center for International Knowledge on Development, which dedicates a whole chapter to the Initiative. The chapter explains the GDI “offers Chinese solutions to the questions of our times”, and expands on the principles driving the initiative (people-centred, innovation-driven, action-oriented etc.) In practical terms, it says the initiative will focus on poverty reduction, food security, COVID-19 and vaccines, financing for development, climate change and green development, industrialization, digital economy and connectivity. The GDI is already been operationalised, with a preliminary list of projects drafted and funds pledged toward its rolling out.
Read No. 2: Unpacking China’s Global Development Initiative
This article in The Interpreter raises a number of red flags regarding the GDI. Firstly, the focus on development as the ‘master key’ to all problems, a view of development consistently maintained by China but which has often raised eyebrows in the West. Secondly, the emphasis on ‘collective’ and ‘greater good’, which, the authors say, could undermine individual rights. Thirdly, the explicit links to China’s Global Security Initiative, announced in April 2022 and with a focus on security issues, but equally scarce in terms of details.
China’s debt and announced debt cancellation in Africa
Read No. 3: China cancels 23 loans to Africa
In August this year, the Chinese government announced it would waive 23 interest-free loans for 17 African countries that matured by the end of 2021. This is not debt cancellation, but rather cancellation of the outstanding balance of those loans that have achieved maturity but were not fully paid off, as Deborah Brautigam explains in this article.
Read No. 4: China’s interest-free loans to Africa: uses and cancellations
While well received by many African countries, the announcement did not provide much details, and therefore caused a lot of speculation about the scope of these waivers. A team at Boston University estimated these cancellations to be worth between US$ 45 and 610 million, constituting only a small share of China’s lending to Africa.
Read No. 5: China has waived the debt of some African countries
This article by Harry Verhoeven says debt relief is welcome, but that its small size is not likely to make a large impact for the recipients. The author argues that the importance of this announcement rather lies in its political implications. With this move, China wants to counter the ‘debt trap’ narrative and at the same time deepen ties with Africa.
Read No. 6: Debt restructuring in Africa
In a working paper published by Boston University, Yan Wang and Yinyin Xu argue a different point. They note that debt is often seen as something to reign in. In relation to Africa, and given the current debt sustainability crisis, it is often said that African countries need to borrow less. But, the authors argue, the current narrative on debt sustainability ignores that debt is not only a liability, it is also necessary to build assets, which are vital to development and debt sustainability. They call for debt sustainability assessments, but also markets and rating agencies, to look more kindly at the increase in public debt if this is used to build productive assets.
Read No. 7: Debt, distress and dispossession
All these discussions raise a broader question. We often investigate details, such as the share of Chinese and other lenders’ debt in African countries, or the conditions at which those loans are offered – but what about the broader conditions that lead countries to borrow more and more, and to end up in recurrent debt sustainability challenges? Tim Zajontz explores this in an article which looks at the structural causes for the recurrence of Africa’s debt challenges. The author argues that it is inherent to global capitalism to lock countries in Africa (and beyond) into periodic cycles of debt financing, debt distress and structural adjustment. So should that not be the most important problem to address?
Reflections on Global China
Read No. 8: Cambridge Elements Series on Global China
Cambridge University Press launched an Elements Series on Global China, edited by Ching Kwan Lee. This is a great resource that may be of interest to many, as it touches on multiple aspects of China’s global engagement, from soft power to its relationship with Hong Kong. Readers interested in development may want to start with the ‘China and Global Food Security’ element by Shaohua Zhan, but it is worth going back to check as the series is constantly being updated. I have very much enjoyed the ‘Global China as Method’ element, which draws striking parallels between China’s development and the course of global capitalism. Some of the elements can be downloaded for free.
Read No. 9: China’s Global Statecraft
In the same vein, this interview to Ching Kwan Lee touches on several elements of Global China. Lee talks about economic statecraft and colonisation, and what these terms mean for places as diverse as Zambia and Hong Kong. Well worth a read.