Read 1: Estimates of China’s foreign aid

As many will know, China does not publish official aid figures; official data is released only in aggregate form every few years in China’s foreign aid white papers. Naturally, this creates curiosity about Chinese global contributions. Naohiro Kitano regularly publishes estimates of China’s foreign aid. The latest iteration, in this (open access) article with Yumiko Miyabayashi, revealed that China’s foreign aid, on a grant-equivalent basis, decreased from US$6.4 billion in 2019 to US$5 billion in 2020. Estimates put China’s 2022 foreign aid between US$5 and US$7.9 billion, placing them somewhere between the 6th and 13th largest donor in the world.

Read 2: Chinese lending as ‘calculated capital’

Chinese lending has often been called ‘patient capital’ due to its long-term focus and higher risk tolerance compared to Western capital, which prioritises short-term gains. However, a working paper by David Landry and Keyi Tang challenges this idea. Their analysis suggests that Chinese financiers use resource-backed loans (where collateral is offered in the form of natural resources) as a risk mitigation strategy. In addition, resource-backed loans carry higher interest rates, on average, than non-resource-backed loans. In fact, resource-backed loans are often used in riskier contexts to mitigate against potential corruption, changes in political cycles, and other forms of instability that could affect repayment. From this analysis, the authors conclude that Chinese loans, while politically influenced, are primarily driven by commercial interests. This makes the economic risk for borrowers higher – if the main motivation is commercial, there will be fewer chances to rely on politically-motivated renegotiation should the need arise.

Read 3: The stalemate in sovereign debt restructuring

Shahar Hameiri and Lee Jones make a similar point about the commercial nature of Chinese loans in their open access article. The authors challenge the narrative that, in the presence of many different lenders, borrowing countries would extract better terms for their loans. Even when faced with many lenders, today many countries are in, or at high risk of, debt distress. Why? The authors argue that the increase in lending in the early 2000s and 2010s was due to the prevailing politico-economic conditions within China, as well as international financial markets, rather than geopolitical reasons. Then, when the economic conditions changed, creditors sought to secure returns. In the case of China, the governance of lenders is fragmented and therefore, commercial interests (of the policy banks) take priority over political reasons to support debt restructuring. Therefore, “China is not riding to debtors' rescue to advance its geopolitical ambitions, because such ambitions did not primarily drive its lending in the first place”.

Read 4: Prospects for Chinese lending to Africa

In this article, Trevor Lwere predicts an increase in Chinese lending to Africa in 2024. He cites four reasons:

• First, the recent decline in Chinese lending is just part of the trends (upwards and downwards) that Chinese lending to Africa has seen in the past 20 years.
• Second, Several African countries (Algeria, Botswana, Tunisia, etc) have not borrowed from China in many years and may have an appetite to do so.
• Third, During the COVID-19 pandemic, African countries may have had less appetite to borrow from infrastructure – and may have been prevented from doing so by the impossibility of travelling for Chinese lenders, which is important for due diligence. As we emerge from the COVID-19 crisis, this may change.
• Finally, expanding its overseas lending for infrastructure remains key to China’s long-term economic growth.

Based on these factors, the author is optimistic about an upward trend for Chinese lending to Africa in 2024 and beyond.

Read 5: China’s Central Bank Digital Currency

Lauren Johnston's study explores China’s efforts to create a Central Bank Digital Currency (CBDC) and the potential implications for African countries. She examines the origin, features of the digital currency currently being rolled out, and the potential impact of China’s e-CNY. The progress and future development of the currency will be important for African countries, many of whom rely on China as their main trading partner. Moreover, as a few African countries are considering the adoption of their own CBDCs and the Pan-African Payment and Settlement System (PAPSS) that was launched at the continental level in 2022, they may need to consider interoperability with the Chinese (and other) systems.

Read 6: The BRI: refocus from ‘full spectrum support’ to ‘elite capture’

Pádraig Carmody offers a compelling perspective on the recent ‘reboot’ of the BRI. Since 2013, BRI projects have encountered many issues – both discursive (accusations of ‘debt trap diplomacy’) and material (financial troubles and underperformance) – which have prompted a ‘change of direction’. The ‘BRI 2.0’ focuses less on large-scale infrastructure projects and more on smaller projects, as well as people-to-people exchanges – such as training offered to political elites. For Carmody, this emphasis on political elites makes geopolitical sense as it may be more cost-effective than building hard infrastructure – and may represent a refocus from geoeconomics to geopolitics.