In property developments, profit is often made by the second owner – the one acquiring cheap assets from an often bankrupt original developer. China may be betting on a similar outcome with its new best friends in Africa.
Forgotten among hoop-la from last week’s two-day gathering is the repayment record of those now lining up to borrow Chinese money. It was only a decade ago that mainly Western lenders wrote off $40bn in debt accumulated by 18 countries and provided conditional relief on $15bn owed by another 20.
African leaders are celebrating a fresh $60bn credit line. Whether African taxpayers should share this enthusiasm depends on where the money will be spent; the interest rate it will accrue; and what security is provided in return for the loans.
The official “Declaration” from the China-Africa summit is long on words but short on important details. Maybe they got lost in translation. Or, perhaps, it’s a case of Western taxpayers getting the experience and Chinese making the profit.
From Biznews community member Ian Jayes
Very good point about Chinese credit. Africa will learn that China is not the West and feels no responsibility towards them.
