Silk Road Headlines_15th January, 2021
Following in the footsteps of Chinese foreign ministers before him, current Foreign Minister Wang Yi chose African countries for his first overseas tour in the New Year. Wang Yi kicked off his official visit on the 4th of January, visiting Botswana, Tanzania, Nigeria, the Democratic Republic of Congo, and Seychelles.
In the meantime, the Institute for Security Studies, an NGO headquartered in Pretoria, South Africa, has put forward the idea that there are increased concerns about the debt exposure China has accumulated to Africa [Is the ‘Silk Road’ unravelling?]. Lending by the two main Chinese policy banks behind most of the financing for BRI projects, China Development Bank and the Export-Import Bank of China, has dwarfed from USD 75 billion in 2016 to just USD 4 billion in 2020.
While China’s lending may be slowing down, writing off the BRI is wrong, judging by the results of Wang Yi’s visit. Botswana became the 46st nation to sign a Memorandum of Understanding (MoU) and Tanzania awarded a USD 1.32 billion contract to two Chinese companies (China Civil Engineering Construction (CCEC) and China Railway Construction Corporation (CRCC)) to build the 341 km Mwanza – Isaka standard-gauge railway [China’s 2021 Progress Across The African Belt & Road Initiative].
Beside bilateral matters, an issue of higher importance central to the tour were the preparations for this year’s Forum on China-Africa Cooperation Summit (FOCAC), scheduled to take place in Dakar, Senegal. China has announced three priority areas for the FOCAC meeting: vaccine cooperation, economic recovery, and transformative development. If China manages to provide debt suspension for fiscal space and at the same time distribute vaccines to countries on the continent, huge geopolitical dividends may be accumulated at the expense of other actors like the US or Europe.