African leaders say China was the only country willing to meet their infrastructure needs. Critics argue that China has built white elephants, fostered corruption and encouraged indebtedness
expressway curves 27km through Kenya’s capital. Built by the China Road and Bridge Corporation, a state-owned enterprise , the road will open later this year. Under its concrete pillars, Nairobians share their views of it. Samwel Juma, a student, calls it “a project for the future” that will unclog traffic jams. But Gabriel Kihoti, a hairdresser, questions why it was a priority when the cost of food and fuel is surging. Francis Muriu, a cab-driver, calls it “a road for the rich, not the poor”.
Like the West, China substantially increased its development finance to Africa in the 2000s. Unlike the West, most of it took the form of loans at or near market rates, rather than aid. From 2000 to 2020 Chinese state financiers lent $160bn to African governments. Whereas Western aid or World Bank lending is typically widely spread around, almost two-thirds of China’s loans to Africa were for infrastructure. From 2007 to 2020, Chinese infrastructure financing for sub-Saharan Africa was 2.
There is little substance to claims of “debt-trap diplomacy”, in which China hoodwinks borrowers so as to seize assets. It is more accurate to say that China’s hard-nosed approach conflicts with its seemingly benevolent rhetoric. China may not be a duplicitous negotiator—but it is ruthlessly self-interested. Last year AidData, a research group at William & Mary University in Virginia, examined 100 contracts between Chinese entities and developing countries.
A chapter in “Banking on Beijing”, co-written by Bradley Parks of AidData, suggests that the average Chinese project raised growth by 0.41-1.49 percentage points after two years—a large boost. The authors find that in areas around a project night-time light increased by 8%. Often the most effective projects are unglamorous, such as a road linking Nairobi to nearby Thika. Yet whether the loans could be put to better use is another question.
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