Sunday, January 20, 2013

Link of the Day: Sweet and Sour: China in Africa, Beyond the Headlines

Sino-Africa scholar Deborah Brautigam has an interview with the University of Melbourne's Up Close program about her research. This caught my eye:
Yes, you’ve written about these infrastructure projects, promised but not delivered and they are getting beyond the memorandum of understanding, it's not always an easy thing. (Emphasis mine)
Exactly. Now, I would caution though about calling these promises or pledges. What we are talking about is a long series of negotiations for any kind of project, whether it's an investment or something that will be financed by a Chinese bank. So there's an initial memorandum of understanding and one expert who works on these issues, not just with regard to China but in Africa more generally, says that only about 3 per cent of any memorandum of understanding ever reach completion and actually become a project. So we are talking about a lot of companies, a lot of banks going around and having initial discussions about something and saying, yes, we are interested, but then getting to the final point where something actually happens is very difficult. One of the reasons is that these products demand feasibility studies. The Chinese bank doesn’t want to actually put the money up until it sees whether or not the project can repay the loan. So this has happened over and over again, the Chinese do a feasibility study and then they go, hmm, this product doesn’t look quite as profitable as it did in the beginning and we don’t think we are going to finance it or we don’t think we are going to invest in it and that's natural. That actually happens all the time and it happens all the time with western companies but it just doesn’t get the headlines because nobody is tracking western interest the way they are tracking Chinese interest. So it seems as though the Chinese are making promises and then not following up but I think it is much more realistic to look at this as the natural progression of negotiations on any kind of project. (Emphasis mine)
The lesson to be drawn here is we need to be sceptical about such agreements actually turning into projects. (Emphasis mine)
Yes, and that's not a new thing. It's not a new thing for the Chinese. It's not a new thing for us but we can't take a headline as an actual project and that's a point I would like to drive home. (Emphasis mine)
Also, if you are on twitter, I heartily recommend following Anne Sherman (@annesher07) who took some great photos of Guangzhou and it's African population and put them up on her instagram. Sherman is a Sino-Africa expert in her own right and the Social Media Manager for the The China Africa Project.

No comments:

Post a Comment