China and African Debt: Behind The Headlines
The increase in Chinese loans to African sovereigns and entities has been marked since the 2008 global financial crisis. Of the top 10 African borrowers, half have strong hydrocarbon or extractive sectors, and the focus of Chinese loans has been the transportation, power and mining sectors. Very little Chinese financing has gone into education, health or the environment, providing strong evidence of a commercial rather than “human development” focus. For China, the volume of African debt remains a small part of its debt holdings. However, questions over the potential for “debt diplomacy” will continue to ensure that there is a focus on Chinese lending behavior.