For the last 20 years — especially since the Chinese stepped onto the world stage with the Belt and Road Initiative in 2013 — British financiers have been trying to break the wall of “secrecy” surrounding Chinese lending policies and details of individual Chinese loans. They need this, they say, in order to properly assess the creditworthiness of a client state, and properly price ("market") their bonds. In the larger (geopolitical) terms, these data are also used to probe for vulnerabilities of Chinese lending institutions, and ways their influence might be undermined.
On Dec. 8, the Financial Times published a piece heralding, “China Curtails Overseas Lending in Face of Geopolitical Backlash,” wherein the empire celebrates in victorious fashion that lending by the Chinese ExIm bank has dropped “from a peak of $75 billion in 2016 to just $4 billion” in 2019. At least they think so, based on forensic work done by the Boston University Global Development Center.
On Dec. 10, Sir Alex Vines, OBE, penned an article for Chatham House (where he is the Managing Director of Ethics, Risk & Resilience and Director of the Africa Program) titled, “China’s Southern Africa Debt Deals Reveal a Wider Plan.” Not having much to say about the actual “plan,” Sir Alex is very detailed in his analysis of the Zambian debt (Africa’s first “pandemic bankruptcy”) that to Western bondholders. He considers Angola, Mozambique or the Southern African Development Community in general, any of which he feels is potentially next on the default block.
Despite his ranting, all Sir Alex is ultimately able to say is that “China already signaled its intention in 2020 to provide debt forgiveness to African countries with zero-interest loans under the existing Forum on China-Africa Cooperation (FOCAC) commitments,” further fretting that, “China is also preparing for the next FOCAC summit scheduled for Dakar in 2021 and wants this to be a showcase about post-COVID-19 recovery and to show China is the preferred Africa partner.”
On Dec. 9, the U.S. Treasury added its weight to the anti-China effort, issuing sanctions against Wan Kouk Koi, aka “Broken Tooth,” a Hong Kong native and notorious underworld figure with additional ties to the Chinese government, who already served 14 years in prison. Since his release, Wan has expanded his underworld activities in areas of growth led by the BRI, establishing the World Hongmen History and Culture Association — cover for a casino and cryptocurrency network — in Cambodia in 2018. In its sanctions of Wan, however, the U.S. Treasury appears to tie the entire Belt and Road to criminal activity, stating, “The Chinese enterprises behind the BRI projects have several things in common: their leadership has links to criminal networks or actors involved in illicit activities in other parts of Southeast Asia, as well as China;” being further “engaged in casinos and cryptocurrencies.”
