Could some Chinese funds invested abroad be more destructive than beneficial?
At a cursory glance, the Forum of China Africa Co-operation (Focac) would appear to be a surprising and resounding success for all involved. By the close of talks on September 4, China had pledged another $60bn for emerging economic developments. This is on top of $20bn in 2012 and $60bn in 2015, which has been loaned to build development-focused infrastructure such as roads, rail and ports. It is no secret that the Chinese government is a growing source of investment and lending into Africa but there are rising concerns — not just in Africa but also in South East Asia — that some of the Chinese money invested abroad could be more destructive than it is beneficial. There are legitimate concerns about Africa’s growing trade deficit with China and the ability of the individual countries to finance rapidly growing, Chinese-financed external debt, but the biggest risk that no one wants to talk about is the risk to governance. Transparency is one of the basic principles of good governanc...
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