THICK END OF THE WEDGE
PETER BRUCE: There’s bad debt. And there are bad loans…
So, the Chinese have come, bearing gifts. A R33bn loan to Eskom, which will immediately spend it on interest payments on existing loans, and a whopping promise from visiting President Xi Jinping to President Cyril Ramaphosa that China will invest $14.7bn in SA. Details, no doubt, to follow. This is not to disparage the Chinese money. We should take it and be grateful for it, because it is easier than going to ask for it in the markets. But we should also understand this isn’t aid we’re talking about. And not grants in the way the US Marshall Plan was used to rebuild Europe after the Second World War. These are loans, and they’re not soft. To accept them is to accept that SA goes even deeper into debt. China is in the middle of a huge gamble. Xi is fighting to make his country the most powerful in the world. His plan is to join some 70 nations in what he calls his Belt and Road strategy to create a new union of trading and political interests joining China to Western Europe. It is wo...
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