China-Africa summit: rejecting the debt trap narrative

As the heads of state and leaders of 51 African nations converged in Beijing earlier this month for the ninth Forum on China–Africa Cooperation (FOCAC), many media outlets sang a tired refrain. As China pledged $51 billion in new funding to the continent over the next three years, observers, particularly in the West and regional rival India accused Beijing of trapping African nations with unsustainable debt.

While Chinese and African leaders exchanged views on deepening mutual growth and win-win cooperation, some went as far as framing Beijing’s ties with African nations as an ‘octopus’ embrace’ that ‘tightened, entangled and constricted’ China’s developing partners.

Other China and Africa watchers downplayed the three-day summit and Beijing’s pledge for new funds. They highlighted, instead, African desires for broad-based debt relief, amid the developing world’s mounting economic woes.

Since China launched its much-heralded Belt and Road Initiative and ramped up its engagement and investment in developing nations, particularly in Africa Western leaders and experts have repeatedly accused it of ensnaring its ‘unsuspecting’ partners in a ‘debt trap’. Since 2017, the neologism ‘debt trap diplomacy’, coined by Indian international relations expert and columnist Brahma Chellaney, has been used almost exclusively to describe Chinese engagement in the Global South, particularly by policy makers in the United States. This is despite the fact that many mainstream academics and experts have since rejected the hypothesis that Chinese lending practices are behind borrowing nations’ debt troubles.

In the aftermath of the three-day summit this month, South Africa’s President Cyril Ramaphosa rejected the notion that Chinese investments are pushing African countries into a debt trap. “I don’t necessarily buy the notion that when China [invests], it is with an intention of, in the end, ensuring that those countries end up in a debt trap or in a debt crisis,” he said.

In its analysis of the ninth FOCAC, Chatham House also dismissed the debt trap rhetoric applied to China’s engagement with Africa. Citing a 2022 report it had compiled, Chatham House noted that there are no grounds to allege that China is using debt as a mechanism to gain political control: “Chinese lenders account for 12 per cent of Africa’s external debt, lower than the share held by multilateral institutions or private creditors,” it pointed out.

The irony here is that the phrase ‘debt trap’ initially gained popularity in the 1970s and 1980s, when the oil crisis and rising interest rates plunged many developing nations that had taken substantial loans from the International Monetary Fund and World Bank into a financial crisis that necessitated debt rescheduling agreements and structural adjustment programmes. That titbit of history is easily overlooked if one searches the phrase these days on the Internet – the results will usually mention China and not much more.

Coming back to this month’s China-Africa summit, Beijing’s $51 billion funding pledge is indeed more modest when compared to pre-2016 levels. However, rather than signalling alarm, the move seems a lot more reasonable against the backdrop of economic uncertainty worldwide. The same applies to Beijing’s reluctance to offer sweeping debt cancellation, according to the Chatham House analysis. It noted that the moves reflect “caution shaped by domestic financial constraints and global economic uncertainty… [and] signals a shift towards a more restrained and pragmatic lending policy, focused on trade relations rather than debt-driven infrastructure investments.” The analysis stated that China now prioritises the growth of African exports, particularly in agriculture and natural resources, adding that the approach aligns Africa’s economic development goals with China’s need for secure access to resources.

More importantly, the reason why the allure of China remains unshakeable for Africa and indeed, the rest of the Global South, is in its compartmentalised approach towards global geopolitics. The BBC, in its review of the ninth FOCAC, conceded that “for African governments resentful of the pressure to take sides in international disputes, China now appears as a refreshingly reliable partner, ready to collaborate without discrimination both with the allies of Moscow and with civilian-ruled states that are closer to Europe and the US.”

“While the influence of others on the continent is questioned – for instance, France and the rest of the EU are being shunned by the Sahelian military juntas, and Russia’s mercenary-security ‘offer’ is regarded with deep mistrust by pro-Western African governments – China has navigated a middle way,” the BBC added.

That approach ties back to the Five Principles of Peaceful Co-Existence, which have provided the cornerstone of China’s foreign policy strategy for the last seven decades. In a world more divided than ever as conflict rages on from Europe to the Middle East, the Chinese way holds much appeal for developing nations that want to focus on growth without being bullied into one geopolitical camp or another. The West too would do well to reflect on why China remains the most attractive partner for the Global South rather than continuing to tarnish its moves without reason.