Month: February 2019

In late 2015, shunned in a tiny column of a newspaper’s front page was the headline: “Zimbabwe to make Chinese yuan legal tender.” Assuredly, little did anyone who even managed to read that title realise—or rather reflect on the significance of that in China’s growing sphere of influence in the days to dawn soon.

Zimbabwe suspended the use of its legal tender in 2009, given the struggle to cope with a 500- billion % hyperinflation rate, coupled with a severe recession. The country had to start using the US dollar and the South African Rand instead. However, during the dark days of Robert Mugabe’s notorious human rights record unveiling before the world, Western countries slowly started shunning their ties while China unflinchingly remained its only major and steady economic and ideological ally. In 2015, they proved the extent to which Mugabe’s administration was their “true and dear friend” by cancelling all their debt (approximately $40 million) and strategically negotiating the adoption of yuan instead. And the magnanimity didn’t end there at all; it was just gearing up.

“The thing that makes you happy about their (Chinese) aid is that it is not tied to any conditions. When they decide to give you (assistance), they just give you,”—Tanzanian President John Magufuli blithely remarked in November last year, just as China dramatically increased its funding in the country’s infrastructure projects. And what he had essentially applauded was China’s indifference to his most controversial policies that have infringed upon innumerable international human rights laws in the past couple of years, to an extent that social media trends embraced “#WhatWouldMagufuliDo” —after his ban on pregnant girls to attend school, public rallies and his brutal crackdown on homosexuals —instantly prompting the World Bank to put its $300 million loan on hold and some other governments to naturally follow suit.

Nonetheless, it is possible to peer through China’s lending practices abroad through a relatively neutral prism and dismiss it as naturally filling the American void by advancing its own interests in being a superpower. However, it is China’s modus operandi that bears a peculiarly pungent and problematic flavour.

The ultimate exhibit is the country’s Belt and Road Initiative (BRI)— the $8-trillion-flagship infrastructural project that is incorporating countries containing nearly two-thirds of the world’s population. Interestingly, the number of studies disproving or just doubting this to be the “global opportunity” or a “win-win”situation that the Chinese government advertises it to be are growing higher.

The Debtator

“John Adams infamously said that the best way to subjugate a country is either through the sword or debt. China has chosen the latter,” said Brahma Chellaney, an analyst affiliated with the Center for Policy Research (CPR), a New Delhi-based think tank.

Their premise is that— behind the facade of facilitating economic development in these countries— China is exercising the devious tactics of “debt-trap” diplomacy on the so-called beneficiaries by “increasing their dependence on China as a creditor and allowing them to make strategic concessions in Beijing’s favour”. Even Christine Lagarde, the Managing Director of International Monetary Fund (IMF), specifically warned the Belt and Road partners in April last year, against considering Chinese investment as “a free lunch”.

And speaking of strings attached, the cautionary tale of Sri Lanka is a noteworthy example in this regard, as the the country handed over control of its strategically well-located southern port of Hambantota to a Chinese company on a 99-year-lease—  to convert the $1 billion of loans that Sri Lanka owes China into equity. The same is expected to recur with the at-risk countries like Pakistan, Djibouti and Tanzania, despite what their governments might daringly declare.

But more direly alarming instances (that are less cited) in Asia include the landlocked country of Laos— in which, the railway funded and built by Chinese is reportedly worth half of the country’s GDP. Nevertheless, the more staggering situations are those of the Pacific economies of  Papua New Guinea and Tonga that are said to owe China around one-quarter of its total external debt and one-third of its annual GDP respectively.

And an alternative to this arrangement is also what’s galvanising the argument amongst African leaders for making yuan a reserve currency for the region, signifying not just the unprecedented level of trade with China, but in the rising consensus of it being a significantly global unit of foreign exchange.  “Most countries in the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) region have loans or grants from China and it would only make economic sense to repay in renminbi (Chinese yuan),” said MEFMI spokesperson Gladys Siwela-Jadagu.

Spraying from the Spy Can

What is vaguely similar— even somewhat surreptitious about China’s techniques in increasing their influence, other than simply— to use the words of the government’s gadflies —dasabi (大撒币) or “throw money around”— China has made its all-time support for authoritarian regimes abruptly blatant. But monetary assistance is not the only concern. The technological support that is being extended by Chinese companies to augment the practices of authoritarian regimes or fester the flawed and dysfunctional democracies is what should make one more queasy.

According to the Human Rights Watch,  the Chinese telecom giant ZTE is actively providing the infrastructure required for the Ethiopian government to spy on members of the political opposition, curb dissent and and monitor its citizens’ communications. And as a Canadian Security Intelligence Service (CSIS) report points out, this behaviour is seen as symptomatic of China having “openly embarked upon a worldwide ideological war against the West to weaken and delegitimise liberal democracy.”

And even though several technologies exist that can be wielded widely to advance the interests of an authoritarian regime —like advanced biometrics, state-based cyber hacking, and information-distortion techniques, China has always kept Artificial Intelligence (AI) as the cornerstone of its tech ambitions, especially with the aim to be the world’s standalone AI leader by 2025. In fact, Ian Bremmer, President of the Eurasia Group, succinctly tweeted out: “China is constructing its own Marshall Plan to build surveillance states instead of democracies.”

The update that prompted Bremmer’s post, disconcertingly, occurred in April of last year, when a Guangzhou-based AI startup—CloudWalk Technology, reportedly inked a deal with the Zimbabwean government to provide a mass facial recognition program to ameliorate public security and surveillance. Introduced as a component of the Belt and Road umbrella, this aims to emulate parts of the surveillance infrastructure that have restricted (annihilated) citizens’ civil liberties in China, spookily akin to the ongoing events of the heavily-monitored northwestern province of Xinjiang where large numbers of the Uighur ethnic minorities have been indoctrinated even at the slightest suspicion of disloyalty or paucity of devotion towards the government.

As Kai-Fu Lee so precisely pointed out in his new book, AI Superpowers—“If AlphaGo was China’s Sputnik moment, the government’s AI plan was like President John F. Kennedy’s landmark speech calling for America to land a man on the moon.” And China seemingly strives to prove that by proliferating these technologies abroad, it can improve its own outcomes in this sphere.

Moreover, by strategically gaining access to a population with a different racial mix from China’s, Chinese companies will reportedly start recaliberating their data for darker skin metrics and be better able to keep racial biases out of its facial recognition systems— giving Chinese surveillance software the evidently desired edge in the race.

With Sierra Leone stepping up to refuse Chinese aid, along with countries, like Malaysia starting to become more vocally vile at the Asian hegemon— the rhetoric and revelations providing a different perspective wherein China is not be the one alone that ought to be punched at and accused for strategic opportunism have risen quite dramatically.

Thereby, the negative neon lights have shifted to even point out how the lack of economic reforms, the red-tapism or even just the restlessness of the debt-risk countries while dealing with the World Bank or Asian Development Bank by not meeting their standard requirements for projects — are all piling up strongly against these countries’ favour, and prove how far they are from seeming simply as victims of China’s savage diplomatic tactics.

Nonetheless, it is probably still early to predict how the staccato of scenarios may unfurl and in whose favour, given the perennial and vigorous volatility in the geopolitical atmosphere. However, that must not prevent anyone from expressing atleast some semblance of concern, especially if someone is vainly of the belief that a virtue like generosity exists, and without mentally adding: terms and conditions apply.

Saishreya Sriram is a Research Associate at One Future Collective.

Featured image: Brookings Institution