African nations are now sending more money in debt repayments to China than they are receiving in new loans, a new report found. The shift highlights the impact of two trends that illustrate Beijing’s changing relationship with the continent: the sharp contraction in new Chinese lending, set against growing foreign direct investment from China into Africa.
The continent has experienced “the most dramatic reversal in Chinese finance” of any region, according to analysis from ONE Data, a partnership between Google and the ONE Campaign advocacy group: Africa went from receiving $30 billion in net flows from China between 2010 and 2014 to paying out $22 billion over the last five years. David McNair, executive director of ONE Data, told Semafor the drop in lending reflected a period in which China’s economy faltered and its priorities shifted. “It will be fascinating to see how China responds to the changing of the international order,” he said.
The analysis comes after research by Boston University showed Chinese lending to Africa has plummeted amid Beijing’s shift in focus to strategic investments, while a separate report by Australia’s Griffith University and Shanghai’s Green Finance & Development Center indicated the number and value of new investment and construction deals by Chinese entities in Africa surged to a record high last year.
