This African country now knows what it feels like

to get owned by the Chinese Communist Party!

Hi, Welcome to China Uncensored.

I'm your host, Chris Chappell.

Zambia is a landlocked country in southern Africa.

And it's poised to be the next African country to fall prey

to the Chinese Communist Party's predatory lending practices.

The news service Face 2 Face Africa gets straight to the point,

asking “Is Zambia Africa's first casualty in China's takeover

after defaulting on loan repayment?”

Well technically it's not the first—

don't forget about Djibouti—

but it could very well be the next.

And it's all happening under the radar.

According to Africa Confidential,

Zambia can't afford to pay back

its multibillion dollar loans to China,

and so there are secret talks going on

between Chinese and Zambian leaders

to hand over the country's biggest energy producer.

The report says,

“The state electricity company ZESCO is already in talks

about a takeover by a Chinese company.”

ZESCO supplies electricity to about 80% of households in Zambia.

So signing away control of a strategic national asset is a big deal.

But it doesn't end there.

The same report also revealed that Zambia is poised

to hand over the Lusaka International Airport to China.

That's in addition to all the Zambian copper, nickel,

and cobalt mines that are already run by Chinese companies.

And Zambia's state-owned TV and radio news channel ZNBC

is already 60% Chinese-owned.

Which might explain why you see lots of news reports lately

about Zambia-China friendship...

...but not so many reports about all those Chinese takeovers.

Of course, a Zambian government spokesperson

has gone into denial mode,

saying that “all stories relating

to the sale or takeover of public assets

such as ZNBC, KKIA and ZESCO by China are false.”

But investigative reporters from Africa Confidential say Zambia

is getting owned by the Chinese Communist Party—literally.

Africa Confidential also warned that the long-term outcome

could be effective Chinese ownership of the commanding heights

of the economy and potentially

the biggest loss of national sovereignty

since they gained independence in 1964.

Another term for this whole thing is simply “debt trap.”

“More of Africa finds itself in China's debt.”

“China is saddling the partner countries with crippling debt.”

“Saddling Africa with unsustainable debt.”

And “debt trap” has become a buzzword that's harder

to shake off than a hater in a Taylor Swift song.

Yes, my pop culture references are very current.

At the recent China-Africa summit in Beijing,

“A senior Chinese official denied...

that his country was engaging in 'debt trap' diplomacy.”

And even Chinese leader President Xi Jinping

jumped on the denial bandwagon.

He prefaced the announcement of 60 billion dollars

of new funding for Africa

with the so-called 'five nots' of predatory lending.

"(China) is determined to implement the 'five nots'—

to not interfere in countries in Africa

exploring a development path

which suits their own country's situation,

to not interfere in the internal affairs of Africa,

to not impose (China's) will on Africa,

to not attach any political strings when offering Africa support,

and to not seek political expediency

during investment and financing in Africa.”

Ok.

Firstly the “five nots”

is a really stupid name for a national policy.

Unless Xi Jinping means it in the elementary school sense.

“The five NOTs!”

Because they're all sarcastic.

And secondly, go back to that opening shot of the China-Africa summit.

Why are most of the Africans sitting in the back?

Anyway, while Africa's demand for Chinese cash is high,

not everybody's buying into the theory of China's good intentions.

A specialist in Chinese Studies at Britain's University of Nottingham

says interference is an inevitable part and parcel of the cash.

“Whenever you engage economically or financially

with another country you do interfere in the political structure,

or the economic structure and the power structure,

so in that sense any kind of engagement

is a kind of disturbing the status quo.

But that said,

there will at some point be conflicts

in the Chinese-African relations.”

And there's a typical formula for how these conflicts play out:

The Chinese Communist Party offers loans to needy governments.

Those governments become dependent on Chinese money.

Then, when they can't pay back the loans,

Chinese companies take over key infrastructure.

That's according to an investment advisor

and political analyst in Nairobi.

“We cannot be naive, at this point in time.

We've seen countries take on enormous amounts of debt.

We've seen hugely inflated infrastructure projects,

many of which are white elephants before the get go.

And you don't have to look very far,

whether it's Gwadar in Pakistan,

whether it's Tonga,

whether it's Sri Lanka, which gorged on Chinese credit

and then had to disgorge their port at Hambantota.”

In what was pretty much a textbook definition of a debt trap,

when Sri Lanka couldn't afford its loan payments,

it had to hand over the port of Hambantota to China

on a 99-year lease.

And the Chinese regime might want to eventually

use that port for military purposes.

Not to say that's happening,

but...it's probably going to happen.

US senators aren't buying the story

of China's good intentions, either.

In a letter to the US Treasury and State Department,

a group of senators expressed their concern

over bailout requests to the International Monetary Fund

by countries who have accepted

predatory Chinese infrastructure financing.

They believe that China has figured out a clever hustle

by saddling countries with debt they can't afford to repay,

and then getting the IMF to bail these countries out

with money that comes, in large measure,

from American tax dollars.

They say the goal for China's infrastructure construction

and financing in other countries is “the creation of

an economic world order ultimately dominated by China”

and that this poses a national security threat to the United States.

I should note that this letter is signed by

both Republican and Democratic senators,

proving that the threat of the Chinese regime's global domination

is something we can all be scared of.

In the letter, the senators ask how the US can educate

our African allies about the risks of Chinese predatory lending,

and how the US can provide an alternative to the Chinese debt trap.

And while those are both good questions,

for countries like Zambia,

which has already signed off on

at least 8 billion dollars of project financing from China,

it may be too late.

“Well I think in some cases it's too late.

In some cases the dominos are falling.

In Zambia you've got a eurobond price at 70 cents on the dollar.

If you follow the markets

that's telling you that basically Zambia's bust.

It's biggest lender is China,

so we're going to watch this situation now in real time

unfold in front of our eyes.

And there are a number of situations

which are very very similar.”

So what do you think about China's lending practices in Africa?

Leave your comments below.

And before we go, it's time to answer a question

from a fan of China Uncensored who contributes to us

through the crowdfunding website Patreon.

james mckay asks:

“Is it possible that the CCP's Belt and Road Initiative

will encourage manufacturing production to move to countries

with a lower labor cost?”

Good question, James.

In a way, that's already happening.

That is, cheap manufacturing is moving out of China

to even lower-cost countries, like Bangladesh.

And even with some high-end products,

we might see it start to happen.

Like how—in the midst of the trade war—

President Trump is encouraging Apple

to move production to the US.

Not that Apple will do something

just because Trump says so.

But moving production out of China

isn't necessarily tied to the Belt and Road Initiative.

It's mainly because labor costs in China

are going up for other reasons,

and multinational companies want to make stuff

to where it's cheapest.

China's Belt and Road Initiative

doesn't exactly aim to reduce labor costs.

It mainly seeks to get cheap raw materials from poor countries,

then assemble those raw materials back in China,

and then sell those finished products

to other Belt and Road countries.

That's the goal of the Belt and Road.

Also to create debt traps that other countries can fall into.

Thanks for your question, James.

And remember,

you too can have your question answered on China Uncensored

when you become a Patreon supporter.

Once again, I'm Chris Chappell.

See you next time.

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