The ‘No Strings Attached’ Fallacy

Rabat – “Every year for the past decade, China, not the US, has been the main source of global economic growth,” author Martin Jacques wrote in a well-argued opinion essay about the “irresistible” rise of China as the centre of gravity of world affairs in the years ahead.

The article’s backbone, as plainly expressed in its title (This Decade belonged to China. So will the next one), was that, in recent years, China has been on record for being the most dominant force in many aspects of world politics.

The article added, almost with cinematic effects: “The West is in the process of being displaced [by China] and, beyond a point, it can do nothing about it.”

Such analyses have been criticized as “Chinese propaganda,” but it is hard not to take them seriously; particularly hard not to notice the respect, reverence, or sometimes scorn the mention of China elicits in different circles.

This has come as Beijing poured billions in developing countries in the Asia Pacific region, Africa, or the Middle East (increasingly), winning veneration and disapproval, depending on the vantage point of those interpreting the implications of China’s colossal investments.

The Asian giant has outspent erstwhile colonial empires like France and Britain in terms of investments or financial clout in most of their former colonies, while outgunning the US and Russia by winning in most African and Asian countries the kind of markets and investment projects that guarantee the sort of military and political leverage that only the White House and the Kremlin could boast decades back. But Beijing’s assertiveness reached much higher, even stratospheric heights, with its much-publicized Road and Belt Initiative.

In Asia Pacific, many countries have already signed up for the gigantic, multi-billion dollar project, considerably upsetting the power balance in the region in China’s favor. In Africa, Beijing’s appeal gained newer, fresher grounds when the Asian giant announced in 2018 that it was poised to invest as much as $60 billion in the continent over the next six years.

“China does not interfere in Africa’s internal affairs and does not impose its will on Africa,” China’s President Xi Jinping beamed, speaking from the formidable hauteur of the latest Africa-China summit in Beijing. “What we value is the sharing of development experience and the support we can offer to Africa’s national rejuvenation and prosperity.”

The announcement, quite naturally, won China an additional legion of admirers in a continent where many had already warmed to the Asian giant, with the most enthusiastic among the adherents to the China-Africa gospel enthusing about Beijing’s “way” of engaging the Third World being different from that of “arrogant” and “entitled” Western countries.

China was no longer a commercial partner only, or a “strategic” ally for poorer countries looking to rise above their current development levels. Beijing instantly became a “model,” a friend, an inspiration.

There were, as a result, reports of the transformative potential of the “Chinese way” or the “China effect” from Third World countries setting out to catch up, to modernize or industrialize. Beijing embraced the good vibes, dexterously portraying its loans as “development financing” and assuring its African and Asian partners that it cared about their wellbeing (food security, vocational training, development funds, among others) as much as it did about its own interests.

The tip of the iceberg

But not everyone has warmed to China’s impressive lending machine, or the “no strings attached” mantra it used to style itself as fundamentally different from other, “traditional” partners.

Beijing’s lending practices have especially come under harsh scrutiny in recent months, with critics pointing out that, like any other “great power” or aspiring hegemon, China is only using the “no strings attached” philosophy to lure countries into requesting “unsustainable” and “unaffordable” loans.

Beneath the “no strings attached” façade lies a delicate policy to trap countries in an overwhelming political and economic dependence on China, critics have claimed.

In Asia Pacific, Pakistan and Sri Lanka have recurrently been singled out as the most telling examples of China’s illusive “no strings attached” theory of lending. The growing influence of Beijing in the two Asian countries’ domestic politics shatter the illusion that China’s loans come with no expectations of political or economic leverage.

In both cases, “debt trap” has been the concept that has been most deployed to explain how Beijing uses “unsustainable” and “unaffordable” loans to surrender “vulnerable” countries’ domestic political arena to its strategic, leadership ambitions.

A recent report by the Harvard Kennedy School of policy analysis identified 16 countries as having been greatly affected by China’s “debt book diplomacy.” Of the countries, the report showed, Sri Lanka and Pakistan are the two where Beijing’s “unsustainable debt”-based conquest is at its most “advanced” stage.

“When countries prove unable to pay back their debts, China has already and is likely to continue to offer debt-forgiveness in exchange for both political and strategic equities,” the Harvard report warned.

In Sri Lanka, the story of the Hambantota Port, which the Asian country’s government ceded to Beijing after failing to pay back its loans, has been the best illustration to date of the dark side of the “no strings attached” tale.

In Pakistan, meanwhile, home to the China-Pakistan Economic Corridor, the linchpin of China’s Asian ambitions, Beijing is mainly accused of seeking to bend the country’s army to its will. While reportedly enabling Pakistan to be a defense exporter to some other less developed countries, Beijing is rumored to be eyeing the replacement of General Qamar Javed Bajwa, the putatively pro-Western chief-of-staff of the Pakistani army, by a more China-friendly figure.

“Pakistan has been the leading example of how the Chinese projects are being used to give Beijing both favor and leverage among its clients,” the New York Times reported in December of 2018. The report went on to point out that deepening China’s strategic and military foray into Pakistani affairs is part and parcel of the Belt and Road Initiative’s goal to deepen Beijing’s Asian leadership by giving it an edge over the US and regional foe India.

Who can criticize China?

Pakistan, other reports have argued, is the crown jewel of China’s strategic ambitions in South Asia. Among the “strategic implications” of Beijing’s presence in Islamabad is the long-term of countering the US and India’s leadership in the region.

As should be expected, then, both Washington and New Delhi have seriously criticized China’s “false” and “misleading” “no strings attached” diplomacy. In August of last year, US Defense Secretary Mark Esper said Beijing was destabilizing the Asia Pacific region with its “predatory economics and debt-for-sovereignty deals.”

In general, however, criticism coming from the US has been dispelled by a number of analysts, the overwhelming consensus being that the West—and especially the US—has very little, if anything at all, to say about the risks of China’s “neocolonial” ambitions or “predatory” lending practices.

When asked whether China is engaged in a neocolonial scramble for influence zones, economist Arkebe Oqubay, Minister and Coordinator of Economic Sectors and Senior Adviser to the Prime Minister of Ethiopia, recently told Morocco World News: “This is a euro-centric view.”

In his many books and articles on China-Africa, including the collective work “China-Africa and an Economic Transformation,” which he presented last December at a book launch in Rabat, Oqubay often speaks about countries’ “journey of learning” and the necessity of devising home-grown policies. These, he likes to insist, are some of the reasons why China’s presence in places like Africa and South East Asia, while associated with the documented risk of “debt trap,” is a needed step.

“Development is essentially about learning from other countries’ successes and failures,” he explained during our interview. “Besides, who is speaking about this so-called neocolonialism? It is mostly the West and western mainstream media. We know how grave colonialism is because we were colonized by the West. So they should not be telling us about [China’s] neocolonialism.”

Abdou Rahim Lema, a Yenching scholar at Beijing University, where he studies China-Africa security, mostly agrees. In a written message to MWN, responding to the question of whether the terms of Chinese loans can be called “neocolonial,” Lema provided a much more nuanced analysis.

Of course, he argued, Beijing is not the benevolent, extremely generous and moral lending force it styles itself as, nor is it the fundamentally neocolonial, evil empire its critics portray it to be. The truth, according to Lema, lies somewhere in between, in the confluence or intersection of Beijing’s interests with those of the countries seeking its loans or support.

 “The truth is that China’s presence is no different from Western countries’ in terms of advancing their national interests through foreign policy,” he said. As Peter Beaumont has so aptly pointed out, in reference to Britain’s newfound interest in Africa in a post-Brexit context, for all the “fine words and window dressing” of China presenting itself as not seeking to export its model to other countries, or ensnare them in the same client-patron trap other “great powers” have, China’s interest in less developed nations, like any other powerful countries, is always a “desperate and unseemly grasp for markets…. Pretending otherwise is a grubby sleight of hand.”

A clear-sighted pro-Beijing analyst, Lema suggests that the postcolonial hubris, the equal partnership romanticism China deploys when striking deals with its African or Asian partners, should not be the focus of scrutiny.

In such a context, he adds, the ball is in the camp of those countries in terms of being proactive in how they deal with China. “The real question should be less about what China is doing and more about how… countries are engaging with China.”

But isn’t that the whole point of the “debt trap” notion? How, in practical terms, can weaker countries be “proactive” or assertive when dealing with far more superior ones?  How do you get a fair result when the playing field is noticeably uneven; when the terms are mostly set by the other party in accordance with what it wants?

In Africa as in Asia Pacific, no cogent answer is forthcoming to the question, other than the alternative for the concerned countries to expand their circles of partnership in order to somehow escape from the burden of diktats and term impositions that come with overreliance on one country as debtor and “development partner.”