[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
CHINA IN AFRICA: THE NEW COLONIALISM?
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HEARING
BEFORE THE
SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH,
GLOBAL HUMAN RIGHTS, AND
INTERNATIONAL ORGANIZATIONS
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
MARCH 7, 2018
__________
Serial No. 115-117
__________
Printed for the use of the Committee on Foreign Affairs
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California
DANA ROHRABACHER, California GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida
TED POE, Texas KAREN BASS, California
DARRELL E. ISSA, California WILLIAM R. KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID N. CICILLINE, Rhode Island
MO BROOKS, Alabama AMI BERA, California
PAUL COOK, California LOIS FRANKEL, Florida
SCOTT PERRY, Pennsylvania TULSI GABBARD, Hawaii
RON DeSANTIS, Florida JOAQUIN CASTRO, Texas
MARK MEADOWS, North Carolina ROBIN L. KELLY, Illinois
TED S. YOHO, Florida BRENDAN F. BOYLE, Pennsylvania
ADAM KINZINGER, Illinois DINA TITUS, Nevada
LEE M. ZELDIN, New York NORMA J. TORRES, California
DANIEL M. DONOVAN, Jr., New York BRADLEY SCOTT SCHNEIDER, Illinois
F. JAMES SENSENBRENNER, Jr., THOMAS R. SUOZZI, New York
Wisconsin ADRIANO ESPAILLAT, New York
ANN WAGNER, Missouri TED LIEU, California
BRIAN J. MAST, Florida
FRANCIS ROONEY, Florida
BRIAN K. FITZPATRICK, Pennsylvania
THOMAS A. GARRETT, Jr., Virginia
JOHN R. CURTIS, Utah
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
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Subcommittee on Africa, Global Health, Global Human Rights, and
International Organizations
CHRISTOPHER H. SMITH, New Jersey, Chairman
MARK MEADOWS, North Carolina KAREN BASS, California
DANIEL M. DONOVAN, Jr., New York AMI BERA, California
F. JAMES SENSENBRENNER, Jr., JOAQUIN CASTRO, Texas
Wisconsin THOMAS R. SUOZZI, New York
THOMAS A. GARRETT, Jr., Virginia
C O N T E N T S
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Page
WITNESSES
Mr. Gordon Chang, author......................................... 7
Mr. Joshua Meservey, senior policy analyst, Africa and the Middle
East, The Heritage Foundation.................................. 19
Mr. Scott Morris, senior fellow, Center for Global Development... 35
Anita Plummer, Ph.D., assistant professor, Department of African
Studies, Howard University..................................... 41
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Mr. Gordon Chang: Prepared statement............................. 10
Mr. Joshua Meservey: Prepared statement.......................... 21
Mr. Scott Morris: Prepared statement............................. 38
Anita Plummer, Ph.D.: Prepared statement......................... 44
APPENDIX
Hearing notice................................................... 68
Hearing minutes.................................................. 69
The Honorable Christopher H. Smith, a Representative in Congress
from the State of New Jersey, and chairman, Subcommittee on
Africa, Global Health, Global Human Rights, and International
Organizations:
Prepared statement of Samantha Custer, AidData at the College
of William & Mary............................................ 70
``China-Kenya Relationship: Influence of Money & Growth of
Corruption,'' by Rev. Abel Oriri, LPCC-S, NCC, Pastor Heights
Fellowship Church, Cleveland, OH............................. 77
Prepared statement of Daniel Asaah, Ghanaian Politician/
Entrepreneur................................................. 84
CHINA IN AFRICA: THE NEW COLONIALISM?
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WEDNESDAY, MARCH 7, 2018
House of Representatives,
Subcommittee on Africa, Global Health,
Global Human Rights, and International Organizations,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:00 p.m., in
room 2172 Rayburn House Office Building, Hon. Christopher H.
Smith (chairman of the subcommittee) presiding.
Mr. Smith. The subcommittee will come to order, and good
afternoon to everybody. Thank you for being here.
Today's hearing will analyze China's activity and
engagement in sub-Saharan Africa. In particular, we will look
into what motivates China and how Chinese involvement has
affected African countries.
While a number of African nations have welcomed Chinese
engagement and investment, it often comes at a very high cost,
with a focus on extractive industries, entanglement with
neomercantilist trade policy, and a tendency to adopt the worst
practices that prop up kleptocrats and autocrats such as DR
Congo's Joseph Kabila, while fueling corruption in an effort to
win contracts.
China's engagement in Africa was once driven by
revolutionary ideology motivated by competition with the Soviet
Union as much as it was directed at ``capitalist roaders''
aligned with the United States.
In Angola, for example, in 1975, Soviet-backed communists
bested Chinese-backed revolutionary rivals including Jonas
Savimbi, who was a Maoist before he was reborn in the 1980s as
an anti-communist freedom fighter.
Today, China's one-time Marxist-Leninist-Maoist impulse has
been softened to the point of almost--but not quite--
disappearing, with revolution replaced by infrastructure
projects, trade missions, soft loans, and scholarships for
promising African students, all part of the ubiquitous Beijing
effort at hegemony.
While on the one hand, Africa needs investment and it needs
infrastructure, we see a worrisome trend of African countries
sliding into indebtedness to China, accumulating burdens that
may be beyond their capacity to meet.
All too often, the roads China builds are meant to allow it
access to mineral resources that it can extract and ship to
China, or are a part of the One-Belt, One-Road initiative,
which is designed to benefit China and, ultimately, help it
project power.
Further, as anyone who has been to Africa has observed,
these grand construction projects often utilize Chinese
engineers and workers and not Africans. I remember being in the
capital of DR Congo on one of many trips to Africa and seeing a
large number of Chinese workers. They looked very happy. I
thought they probably were Laogai prisoners who were there
working, and they didn't even look up during the hour of
observation by myself and a member of our Embassy staff.
As we will hear today, nowhere in Africa is the problem of
indebtedness more pronounced than in Djibouti, a strategically
important country in the Horn of Africa which sits astride the
Mandeb Strait and one of only five African countries where
Secretary of State Tillerson is visiting on his trip to Africa
this week.
A former French colony, Djibouti hosts a French military
base and an American one, and Djibouti also hosts, as of last
summer, China's only permanent military base outside of China.
China's overall foreign aid and financial leverage on the
continent has been difficult to quantify--as has demonstrating
how that translates into influence.
Yeoman work in this regard has been done by Aid Data at the
College of William and Mary, which had written testimony to be
submitted as part of the record, without objection. It
demonstrates a correlation between how an African country votes
at the United Nations General Assembly and how much aid it
receives from China. There is a quid pro quo.
Another strategically important country with high
indebtedness to China that the Secretary will visit is
Ethiopia. It is also a country where China has most clearly
aligned itself with repressive forces.
In addition to assisting the government in controlling
information flows, such as jamming the Voice of America and BBC
broadcasts, the Chinese Communist Party has engaged with
Ethiopia's ruling party in ``training and exchanges.'' And just
recently, we held yet another hearing on the brutality by the
Ethiopians in this subcommittee.
At the Brookings Institution, as it has documented, cadres
from the ruling Ethiopian People's Revolutionary Democratic
Front were ``taught'' comprehensively how to manage their own
organizational structure, ideological work propaganda system,
and cadre education.
Thus, it seems, ideology still matters with regard to how
China engages with Africa. It is no coincidence that Ethiopia
has become one of the most repressive regimes on the continent
and the subject of a House resolution focused on Ethiopia's
abusive practices that Ms. Bass and I have sponsored, H. Res.
128.
Whereas the U.S. emphasizes good governance, it suits
China's interest to train its partners in old-style Leninism.
We have also received testimony from one of our witnesses on
how China projects power in the form of Confucius Institutes
located in close to 40 African nations, and I would point out
parenthetically that as co-chairman of the China Commission,
I've had hearings and requested a GAO report on Confucius
Institutes in this country.
There are well over 100. They have a disproportionate
impact. Their teachers carry with them the ideology of Beijing,
and to the receiving universities and colleges they are often
seen as just another addition--free money, if you will--but
with a very, very significant cost because it is a projection
of soft power.
This subcommittee has held hearings on how China has used
these to push the Sino-centric narrative, again, which aligns
with Communist Party propaganda, and totally curtails academic
freedom.
In addition to utilizing Confucius Institutes, they train
Mandarin speakers and indoctrinate students with a pro-China
world view. China is expanding its media presence in Africa.
Kenya is the country with the largest penetration of
Chinese media and the highest level of brand recognition,
according to our Broadcasting Board of Governors, which
overseas the Voice of America, and which recently conducted a
survey of China's media presence in Africa.
It should be noted that, of the five major international
networks in Kenya, China's news broadcasts were the least--I
say again, least, trusted.
There is also a thought for Voice of America and the
Broadcasting Board of Governors to consider--add Mandarin
programming to the repertoire of languages in which you
broadcast in Africa. By broadcasting objective news stories in
Mandarin, you will expose not only African students learning
Mandarin to more truthful media, but you will be able to reach
the estimated 1 million or so Chinese living or working in
Africa with news that they are otherwise unable to access.
China is also Kenya's largest bilateral lender. Kenya is
one of the three highest debtor nations to China in Africa,
along with Djibouti and Ethiopia. It is also a country where
Secretary Tillerson will be visiting.
On his trip he may want to highlight the following
anecdote, which I believe aptly contrasts China's African
engagement with that of the United States.
Health commodities supplied by the U.S. Agency for
International Development, including lifesaving antiretrovirals
distributed as part of our PEPFAR program and antimalarial
commodities, used to be shipped to and stored in a warehouse
near Nairobi for distribution, not only throughout Kenya, but
also neighboring East African countries as well.
Then in July 2013, Kenya's Parliament proposed a 1\1/2\
percent levy on all imports to Kenya to help pay for the nearly
$4 billion railroad from the Port of Mombasa to Nairobi built
by the state-owned China Road and Bridge Corporation.
Donated goods including antiretrovirals for Kenyans living
and coping with HIV/AIDS were subject to this levy to help pay
Kenya's debt to China.
As a result of this, the flow of lifesaving commodities
into Kenya and neighboring countries was burdened and slowed.
Kenya's ministry of health offered to step in and pay the levy.
But their payments were often delayed by some 2 months.
Meanwhile, charges attributed to clearance delays continued to
accrue and had to be paid by the United States taxpayer.
Ultimately, over a year later, Kenya's Parliament amended
the legislation to exclude donated goods from the Chinese
railway payment levy. But the damage had been done.
Today, due to this experience and other factors related to
logistics and a new USAID implementation partner, USAID no
longer uses a warehouse in Kenya. Storage and distribution has
been moved offshore to a location that's centrally located and,
one hopes, less prone to disruption.
I close with a number of questions. How did this warehouse
episode, borne out of Kenya's need to repay debt to China,
benefit Kenyans suffering from HIV/AIDS?
How did it affect the ability of Kenya to serve as a
regional distribution hub for East Africa with all the
collateral economic benefits that accrue from the purely
humanitarian initiative paid for by the United States taxpayer?
More broadly, where is China's PEPFAR or the equivalent of
the President's malaria initiative? These are questions and
more that we on the subcommittee will have for this very, very
distinguished group of panelists.
But before going to them, I'd like to yield to my good
friend and colleague, the ranking member, Ms. Bass.
Ms. Bass. Thank you, Mr. Chairman.
Once again, you are calling an important hearing to examine
China's economic and political impact in Africa. The title of
this hearing raises the question as to whether or not China
should be viewed as the new colonial power within the continent
of Africa.
I am very much concerned about that as well, especially
with regard to labor, given the need for employment on the
continent and the recurring disputes about wages and the
treatment of workers.
There are also concerns about the extractive nature of
China's engagement and what is now being referred to as debt-
trap diplomacy. This concept poses the question of whether
developing countries are mortgaging their resources and
strategic assets to China. If there is a drop in commodity
prices and countries have difficulties with these loans, they
might get caught in a debt trap that leaves them vulnerable to
China's influence. These are critical issues and that I will
expect to be addressed throughout the hearing.
A recent Atlantic Council report entitled, ``Escaping
China's Shadow: Finding America's Competitive Edge in Africa,''
argued that the presence of Chinese companies does not preclude
American business success.
So I hope that our discussion today will shed light on the
fact that U.S. companies can and should be doing business in
Africa. Some people suggest that China shouldn't be in Africa.
But instead of going down that road, I would rather say
that the U.S. should step up our involvement. If we are
concerned about the Chinese, then where are we?
There is a major infrastructure deficit across the African
continent. African countries need roads, hospitals, school
buildings, and other vital infrastructure and China is
currently filling that need.
But the United States can, too. But we should do so in a
responsible fashion that benefits African countries and U.S.
businesses, and African nations want to partner with U.S.
businesses.
In fact, the President of Ghana was just in the United
States and one of his goals in coming here was to encourage
investment and partnership in order to develop a relationship
with the United States that is characterized by increased trade
and investment cooperation.
We should remember that as we seek to promote U.S. trade
and direct investment in Africa, we are also creating
opportunities for African growth so that the African middle
class can help create societies that are no longer dependent on
foreign aid.
The chairman and I, as well as the full committee chairman,
Chairman Royce, have worked on a number of initiatives that
really begin to reframe how we do foreign aid such as Feed the
Future, Mr. Chairman, and Electrify Africa, where we are
promoting our business involvement with the goal of African
nations not being dependent on foreign aid.
I also hope that our discussion today will highlight areas
of common interest between the United States and China in
Africa that could provide the basis for enhanced bilateral and
multilateral cooperation, particularly on important conflict
mediation priorities across the continent.
So my goal for this hearing, therefore, is to be forward
thinking in how we view China's engagement across Africa. We
must continue to stay focused on U.S. policy toward Africa by
partnering with African nations and deepening our engagement
with African civil society, especially the next generation of
leaders because rest assured, if the United States loses focus,
other countries are more than happy to fill any gap left behind
by the U.S.
So I look forward to this hearing, look forward to our
distinguished witnesses on how the U.S. can help achieve these
objectives.
Mr. Chair, I yield back.
Mr. Smith. Thank you very much.
We now go to Ambassador Rooney. Any opening comments?
Mr. Rooney. I am not on the committee but I'd like to thank
Chairman Smith for letting me come and learn a little bit more
about Africa.
I've been in 100 countries and Africa is the one part of
the world I freely admit I know the least of. So I've been
reading your material and look forward to your testimony.
Thank you very much.
Mr. Smith. Thank you, Mr. Ambassador.
I'd like to now yield to Dr. Bera.
Mr. Bera. Thank you, Mr. Chairman, and to the ranking
member, not just for the hearing, but also for your leadership
in making sure Congress stays interested in the continent of
Africa.
You know, I absolutely look forward to the witness
testimony as well as getting more information and, you know,
when we were with Ambassador Green yesterday and just thinking
about where USAID is going and, you know, given his history in
Africa as well, I know our aid and development work really is
looking at capacity building and helping look at the unique
resources in the countries that we are going into and trying to
move toward capacity building. And I'd be really interested in
hearing from the witnesses because when I think about China's
involvement and, you know, we welcome that foreign direct
investment into the--into Africa and other developing
countries.
You know, our worry though is China is--you know, with that
foreign direct investment, it's Chinese companies that are
building a lot of that infrastructure, Chinese workers that are
benefitting from that as opposed to looking at the workforce in
the countries that they are developing, helping them develop
their own capacity.
And the chairman and the ranking member have already
touched on the impact of the loans and the loan repayment and
what that has in terms of the African countries' and the
recipient countries' ability to, again, care for themselves.
So, again, thank you for this hearing. I'm looking forward
to the testimony and, you know, again, perhaps if you all can
touch on the contrast between U.S. and Western approach to aid
and development versus the Chinese approach.
So thank you, and I yield back.
Mr. Smith. Thank you very much, Dr. Bera.
I'd like to now introduce our very distinguished panel,
beginning first with Gordon Chang, who I have listened to for
years on radio and, as a matter of fact, I asked that he be
here because I am so impressed with his incisiveness, but also
much of what he has written.
He is the author of the ``Coming Collapse of China'' and
``Nuclear Showdown: North Korea Takes on the World'' and a
columnist for The Daily Beast. He's also an expert on China and
northeast Asia. Mr. Chang lived and worked in China and Hong
Kong for almost two decades, most recently in Shanghai.
He has spoken at a number of colleges and universities and
given briefings to government entities such as the National
Intelligence Council, Central Intelligence Agency, State
Department, and the Pentagon.
His writings have appeared in news outlets such as The New
York Times, the Wall Street Journal, and the Weekly Standard,
and Mr. Chang has testified before the Foreign Affairs
Committee and the U.S.-China Economic and Security Review
Commission. So we welcome him back to Capitol Hill and look
forward to his expert analysis on this important topic.
We will then hear from Mr. Joshua Meservey, who is a senior
policy analyst for Africa and the Middle East at the Heritage
Foundation. A former Peace Corps volunteer in Zambia, he
specializes in counterinsurgency, non-state-armed groups in
security development's nexus.
Prior to joining the Heritage Foundation, Mr. Meservey
worked in the Church World Services Refugee Resettlement
Operation in Kenya as well as the U.S. Army Special Operations
Command in the Atlantic Council's Africa Center. He has
testified before the Senate and is a frequent commentator on
African policy issues in a range of print and digital media
outlets. We welcome him as well.
We will then hear from Scott Morris, who's a senior fellow
at the Center for Global Development and director of the U.S.
Development Policy Initiative. Prior to joining the Center for
Global Development, Mr. Morris served as Deputy Assistant
Secretary for Development, Finance, and Debt at the U.S.
Treasury Department during the first term of the Obama
administration.
In that capacity, he has led U.S. engagement with a number
of international financial institutions, such as the World
Bank, American Development Bank, and the African Development
Bank.
He has also represented the U.S. Government in the G-20's
Development Working Group and was the Treasury's plus-one on
the board of the Millennium Challenge Corporation.
Before his post at the U.S. Treasury, Mr. Morris was a
senior staff member of the Financial Services Committee of the
U.S. House where he was responsible for the committee's
international policy issues.
It should be noted that Mr. Morris was asked last minute to
fill in for the witness, although on his own right we are very,
very happy to have him. So I thank him for coming at such short
notice.
And then we will hear from Anita Plummer, who's an
assistant professor of African studies whose research focuses
on African political economy, emerging markets,
transnationalism, and Sino-African relations.
Her current book project, ``Close Encounters: Street-Level
Perspective on Kenya and China,'' examines local, national, and
transnational narratives in South-South cooperation.
Before joining the faculty at Howard, Dr. Plummer taught
international studies at Spelman College. She was a Mellon
post-doctoral fellow in the Cultures and Transnational
Perspective program and visiting assistant professor of global
studies and political science at the University of California,
Los Angeles.
She's also a fellow at the Carter G. Woodson Center, a pre-
doctoral fellow at the University of Virginia. Dr. Plummer
received her Ph.D. from Howard in Washington.
So if I could now, Gordon Chang, you have the floor.
STATEMENT OF MR. GORDON CHANG, AUTHOR
Mr. Chang. Chairman Smith, Ranking Member Bass, and
distinguished members of the committee, thank you very much for
this opportunity.
My testimony focuses on China's views on sub-Saharan
Africa, especially in relationship to Beijing's expanding
ambitions and I also look at this in the context of
colonialism.
I conclude that China is practicing a new form of
colonialism and that China's relations with Africa threaten
Americans' interests.
Beijing looks at Africa as special. For instance, it says
that more than half of its foreign assistance goes to the
continent.
Now, Beijing, obviously, wants favors in return and,
clearly, there is this strong connection between what a country
will do for China and the amount of aid that it receives.
China needs African support for a number of things but
especially because Xi Jinping, the foreign leader, wants to
show that he is the commanding voice of the developing world.
At one time, Beijing denied that it provided any sort of
model for the developing world, but now it brags about it and
has even branded it, calling it socialism with Chinese
characteristics for a new era.
Xi Jinping, however, has ambitions beyond just assisting
the developing world. There are indications that he believes
that not only should China's model be the world's model but
that China's leader be the world's leader.
China, in its pronouncements recently, is making the case
that it should be the world's only sovereign, a view that
Chinese emperors maintained, and that, of course, brings us to
China's relationships with Africa.
Now, Beijing vehemently denies, as some influential African
voices say, that China is practicing a form of colonialism, or
neocolonialism.
Nonetheless, Beijing's use of this imperial-era language is
inconsistent with the denial of its colonial ambitions. China,
if it were free to implement its imperial system, would divest
all other nations of sovereignty and that, of course, is the
essence of colonialism.
The Chinese leadership, unfortunately, holds views that
foster colonial mentality in the Chinese capital and there are
two of these that I'd like to just briefly mention.
First of all, Chinese leaders have this view of a brutish
conception of the world where the strong do what they want and
the weak must comply.
Second of all, to make matters worse, Chinese officials
give the impression that they view African people as inferior
to their own. This was made painfully obvious during a 14-
minute skit last month on China's Central Television at the
Spring Gala.
The skit, which was seen by some 800 million viewers,
depicted Kenyans as objects of derision and even as subhuman.
It is therefore hard to think that China's leaders see Africans
as equals and these perceptions of inequality fuel the notion
that they must hold neocolonial attitudes.
African nations, at least at first glance, are dealing with
China freely, and so therefore, China, of course, is not
practicing a 19th century type of colonialism.
Yet, of course, in our world, the nature of colonialism is
changing, and China, by basing troops on the continent, by
corrupting officials, by flooding local markets with Chinese
manufactured goods, by sending workers to Africa, by straining
local economies with trade imbalances, as well as by swamping
countries in debt, which Ranking Member Bass mentioned in her
opening remarks, have now begun to dominate the continent.
Once it locks in countries and makes them dependent,
Beijing gets their support for geopolitical goals and one of
these goals is undermining democracy.
Africa is struggling to shake off the rule of the so-called
``big men'' and it doesn't need any more failing states like
China-supported Zimbabwe.
Now as the Zimbabwe example shows, Beijing is affecting the
course of African development at a crucial period of its
history. Some people believe that the United States doesn't
have interests in Africa.
Even if this were true, and it's not, but even if it were
true, Africa gives China the ability to threaten the American
homeland.
As Chairman Smith mentioned, the Chinese now have a
military base in Djibouti, their first overseas one, but they
also want one at Walvis Bay in the South Atlantic.
The Chinese leaders have even been thinking about taking
over an air base in the Azores. From the Azores, China would be
able to control the mouth of the Mediterranean and their planes
would be closer to New York than Pearl Harbor is to Los
Angeles.
A belligerent China in Asia is bad enough. A dangerous one
close to our shores would be far worse.
Thank you.
[The prepared statement of Mr. Chang follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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Mr. Smith. Thank you, Mr. Chang.
I would like to now go to Mr. Meservey.
STATEMENT OF MR. JOSHUA MESERVEY, SENIOR POLICY ANALYST, AFRICA
AND THE MIDDLE EAST, THE HERITAGE FOUNDATION
Mr. Meservey. Chairman Smith, Ranking Member Bass, and
members of the committee, thank you for this opportunity to
testify.
Thank you as well for highlighting one of the most
important issues facing Africa and, by extension, U.S.
interests in Africa.
With your permission, I would like to submit my written
testimony into the record.
Mr. Smith. Without objection, so ordered.
Mr. Meservey. I need to add that the views I express in
this testimony are my own and should not be construed as
representing any official position of the Heritage Foundation.
Mr. Chairman, in the last two decades, China has built, by
many measures, unparalleled influence in Africa. It has done so
through an array of economic, military, and diplomatic
initiatives.
Beijing wants to secure a stable supply of natural
resources and make money in Africa. Yet, it is also seeking
influence on the continent to support its rise to what it sees
as its rightful place as a global superpower.
The U.S. prefers cooperation to competition, but the U.S.
and Chinese models are fundamentally at odds, and the danger
for U.S. interests is if the illiberal economic and governance
model the Chinese exemplify continues to gain ground in Africa.
If it does, it would likely mean that U.S. and other
countries' firms would be increasingly cut out of some of the
growing economic opportunities on the continent, that the U.S.'
longstanding foreign policy goal of encouraging the global
growth of democracy would be turned back in Africa in favor of
Beijing's authoritarian model, and that China could supplant
the U.S. in strategic areas of the continent.
There are troubling signs that the Chinese model is gaining
in Africa. Researchers found that as African countries' trade
increases with China, they grow more likely to vote with
Beijing against U.N. resolutions condemning human rights
violations.
Polls show that while the U.S. as a model of national
development holds a slight lead over China in Africa, China is
even in southern and north Africa and leads in central Africa.
I want now to focus on a few of the ways China is building
such influence. One part of Beijing's huge increase in economic
activity in Africa has been issuing loans, as we have already
been discussing this morning.
In 2015, Chinese loans from the 3 years previous accounted
for an estimated one-third of all recent debt in sub-Saharan
Africa. This gives it significant influence with many
countries.
Djibouti, as we have also already been talking about, sits
on the Bab-el-Mandeb Strait, a global shipping choke point. It
hosts a number of military bases, including China's first
permanent overseas base, and the U.S.' Camp Lemonnier.
China now holds Djiboutian debt worth about 60 percent of
that country's GDP, giving it significant leverage over a
country critical to U.S. military operations on the continent.
The Chinese base will supposedly serve as a rest and
resupply depot for its forces participating in anti-piracy
patrols and support Chinese personnel serving in U.N.
peacekeeping operations in Africa.
The number of that personnel has skyrocketed to nearly
2,200 from only 20 in the '90s. China has recently enhanced
other elements of its longstanding military ties with Africa.
From 2012 to 2015, Beijing accounted for nearly one-third
of the value of all arms deliveries to the continent. Today,
two-thirds of African countries use some Chinese military
equipment. In addition, China trains militaries and builds
military training centers in various African countries.
Across Africa, Beijing is also establishing Confucius
Institutes, which are centers devoted to teaching Chinese
culture and tradition, as well as pushing Beijing's narrative
on topics such as Tibet and Taiwan.
Senior Chinese officials have described these institutes as
important to Beijing's efforts to promote a positive Chinese
global image, thereby strengthening Chinese national power.
In just over 10 years, the Chinese Government has
established 76 Confucius Institutes and classrooms in 38
African countries.
Beijing is also training in China an increasing number of
African politicians. These trainings sometimes cover decidedly
illiberal topics such as how to control public opinion.
Other public diplomacy initiatives include Chinese medical
teams conducting hundreds of African missions since 1963, and a
hospital ship visiting at least nine African countries since
2010.
Some of Beijing's activities can be beneficial, such as
filling part of Africa's huge infrastructure gap. Yet the U.S.
should vigorously expand its own still significant influence in
Africa to ensure the commitment to the rule of law, individual
rights, and the free market is preeminent on the continent.
To do so, the U.S. should, among other initiatives,
reorient its development aid to Africa to focus on enhancing
free markets and accountable and competent governance, deepen
cooperation with like-minded allies active on the continent
such as the U.K., Israel, and Japan, swiftly fill the vacant
Africa-related positions in the U.S. Government, and finally,
seek opportunities such as in counterterrorism to cooperate
with the Chinese while maintaining an appropriate level of
wariness.
Thank you again for the opportunity to speak. I look
forward to your questions.
[The prepared statement of Mr. Meservey follows:]
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Mr. Smith. Thank you so very much for your testimony and I
look forward to the questions because I do have a number--a
few, as well.
I'd like to now yield to Mr. Morris.
STATEMENT OF MR. SCOTT MORRIS, SENIOR FELLOW, CENTER FOR GLOBAL
DEVELOPMENT
Mr. Morris. Mr. Chairman, Ranking Member Bass, thank you
for the opportunity to testify, even at the last minute. I
appreciate it very much.
I'd like to use my time to highlight some new research from
me and my colleagues at the Center for Global Development, John
Hurley and Gailyn Portelance, on the question of China's
lending practices and their implications for debt distress in
developing countries. I'll also offer some of my personal views
on the implications of this research for U.S. policy.
Our new work, which I've submitted to the committee along
with my testimony, specifically looks at the debt implications
of China's belt-and-road initiative.
While much of the initiative falls outside of Africa, we do
identify a handful of African countries as part of belt-and-
road. We also look broadly at Chinese practices associated with
debt distress, which has particular relevance for African
countries.
We find that Chinese lending could lead to debt distress in
at least eight countries associated with belt-and-road due to
the current debt profile of those countries, the volume of
Chinese lending contemplated under the initiative, and the
predominantly commercial terms of that lending.
Djibouti, which we have already heard a lot about, is one
of the most vulnerable of these countries. It is the site of
China's only overseas military base and has been the recipient
of large-scale Chinese lending and investment.
Our analysis suggests that Djibouti's external debt,
already very high for a low-income country, could rise to over
90 percent of GDP under the belt-and-road lending.
Equally important, nearly all of this external debt--over
90 percent--will be owed to China. So if Djibouti faces a debt
crisis, how is China likely to respond? The answer is we don't
know, which speaks to why Chinese practice in this area is
problematic.
China's approach to debt relief isn't particularly
transparent or predictable, yet transparency and predictability
are critical to managing debt problems in an orderly way.
This is why the work of the Paris Club of Creditors, which
includes the United States along with other major creditor
countries, rests on well-articulated rules and actions pursued
on a collective basis.
China is not a member of the Paris Club and has only
participated in the club's agreements on a very limited basis.
So what does all this mean for the United States? First,
even as we highlight Chinese practices that are clearly
problematic in the developing world, we also should acknowledge
that degree to which Chinese financing is contributing and
helping to spur growth in these economies.
Ethiopia is a case where we see a mix of Chinese projects
and investments, some that may not be sustainable or productive
alongside others that are clearly delivering an economic
benefit to the country.
So as long as this is the case, as it very well may be in a
wide range of countries, then dire warnings from the United
States are unlikely to find a receptive audience in the
developing world.
Instead, we should be specific in our criticism of Chinese
lending practices and look for specific opportunities to engage
the Chinese on reform.
We would do well to continue to press the Chinese on
alignment with global norms and practices on lending
transparency, debt management, procurement standards, et
cetera.
Progress is frustratingly slow but it's not entirely
absent. As a member of the G-20, China has signed on to
important principles around sustainable financing which
includes commitments to lending transparency.
U.S. officials should aim to steer these G-20 commitments
to operational practice. We should also prioritize our own
engagement in the developing world. This means continuing to
exercise leadership in the humanitarian and health sectors as
well as beefing up our development finance tools.
On the latter, the proposed U.S. Development Finance
Corporation for which there is legislation now would mark a
positive step forward, I think.
At the same time, we should be realistic about its utility
as an answer to China. It is not likely to operate on a scale
that rivals Chinese development finance institutions, and as
private sector focus, while important, also limits its role in
purely public infrastructure.
Fortunately, we do have a ready-made set of tools in our
toolkit when it comes to deploying high-quality development
finance across Africa and globally.
U.S. leadership in institutions like the World Bank and the
African Development Bank is of critical value and I worry that
current policy fails to exploit the full potential of these
institutions.
These banks define best practice in the very areas that
concern us about Chinese lending, from setting appropriate
lending terms to ensuring open and transparent procurement
rules.
If we are worried about China's growing presence in a wide
array of countries globally, then now is not the time to be
shrinking the footprint of these institutions.
So, rather than resisting the World Bank's call for more
capital this year, I would suggest that U.S. officials take
whatever the number that the bank has requested and double it,
and then repeat this exercise across all of the multilateral
development banks.
This certainly may sound overly ambitious, but would only
account for just a few more percentage points of our foreign
aid budget.
Whether or not we can muster this level of ambition it will
be critical for U.S. policy to be defined by a positive agenda
in the developing world. It is a losing proposition to limit
ourselves to the role of China's chief critic if we have
nothing to offer in the alternative.
Thank you.
[The prepared statement of Mr. Morris follows:]
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----------
Mr. Smith. Thank you so very much for your testimony and
insights.
I'd like to now call on our final witness, Dr. Plummer.
STATEMENT OF ANITA PLUMMER, PH.D., ASSISTANT PROFESSOR,
DEPARTMENT OF AFRICAN STUDIES, HOWARD UNIVERSITY
Ms. Plummer. Thank you, Chairman Smith and Ranking Member
and the honorable members of this committee, Congressman Bera.
It is an honor to appear before you today to discuss
China's engagement with Africa. I want to begin with a note
that I think will contextualize my remarks.
Africa is a diverse continent with 54 countries which,
except for Liberia and Ethiopia, share a legacy of colonialism
which has shaped political, economic institutions, culture, and
its position in the global system.
When discussing China's engagement with Africa, some
generalizations may be appropriate, but to have substantive
discussion, we should consider the features of the commitments
on a case-by-case basis.
So in the spirit of specificity, I will focus my testimony
on Kenya's ties with China to hopefully illustrate some of the
nuances and ambiguities of China's role in Africa.
In 2008, the Kenyan Government implemented its Vision 2030
Development Program. The program's goal is to transform Kenya
into a newly industrializing middle income country with far-
reaching political, economic, and social reforms.
The government has undertaken a robust agenda that focuses
on large-scale infrastructure. Coincidentally, China's belt-
and-road initiative, a project aimed at developing overland and
maritime trade routes connecting Asian, European, and African
countries, corresponds with Kenya's goal to secure its role as
a gateway to eastern and central Africa.
Kenya's geostrategic position provides much-desired access
to consumer markets as well as the facilitation of extractive
industries in South Sudan, Uganda, and the Eastern Democratic
Republic of Congo.
Infrastructure is the third largest sector that the Chinese
are engaged in on the continent of Africa following mining and
financial services. On the macro level, the rationale is that
investments in telecommunications, energy, and transport will
increase foreign direct investment in the country and region.
On the micro level, there is an assumption that large-scale
capital investments in infrastructure will promote economic
growth by integrating rural areas with urban business centers.
For Kenya, investments in transport are viewed as an
imperative because its landlocked neighbors, such as Tanzania,
South Sudan, and Uganda rely on its road and rail network along
with its ports in Mombasa and the one slated to be built in
Lamu.
Conversely, the East Africa region, home to 230 million
consumers, is an attractive destination for products,
particularly from China.
Foreign direct investment by emerging economies such as
China has been a vital part of Kenya's growth strategy. Kenyan
policy makers believe that the delivery of mega transport
projects will boost their competitiveness in the global market
and increase possibilities for high-value production in
different sectors.
However, China's engagement with Africa has included
significant debt finance investments in transport
infrastructure. This engagement brings inevitable conflicts
between diverse actors from China and local Kenyan communities
who must contend with the ambiguities of China's role in Africa
and its implications for labor markets and sites of production.
Within the Kenyan context where exogenous factors have
historically driven development, infrastructure delivery is a
political process and in the absence of quality decision making
that is participatory and transparent, government and business
elites overlook criticisms of this model.
These critiques include those that you're well aware of--
debt traps, environmental degradation, lack of skills transfer,
and so on.
These projects are primarily financed by Chinese banks or
institutions and its financing is tied to Chinese companies
being awarded the contracts. African Government value turnkey
projects and the accompanied funding.
African leaders applaud China's responsiveness to requests
for development projects. The largest one in the country to
date is the standard gauge railway.
However, in response to high rates of youth unemployment,
particularly in Kenya, youth have protested for jobs, decent
wages, safe working conditions, and environmental
sustainability--all promises made by both Kenyan and Chinese
Governments when the projects were announced.
Second, infrastructure projects aimed at supporting
extractive industries or ensuring Chinese-made goods easily
reach African markets is too narrow an approach to economic
development.
It may be convenient to argue that China's presence is
neocolonial. But that fails to consider African agency in
determining the scope and scale of their relations with China.
China's strategy is rooted in its imperative to access
resources in markets, to appear to be a global responsible
power, and to isolate Taiwan's role in Africa.
Conversely, African leaders want to use China's presence in
their nations to boost their political legitimacy both
domestically and internationally. The issue at hand is how to
assess the extent to which elites in Africa and China are
fostering policies and practices that further extract from
people's livelihoods and constrict political space.
A dangerous trend that we do not want to see in African
nations follows what we have observed in China with Xi
Jinping's efficient consolidation of power. Currently, there is
a problem with the lack of transparency in Sino-African
engagements which results in mutually reinforcing practices
among African and Chinese elites of acting autonomously from
their citizens, and this is despite a robust campaign of public
diplomacy in Africa by Chinese diplomats who frame China as
nonpaternalistic and nonhegemonic.
I want to add that there is also discussion in Africa on
the implications of China's role in hindering the democratic
project and how shifts in U.S. policy may further undermine
grassroots efforts to promote African democracy.
For example, in an op-ed published yesterday in one of
Kenya's most widely-read papers, the author, Wachira Maina,
wrote, ``China does not have a democracy agenda. Its
investments in Africa and its flexible apolitical diplomacy
have allowed its clients to resist the political terms that the
West wants imposed for aid on the continent.''
He goes on to write, ``Fearing that it could lose out if it
stuck to ethical foreign policy in the face of Chinese
incursion, the West has changed its posture. Western diplomats
now talk stability, not democracy. Elections are okay if they
are peaceful rather than free and fair. Quiet diplomacy is
increasingly favored over visible, public, and the frank
approach of the 1990s. With China in the foreground, the West
bargains from a weak position.''
In conclusion, the model of political authoritarianism and
economic liberalism is appealing to most African leaders. But
African publics interpret this model differently.
The assumption made by elites in China and Africa is that
liberal economic frameworks are the most efficient tool for
development and their investments in large-scale transport
energy infrastructure support that view.
The other assumption made by the leadership in China and
Africa is that institutions built on democratic norms are
inefficient and antithetical to growth.
As the U.S. considers its engagement in Africa in an
increasingly crowded political and business environment, i.e.,
China, India, and Brazil, it may consider shifting attention to
supporting development from within. That is supporting efforts
to create space for African-based entrepreneurs to flourish and
for civil society to continue to push for political pluralism
and inclusivity.
Thank you.
[The prepared statement of Ms. Plummer follows:]
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----------
Mr. Smith. Thank you very much, Dr. Plummer.
To begin the questioning, let me begin by asking Mr. Chang
and any others who would like to jump in on these questions, in
your testimony--first of all, let me just preface that.
I do co-chair the China Commission with Marco Rubio. We had
another hearing just a few days ago on Tibet and the tightening
noose on the Tibetan people under Xi Jinping, which has been
bad, but is getting worse.
He does the same thing with the Christian churches, the
Falun Gong, religious groups of all kinds, the Uighurs, as well
as with NGOs, which now have a very much tightened space within
which to operate, all under Xi Jinping.
Our annual report, which we put out every year--it's a
bipartisan report--nine members of the House, nine members of
the Senate, and five of the executive branch--was the most
scathing we have ever had since the inception of the China
Commission, again, underscoring that Xi Jinping is truly in a
race to the bottom with North Korea when it comes to human
rights.
Why is that important, of course? Because their model which
they are seeking to export, and until recently--until the
changes--hoped for changes in Zimbabwe, you know, they got
along very well with Robert Mugabe and others like him, but not
so with more democratically-elected African countries.
So my first questions would be about this threat to good
governance. Do you see it? You've all spoken about the debt.
I remember, when George W. Bush, and Bono, and others in
this Congress, in a bipartisan way, we all worked to try to
help highly-indebted countries get out from under through debt
relief, and it continued for many, many years.
But it seems like that may be turning a corner, and as was
pointed out in testimony today, the connection of those debts
or those loans, I should say, to extractive industries and the
like and projects is very, very high.
So the first question would be, do the Chinese pay a fair
price to Chinese companies or government companies in China for
the products that they sell, whether it be minerals, oil, or
whatever it might be?
Is there a longer-term cost that's not immediately
apparent? The debt-forgiveness--when does that reach a critical
mass?
Is it approaching that in terms of loan sharks--you know,
it's over time that it becomes more troubling, and if there are
all kinds of strings attached and, as was said during today's
testimony by Mr. Meservey, the no-strings-attached approach
applies to a lot of things, especially to human rights and good
governance issues--Tibet, Taiwan.
Mr. Chang, you made several very, very powerful statements
that the dealings between Beijing and African states seem to be
tainted by both corruption and several forms of coercion.
You might want to elaborate on that, if you would. You also
pointed out that China is spreading its economic and political
model to Africa.
There are some people who thought at the beginning--not me
and probably not anybody at this table--that it was not a
package deal--that the bad governance model follows it. And you
also made a point that Xi Jinping's ambitions are beyond
helping the developing world.
There are indications that he, in fact, wants China's model
to be the world's model, and that the Chinese leader should be
the world's leader, and you point out that Xi suggested the
world would be peaceful should Beijing rule it as an ``all-
under-Heaven approach,'' obviously, using their words.
They use the word ``Tianxia.'' Could you explain that
further? I've done a lot of reading about the Japanese. My
father fought in New Guinea and the Philippines. He was a
combat infantryman.
So that issue of the Japanese--the why of it has always
fascinated me, troubled me like it does so many. The Japanese
have this idea called ``the eight corners of the world under
one roof,'' which wasn't just imperial Japan--it predated
that--that they had this almost divine right to encircle the
Earth with their ideology and their governance. It was one of
the reasons--maybe the reason--for their aggression against,
first, Asia, and then, elsewhere.
The comparisons, if there are any, with China today may not
be religiously based. They are not claiming Hirohito to be
divine. They are not saying Xi Jinping is divine. But they seem
to have an ideology that says they are destined to rule the
world.
And I look everywhere, from Europe to Latin America. This
subcommittee deals with human rights all over the world, and
the Chinese influence is profound. Again, it's no strings
attached. So I wonder if you could speak to that possible
connection, or are there any comparisons there?
Mr. Chang. Thank you, Chairman Smith.
One of the most striking elements of Xi Jinping, in
addition to the consolidation of power that Dr. Plummer talked
about, really has been his ambitions for China.
And in this, he's been using language recently that
indicates that he believes that China should be the world's
only sovereign--a proposition which sounds ludicrous but
nonetheless we have to look at what he's actually been saying.
So over the course of a decade he's been using language of
``all under Heaven,'' which is the concept that China's
emperors for two millennia used.
We saw some of these in some of the words that were used
during the slogans for the 2008 Summer Olympics. This became
very clear in his 2017 New Year's message where he talked about
the world being all under Heaven, would be happy if we were one
family.
And then, if all of this weren't clear enough, in September
of last year, Wang Yi, the foreign minister of China, published
an article in Study Times, which is the paper of the Communist
Party's Central Party School, and in that article Wang Yi says
that Xi Jinping Thought--that's a body of work--the way the
Chinese refer to an ideology--that Xi Jinping Thought
transcends and replaces 300 years of Western thinking on
international relations.
Well, if you go 300 years back, you're just about at 1648,
which is the Treaty of Westphalia, which established the basis
of the world's international system today of competing
sovereign states.
So what you can look at in terms of the ``Tianxia''--the
``all under Heaven'' language that Xi Jinping has been using--
and looking at Wang Yi's Study Times article, it's pretty clear
the way the Chinese are looking at these things.
And, indeed, China's house scholars study this concept.
Now, as I mentioned, this is breathtaking but this is what they
are telling us.
Now, you know, in terms of comparisons with the Japanese,
the Chinese don't have this notion of divinity as much as the
Japanese do in the Shinto religion.
But nonetheless, you can see the idea that there is one
power that's supposed to be in the world that will make the
world peaceful and safe and that just happens to be Japan in
the 1930s and China in our time.
And so we have to be--of course, there are differences. But
when you combine this with China's views of Africans on a
personal level, this becomes extremely dangerous.
Now, of course, you know, many African countries have
benefitted from certain aspects of what China has done. But
what we have also seen is China trying to use low-cost loans
basically to encourage governments to spend freely, to create
the crises of the future--these debt crises.
We have these in a number of countries that were mentioned
so far and, indeed, at this very moment Tanzania is trying to
restructure its debt and having discussions with Beijing and
with multilateral institutions in China--to a certain extent,
is undermining what those multilateral institutions are trying
to do.
So when you put that together with the low-level
corruption, sometimes high-level corruption, it's a very
difficult picture for Africa and one which the United States
needs to speak out about.
Mr. Smith. You did, in your testimony--before we go to any
other witnesses--talk about how China's words appear ominous
and not benign and you used the words ``colonial master.''
You also pointed out, and as a matter of fact, Mr. Meservey
pointed out the Confucius Institutes and how troubling they
are, and the fact that so many African leaders are being
brought to China for schooling just to train up the next
generation of leaders--again, using the bad governance model.
And as far as I know, and maybe you can correct me if I am
wrong, we have the Foreign Corrupt Practices Act, which tries
to mitigate bribery and the like. Not so with China, as far as
I know.
I've never seen anything that would even come close to
suggesting they had such a thing. So if you could answer those.
Then I'll yield to my good friend, Ms. Bass.
Mr. Chang. The colonial master language is really the
result of China trying to divest other nations of sovereignty
because that is the essence of colonialism.
Today, you know, one can argue about the nature of China's
relations with the countries on the continent and, of course,
as Dr. Plummer has pointed out, those relations differ from
country to country.
But we do see certain trends which concern us and we have
talked about the debt, because through debt, China gains a hold
over political systems in various countries.
You know, and we have seen this not just in Africa. This is
something that they've done, for instance, on our own continent
with Venezuela--something that has a direct effect very close
to our home--where China is now using the renegotiation process
to gain advantage in our own continent. Of course, they do that
in Africa as well.
One can argue that a country can do whatever it wants to
gain power. But nonetheless, when we put all of these things
together, it paints an extremely disturbing picture.
So we can't look at just low-cost loans in isolation. We
can't look at just Xi Jinping's thoughts on the Treaty of
Westphalia in isolation. We can't look at the corruption that
China has fostered or the bad governance that it tends to
promote.
You put all of that together and the picture is one of
danger not only for Africans but for others as well.
Mr. Meservey. Yes, I'll address a couple of those
questions.
One is the fair price for resources that you referenced
earlier and the answer is that we don't know because so
frequently these arrangements are very opaque and that's one of
the criticisms that you'll hear even among the African public
or usually opposition politicians will make this point.
No one quite knows what China is paying for access to
certain resources. But I--and even with some of the large
infrastructure projects--we mentioned the standard gauge
railway in China--in Kenya, excuse me--those too are starting
to come under scrutiny.
There is growing concern I think in Kenya that the standard
gauge railway is a white elephant. There was--there was three
newspaper articles about this just earlier this week where they
were concerned--the Kenyan Government trying to compel
importers to use the standard gauge railway because they still
didn't want to use it.
And, of course, the specter is looming that they are going
to be stuck with an extraordinarily expensive piece of
infrastructure that isn't going to return on--that isn't going
to produce a return on investments.
There is also another example in Uganda where a road was
built by the same Chinese company that built a road in--from
Addis to Eritrea and the road in Kenya was twice the cost,
essentially, than the one in Addis--from Addis to Eritrea.
And as I mentioned, it was built by the same company and
part of the problem was the contract was--demanded single
sourcing so meaning a Chinese company, which ended up being
this company that had been involved in the Ethiopia projects
got the contract and that's caused a lot of consternation--why,
again, was this road in Uganda so much more expensive. So there
is starting to be these questions asked not just about are
African countries getting a fair price for their resources but
also are they getting good value on these massive
infrastructure projects.
Mr. Morris. Mr. Chairman, I wanted to address one question
you raised around that forgiveness and you mentioned the
heavily-indebted poor country initiative--HIPC--which, I have
to say, the U.S. Congress really demonstrated tremendous
leadership on for the international community at the time.
And I think it is instructive because if you look at what
made HIPC work at the time, it had a lot to do with who these
countries owed money to and it was essentially the World Bank,
the IMF, and the G-7 and you had the possibility and the
reality of those actors getting together and deciding to act in
concert to relieve debt in the face of evidence that this was a
tremendous burden on these poor countries mostly in Africa.
If you look at the profile of debt--of countries today that
we are worrying about--again, many in Africa--it looks very
different.
In fact, increasingly it is not the G-7 at all. They are
simply not there as creditors. It is still the World Bank, the
IMF, but it is China and then it is a set of other emerging
actors.
And so far, we are not seeing any evidence that these
actors and primarily the Chinese have an interest in engaging
in this kind of collective engagement around considering debt
relief.
It's not that the Chinese have not done debt relief. They
do it on an ad hoc basis. Some ways--in some ways they do it in
a very traditional way that looks like the way that the Paris
Club might do it.
But then other times they do things that, frankly, look--
let's call it peculiar--in terms of debt for equity swaps, debt
for land swaps and it's that set of activities that really, you
know, from my perspective, is a cause for concern and does
worry me about, you know, the potential for wide-scale debt
problems and what will the international community be able to
do this time around, given the state of play compared to what
it looked like 15 years ago.
Ms. Bass. Thank you. Thank you very much, Mr. Chairman.
One question I would like for all of you to address in a
minute is what's the solution here because, to me, as Mr.
Morris said, it's easy to sit here and be real critical of
China. But what leverage do we have over China to get China to
act differently?
And, you know, Mr. Morris, you were just talking about 15
years ago, and the role that the U.S. played, and it seemed as
though--it seems as though maybe we have an opportunity to play
that role again by mobilizing the international community.
It might not be that the debt is owed to the IMF and G-7. I
believe you said it wasn't. But maybe the world community has
leverage. Because I just don't understand what the solution is.
I mean, to me the solution is the U.S., and our stepping
up. I don't know if you four have other ideas as to what the
solution is.
But, you know, I could look at how the Chinese could easily
say several things about our involvement, from the military to
youth leaders to all of that, which I think our involvement is
very positive, especially in terms of training the next
generation of leaders.
But I am concerned about the lack of our involvement and
the direction that we are going in terms of the cuts to the
State Department and all of that.
But there is the independent private sector that I am
hoping, and I am sure the chairman is, too, would step up more
and be more involved in China's--I mean, in Africa's
infrastructure.
So maybe each of you could tell me what the solution is
that's different than the U.S. stepping up.
What leverage do we have to tell China to stop acting the
way it's acting in the continent of Africa?
Mr. Chang. Well, Ranking Member Bass, I think the United
States has enormous leverage over China. We have a much bigger
economy. We have a stable economy.
China right now is heading to a debt crisis and there are a
number of different ways that we can deal with the Chinese. One
of them is just a very simple one. We could enforce U.S. law
against North Korean banks that are laundering--Chinese banks
that are laundering money through New York on behalf of North
Korea.
I mean, a threat to, for instance, declare the Bank of
China a primary money laundering concern under Section 311 of
the PATRIOT Act could rock the Chinese financial system.
Ms. Bass. Can we do that, Mr. Chairman? Sanction the Bank
of China?
Mr. Chang. I think that we can because there is evident
proof that there is--Bank of China's involvement in, for
instance, devising and operating a money laundering scheme for
the North Koreans in Singapore.
This was in a U.N. panel of experts report for the year
2016. There is other evidence that the Bank of China has been
involved in money laundering for the North Koreans in other
locations, and the Bank of China, as big as it is, is not the
biggest Chinese bank.
But the point is not so much--you know, this does not
relate to Africa but we do have----
Ms. Bass. That is what I am referring to.
Mr. Chang. Excuse me?
Ms. Bass. That is what I am referring to.
Mr. Chang. Yes. We can do it. We have the authority to do
it. Matter of fact, we should be doing it because we shouldn't
allow anybody, especially Beijing, to use our financial system
in ways that violate American law.
Ms. Bass. Okay.
Mr. Chang. But to answer your question in terms of Africa,
China's influence in Africa is largely because it's got these
economic relationships, not only just extracting minerals but
also selling goods in China--in Africa.
And we have a very different system. You know, our
companies don't say yes when the President of the United States
calls up. They very well can say no. But that's not the Chinese
system. When you have a big Chinese enterprise or a big Chinese
bank, they have to do what they are told by the party and----
Ms. Bass. Right. And I am not--and I am not doubting you.
You know, that's fine. But my question was--and you answered it
in part with the Bank of China. I don't think we are going to
do that but you answered part of it.
What is the solution outside of us stepping up? And maybe
I'll pass it on to Mr.----
Mr. Chang. Just quickly.
Ms. Bass. Yes, go ahead.
Mr. Chang. You know, I think democracy promotion that was
very important----
Ms. Bass. That we cut. Go ahead.
Mr. Chang. Also, our aid, for instance, is not building
these big buildings, for instance, like the African Union
headquarters, which was bugged by the Chinese.
But our aid has been more people-oriented. You know, it's
developing--in local communities--clean water, vaccines, all
the rest of it.
Ms. Bass. Yes, and I have a problem with how we do our aid
too because I don't think our aid promotes self-sufficiency of
African countries that I believe have the capacity to do a lot
of those things themselves.
Mr. Chang. And we should be doing more of those things that
do promote self-sufficiency because they are extremely popular
among people and this is a struggle for hearts and minds.
So that's where I would concentrate our efforts and, of
course, I think, you know, it's an all-of-the-above issue
where, you know, if we should be putting more money into the
IMF. Yes, let's do that. Let's do all of these things.
But I like the idea of essentially the way we work with
countries, you know, at the local level because that's
important for people-to-people relationships, and the Peace
Corps is a very important initiative in that regard.
Mr. Meservey. Yes. I agree with your fundamental point that
the best way to approach this challenge is to enhance American
activities.
Ms. Bass. Pull your microphone up a little bit. It's hard
to hear you.
Mr. Meservey. Oh, sorry. I agree with your fundamental
point that the best way to deal with these--this challenge is
to enhance American activity because we do still have immense
influence on the continent.
We give--last year or in 2016, rather, we gave $10 billion
in overseas development assistance to Africa. So that alone
buys us immense leverage.
Now, I don't think we have used it as well as we should
have.
Ms. Bass. Right.
Mr. Meservey. But to your--to your--the core of your
question of what leverage do we have over China, we don't--so
China cares deeply about its international image, for instance.
So I would point to the ivory ban that recently the Chinese
Government implemented in China, and I think they became
embarrassed about the fact that Chinese demand for ivory had
been driving this poaching epidemic across the African
continent. And so eventually they started to do something.
Now, whether they are going to continue, whether it is a
truly good-faith effort, we will see. But at least, in my mind,
it was an incremental step at the very least. So international
image issues--there is a limit, too. If it--if it conflicts
with their core interests they don't care how they look.
But so there is a limit to that. But that's something.
Prosecuting corruption--there was, again, a recent case. The
Department of Justice laid charges against an emissary from a
major multinational Chinese company--a private company that had
bribed Chadian officials and Ugandan officials, I think, for
access to oil rights. So seizing those opportunities.
But, fundamentally, China in Africa is a fact of life and
it will be for the foreseeable future. So and there are good
elements to Chinese activity.
Now there are all these negative things that I think are
best dealt with by enhancing our own activities, as you said in
your opening remarks and in your questions, and just burnishing
the attractiveness of the American model, which still has a lot
of resonance on the continent.
Ms. Bass. Thank you.
Mr. Morris. Thank you, Congresswoman.
I would say what's critical and what I am worried about is
that we are not maintaining the level of engagement directly
with the Chinese that helps make progress on these issues and,
as I said in my testimony, however painfully slow that might
be, the absence of the engagement isn't going to--going to do
anything positive.
And I would point to one example. So you have something
called the Strategic Dialogue. It's changed names over the
years. But it was started in the Bush administration, carried
forward in the Obama administration.
And over the course of the years, it addressed many
different issues, one of which was this issue about debt
problems in low-income countries and China's behavior.
Just a few years ago, the signals were that China was very
close to joining the Paris Club of Creditors, which I referred
to in my testimony as a really important forum for dealing with
debt problems and doing it in a responsible way.
What I see now is no evidence that that dialogue is a
priority anymore for this administration and statements from
Treasury officials that it simply isn't a priority. And, you
know, from my perspective we probably lost an opportunity as a
result to keep that momentum up on questions like responsible
lending practices.
Ms. Bass. Thank you. Yes?
Ms. Plummer. Very thoughtful questions--one that I've been
grappling with for years in terms of what we can do on our end.
One, in terms of leverage, the U.S. is still favored over
China. So opinion polls that have taken place in nearly every
sub-Saharan African country by the Pew, Global Attitudes
Project, and Afrobarometer show that U.S. values are still
favored over the values of authoritarian bureaucracy that are
heralded from China.
So when we look at leverage, we have to look at it on the
level of the elites that we are engaging with but also the
masses of people who are impacted by our policies.
So initiatives, like the YALI initiative, I think are very
encouraging to support young entrepreneurs, civil society
leaders in developing strategies to be able to bring pressure
on their governments from below.
I think we should also look at debt models and consider
debt forgiveness. Billions of dollars are leaving the continent
every year servicing debt----
Ms. Bass. Right.
Ms. Plummer [continuing]. But also linked to illicit
financial flows. The U.S. has a very robust system and we can
look at where African leaders are stashing billions of dollars
offshore including in banks in the United States. I think----
Ms. Bass. And buying property here.
Ms. Plummer. And buying property here. This is money that
belongs to the masses of African people. So in terms of U.S.
leverage and building on the favorable image that the U.S.
already has in Africa, I think it will be much welcomed if our
policies really consider how the masses would be impacted by
our policies.
Finally, I think the Millennium Challenge Corporation had a
very good model in terms of money going to development projects
in Africa being given to African companies to carry out the
projects.
So expanding MCC, also considering expanding AGOA and
preferential trade treatment. What products are given
preferential treatment is also a very tangible area that the
U.S. can improve its policy on.
Ms. Bass. Thank you.
And just to wrap up, Mr. Chair, I would agree with you in
terms of the U.S. being valued over the Chinese because some of
the roads we are talking about and infrastructure, we know,
collapses.
But, you know, again, I think it falls on us. One of the
other issues that I don't believe you raised, or maybe I missed
the various panelists, is one of the problems is labor. So, you
know, in communities in--well, my community, for example--part
of my district's people get upset if there is a major project
and no one on the project is from the community. I can only
imagine what Africans feel who are unemployed and see Chinese
labor come in.
All of those, to me, are reasons why I think we should
focus on the U.S. and increase our footprint on the continent,
and leave our viewpoint of the continent--our viewpoint of the
continent is from a charity perspective--what you watch on
late-night TV on Africa in terms of the commercials.
Until we leave that viewpoint and join the rest of the
world in looking at the continent of Africa from the point of
view of partnership and opportunity, and then promote U.S.
businesses to do business on the continent. We can sit and
complain about China all we want. But, to me, it's a question
of us stepping up.
And with that, I yield back.
Mr. Smith. Thank you.
Chairman Chabot.
Mr. Chabot. Thank you very much, Mr. Chairman.
Last month, it was brought to my attention that the tribal
rivalry between the Dinka and Nuer people in South Sudan has
resurfaced.
I've heard reports that the Chinese Government is directly
benefitting from this conflict by extracting resources with
virtually no benefit for the people who inhabit the land and
possibly even using enslaved locals for their labor.
Could any of you speak to this or have you heard of Chinese
engaging in similar practices in other parts of Africa?
Mr. Meservey. I'll take a stab.
So I follow South Sudan quite closely and yes, the Chinese
companies are heavily involved in that country, specifically in
the oil industry, which is one of the areas of contestation in
the country because, obviously, it's lucrative to control the
oil fields.
Again, I don't know what the specific terms of the contract
are because they are very rarely ever made public. So it's very
difficult to know what are the Chinese paying and things of
that nature.
But I suspect that in this case, given how thoroughly
corrupt the South Sudanese regime is and how its primary
concern is to prosecute the war in South Sudan, that it would
happily strike a very poor deal with these Chinese companies in
order to have some sort of--in order to earn some money at all
because they are under very difficult financial strain.
To the question about slave labor, I haven't encountered or
heard of that happening in South Sudan specifically.
But one of the concerns of Chinese engagement on the
continent is the standards for labor, and frequently, they are
not up to the standards that a Western firm would demand or
uphold.
So I--and this has caused conflict in other parts of the
continent where there have even been deaths when miners have
struck, for instance, at Chinese mines and then been shot.
So I wouldn't at all be surprised if there are serious
labor abuses in the South Sudanese oil fields as well.
Mr. Chabot. Thank you very much.
Would any other panel members want to add anything to that?
If not, I'll move to another question. Okay. I'll go ahead.
China is notorious for undermining Taiwan every chance it
gets. I was one of the original founders of the Congressional
Taiwan Caucus and have been working on Taiwan issues for many
years now.
How has Beijing leveraged its influence in Africa against
Taiwan? What impact has increasing Chinese influence in Africa
had on Taiwan's global standing, for example, pressing
countries across the globe including in Africa to drop their
recognition of Taiwan? Would anybody want to address that?
I saw you nodding, Mr. Meservey. So if you'd like to----
Mr. Meservey. Sure. I address this in my written testimony.
In 2005, there were seven African countries that recognized
Taiwan. There are two left now, and that's the result of a
campaign by the Chinese on the continent.
Sao Tome and Principe was the most recent African country
to cut ties. That was just last year--late last year--and they
immediately received very large Chinese loans.
The Chinese have never given loans to countries that
maintain ties with Taiwan. There are only two left, as I said--
Burkina Faso and Swaziland.
And I suspect--I didn't go back before 2005 but if you went
further back I am sure there were many more African countries
with ties to Taiwan that have--that have steadily cut them off
because of Beijing's inducements.
Mr. Chabot. Thank you.
And then finally, when China builds good will when it does
various projects in Africa but really around the world, it
always does so with the expectation that its partner will
disproportionately favor China.
There is always something in it much more for China. You
might think you're getting something out of it and it's sort of
free but it's never free with China.
I know you've all addressed this in your testimony. But to
what extent will Chinese investment perhaps make various
countries in Africa less hospitable to Western businesses and
organizations because of the way they've undermined free and
open markets, rule of law--the way you're actually supposed to
do things?
Anybody is--Mr. Chang?
Mr. Chang. Yes. I mean, that generally has been Beijing's
ultimate intention.
You know, when Chinese companies first go to a country they
can't do that. But what we have seen in Africa and elsewhere
that when there is this critical mass that Beijing does have
the ability to use its economic power for what you've
mentioned--to undermine.
The whole concept of Beijing undermining good governance in
Africa and elsewhere it's just been so clear and we have seen
the effects of it in countries like Zimbabwe.
So with the big men in Africa, they do have Chinese support
and that's sort of an indication where Beijing would go if it
indeed had more influence.
Mr. Chabot. Very good.
Thank you very much. I yield back, Mr. Chairman.
Mr. Smith. Let me just ask a few followup questions or
follow up on final questions, and thank you again for your
very, very incisive answers.
Could any of you shed any light on what the relationship is
between the Chinese Government and the African Union? What are
their goals? What are they trying to influence, if anything, in
your view, with the AU?
Ms. Plummer. So the Chinese Government built the African
Union headquarters. So that's obvious.
It's interesting that the Chinese Government prefers not to
engage in negotiations with blocs--power blocs. They prefer to
negotiate on a bilateral basis, and that's obvious.
Any time a group of countries negotiate as a bloc,
especially countries that aren't as integrated like in Africa,
that will put China at a better advantage in terms of
negotiating trade deals.
There are representatives from the Chinese Government at
the African Union headquarters. Aside from that, I am not sure
of how the Chinese Government uses the African Union to lobby
African leadership or what access they have in the African
Union because they have their Embassies in each country that
they have ties with.
And I would imagine that on a bilateral basis within each
country the relationships are stronger outside of the AU.
Mr. Smith. Thank you.
Mr. Meservey, you pointed out in your testimony, and I
quote, ``Echoes of Mao's shrewd practice of building influence
with rising African leaders and political parties remain today
in Beijing's program for granting young and sometime senior
African politicians scholarships to attend trainings in
China.''
You point out that in 2016 China announced it would invite
1,000 more African politicians to receive training.
Do you, or any of you, have any sense what that training
actually is? What is the duration of it? You know, is it
indoctrination all wedded together with what? Do we know?
Mr. Meservey. Like many elements of Chinese engagement with
Africa, it's a bit opaque. But there is no doubt that some--and
I reference this in the written testimony--some of these
representatives of African political parties are receiving
training on how the CCP organizes its own party, for instance.
The EPRDF, which is the ruling coalition in Ethiopia, which
in your opening remarks you referenced its deeply authoritarian
tendencies, has received trainings on how to control public
opinion including relations with the media.
So I think the thrust of a lot of these trainings--and
there is also--there are objectively benign trainings like
around agricultural competencies and such--but the thrust for a
lot of the parties--the African parties that are interested and
I think there have been at least seven ruling African parties
that have participated in these trainings--is learning how to--
to learn how to sort of--learn how to dominate the country,
frankly, as the CCP does and I think it's deeply worrying when
you have parties like the Jubilee Party from Kenya.
Kenya is a democracy, but they are going to receive
trainings--we don't know the content of all of them but we
suspect that they are--the CCP is training parties like Jubilee
and the EPRDF and SWAPO in how to deepen their own and
centralize their authority.
Mr. Smith. Yes, Mr. Morris.
Mr. Morris. Mr. Chairman, if I could, I think it's
important that we not underestimate the degree to which China
is becoming a desirable place to obtain technical knowledge.
Their increasingly sophisticated economy, investing heavily
in areas of R and D, and to the degree that they are, you know,
actively seeking to attract students from other countries,
let's recognize that's our model and I do worry that at the
moment that feels a little vulnerable here and I think it's one
of the ways in which we have been so effective in the world is
that we have been particularly open to foreign students who
come to our universities.
And so that--you know, as a model that is now growing in
China we need to recognize its value to us as well.
Mr. Smith. But is there any kind of political baggage that
goes along with that? Because we know for a fact that the
Confucius Institutes and many of our colleges and universities
who have campuses on mainland China are highly restricted in
what they are able to do and that there is a political baggage
weight that is imposed by having such an institute, for
example, on a U.S. campus.
And we are looking further into it on the China Commission.
Like I said before, we have asked the GAO to really vigorously
study what the parameters are--what they are teaching--because,
like I said in my opening remarks, it's like a free gift to a
university to have what seems to be a value added, but really,
in real terms, probably is not. It's soft power.
Mr. Chang. Mr. Chairman, just on one aspect, I don't know
the nature of the training that the Chinese are offering.
But the one big drawback that China suffers is that African
students and others have been the targets of really ugly racism
in China and that must have tarred the image.
And one of the great things about the United States is just
the openness of it and so that when students come here they
generally have a very positive view of the United States, and
we have to work at that, of course.
But Beijing does suffer from it because it does have the
money to bring everybody to Beijing but it doesn't have the
ability to change Chinese attitudes and those attitudes, I
think, are the biggest impediment to China making actually more
inroads into the African societies.
Mr. Smith. On one trip to the DR Congo I remember meeting
with a group of lawmakers who told me that the Chinese are very
adept at making sure that the roads go close to minerals and
that which they have their eyes on, and often have access to it
at a very small or negligible price. They also said the roads
weren't that good.
What is your sense in terms of the quality of the goods? We
know that, in Kenya, a bridge, several months ago, collapsed in
Kenyatta. I had been there visiting just 2 weeks before it
collapsed. A couple dozen people were severely injured as a
result. What is the quality of those goods?
And finally, just let me ask, if you could--Mr. Chang, in
your book, ``The Coming Collapse of China,'' and elsewhere, you
have questioned the sustainability of China's debt in the long-
term in part due to its inefficient lending to state-owned
enterprises.
And I am wondering how the level of indebtedness of African
nations, in particular those rated by the Center for Global
Development as being potential high risks of distress--namely,
Djibouti, Ethiopia, Kenya, others--factor into China's own
financial health?
What would be the effect on China's lending institutions of
a default or a restructuring and how do you think that might
rattle markets globally?
Mr. Chang. You know, Mr. Chairman, we are seeing--and it's
not played out in Africa but certainly being played out in
Venezuela where there is somewhere between $17 billion to $20
billion of debt, and to borrow your term, we just don't know
the full extent of that debt.
But we do know that China is in difficult straits because
they don't know how to do this. Part of it is because maybe of
a lack of experience, but also because they realize that the
more money they put into Venezuela the more difficult it
becomes as a bigger problem and, indeed, in the last year or
so, they have not been extending additional advances.
Now, they are going to play this all out in connection with
Djibouti, as you mentioned, and also with Tanzania right now
with the debt restructuring.
You know, Beijing has a lot of money, but it also has a lot
of commitments and this is the whole concept of imperial
overstretch, and we see this playing out in China's relations
with countries around the world, especially in Africa, where
they have gone out and made very large commitments, but have
not oftentimes been able to fulfill them, and that is largely
because they've got too big ambitions.
They say that they have $3.2 trillion of foreign exchange
reserves but that money is not unencumbered. They've been using
a fair amount of this money for belt-and-road projects, which
are not sustainable.
I practiced law in Hong Kong at a time where anything that
could be financed was financed by the private sector. What
China is doing with belt-and-road right is financing those
things that nobody would have ever touched, and they wouldn't
have touched them for a good reason.
So Beijing is going to see all of these projects--not all
of them but many of these projects having to be refinanced on
terms that are unfavorable to the Chinese largely because these
projects are just not economic.
We see this especially in Latin America right now where
you've had two very large Chinese projects crater--the
Interoceanic Canal at Nicaragua and also the Atlantic to
Pacific railroad.
China hasn't done, I think, anything as large as that in
Africa, which have been such spectacular failures. But we have
seen smaller projects not go forward in similar fashion.
Mr. Smith. Mr. Castro.
Mr. Castro. Thank you all for your testimony today.
Let me ask you all, how much does China use--aside from
their projects, right, like the ones they are doing in Latin
America and some of the projects in Africa--what kind of
development aid do they offer to the countries in the way that
United States has USAID, for example?
Mr. Morris. I think the common view is that they don't have
an aid model. I don't think that's entirely correct. They do
have what we'd consider foreign aid. Official development
assistance is the terminology.
It is very small relative to the other types of financing
they do. It is growing.
Mr. Castro. And why do you think that they haven't used
that--they haven't adopted the same model? Is it that they
can't afford it or they just don't believe in it? What's your
best assessment?
Mr. Morris. What I would hear from Chinese counterparts
over the years consistently is, ``We are not a rich country--we
are not an aid provider--we ourselves are a poor country.''
Now, they've had to evolve that message, as we----
Mr. Castro. It's the second largest economy in the world.
Mr. Morris. Yes, and both--so the message has evolved but
also the reality is changing. They are increasing their levels
of foreign aid.
On something like the belt-and-road initiative, which is
infrastructure oriented, you are seeing an aid component
allocated to things like technical assistance, project
preparation.
Mr. Castro. Let me ask you--I have a question.
There have been stories recently about cobalt mining in
Africa. To what extent do Chinese companies comply with
international standards on child labor when extracting natural
resources in African countries, such as cobalt mining in the
Democratic Republic of Congo? If anybody can address that.
Mr. Meservey. You know, the cobalt issue in Eastern DRC is
a fascinating one. The Chinese have moved strategically, I
would say, to dominate the global supply chain for cobalt.
Cobalt, of course, is a critical mineral in the creation of
lithium ion batteries, which may well be extraordinarily
important even more so than now if--particularly if driverless
cars becomes as big of an industry as many people think it
will.
So as far as child labor standards specifically, I am not
sure what the Chinese companies that are involved in cobalt
mining have for those sorts of standards.
As we have mentioned throughout this hearing, though, there
is no doubt that Chinese companies do not subscribe to the same
level of labor standards as Western firms do, for instance.
So whether that translates specifically into using child
labor at a cobalt mine, I don't know. I wouldn't be surprised
if the answer is yes.
Mr. Castro. Also, China recently opened its first overseas
military base in Djibouti. What do you expect the purpose of
this base is and where do you see China's expanding footprint
in the region and do you see them expanding militarily in
Africa beyond this one base?
Mr. Chang. Beijing has indicated that it clearly wants to
dominate the Indian Ocean and in order to do that it does need
logistical bases. And so it's no surprise that their first
overseas base is essentially to support the People's Liberation
Army Navy and it's no surprise that it's in the Indian Ocean.
The thing that I am concerned about is the Chinese have
been thinking about establishing a base at Walvis Bay in
Namibia in the southern Atlantic, and what's even more
concerning--and I mentioned this before--is Chinese officials
have been looking at the Azores.
The United States Air Force has a base. It's called Base
Number 4, Lajes, and because of budget cutbacks has been
reducing the presence there down to what they call a ghost
base.
Then-Chinese Premier Wen Jiabao--I think it was in 2009
when he was going from Santiago, Chile back to Beijing actually
didn't fly over the Pacific, as you'd expect. He flew to Lajes
and spent a couple days on the island looking at not only the
air base but also looking at the port facilities, and there
have been, clearly, a lot of discussions between the Chinese
and the Portuguese.
So this is a concern because from Lajes, which was a base
that would control the mouth of the Atlantic--sorry, the
Mediterranean--and also it is closer to Washington, DC, then
Pearl Harbor is to Los Angeles.
So it is important for us to make sure that--it's sometimes
difficult to tell the Air Force what to do. But it would seem
that reducing our commitment to the Azores at a time when the
Chinese want to use the Azores doesn't seem to be wise policy
in the long term because, clearly, we do not want Chinese
planes flying over the Atlantic and threatening the American
homeland.
Mr. Castro. Thank you.
I yield back.
Mr. Smith. Mr. Garrett.
Mr. Garrett. Thank you. I want to touch on something that
my colleague, Mr. Castro, spoke to--and I want--and, by the
way, I am a listener to the John Batchelor program so it's an
honor to get to see you in person--and that is Chinese aid
versus U.S. aid and the aid model.
And I want you to tell me if I am wrong and I'll open this
up to anybody, but I do have a finite amount of time. And that
is that the Chinese have learned very quickly that it's easier
to give a lot of money to a few people than it is to give even
more to a large number of people.
In other words, I was in an African nation that shall
remain nameless for a particular reason wherein the
Presidential palace was a wholly financed function of the
Chinese Government.
It, obviously, endeared itself ultimately to three
families. It was probably about the size of the Rayburn House
Office Building and by giving that aid they didn't need to give
aid to the people in that country who were living on less than
$1 a day.
Is that about right? The Chinese aid model is to pay off
the oligarchs because they don't need to worry about the masses
if they do that.
Mr. Chang. Some people have called it big project
diplomacy. Build, for instance, as Dr. Plummer has talked
about, the headquarters for the African Union. You build a
soccer stadium. These are high-profile projects.
The United States does something a little bit different.
You know, we have a Peace Corps volunteer here, I guess. You
know, the aid is more on a person-to-person level--you know,
vaccines, which are important, clean water--these types of
things which matter day to day--much more important than the
headquarters for a multilateral organization in Addis Ababa.
So I think that we are doing the right thing. It's just a
question of whether we should be doing more, and let me just
close out by saying that I am privileged to know John
Batchelor. So thank you very much.
Mr. Garrett. Well, I've--as a new resident of the district,
I have evolved into a great appreciation for the depth and
subject matter expertise that's present in that venue, and I
know I've digressed beyond the role of the committee today. But
I do think I get analysis there I don't get other places.
As it relates to sort of the neocolonialist tag, which I
candidly think is incredibly appropriate--it's been my
observation in a very limited period of time and only a couple
of different countries in the African continent that the
reality is that China is on the ground in a depth that we as
Americans and even as members of this body fail to understand
as it relates to control of the apparatus that make things go--
the infrastructure, if you will.
The cliche that I've heard is that ultimately the
infrastructure provided by the Chinese serves the Chinese at
the expense of the local population, which looks an awful lot
like colonialism to me.
I would invite you to speak to the cliche that the roads
that they build run from the resource to the port and whether
or not that's the reality or if these--if these projects and
``investments'' actually serve the local populaces, and I would
speak to that for perspective, for example, to the story that
was in Bloomberg 6 days ago with regard to the Chinese garment
manufacturing endeavors in Ethiopia and then the treatment of
the workers therein without even digressing into child labor
circumstances in China, which they've told us have changed but
we have anecdotal and real evidence that indicate they haven't.
So the infrastructure investment that the Chinese tout in
the developing world is that to serve the developing world or
is that to serve the Chinese, based on--and again, anybody
chime in.
Again, Mr. Chang, I hold you in extraordinarily high
regard. I have three other awesome people here, including Dr.
Plummer, who's got a Woodson fellowship at UVA, which is in my
district. So you're awesome.
So anybody--the Chinese investment in infrastructure--is it
serving these developing nations or is it serving China?
Ms. Plummer. Well, I think it all depends on the project.
So your first question when you asked the scope of the
infrastructure, who does it serve, you mentioned a project--the
Presidential palace.
You find that the Chinese Government tends to be very
responsive to what African elites request. So if there is an
election year and an elite--a representative says, hey, I need
a road built between these two towns--it's an election year--
will you be able to deliver that project, of course, it's not
free. There is a loan taken out. Leaders in China have been
praised for being responsive in that way.
So it's up to the African leadership to make certain
requests. So----
Mr. Garrett. Let me interrupt, not by disrespect and not to
even disagree.
The autocratic regime is a lot more responsive, right, than
a laboriously democratic----
Ms. Plummer. Absolutely. Absolutely.
Mr. Garrett. But go ahead.
Ms. Plummer. So to answer your question, do the--does the
local population benefit from the infrastructure--it all
depends on the quality of leadership and whether the leadership
within that country works autonomously from their population or
if they work to benefit their population. So it all depends.
In terms of the large-scale transport infrastructure models
and, to some extent, the power infrastructure models,
geographers have gone in and mapped out where the roads, the
railways, where the ports are being situated.
And yes, you find that it's a two-way street. They benefit
the extractive sectors but also they are intended to get
Chinese-made products into hard-to-get places within the
African interior.
So it serves that dual purpose. But you also find that some
of the aid is within the agricultural sector so to teach
farmers how to build rice paddies. You have medical doctors
that have been dispatched. You have teachers that have been
dispatched to different areas. So it's a lot broader than just
the large-scale infrastructure.
Mr. Garrett. I would say this. I mean, the race is a
manifest to sort of--there is almost a Sino supremacist sort of
attitude amongst a segment of the Chinese leadership--that they
are just better than everybody else and that they are doing
everybody a favor by virtue of gracing them with their
presence, which I think hearkens back to what we saw coming out
of Europe for a couple centuries.
But that's troubling in a world where I think we should get
back to the King model of content of character versus color of
skin, and when it manifests itself in foreign policy--and I
think China is not the only instance where this happens, but we
aren't talking about some other regions right now that some of
you all might have some expertise in--that becomes worse.
Let me ask you a rhetorical based on essentially my
opinion, and let me give it to Joshua and Scott, and then
conclude, because you all have been very indulgent.
The U.S. model of international aid is the superior model
if it is in a world where the individuals in receipt of the aid
have self-determination.
In other words, we give aid to the end user--the person who
might lack a meal. I am a huge champion of McGovern-Dole, of
educating women, to reduce radicalism, and create economic
opportunity. Not because I like women better than men but
because we see patterns where educated women create greater
opportunity, reduce radicalism, and lift the society, right--
that if you take 50 percent of your population and
disenfranchise them then, ultimately, you never get to be as
good as you can be.
So when the end user is self-determinative and our aid goes
to the end user then our model works. But where there are
autocratic regimes, where there are dictatorial regimes, the
Chinese model works because essentially--and you can call them
priority projects or whatever you want to call them--but it's
buying off the people at the top so as to extract benefit from
essentially the sweat of the people at the bottom.
Is that an accurate, in your opinion, Joshua and--or Mr.
Meservey--I am dodging your last name because I don't want to
mispronounce it--and Mr. Morris?
Mr. Meservey. Yes, I think there is a lot of truth to that.
In my written testimony, I called corruption a Chinese
competitive advantage on the continent.
We have the Foreign Corrupt Practices Act, as we have
already talked about during this hearing, and you will go to
prison if you're American and you do the sorts of things that
Chinese firms are frequently willing to do on the continent.
And it's not just the Chinese, of course, but they are--
they are prime perpetrators. And I think the more fundamental
issue is that governance is hugely important, as your question
referenced, and fundamentally the blame for striking a lot of
irresponsible deals lies with governments in Africa and they
are to blame for signing these terrible contracts--for allowing
themselves to be bought off in some situations.
So I think our U.S. engagement, the aid model, should focus
on improving governance on the continent because also even
poverty has very strong links to governance. The MCC is a
really positive model because it rewards good governance.
So I think that's the direction in which U.S. policy should
be going on these issues.
Mr. Garrett. Mr. Morris.
Mr. Morris. So, Congressman, I would certainly agree with
you completely on sort of core principles and values that are
embodied in what we do internationally that look very different
from China.
That said, I would say that if you look at programs like
PEPFAR, you know, tremendous strides we have made through that
program in incidence of disease and, frankly, irrespective of--
I mean, in a lot of different kinds of countries and I think it
was really important not to be too restrictive about where we
choose to try to make progress in an area like that.
And then on the question of infrastructure, I think it is
just--you know, it is a fundamental driver of growth in
economies today and, again, that's irrespective of political
models.
I think you're right, though, that at the end of the day,
the political models bear directly on how that goes when you do
actually engage.
But I do think, you know, with our model of leading on
global health issues, on humanitarian issues, disaster
response, it's critical that we are there when there is a need
and find ways to work even when governance is challenging.
Mr. Garrett. It's amazing, and I say this as an aside--and
I thank the chair for his indulgence--but to ask the opinion of
George W. Bush in Africa versus in America, right, because we
did stuff that helped human beings and they--and they get it.
So without advocating on behalf of a particular
administration, when you help people you help America, and when
you empower people and create hope, then we reduce
radicalization and, as McMaster said, we buy fewer bombs.
Having said that, I served in the military. I want to have
a strong military. I don't want to have to use it. We should
never aspire to use it.
Thank you, guys, immensely.
Mr. Smith. Thank you, Mr. Garrett.
Just to conclude, I do have one final question. You know,
in my own home state of New Jersey, our former U.S. attorney,
Christopher Christie, was able, when he looked at corruption
within our own state, to put about 130 politicians, both
Democrats and Republicans, behind bars over an 8-year period as
he served as U.S. attorney.
Remember, there was a book written, called ``The Soprano
State,'' that really showed that corruption is in so many
places.
So when we talk about it overseas, we need to look in the
mirror. It's here as well. You, Mr. Chang, talked about some of
the dealings between Beijing and African states being tainted
by corruption.
I co-chair the Helsinki Commission. In 2000 there was a big
conference--we have one every year. It's an annual conference--
in Bucharest.
The theme of it was that corruption is the hijacker of
democracies, and it seems to me that when there is no Foreign
Corrupt Practices Act to hold the bad players to account and
bags of money are showing up, it has a coercive and, I think, a
totally debilitating impact on democracy, which we want every
African country--every country in the world--to enjoy the
benefits of a robust democracy.
If any of you would like, as we conclude, to speak to that
issue. And I remember in Bucharest, we were talking a lot of
the emerging democracies and some of whom are going the wrong
way, sadly--Russia being probably chief among them--and, of
course, the kleptocracy there and the oligarchs have stolen so
much, robbed the people of so much there, and Putin is walking
point on that.
So if you could speak to that issue, because I think on the
intermediate, long-term, short-term as well, you know, we want
Africa to thrive. You can't thrive when you have corruption.
Mr. Chang. Mr. Chairman, I thought--what I thought was
really striking was that in the era of Hu Jintao, the
predecessor to Xi Jinping, his son was implicated in a bribery
scandal in Tanzania for the sale of airports scanners, I
believe that it was, and this indicates that this is not just
some Chinese businessman being caught--China bribed an African
official.
This goes to the--this went to the top of the Chinese
political system, and I think people understood that this was
the nature of China in Africa, in other places as well.
And so you see this replicated. You know, as Dr. Plummer
said, you got to look at it country by country. But
nonetheless, this was one very glaring example of the son of a
Chinese political leader bribing officials in Africa and being
withdrawn out of Africa to avoid embarrassment in Beijing.
Mr. Smith. Dr. Plummer.
Ms. Plummer. Chairman Smith, thank you so much for bringing
up the corruption issue.
I just want to reiterate the illicit financial flows.
Billions of dollars are leaving Africa every year and they are
being held in banks in Europe, in the United States, and in the
Caribbean, and the United States can play a role in helping to
recover that money and repatriate it back to the continent.
So I think that's something that's very tangible that we
can play a role because we have robust institutions to be able
to investigate where this money is going and where it's being
held.
Mr. Smith. Mr. Morris, what role should we play?
Mr. Morris. I just want to agree with Dr. Plummer. I think
this is--I mean, it's not what we consider by any means
traditional foreign aid but it's a--it's a critical function of
the U.S. Government that, you know, we are providing a good to
the global community in this regard by acting aggressively in
this area.
Mr. Meservey. I'll give a quick example to supplement what
Dr. Plummer said.
The Vice President of Equatorial Guinea is the son of the
President there actually, and he has had luxury vehicles and
mansions seized all over the world now because--in Europe and
in the U.S.--because those governments decided to go after him.
There is a plethora of opportunities to do that sort of
thing. The U.S. has particular leverage with dual citizens who
populate governments in Somalia and South Sudan. So that's an
obvious--another area.
And it's not just China that engages in this activity. Gulf
States are very bad in this way as well.
Mr. Smith. Thank you so very much for sharing your insights
and wisdom with the subcommittee.
The hearing is adjourned.
[Whereupon, at 3:52 p.m., the committee was adjourned.]
A P P E N D I X
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Material Submitted for the Record
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Material submitted for the record by the Honorable Christopher H.
Smith, a Representative in Congress from the State of New Jersey, and
chairman, Subcommittee on Africa, Global Health, Global Human Rights,
and International Organizations
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Material submitted for the record by the Honorable Christopher H.
Smith, a Representative in Congress from the State of New Jersey, and
chairman, Subcommittee on Africa, Global Health, Global Human Rights,
and International Organizations
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Material submitted for the record by the Honorable Christopher H.
Smith, a Representative in Congress from the State of New Jersey, and
chairman, Subcommittee on Africa, Global Health, Global Human Rights,
and International Organizations
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]