China Spreads Aid in Africa, With a Catch

In recent years, China has greatly increased its presence throughout the developing world by offering loans below market-rates, championing such efforts as win-win for both China and the receiving countries. Whereas Western nations have often attached political and economic reforms as conditions to their aid, China instead offered “no strings attached” assistance, disregarding human rights concerns in the name of respecting state sovereignty. Yet, these loans include their own demands: in Namibia, the Philippines, and elsewhere, China has required funds to be used immediately on bloated contracts to Chinese companies with strong ties to the state. Recently, accusations of corruption against some of these Chinese companies working internationally have raised questions about the ethics behind these business deals. One scholar describes China's approach to foreign aid, lacking transparency and engaging in practices long-condemned by the OECD, as a “glaring contradiction to the broader trend of China's adherence to international norms.” Though China's strategy has helped it become a larger presence in the developing world, nearly surpassing the United States as Africa's leading trade partner, with projects collapsing after the revelation of kickbacks and back-room deals, reforms are likely necessary to build the nation's credibility as an ethical business partner. – YaleGlobal