Kenya Railway Loan Terms with China under Fire

Kenya's Daily Nation published on 13 January 2013 a story titled "SGR Pact with China a Risk to Kenyan Sovereignty, Assets" by Edwin Okoth.

The 2014 contract between Kenya and China's state-owned Export-Import Bank for funding construction of the Nairobi to Mombasa railway has become public and contains worrisome terms for Kenya. Failure to repay the loan could result in China taking control of the port of Mombasa or other Kenyan properties from airports to natural resources. The contract also states that its terms are governed by and construed in accordance with the laws of China. The goal was to keep the contract secret. China has strongly denied that the contract is an example of debt-trap diplomacy.

African Development and the China Model

The Oxford University China-Africa Network (OUCAN) has just published a summary of a June 2014 conference on "African Development, The China Model and the Poltics of Industrialization," which it held jointly with Fudan University.

The key conclusions were that China still lacks the confidence or political will to promote actively or export a "China model."  Western and Chinese approaches to the global political economy are not as great as is often alleged.  In Africa and elsewhere, China is increasingly seen not as a radically unique partner or threat, but as a normal great power.  Chinese involvement in the mediation of conflict in South Sudan is raising questions about its cardinal principle of upholding sovereignty. 

China, Nepal, Sri Lanka, Sudan and South Sudan

Saferworld, an independent international non-governmental organization based in London, has just released a major study dated January 2012 and titled China and Conflict-affected States: Between Principle and Pragmatism. It is based on case studies in Sri Lanka, Nepal, Sudan and South Sudan. The authors are Ivan Campbell, Thomas Wheeler, Larry Attree, Dell Marie Butler and Bernardo Mariani.

The study concludes that China's priority is generally to maintain stable bilateral relations and it avoids overt engagement on conflict issues, except when vital interests are threatened. China tends to support a top-down model of stability, providing military assistance and arms to host governments. State sovereignty is regarded as sufficient to legitimize the transfer of Chinese arms in most cases. China's diplomatic approach to conflict-related issues in multilateral bodies remains firmly based on the principle of state sovereignty.

State stability is the basis for advancing mutual economic interests. This business-like approach to development often appears to yield quicker results than Western aid. Western policies linking aid to government performance in areas such as governance or human rights will become harder to pursue since China's presence as an alternative financier and diplomatic ally weakens Western leverage. Competition for influence between China and India will have greater significance for peace and stability in some countries than the relationship between China and the West.

You can access an abbreviated version of this report at China and Conflict-affected States: Risks and Opportunities for Building Peace.