US-China Rivalry in Africa, Latin America, and Southeast Asia

 Merics published on 24 March 2022 a study titled "Growing US-China Rivalry in Africa, Latin America and Southeast Asia: Implications for EU" by Matt Ferchen.

The author concluded that of the three regions, Africa has provided the best fit for and been most receptive to China's development focused economic diplomacy.  In part this is because Chinese officials have worked assiduously to build on Mao-era legacies of post-colonial, Third World leadership and solidarity in the region.  

While China's comprehensive commercial and diplomatic presence in Africa has made it an important actor in the region and the United States has deepened its engagement there, Europe's position remains strong. 

Role for China-US Cooperation on Sovereign Debt of Low Income Countries?

 The Shanghai Institutes for International Studies (SIIS), a leading Chinese government-affiliated think tank, published in October 2021 a paper titled "The G20s Sovereign Debt Agenda: What Roles for China and the US?" by Ye Yu and Zhou Yuyuan. 

The study acknowledges the current poor state of US-China relations, arguing that the root cause is Washington's intolerance of another great power with non-Western political institutions and ideologies embarking on accelerated rejuvenation.  Beijing opposes the US policy of "strategic competition" with China. Nevertheless, SIIS argues there is actually room to explore how China and the US can work together to develop a new agenda for bilateral collaboration.  In this connection, it has identified areas of cooperation on cyberspace, climate change, and institutional reform on global economic governance.  

The US and China, one as the dominant financial power (US) and the other as the largest official bilateral creditor (China), share common interests and responsibilities in enhancing sovereign debt governance and fostering global sustainable development under the G20.  SIIS proposes five steps the US and China could take.

First, both sides should put politics right and prioritize cooperation on sovereign debt treatment and sustainable development.  The US should stop scapegoating China for the sovereign debt of developing countries, by hyping the theory of "debt trap," while China should address US concerns about lack of China's transparency.  Second, the two countries should lead in coordinating macroeconomic policies, controlling global debt risks and mobilizing new resources for alleviating the debt burdens of the debtor countries.  Third, China and the US should work together in exploring truly multilateral and public-private partnership approaches to deal with the unsustainable debt, based on case-by-case terms, ensuring equitable and fair burden-sharing among all categories of creditors.  Fourth, the two countries should take the opportunity of debt treatments in fostering green and sustainable development of the debtor countries, while respecting their ownership and development level.  Fifth, both countries should deepen trilateral development cooperation in the developing world through broader policy dialogue in the future.  

Comment:  This is a curious paper to be published at a time when US-China relations are so fraught.  China has more to gain from this particular proposal than does the US because Beijing holds far more sovereign debt of countries that are debt distressed or at high risk of debt distress. The US ended nearly all loans to these countries many years ago.  Nevertheless, even in the best of times, China never demonstrated much interest in cooperating with the US on development of low income countries.  

US Strategic Competition with China: Implications for Africa

 Senators Robert Menendez (Democrat of New Jersey) and James Risch (Republican of Idaho) have introduced the "Strategic Competition Act of 2021," which is designed to counter China globally.  

The proposed legislation contains sections (271-276) on Sub-Sahara Africa that call for a series of actions by elements of the US government.  They include:

--A report that assesses the nature and impact of Chinese political, economic, and security sector activity in Africa, and its impact on US strategic interests;

--A report setting forth a multi-year strategy for increasing US economic competitiveness and promoting improvements in the investment climate in Africa, including through support for democratic institutions, the rule of law, improved transparency, anti-corruption, and governance;

--A review of the number of Foreign Commercial Officers and Department of State Economic Officers at US embassies in Sub-Sahara Africa;

--Establishment of an interagency working group to counter Chinese cyber aggression with respect to Africa;

--The commitment of resources to enhance the entrepreneurship and leadership skills of African youth with the objective of enhancing their ability to serve as leaders in the public and private sectors.  This will include the establishment of the Young African Leaders Initiative.  (This is a return to a key component of President Obama's Africa policy); and  

--A report by the US Agency for Global Media on the resources and timeline needed to establish an organization whose mission is to promote democratic values and institutions in Africa.

The Bill contains less detailed sections (281-282) for the Middle East and North Africa.

Comment:  While it is too soon to predict where this Bill is headed, it has bipartisan sponsorship.  It also deals with one of the major omissions of the Trump administration's efforts to counter China in Africa: no new proactive American programs except for the US International Development Finance Corporation.  The reports requested in this Bill are aimed at creating new programs and adding resources.