China's New Front In The Trade War With Australia — Africa

China's New Front In The Trade War With Australia — Africa

High up in the mountains straddling the border between Cameroon and the Republic of Congo, Perth-based mining minnow Sundance Resources saw its future extinguished amidst accusations of deceit and corruption.

Andrew H. Sweet
Andrew H. Sweet

After more than six months of wrangling and threats of legal action with the Congo government, Sundance's boss discovered to his horror that his former partner, an Australian-domiciled company with Chinese government links, had snared his company's major asset.

They call it "debt-trap diplomacy." China isn't the first nation to employ this as an imperial strategy. But when it comes to Africa, it has turned the tactic into an art form.

Areas Of Chinese Investing

Beijing is far and away the biggest lender to Africa. When it comes to the Republic of Congo, China has supplied 80 percent of the nation's borrowings, worth around 25 percent of Congo's GDP. Neighboring Cameroon is in a similar situation.

Direct loans aren't the only means of providing the cash. One of the more controversial practices is for a handout to be secured against a long-term mining project where Chinese-government-owned firms take all the profit.

In 2017, Guinea negotiated a $20 billion barter deal with China, where Beijing promised to provide infrastructure, road networks, sanitation, and a university building. Guinea also happens to be the home of one of the richest iron ore deposits in the world.

In the four years to 2018, Beijing clocked up $US164 billion ($218 billion) worth of such deals across Africa. As tensions between Canberra and Beijing continue to escalate, so too will its determination to shut out Australia and its interests wherever it can.

Read the original story here.

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