In ancient times, China and India dominated the world economy. Their combined GDP accounted for nearly 40 percent of the world total. In the first millennium of our Christian era, geopolitical power shifted to the Mediterranean powers, Venice, Spain, and Portugal. It later gravitated to the central Eu.
rope trading states of Holland and Sweden. Then came France, England and Germany in the nineteenth centuries.
Britain in particular achieved world mastery through conquest of the high seas and acquisition of colonies. Under the power of sterling, the Bank of England became the world’s banker of last resort. However, the rise of the young American republic and the toll of two world wars spelt the death-knell of British Empire.
Our twentieth century, as Walter Lippmann described it, was “the American Century”. From Woodrow Wilson to Harry Truman, American statesmen largely crafted the economic and political institutions of global governance in their own image. Without American assistance through the Marshall Plan, Europe would not have risen Phoenix-like from the ashes. For better or worse, my generation grew up in the shadows of the American Imperium – in the frosty atmosphere of the Cold War. With the benefit of hindsight, the “balance of terror” ensured a long peace. The disintegration of the Soviet Empire in 1989 and the ending of the Cold War has, ironically, created a new dis-order under heaven.
Today, history has come full circle. Over the last 30 years the centre of world gravity has gradually been shifting towards the East. China and India have risen from the ashes of a millennial servitude.
Napoleon Bonaparte famously warned his compatriots long ago: “Let China sleep; when she wakes, she will shake the world.”
The rise of China is one of the defining features of our twenty-first century. For centuries, the Chinese defined themselves as the Middle Kingdom –- essentially the centre of the universe. That worldview embodied both a strength as well as a fatal weakness. It bolstered a cultural self-confidence about their stature as a race and a civilisation. But they also became frozen and insular — prisoners of their own imagined self-sufficiency.
It is evident Chinese loans are quite not as generous as we imagine. This is why we must defend the right of parliament to scrutinise them. Under our constitution, the National Assembly has fiduciary duties to scrutinise as well as approve all external loans
In terms of today’s nominal GDP, America outstrips China by a considerable order of magnitude, with $22.32 trillion as against China’s $14.140 trillion. However, if we base the comparisons on purchasing power parity (PPP), China has already surpassed the USA, currently estimated at $27.3 trillion. Even in nominal terms, China is closing up rapidly. By 2030, China’s nominal GDP would have overtaken that of the United States.
The Chinese themselves are wary of such comparisons. They prefer not to see themselves as Number One. Rather, they want to continue to pursue their quiet policy of “peaceful development” without drawing too much attention from the world powers.
With external reserves estimated at $3.3 trillion, China is currently investing some US$2 trillion in developing its ambitious Silk Road project that will cover much of central Asia, the Middle East, Southern Europe and East and West Africa. It will link these regions with transcontinental highways, speed trains and other trading infrastructures.
The Made in China 2025 policy unveiled by Premier Li Keqiang and his cabinet in 2015 is another ambitious programme aimed at upscaling the technological capability of China by moving away from being a factor for cheap low-grade products to becoming the manufacturing hub for high-quality goods. The mandarins in Beijing have committed $300 billion to this project. When fully implemented, these projects will reposition China as the preeminent factory of the world while consolidating her geostrategic position as a world power.
India is having one of the world’s most rapid growth rates, averaging 7.5 percent in the last couple of years. China is slightly lower at 6.9 percent. These growth trends are considerably ahead of the United States average of 2.3 percent and the EU average of 2.4 percent. Despite the slowdown occasioned by the novel coronavirus pandemic, the world centre of economic gravity has all but shifted to Asia and the emerging economies. China and India will both account for 35 percent of world population and 25 percent of world GDP.
China is currently the biggest creditor to our continent. From the year 2000 to 2018 Chinese loans to Africa stood at the order of magnitude of $152 billion. Most of such loans are issued on commercial terms and go into financing projects in sectors such as mining, extractive industries and infrastructures.
As matters currently stand, Nigeria’s total national debt stands at an unprecedented $79.5 billion, of which the external component is $27 billion. We owe some $10 billion to the World Bank and $2.56 billion to the African Development Bank Group. We owe the Exim Bank of China the sum of $3.12 billion, which is about 81.25 percent of our total bilateral debt obligations.
China is awash with cash. It has become a capital-surplus country needing to find good investment outlets. If we could make good business deals with Beijing, it would be a win-win positive-sum game. My concern is not only with the quality of the projects for which the loans are being incurred, but also with their Shylock-like collateral terms.
Several of the infrastructure projects for which we have incurred loans are badly planned. I believe that the Ethiopians, for example, have negotiated far better terms for their 1,300-rail project from Addis Ababa to the port of Djibouti. The cost is about 50 percent of what we are spending on our own China rail project. In addition, the Ethiopians insisted that 3,000 of their engineers and technicians must be trained to maintain the coaches, engines and rail lines. They also got a deal by which all the engines and coaches must be assembled within Ethiopia. They have negotiated technology transfer terms that would ensure that the rail project will be sustainable, going forward.
By contrast, ours is far more expensive and the terms we settled for are a simple build, operate and transfer (BOT) scheme. There is no real technology transfer component that we are aware of.
There is also the big matter of the little print. We understand that the original contracts are often written in Mandarin. We hear that our government has already pledged some of our oil fields as collateral. We have no firm evidence to that effect, but the troubles countries such as Madagascar, Zambia, Kenya and Djibouti are currently facing with their debt-repayment raise deep concerns.
It is evident Chinese loans are quite not as generous as we imagine. This is why we must defend the right of parliament to scrutinise them. Under our constitution, the National Assembly has fiduciary duties to scrutinise as well as approve all external loans. This is not only a constitutional duty; it is a moral obligation. I am therefore surprised that a serving minister of the federal republic can warn that the National Assembly should not do its duty simply because a foreign power might feel unhappy.
The Middle Kingdom has certainly never pretended to be a democracy. It is not for us to question the morality or jurisprudence of their system. But they have a duty to respect ours. Our parliament is empowered by our constitution to scrutinise all foreign loans. They are also required to ratify all treaty agreements that our government has entered into with foreign powers. It is incumbent on our officials to be prudent enough to negotiate contract terms that safeguard our national sovereignty while bringing material advantages to our people.
Chinese culture and civilisation have always held a great fascination for me. But it is unacceptable that our forefathers fought the White Man to liberate our continent only for our generation to hand over our hard-won liberties to the Chinese.