Chinese envoy arrives in Zambia as new debt crisis looms in Lusaka

Zambia’s debt problems will be the biggest headache for the new Chinese ambassador to Lusaka, who arrived on Sunday with a promise to “strengthen the friendly ties the two countries have nurtured over the years”.

Du Xiaohui is the 16th Chinese ambassador to Zambia since the establishment of diplomatic ties in 1964. His predecessor, Li Jie, held the post since 2018.

Du said the “all-time friendship” between China and Zambia “has stood the test of time and is deeply rooted in the hearts of both peoples.”

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In a statement posted on the embassy’s website, the new envoy and his colleagues pledged to uphold the spirit of China-Africa friendship and continue contributing to South-South cooperation and world peace. .

Du’s arrival coincides with Zambia’s latest currency crisis, as it waits for private lenders and the world’s 20 richest countries to vote on its request for debt relief under the joint G20 framework. .

G20 finance ministers will meet this week at the International Monetary Fund’s spring meeting to discuss the global economy, including progress on the debt relief package.

In 2020, Zambia became the first African country in the pandemic era to default on $3 billion in dollar-denominated bonds.

According to a recent report by Fitch Ratings, Zambia has failed to repay most of its outstanding external debt since failing to make interest payments on Eurobonds in October 2020.

Lusaka then declared that it would stop repaying all of its external debt, except for certain priority project loans, and requested debt relief.

Zambia is in the process of restructuring about US$15 billion in external debt as a precondition to securing US$1.4 billion in IMF loans. Chinese lenders account for more than $6 billion of the amount, spent on megaprojects including airports, highways and power dams.

Stephen Chan, professor of politics and international relations at the School of Oriental and African Studies in London, said a third of Zambia’s external debt was owed to various Chinese banks and agencies.

“A high-level Zambian delegation to China does not appear to have been warmly welcomed by Beijing’s financial districts. But it also appears that the Zambian approach was naive and disregarded cultural intricacies and nuances,” he said. -he declares.

“That being the case, the new Chinese ambassador to Zambia will be a major bridge-building tool. But what is needed is China-specific negotiation expertise from the Zambians.”

The debt issue was reportedly raised during Zambian Foreign Minister Stanley Kakubo’s visit to China in March, which included talks with his counterpart Wang Yi in Tunxi, in the eastern province of Anhui.

Wang said the two sides should make “persistent efforts to strengthen cooperation in traditional fields such as mining development, and expand cooperation in emerging fields such as modern agriculture, processing and processing industries.” manufacturing and renewable energy”.

Yun Sun, director of the China program at the Stimson Center in Washington, said a major problem in Sino-Zambian relations was debt, as Zambia struggled to repay Chinese loans.

But Zambia was not alone and the ambassador was not the ultimate decision-maker on these issues, Sun said.

David Shinn, a professor at George Washington University’s Elliott School of International Affairs, said debt and China as a source of military equipment, particularly aircraft, would be among Du’s main problems.

Some of the loans given to Zambia are used to pay for Chinese military equipment. A 2020 study by Jyhjong Hwang, a China-Africa researcher at Ohio State University in the United States, placed Zambia as the largest recipient of Chinese loans for military procurement in Africa – with US$600 million advanced to Lusaka between 2000 and 2017, out of a total of US$1.5 billion.

Most of the money, which funded the purchase of planes for the Zambian Air Force, came from China Eximbank, Chinese aerospace and defense giant Aviation Industry Corporation of China, and China Poly Technologies.

Other diplomatic moves in Africa include the departure of Chinese Ambassador to Gabon Hu Changchun and Rao Hongwei, who served as an envoy to Rwanda. Their African Union counterpart, Liu Yuxi, also recently left his post.

Before leaving Rwanda in March, Rao recounted highlights of his diplomatic tenure since 2017 to local media, including a visit to President Xi Jinping’s country.

Rao said 15 agreements signed during the visit are being translated into projects and results. He also said that Rwandan agricultural products, including coffee, tea, dried chilli and stevia, were now accessible to the Chinese market.

“More and more Chinese companies are in Rwanda to invest in high value-added manufacturing industries like electric motorcycles, bamboo production and ICT.”

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice journal on China and Asia for over a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.

Robert P. Matthews