A lot of that money is tied at the moment to assets in the United States and to the weak dollar.

And there are the opportunities arising from the difficulties the emerging world has in financing these infrastructure projects, especially as foreign banks retreat to home markets.Īt the same time, China is keen to invest billions of dollars of its foreign reserves.

Over three years, he is pledging $10bn (£5.9bn) in new loans, 100 new clean energy power stations. Wen Jiabao denies allegations of neo-colonialismĬhinese Prime Minister Wen JiaBao has a big chequebook. You can't do that without money for infrastructure.' 'We need the ports, roads, electricity, the airports to help Africa's poorest country grow. Mr Ouedraogo recognises that in exchange for the oil, gas, and minerals that drive China's fast expanding economy, there is hard cash available for Africa's biggest projects. 'Africa needs infrastructure,' said Youssouf Ouedraogo, a special adviser to the president of the African Development Bank. There are the giant oil producers of Libya, Nigeria and Angola, the mineral-rich governments of central Africa and of course the leaders the West has turned its back on - Zimbabwe's Robert Mugabe and Sudan's indicted President Omar al-Bashir are both here.īut whichever country they come from, the African leaders all understand one thing. Since 2001 total trade has grown tenfold - last year it stood at $107bn (£63.7bn).Īdd to that the significant sums of financial aid and direct investment that are on offer and you can see why the representatives of the 50 African states who have travelled to the Egyptian resort of Sharm el-Sheikh are extremely keen to hear what China has to say. Several experts fear China is dumping unviable projects deliberately to push long-term strategic objectives, if India is concerned about Chinese investments in Sri Lanka and recently in Nepal, Australia is concerned about China's activities in its neighbourhood.įor the US, its strategic hold over the Marshalls islands and Palau in the Pacific could end as China muscles its way through 'cheque book diplomacy'.China sees vast opportunity in Africa. On the other hand, Philippines saw its banana exports being hit after it criticised China over its intervention in the South China Sea.Īs part of the renewed push towards 'debt book diplomacy', Vanuatu located in the south pacific ocean, owes China half of its debts with reports suggesting Beijing may get a naval base there, the study said. Malaysia which was earlier a staunch critic of China has toned down its rhetoric of China's muscle-flexing in the South China Sea after Beijing invested more than $2 billion in the country's state development fund. This has meant Papua New Guinea's debt to China has risen from less than $ 3 million in five years to over $20 million today. China is already a majority-owner in nickel mine and is funding construction of roads, ports and high-speed Intenet in the country. The dependence has seen Cambodia scrap the Angkor sentinel military exercise with the US and ties with Taiwan, Harvard researchers revealed.Īlso, China has ensured Loas debt burden to rack up to 65 per cent which has resulted in vast tracts of agricultural land being taken over by Chinese migrants, the study said. China is also funding a new $6.7 billion railway line and it is not clear what China will demand if the Loas government is unable to repay the debt.Įlsewhere in Papua New Guinea near Australia, the government may have to surrender control over some of its reserves of oil, gold, copper and coffee, the study found. In the far east, China invested $7 billion in Cambodia last December alone and with loans taken over the last two decades Cambodia is indebted to China to the tune of 60 per cent. Like Pakistan, it has already handed over the Hambantota port on a 99-year long lease and Chinese ships have already started docking there during voyages from bases in the South China Sea. Sri Lanka owes China $8 billion for loans forwarded by Beijing for various infrastructure projects. It has already handed over the Gwadar port to China. Pakistan already owes China $19 billion for loans taken on various accounts including day-to-day spending. The question on the minds of most Pakistan experts is how will Islamabad pay back China all the money, along with interest.

The chinese chequebook