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https://static1.squarespace.com/static/5652847de4b033f56d2bdc29/t/5c467754898583fc9a99131f/1548121941093/Briefing+Paper+1+-+August+2018+-+Final.pdf

We find that Chinese loans are not currently a major contributor to debt distress in Africa. Yet many countries have borrowed heavily from China and others. Any new FOCAC loan pledges will likely take Africa’s growing debt burden into account.

According to a study on the debt burden of African nations, it has been found that China is not a major contributor to debt distress in Africa, yet people in the U.S. administration like Pompeo keep pushing the narrative that China is trying to burden African countries among others with debt they won't be able to repay? Why does Pompeo keep pushing this narrative, what does he have to gain from this?

https://www.latimes.com/world/la-fg-china-belt-road-xi-jinping-rebrand-development-debt-20190426-story.html

Vice President Mike Pence, speaking at an Asia Pacific Economic Cooperation summit in November, said, “We don’t drown our partners in a sea of debt, we don’t coerce, compromise your independence. We do not offer a constricting belt or a one-way road.”

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    The simple reason is that this US administration lies about anything and everything to suit its whims. Previous administrations have lied plenty, of course. But the current one will make up fake trajectories for hurricanes, or fake numbers for inauguration attendees. So why this particular lie? Well, it seems clear that someone in the administration is unhappy about China having any involvement in Africa. So they concoct some narrative and start pushing it to whoever will listen. – klojj Sep 23 at 14:39
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The 2018 CARI paper concludes that China is not a big source of distress overall for Africa. It does not exclude that it might be for some African countries. The BBC summarized an earlier iteration of that paper in this respect:

In 2015, the China-Africa Research Initiative (CARI) at John Hopkins University identified 17 African countries with risky debt exposure to China, potentially unable to repay their loans.

It says three of these - Djibouti, Republic of Congo and Zambia - remain most at risk of debt distress derived from these Chinese loans.

In 2017, Zambia's debt amounted to $8.7bn (£6.6bn) - $6.4bn (£4.9bn) of which is owed to China.

For Djibouti, 77% of its debt is from Chinese lenders. Figures for the Republic of Congo are unclear, but CARI estimates debts to China to be in the region of $7bn (£5.3bn).

The same info is basically found in the CARI paper you have linked, in the last section of the table below:

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Shadow's answer has given you the narrative version of what happened in Djibouti.

Clearly Pence is choosing to emphasize the most negative aspects of Chinese involvement in Africa. After all, the US and China are fighting an economic and propaganda war presently. And Pence has been remarked as one of the hawks in this war.

Finally, if one focuses on the bigger picture of Chinese loans rather than just those that cause distress... resorting again to the BBC:

Around 20% of African government external debt is owed to China, says the Jubilee Debt Campaign, a charity which campaigns for the cancellation of poor countries' debt.

This makes China the largest single creditor nation, with combined state and commercial loans estimated to have been $132bn (£100bn) between 2006 and 2017.

That probably has the current US administration worried because it gives China influence in Africa, so I'm guessing they try reduce that in the cheapest way possible, which no doubt includes emphasizing the negative aspects in their speeches. The BBC points out another similar speech from Rex Tillerson, which did provoke a Chinese rebuttal:

Compared to institutions such as the IMF, World Bank and Paris Club (a group of 22 creditor nations not including China), loans from China are seen by some as much quicker, cheaper, and come with fewer strings attached.

The United States in particular has been highly critical of China's approach.

Earlier this year, ahead of a visit to Africa, the then US Secretary of State, Rex Tillerson, said China's lending policy to Africa "encouraged dependency, utilised corrupt deals and endangered its natural resources".

China's response was forthright. Its ambassador in South Africa, Lin Songtian, said China was proud of its influence in Africa and that Mr Tillerson's comments were part of a smear campaign by the United States.

  • Thank you for this objective answer. – VOXuser Sep 20 at 18:31
  • @VOXuser: China Africa Research Initiative(CARI) is a Johns Hopkins based group founded in 2014. Not saying they are not objective at all, but I can't help but wonder, where are the objective studies on France, Belgium, or Great Britain role in Africa? In particularly, Belgium and France.... youtube.com/watch?v=42_-ALNwpUo The truth is objectivity is a highly selective thing.. We are very human rights conscious, as long as it is not our best friends like Saudi Arabia doing it. – dolphin_of_france Sep 20 at 19:40
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1) Currently are not a problem

We find that Chinese loans are not currently a major contributor to debt distress in Africa

So in other words, what they state is that loans which repayment period spans for decades, that that were borrowed mostly in last few boom years have not go badly so far. Yes, in a way it's mostly correct.

2) The article politely omits Chinese track record of lending to countries in not-sustainable way and later accepting payments in form of political concessions. From African example lent oversized loans to Djiboutis and later accepted military port as part of payment Technically speaking in this article is mentioned, but as a great help, as:

Chinese naval facility opens in Djibouti in 2017: facilitates rapid response deployment, evacuations in case of security crises, anti-piracy patrols in Gulf of Aden, and peacekeeping troops’ deployment

Similar help happened also to Sri Lanka

3) There is a problem that those contracts quite often go in big white elephants (for example the above mentioned Sri Lanka port)

However, to be fair, one may say that from Chinese perspective the issue presumably looks differently:

  • China has excessive currency reserves and is simply desperately looking for any good way of investing them abroad.
  • From Chinese perspective instead of restructuring the debt and getting some minor concession, they would presumably just want to see a nice return on investment.

  • Chinese does not force anyone to take those loans and main strings initially attached is usually spending the money on hiring some Chinese contractor.

  • West would like to talk about malicious debt trap, and so would like countries who got in to trouble. From Chinese perspective it looks as if someone took loan, wasted the money and later started talking about some malicious conspiracy.
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    you have to admire Djibouti for their strategic and economic genius. They have pretty much ensured their independence by renting their country out to host as many bases from as many countries as they can. US, France, Great Britain, Japan, Saudi Arabia and China are all there. We are like a straight guy on Tinder trying to get as much action as possible, while calling every other man a rapist. It is an interesting dating strategy... let's see how it works out. – dolphin_of_france Sep 20 at 14:58
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Because.. if you loan someone $10, and that person could already barely make payment, another person comes in and loan your debtor another $3 ... of course the person would not be able to repay it. And of course as the original lender, you would be concerned.

It is the straw that breaks the camel's bank

And we have spent a lot of time and effort to carefully calibrate that debt load to make sure the camel's back would merely be maximally burdened and not break.

Now comes the chinese, messing all our calculations up, throwing on more straws..

As to why it is called a debt trap... because when we do it, it is called 'doing god's work' (what's what Goldman Sach called making subprime loans to Americans, can't imagine lending to African nations is any less noble)

Check out how leopold ii spread Christianity to the Congos.

We have been having a lot of fun with words for centuries. why stop now?

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