China’s Digital Silk Road Is Looking More Like an Iron Curtain

The funding of tech projects in dozens of countries may well divide the world.
By Sheridan Prasso

Ads for China’s telecommunications and tech-infrastructure companies appear prominently in developing countries such as Zambia.

The first billboard that greets passengers arriving at the airport in Lusaka, before Pepsi’s “Welcome to Zambia,” is an advertisement for Bank of China. 

Nearby, a Chinese company is building a sleek terminal. 

On the road into the capital city, near the office of Chinese telecom company ZTE Corp., another billboard features surveillance cameras made by Hangzhou Hikvision Digital Technology Co. 

At the national data center built by Huawei Technologies Co., a Chinese man in a bright orange vest walks toward a building that houses government servers.
This southern African nation, a former British colony rich in copper and cobalt, is spending $1 billion on Chinese-made telecommunications, broadcasting, and surveillance technology. 

It’s all part of China’s “Digital Silk Road,” a subset of its “Belt and Road” initiative that contributes an estimated $79 billion in projects around the world, according to RWR Advisory Group, a Washington consulting firm that tracks Chinese investment. 

That funding has boosted development in Zambia and many other countries, but it comes at a price.
Most of the digital infrastructure projects in Zambia, like the more visible airport terminals and highways, are being built and financed by China, putting the country at what the International Monetary Fund calls a high risk of debt distress. 

It’s also given rise to fears that what has long been a thriving and stable multiparty democracy is veering toward a Chinese model of repression.
“We have sold ourselves to the Chinese,” says Gregory Chifire, the director of an anticorruption organization who fled the country after being sentenced in November to six years in prison on what Amnesty International calls trumped-up charges. 

“People’s freedom to express themselves—their freedom of thought, their freedom of speech—is shrinking by the day.”
Zambian government officials defend their reliance on Chinese technology and deny it’s being used for political purposes. 

“The government has the responsibility to invest in infrastructure,” says Dora Siliya, the information minister. 

“Zambia’s model for development is neither the West’s nor China’s but an attempt to take the best from both. We have a Zambia model.” 

The Chinese Embassy in Lusaka didn’t respond to requests for an interview.
What’s playing out in Zambia is part of a larger contest between the U.S. and China for dominance over the future of technology and global influence. 

Companies from both countries sell tech products around the world, but Chinese businesses are offering a wide range of gear and relatively cheap financing in countries from Zimbabwe to Vietnam. They have an advantage in developing nations such as Zambia, which are looking to modernize their technology infrastructure.
The rivalry risks dividing the world with a digital iron curtain. 

The potential for bifurcation is already noticeable, as U.S. allies including Australia and New Zealand have banned Huawei and ZTE from providing equipment for 5G wireless technology on national security grounds and Canada arrested Huawei Chief Financial Officer Meng Wanzhou in December on allegations she defrauded banks to violate Iranian sanctions.  

China is exporting to at least 18 countries sophisticated surveillance systems capable of identifying threats to public order and has made it easier to repress free speech in 36 others, according to an October report published by Washington watchdog Freedom House. 

“They are passing on their norms for how technology should govern society,” says Adrian Shahbaz, the author of the report, which found that Zambia had slipped in the group’s ranking of national internet and media freedoms for the past two years. 

Nadège Rolland, a senior fellow at the National Bureau of Asian Research, a Washington think tank, says, “There’s a 1984 component to it that’s kind of scary.”
Discussions with government officials in Lusaka often begin with a history lesson. 

First comes the what-did-the-West-ever-do-besides-exploit-us part, followed by a version of the China-has-always-been-our-friend speech. 

It’s a convenient way to defend the growing reliance on Chinese projects that’s raised Zambia’s debt to that country to $3.1 billion, about one-third of its total foreign debt, according to government estimates.
That’s the way it plays during a December interview with Brian Mushimba, Zambia’s minister in charge of transport and communications. 

He’s from Zambia’s Copperbelt, one of 16 children. 

He studied engineering at the University of Arizona, worked at Pratt & Whitney in Hartford, and has an American wife. 

But he’s a firm defender of China’s development agenda, saying it’s lifted millions of people out of poverty and offers the same to Zambia. 

“China has not only done this but is willing to share and give cheap financing for us to also do it,” he says, sitting in his office in a one-story colonial-era building with peeling pale-peach paint. 

“Their model is very interesting, very different from how the Western world interacted with Africa. China serves as a model worth replicating.”

A Bank of China billboard greets travelers at the airport in Lusaka.
The 44-year-old minister has invoked the “China way” of dealing with the internet when threatening to ban Google and Facebook, which has provided a platform for disinformation campaigns in Myanmar and other countries. 

He’s called “fake news” a threat to national security and urged self-censorship, saying the government has the ability to monitor all digital devices in the country. 

A draft cyberlaw scheduled for debate in the National Assembly this year would create an agency with the power to determine whether information published online threatens national security, punishable by jail time, something free-press advocates say could be applied to news organizations that expose corruption. 

Criticizing President Edgar Lungu in social media posts has already landed several people in prison on charges of defamation.
While Mushimba acknowledges that the idea of governance “with less dissenting views” is in conflict with Zambia’s democracy and free press, he denies the government is trying to stifle expression and says it’s just enforcing the law. 

“The internet is a powerful tool that can’t be left to run wild,” he says. 

“The government has good intentions—the good intention to keep peace, order, and security in the country.”
Talk of restrictions doesn’t sit well with Richard Mulonga, the 39-year-old founder of Bloggers of Zambia, a group that’s been urging the government to follow European standards of cyberlaw. Mulonga, a photojournalist fired from his job at a state-run newspaper after he posted pictures on his blog that the paper wouldn’t publish, says free-speech advocates are fearful. 

“Citizens have the right to hold power to account,” Mulonga says, sipping coffee in a Lusaka hotel lobby, a Facebook pen clipped to the collar of his black T-shirt. 

“Only through free expression can we participate in democracy.”
In 2013 and 2014 the government blocked at least four websites by using a technique typically associated with censorship in China, according to the Open Observatory of Network Interference, a global network that collects data on internet tampering. 

It couldn’t prove Chinese equipment was involved, but its report cited information that Zambia had installed internet monitoring and blocking equipment from ZTE and Huawei. 

State-run Zambia Telecommunications Co.and its regulator declined to answer questions. 

A Huawei spokesman in Lusaka says he’s unaware of the company’s technology being used for such purposes.
Zambian Watchdog, which focuses on corruption, was one of the websites blocked. 

Today, its posts are regularly called “fake news” by government officials. 

Representatives of the group didn’t respond to requests for comment. 

But editors of the Mast, a newspaper often critical of the government, were willing to talk about the climate of fear engendered by new technologies.
“Being a newspaper, if you’re going to call a source, it means they know who you’re calling,” says editor Larry Moonze, sitting at a conference table in one bedroom of the two-bedroom house where the newspaper is produced. 

“Media institutions are working under fear of the government, with the help of the Chinese,” adds Chief Executive Officer Likezo Kayongo, whose brother founded a predecessor publication that was raided and shut down in 2016.
ZTE is also installing cameras in public spaces in Lusaka as part of a $210 million “Safe City” project. 

The contract was canceled in 2013, over irregularities in how it was awarded, then reinstated in 2015, government officials confirm. 

The project is designed to increase policing power in a city that’s already one of the safest in southern Africa.

Outside Huawei’s office in Lusaka.

In China, authorities use surveillance systems with facial recognition software to compare citizens against government databases, allowing them to track those with dissenting views as well as criminals. 

In Zambia, “there will be no political uses,” says Chileshe Mulenga, permanent secretary at the Ministry of Home Affairs, which is in charge of the project. 

“We are not passive. We are defending our interests.”
Representatives of ZTE in Zambia and China declined to talk about the company’s projects. 

Huawei spokesman Hansen He was more talkative. 

He says his company’s “Smart Zambia” initiative, which includes plans to bring mobile and broadband connectivity to rural villages without coverage and to put government functions online, is supplying technology for what Zambia wants to do and the support to make sure it works. 

“We just provide the solutions,” he says. 

“They are the operators to run it.”
Huawei also built Zambia’s national data center, which handles all government data and storage. Zeko Mbumwae, the center’s general manager, says officials have no concerns that the gear could be used for Chinese intelligence or data-gathering purposes. 

“Once someone’s built you a home, you change the locks,” he says. 

“That’s what we did.”
Another Chinese-funded project is the migration from analog to digital TV, which is being handled by TopStar Communications Co., a 60-40 venture between Beijing-based StarTimes Group and Zambia’s state-owned broadcaster, ZNBC. 

Chifire, the anticorruption activist, has called it “one of the biggest financial scandals in modern-day Zambia.”
The country of about 17 million people is spending $282 million on the switch, or about $16.60 a person. That’s 46 percent more on a per-person basis than South Africa is spending. 

Zambia borrowed almost all of the funding from the Export-Import Bank of China. 

Independent stations complained that they were being turned into content providers for the government’s network and protested the $72,000 in monthly fees for TopStar to carry their channels. They said the fees would put them out of business, leaving only a Chinese company and its state-run partner as the nation’s primary TV outlet. 

“We’re not refusing to pay,” says Costa Mwansa, CEO of Diamond TV. 

“What we are refusing is figures that will kick us out of business.”
The government says Zambia’s digital migration is expensive because the project includes eight new studios, broadcasting vans, and trips to China to train hundreds of ZNBC journalists. 

Anyone who criticizes the cost is comparing apples to oranges, says Siliya, the information minister. 

“The corruption assumption being perpetuated is wrong.”
Similar debates are going on across Africa and other continents as Chinese digital infrastructure spreads its roots. 

In neighboring Zimbabwe, where Hikvision surveillance cameras are being installed in the capital, Guangzhou-based CloudWalk Technology Co. won a contract last year for Africa’s first artificial intelligence project. 

It stalled when the government asked for a discount after learning that facial data would be transmitted to China to help the company perfect its technology, says Shingi Magada, a China-based Zimbabwean consultant who helped broker the deal. 

“We were just giving away our data,” he says. 

Hikvision has come in with a competing offer, and the Zimbabwean government is keen to go ahead at the right price, he adds. 

Neither Hikvision nor CloudWalk responded to requests for comment.
In Mauritius, off Africa’s east coast, Huawei is installing 4,000 cameras. 

Opposition politicians fear an increase in monitoring and surveillance. 

“It’s really Big Brother,” says Xavier-Luc Duval, a former deputy prime minister who now leads the opposition at the National Assembly. 

“They’ll be able to spy on all political opponents and control all the political activity. The potential for misuse is enormous.”

An ad in Lusaka for China’s Hikvision, the world’s largest surveillance-camera company.
Concerns that Chinese technology could be used for spying flared last year when Le Monde reported that data had been transmitted from the African Union’s headquarters in Addis Ababa, Ethiopia, to China nightly for years. 

The $200 million building was built by a Chinese company with Chinese funding. 

The organization, after accusing China of spying, backtracked.
In Vietnam, hackers took over screens and audio communications in the country’s two major airports in 2016 to broadcast propaganda supporting China’s claims in the South China Sea. 

The incident caused an alarmed Vietnamese government to warn its agencies and companies to reduce their reliance on Chinese equipment, which was believed to have played a role.
Potential threats to national security like these have prompted the U.S., Australia, and Japan to take countermeasures against the spread of Chinese technology. 

The three have opposed plans by Huawei to lay submarine cable connecting Australia to Papua New Guinea and the Solomon Islands in the South Pacific. 

But a Huawei cable project within Papua New Guinea is going forward despite efforts by Western governments to supplant it.
The U.S. is having better success blocking the rollout of Huawei’s 5G telecommunications systems, with Australia, New Zealand, and Japan among countries going along with a ban. 

The U.S. recently moved to inject $60 billion into the Overseas Private Investment Corp. to increase funding for projects in the developing world to counter China’s spending. 

And on Dec. 13, U.S. national security adviser John Bolton announced a new strategy for Africa to fund infrastructure projects, saying that Chinese influence has put the continent at risk. 

The U.S. is the largest donor to Africa, but most of its money goes toward health, agriculture, and clean-water projects. 

Bolton said the U.S. will try to ramp up funding for other projects. 

He cited Zambia as being particularly at risk.
To activists like Chifire who have suffered or fled the country, the China model appears ascendant. “What is remaining about democracy in Zambia,” he says on a phone call from a location he wouldn’t disclose, “is the name.”

The Empire Strikes Back

Bolton Outlines a Strategy for Africa That’s Really About Countering China

By Mark Landler and Edward Wong

WASHINGTON — The Trump administration rolled out a new strategy for Africa on Thursday, but it was really all about China.
John R. Bolton, President Trump’s national security adviser, said the United States would lavish money and greater attention on the African continent, casting it as a crucial battleground in the global economic contest between the United States and China.
But Mr. Bolton conceded that the United States had limited resources to compete with the tens of billions of dollars China is pouring into Africa. 

He also threatened to withdraw American aid for some United Nations peacekeeping missions, which he labeled ineffective, as well as for certain African countries like South Sudan that he said were corrupt or ungrateful.
Mr. Bolton’s speech, at the Heritage Foundation, was his latest effort to flesh out what Mr. Trump’s “America First” foreign policy means for particular regions. 

In Africa, the greatest threat came not from poverty or Islamist extremism but from an expansionist China, as well as Russia.
“They are deliberately and aggressively targeting their investments in the region to gain a competitive advantage over the United States,” Mr. Bolton said. 

“China uses bribes, opaque agreements and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.”
Mr. Bolton announced a new program, “Prosper Africa,” to support American investment across Africa. 

Without attaching a dollar figure, he said the United States would facilitate alternatives to the large, state-directed public works projects pushed by the Chinese.
Those projects were turning African countries into economic vassals of China. 

Zambia, for example, owes Beijing $6 billion to $10 billion, according to Mr. Bolton, and is at risk of having the Chinese take over its national power company.
China built a military base in another indebted African country, Djibouti, a few miles from where the United States has a base for counterterrorism operations. 

Earlier this year, the Chinese fired military-grade laser beams at American aircraft, injuring two pilots.
Experts welcomed the focus on Africa, which has often been neglected by both Republican and Democratic administrations. 

But some noted the contradiction between Mr. Bolton’s promise of increased investment and a rollback of American engagement in other areas.
“You can’t counter a multifaceted, long-term Chinese play just by increasing investment,” said Grant T. Harris, a former adviser on Africa to Barack Obama. 

“Washington needs to understand that China is investing in relationships, not just infrastructure.”
President Trump famously asked why the United States should accept African immigrants, belittling their countries with an epithet. 

The first lady, Melania Trump, made a four-country tour of the continent in October, which drew more attention for her wardrobe than for her encounters with Africans.
Mr. Bolton traced his interest in Africa to his first job in government, working at the United States Agency for International Development during the Reagan administration. 

Yet he made clear that he viewed much of the American aid sent to Africa as wasted or misspent.
“From now on,” he said, “the United States will not tolerate this longstanding pattern of aid without effect.”
South Sudan, where rival leaders recently agreed to end a ruinous civil war, is among those at risk of losing aid. 

Mr. Bolton said the country was still being led by “the same morally bankrupt leaders” who prolong “horrific violence and immense human suffering.”
In the 2017 fiscal year, foreign assistance to Africa from the State Department and the Agency for International Development amounted to $8.7 billion. 

From 2014 to 2018, the United States provided some $3.8 billion in humanitarian aid to South Sudan and its neighbors. 

American businesses invested $50 billion in Africa in 2017, according to the State Department.
The flow of money from China to Africa has been substantial, but much of it is not what experts consider aid. 

From 2000 to 2014, Chinese financing to Africa totaled $121.6 billion, according to an analysis by AidData, a research center based at the College of William & Mary in Virginia.

About 40 percent of that can be defined as aid, based on the parameters of the Organization for Economic Cooperation and Development, according to Bradley Parks, AidData’s executive director. During the same period, the United States provided $106.7 billion in aid, according to the group.
Most of the Chinese money comes in the form of loans, many of which are for projects being built by Chinese state-owned companies. 

The contracts typically have strict conditions attached to them; borrowers often have to start repaying the loans within a few years, unlike loans from the World Bank, which can have a grace period of a decade.
“The work that they do, the assistance that they provide, is more about China than it is about the countries that are the target, or the recipients of the assistance,” said Mark Green, the administrator of the Agency for International Development.
But the Chinese companies have had great success in winning contracts for projects in Africa. 

In many cases, this is tied to bribing officials. 

But in others, Chinese companies have been good at managing relations because, unlike American companies, they have a strong presence on the ground.
“For American businesses to compete effectively in the region, the U.S. government must develop methods to come to the table with a full package,” said Mike Davis, an American businessman in Uganda. 

“The current approach has not proven effective when you compare it against the competition.”
President Trump, driven by a desire to confront China’s growing influence, signed a bill to double the war chest of the Overseas Private Investment Corporation, which finances American businesses in developing nations. 

Starting in October, the agency will have $60 billion to dole out in the form of loans, loan insurance and equity.
But the agency’s chief executive, Ray W. Washburne, said projects that the agency finances still “have got to make economic sense,” adding, “The Chinese seem to be doing these loan-to-own programs.”

Colonialism with Chinese Characteristics

Chinese investment in Africa creates national economies entirely dependent on China

Independent

Gold bars are displayed at South Africa's Rand Refinery in Germiston. 

Chinese investment in Africa could be accelerating debt on the continent and creating economies which are “entirely dependent on China”, according to financial experts.
Around $86bn (£64bn) in loans were issued by China between 2000 and 2014 to finance over 3,000 infrastructure projects in Africa.
But as leaders gather in Beijing for China’s Belt and Road Summit this week, under the banner of Xi Jinping’s flagship policy, experts have warned that this level of investment may not be as rosy at it appears.
Zuneid Yousuf, from MBI Group, said: “The 10,000 state owned firms operating in China today arrive off the back of these mammoth investments, and there’s no doubting their significant positive impact in many areas.
“However, these firms come under the guise of partnership, but this rhetoric, combined with genuine short term benefits masks longer term problems.”
One of the main issues around the Chinese approach is the dangerously high levels of debt that it brings, which could prove unsustainable for growing economies.
There is also a risk that the continent becomes overly dependent on one country, which could allow it to hold an uncomfortably high level of influence.
Mr Yousuf said: “China is seeking to present itself as the new face of globalisation, an image it will work hard to portray at this week’s Belt and Road summit.
“The problem with this is that the current model of their ‘globalisation’ doesn’t so much encourage increased interaction between nations on a worldwide scale, as increased interaction with China on a worldwide scale.
“The reality in Africa is a model of globalisation that works only in China’s interests.
“A far more effective model, one which would not lose the short-term benefits outlined above whilst simultaneously avoiding the pitfalls of unsustainable debt, would be to focus investment on partnerships with local businesses.
“This way there would be no need for vast government loans, and the job creation, skills development, and technology transfer would be ingrained at a local level and grow organically.”
Zambia is an interesting case study of Africa-China relations.
China is the largest foreign investor in the country, but it is often cited as an example of the limitations of Chinese investment.
The top-down, large government loan model has led to tensions.
One recent example is the problem of labour laws, and the news that Chinese investors in Zambia have been preventing labour representatives from being present at construction sites.