African countries have been beneficiaries of deep-pocketed China’s ‘generosity’ for yonks. Even South Africa, the most developed country on the continent, has been a beneficiary, having received a $2.5-billion loan to complete the Kusile coal-fired power station, in Mpumalanga.

I use quotation marks because opinion is divided on whether or not the transactions with the Chinese will not end in tears. Some commentators are quick to point to Sri Lanka, which borrowed heavily from Chinese State-owned banks to build a major port but eventually defaulted on the loans, at which point Beijing demanded the port as collateral, forcing the Sri Lankan government to cede control. One such commentator is Kenyan-born lawyer and pan-Africanist intellectual PLO Lumumba, who contends that, like Shylock in The Merchant of Venice, the Chinese will always demand their pound of flesh.

Critics of Chinese lending to Africa also include some in the West, who are adamant that Beijing’s motivation is to hold African States captive to its wishes and demands.

I got thinking about the Chinese and their ‘benevolence’ towards African countries earlier this month when I read a piece about Chinese lending to the continent having declined to $7-billion in 2019, from $9.9-billion a year earlier, according to data from the China-Africa Research Initiative (CARI) at John Hopkins University, in the US. These figures, sourced mostly from media reports in China and recipient countries, are more or less in line with statistics published by researchers at Boston University, also in the US, which revealed that the Asian country had sharply cut offshore lending by its two largest State-owned banks.

The main losers from this paring down are countries that have recently restructured or reprofiled their debt – the likes of Angola, Cameroon, Djibouti, Ethiopia, Kenya, Mozambique, the Republic of Congo and Zambia – which either received no new loans or were granted very small amounts.

Angola is most illustrative of China’s apparently waning appetite for lending to countries whose ability to repay could be an issue. From 2010 to 2017, it received Chinese loans averaging $1.5-billion a year. However, only $405-million was forthcoming in 2018, with the figure further declining to $106-million in 2019.

As proof that the dwindling amounts are not indicative of China’s reduced ability to grant loans but of an apparent shift towards what we in Mzansi would call responsible lending, some African countries – such as Cote d’Ivoire, Egypt, Ghana, Nigeria and South Africa, all of which have not had issues with debt sustainability – were the recipients of large loans from the Asian giant during 2019, according to the CARI’s statistics.

Commenting on the significantly reduced loan amounts to African countries that are deemed to be in debt distress, a CARI official told the Bloomberg news agency in an interview: “The data on Chinese lending to Africa from the past ten years shows that Chinese financiers adapt to changing economic and political conditions in Africa as they learn from experiences with borrowers in debt distress and debt restructuring negotiations.

“Rather than continuing to blindly dump finance into countries with debt issues, Chinese financiers have shifted away from these countries – albeit belatedly in some cases, such as Zambia – and towards borrowers with stronger economies and debt management.”

Does this mark the beginning of a sustained decline in Chinese lending to African countries, which peaked at $28-billion in 2016? While statistics for 2020 will likely show a continuation of the slide witnessed in 2019, reflecting the impact of the Covid-19 pandemic, the trend is unlikely to endure into the long term. The reason is that China’s banks, like their counterparts from other regions, are not about to forego the profits that can be reaped in emerging markets; the only difference is that they will be more circumspect going forward.