Charged Affairs, Washington, 23 February 2025) The Trump administration’s cuts to USAID and foreign aid programs could reshape U.S. global influence, with a focus on strategic investments over humanitarian assistance. The shift may open opportunities for China to expand its influence, particularly in developing countries like the Cook Islands, where USAID’s withdrawal has led to Chinese funding. However, this move could also impact U.S. competitiveness in global infrastructure projects.
China
EU urged to launch dedicated unit for export and development finance
(Global Trade Review, 26 February 2025) Experts call on the EU to establish a dedicated unit to better coordinate export credit agencies and development finance institutions, boosting the Global Gateway Initiative’s €300bn global infrastructure ambitions. A report highlights the need for a unified strategy to compete with China’s Belt and Road Initiative and support European businesses in global markets. Advocates believe that such a unit could bolster the EU’s global competitiveness and facilitate sustainable development projects.
Sinosure in China’s overseas finance and the evolving international response
(ODI Global, London, 14 December 2023) This year old report explores the development of Sinosure as an institution and its involvement in China’s overseas lending and the Belt and Road Initiative (BRI). This report makes two main contributions. First, it examines an understudied aspect of China’s BRI financing to show how the Chinese government uses Sinosure to hedge – or protect from – risk in its overseas lending and investment. Second, it contextualises Sinosure within the wider landscape of financial institutions providing guarantees and risk insurance, and the challenge and change that China’s state-backed finance has provoked. In several areas, development finance institutions (DFIs) and export credit agencies (ECAs) are adapting not only to Chinese competition but also to new demands on their mandates. The use of export credit within China’s wider official financing is a challenge to OECD regimes that separately govern finance for trade and for aid. Sinosure and other Chinese Export Credit Agencies offer highly favourable terms and longer-term finance, potentially undermining the ‘level playing field’ of the OECD.
Ex-Im Bank’s $2.5 billion Angola loan funds Chinese-tied firms, not American jobs
(Washington Examiner, Washington, 10 November 2024) The U.S. Export-Import Bank faces scrutiny over a $2.5 billion giveaway to green energy development in Angola that benefits foreign companies with ties to China and the Angolan president, despite the bank’s claims that it will support thousands of American jobs. The Ex-Im Bank, led by Biden administration appointee Reta Jo Lewis, loaned over $900 million in June 2023 and another $1.6 billion to American company Sun Africa, which is in charge of developing solar energy plants, mini-grids, and storage and water treatment facilities in Angola. The largest-ever Ex-Im loans were issued as part of the Biden administration’s flagship global infrastructure partnership and the China and Transformational Exports programs, which seek to support American companies competing against China. The bank touts that the financing will support over 4,700 American jobs. Despite the bank’s statements that the financing agreement benefits American exports and jobs, the announced suppliers are foreign companies and include firms close to Angolan President João Lourenço or frequent contractors to the Chinese government, the Washington Examiner can reveal.
Sinosure reportedly begins refusing to insure exports to Russia
(Kyive Independent, Kyiv, 6 November 2024) Chinese state-owned company Sinosure that insures export supplies against the risk of non-payment has begun to refuse to cooperate with Russian entrepreneurs, Russian newspaper Vedomosti reported on Nov. 5, citing four unnamed sources from importing companies. Trade between Russia and China has reportedly surged by 121% since 2021, underscoring Beijing’s role as Moscow’s economic lifeline. One Chinese supplier told a Russian importer that the company refused to insure their deal because of the nature of the exported goods. Since July, China has tightened export controls on military and dual-use products, the Moscow Times reported. Beijing has positioned itself as neutral in the ongoing war but has deepened economic ties with Russia and become Moscow’s leading source of dual-use goods, feeding the Russian defense industry.
Does Italian ECA stifle Mozambique LNG atrocities?
(Barrons/AFP, Paris, 15 November 2024) French energy giant TotalEnergies, recipient of Italian (& French?) ECA funding, was aware of accusations of abuses committed by soldiers charged with protecting its gas site in Mozambique as early as 2021. “Complaints of extortion, disappearances and even violence leading to the deaths of two fishermen are recorded in quarterly social reports written by teams of Mozambique LNG,” TotalEnergie’s subsidiary in the country, according to Le Monde. The reports were sent to the Italian export credit agency SACE, from which an Italian NGO, ReCommon, and Le Monde obtained them under a right of access to information legislation. TotalEnergies used hired guards of the local affiliate of UK security firm G4S linked to a former liberation figure and ex-minister of security in the 1980s. ECA-Watch noted in 2016 that Korean, French, Italian and Chinese ECAs were set to play a key role in the financing of two LNG projects planned in the north of Mozambique despite widespread concerns about gross human rights violations by local authorities.
China announces new ECA policy measures to protect its exports from Trump’s new tariff threat
(Economic Times, Delhi, 21 November 2024) China is bolstering its export sector to counter potential tariff hikes by the incoming Trump administration. The nine-point plan includes expanded export credit insurance, increased financing for international trade, and support for cross-border e-commerce. These measures aim to mitigate the impact of anticipated US trade restrictions and maintain a favourable environment for Chinese exports.
Uganda finally signs deal to start building 1,700km railway, dumping China
(Global Construction Review, London, 15 October 2024) After 9 years of striving, the government of Uganda yesterday signed a contract with Turkish contractor Yapı Merkezi to build the first section of the country’s standard gauge railway. The €2.7bn deal was formalised in the capital Kampala by Bageya Waiswa, the permanent secretary for public works, and Erdem Arıoğlu, the vice chair of Yapı Merkezi. Waiswa said Uganda would use its own funds and loans from the UK’s Standard Chartered bank, backed by export credit guarantees, to finance the project. The deal follows a number of false starts. As far back as 2015, Uganda entered into an agreement with China Harbour, a subsidiary of China Communications, to implement the project, on the condition that Chinese capital would be made available to pay for the work. The reluctance of China’s Export–Import Bank to finance the scheme led Uganda last year to abandon the contract, clearing the way for the Turkish deal.
NGOs urge banks & China to refuse support for Ugandan oil projects
(Mongabay, Menlo Park, 17 October 2024) A group of 28 NGOs have written to 34 banks, insurance companies and the Chinese government, urging them to deny financing and other support for oil and gas projects in Uganda. The letters, written by U.S.-based Climate Rights International (CRI) and 27 Africa-based NGOs, follow a report detailing numerous human rights violations and environmental harms at the Kingfisher oil project sites in Uganda. Similarly, Uganda’s Tilenga oil fields also face scrutiny over their ecological and social harms, including impacts on wildlife and displacement of local communities. Both Kingfisher and Tilenga are co-owned by French oil and gas giant TotalEnergies, the Chinese National Offshore Oil Company Uganda Ltd. (CNOOC), and the Uganda National Oil Company (UNOC). Both projects are also part of the East African Crude Oil Pipeline initiative (EACOP), where TotalEnergies is a major partner. The initiave aims to transport oil and gas from Uganda to Tanzania for export.
UK Steps Up Export Deals to French-Speaking Africa as has China
(BNN Bloomberg, Toronto, 7 September 2024) The UK has stepped up business in French-speaking West and Central Africa as it seeks new frontiers for its exports. UKEF was backing transactions in francophone Africa worth a cumulative £1 billion ($1.3 billion) at the end of the 2023-4 financial year, up from just £3 million in 2017-8. These countries now represents about 13% of UKEF’s portfolio on the continent. Meanwhile, China’s export credit agency Sinosure is increasingly dominant. China’s Sinosure has backed projects to support the country’s Belt and Road Initiative, a global development push that brought more than $120 billion of Chinese construction contracts and investments to Africa in its first 10 years, according to a study by the Green Finance and Development Center at Shanghai-based Fudan University. China is not bound by the same rules as the UK and France, which are members of the OECD. The OECD has in the past few years made it easier for ECAs to cover costs in the recipient’s country. Both UKEF and Bpifrance Assurance Export require at least 20% of a transaction’s value to come from businesses in their country.
