Decline in Chinese

Mozambican analysts call for a greater presence of Chinese business in the country after the Covid-19 pandemic but warn of a possible reduction in loans and state support from the Asian giant. “The large loans should be reduced, but in return, we could see more private Chinese investment in Mozambique,” Sérgio Chichava, a researcher at the Institute of Social and Economic Studies, told Lusa.

“There will be a need for a review and [the support] cannot continue on the same scale because the Chinese economy is in some difficulties, as all economies are,” he said. Chichava also referred cases of mistreatment of African and African-American citizens in China since April in cases of discrimination and racism driven by the new pandemic, and to a murder of three Chinese businessmen in Zambia in June. The cases, he said, have tainted interpersonal relations, but have not been strong enough to undermine economic and business cooperation. Journalist and analyst Fernando Lima said that the tense situation due to reports of discrimination and racism has caused resentment. The context generated discomfort among small entrepreneurs who buy products in China and sell in Mozambique. “This sector has been severely penalised, on the one hand, by the restrictions due to the pandemic and, on the other, by this wave of racism,” he said. However, he believes that the situation will not have an impact on big business. Despite highlighting the importance of China when Mozambique was left without direct support from intranational partners due to the scandal of the state’s hidden debts, in 2016, Fernando Lima noted that cooperation with the Asian country is not cheap.

“Mozambique has great difficulty in going to foreign markets and finding concessional funds to develop its infrastructure. Therefore, this means that it often must submit to the terms of the financing lines that are established by China,” said Fernando Lima. Mozambican businessman Dino Foi, who has business in China and Mozambique linked to the agricultural and import/export sector, recalls that the Asian country was one of the first countries to support the African continent in the face of the pandemic and this should be taken into consideration. Foi said that the impact of Covid-19 opens space for a renegotiation of Mozambique’s debt to China, but recalls that the Asian country is not a charity organisation. According to Johns Hopkins University, the government, banks, and companies of the People’s Republic of China lent about $143 billion (€131 billion) to African countries between 2000 and 2017. African governments have also taken out more than $55 billion (€50 billion) in the international debt markets in the last two years alone.