Prof. Gallagher Co-authors Paper on China in Africa and Latin America
Frederick S. Pardee School of Global Studies Associate Professor Kevin Gallagher is the co-author of a recent research paper on “Bartering Globalization: China’s Commodity-backed Finance in Africa and Latin America” with Prof. Deborah Bräutigam of Johns Hopkins University. The paper has been published in the journal Global Policy (Volume 5, Issue 3, pages 346-352; September 2014).
The abstract of the paper outlines the argument:
In just over a decade, China has become a source of finance for emerging market and developing country governments. Recipient governments and the Chinese have been less than transparent with respect to the scale, terms and composition of this finance, engendering a great deal of speculation about its nature. This article provides preliminary estimates of Chinese finance to both Africa and Latin America since the turn of the century, with a specific focus on ‘commodity-backed’ or ‘resource-secured’ loans.
We estimate that Chinese banks have provided approximately $132 billion in financing to African and Latin American governments and state-owned firms since 2003. Just over half of these, or $75 billion, are in the form of resource-secured finance. Contrary to many of the claims in the popular press, we found that Chinese finance is generally not out of line with interest rates found in global capital markets, does not bring windfall commodity profits to China, and does not mandate the use of Chinese workers.
Access the full paper here (subscription required).
Prof. Gallagher is the author of The Dragon in the Room: China and the Future of Latin American Industrialization (with Roberto Porzecanski) and a leading expert on China’s foreign investments, especially within BRICS partner countries.