China practices a form of merchant-state capitalism and - altruistic rhetoric aside - these projects are about securing commodities for the home market and offshore construction projects for state-owned companies. Soft loans for overseas infrastructure projects are provided by China’s state-owned banks, primarily the China Development Bank and the Export-Import Bank of China, and are often structured to benefit China’s state-owned construction firms. CDB and Eximbank provide project finance for overseas investment projects, but funding also comes from a variety of governmental and quasi-governmental sources. Root cites a 2009 US Senate Committee on Foreign Relations finding that China’s infrastructure projects in Sri Lanka are not structured as grants but as commercial projects that are highly inflated to make allowances for kickbacks. Much the same has been said about its Africa projects, often won in tenders that see state-owned construction firms submitting extremely low bids, back by government subsidies, that global firms can’t compete against. From 2010 to 2012, China committed a total $14.41 billion in foreign assistance, 55.7 percent of which was in the form of concessional loans for medium-sized infrastructure and manufacturing projects, according to a 2014 white paper by the information office of the State Council, China’s cabinet.
China practices a form of merchant-state capitalism and - altruistic rhetoric aside - these projects are about securing commodities for the home market and offshore construction projects for state-owned companies. Soft loans for overseas infrastructure projects are provided by China’s state-owned banks, primarily the China Development Bank and the Export-Import Bank of China, and are often structured to benefit China’s state-owned construction firms. CDB and Eximbank provide project finance for overseas investment projects, but funding also comes from a variety of governmental and quasi-governmental sources. Root cites a 2009 US Senate Committee on Foreign Relations finding that China’s infrastructure projects in Sri Lanka are not structured as grants but as commercial projects that are highly inflated to make allowances for kickbacks. Much the same has been said about its Africa projects, often won in tenders that see state-owned construction firms submitting extremely low bids, back by government subsidies, that global firms can’t compete against. From 2010 to 2012, China committed a total $14.41 billion in foreign assistance, 55.7 percent of which was in the form of concessional loans for medium-sized infrastructure and manufacturing projects, according to a 2014 white paper by the information office of the State Council, China’s cabinet.
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