Sunday, January 31, 2010

Sinosure & Nigeria: the elusive $50 billion

On April 2, 2008, China-Africa watchers read in the Financial Times that Sinosure (China Export & Credit Insurance Corporation, Beijing's export finance insurance agency) had told Nigerian officials that it was ready to provide $50 billion in export insurance for exports or projects in Nigeria. This figure has been repeated often, including recently in an article in Africa-Asia Confidential, where it figures among the "unmet promises" for China-Africa relations. What's the likely reality of this story? Here's some evidence. For all of 2007, Sinosure provided $39.6 billion in export insurance worldwide. This rose to $62.7 billion in 2008, according to their 2008 Annual Report. Almost all of this was insurance for short-term export credits, including suppliers' credits. Does it seem likely that after providing $39.6 billion in 2007 across the world, Sinosure would offer to provide $50 billion, just for Nigeria, in 2008? When I was in Nigeria in May 2009, I asked at the Nigerian Ministry of Finance, the IMF resident office, and the Nigerian embassy about this "$50 billion" Sinosure "pledge", only to be met by bafflement. None of them had even heard about this tale. It continues, however, to circulate around cyberspace with a robust life of its own.

Monday, January 18, 2010

The $100 Billion Chinese Investment in Latin America Myth

This weekend, I came across a Latin American myth about Chinese economic engagement circulating around cyberspace. In a November 2004 speech to Brazil's parliament, Chinese president Hu Jintao (allegedly) said that China would invest $100 billion in Latin America over the next few years. Whoa, I thought. This is way too high, it can't be right. I googled "$100 billion investment Hu Jintao 2004 Brazil" and got dozens of references to this alleged pledge. So I then checked the Chinese English language media. China Daily carried the actual speech in full. This revealed that Hu had actually pledged to increase trade between China and Latin America ... to $100 billion by 2010. Not investment.

Sigh. Even the Congressional Research Service repeated the $100 billion investment figure in an otherwise pretty good 2008 report to Congress ("China's Foreign Policy and 'Soft Power' in South America, Asia, and Africa"). With "facts" like this floating around the Hill, it's no wonder alarm bells go off.