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How Chinese Financing is Fueling Megaprojects Around the World

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How Chinese Financing is Fueling Megaprojects Around the World

How Chinese Financing is Fueling the World’s Megaprojects

On a mountaintop a few miles north of the bustling streets of Harare, Zimbabwe, a curving, modern complex is beginning to take shape. This building, once completed, will be the home of the African country’s parliament, and the centerpiece of a new section of the capital city.

Aside from the striking design, there’s another unique twist to this development — the entire $140 million project is a gift from Beijing. At first glance, gifting a country a new parliament building may seem extravagant, but the project is a tiny portion of China’s $270 billion in “diplomacy spending” since 2000.

AidData, a research lab at the W&M Global Research Institute, has compiled a massive database of Chinese-backed projects spanning from 2000–2017. In aggregate, it creates a comprehensive look at China’s efforts to grow its influence in countries around the world, particularly in Africa and South Asia.

Beijing has ramped up the volume and sophistication of its public diplomacy overtures, […] but infrastructure as a part of its financial diplomacy dwarfs Beijing’s other public diplomacy tools.

– Samantha Custer, Director of Policy Analysis, AidData

Below, we’ll look at three diplomacy spending hotspots around the world, and learn about key Chinese-funded megaprojects, from power plants to railway systems.

1. Pakistan

In 2015, Chinese President Xi Jingping visited Islamabad to inaugurate the China-Pakistan Economic Corridor (CPEC), kicking off a $46 billion investment that has transformed Pakistan’s transportation system and power grid. CPEC is designed to cement the strategic relationship between the two countries, and is a portion of China’s massive One Belt, One Road (OBOR) initiative.

CPEC investment China to Pakistan

One of the largest projects financed by China was the Karachi Nuclear Power K2/K3 project. This massive power generation project is primarily bankrolled by China’s state-owned Exim Bank which has kicked in over $6.6 billion over three phases of payments.

Billions of dollars in Chinese capital has also funded everything from highway construction to renewable energy projects across Pakistan. Pakistan’s youth unemployment rate sits as high as 40%, so jobs created by new infrastructure investments are a welcome prospect. In 2014, Pakistan had the highest public approval rating of China in the world, with nearly 80% respondents holding a favorable view of China.

2. Ethiopia

Ethiopia has seen a number of changes within its borders thanks to Chinese financing. This is particularly evident in its capital, Addis Ababa, where a slew of transportation projects — from new ring roads to Sub-Saharan Africa’s first metro system — transformed the city.

china ethiopia investment

One of the most striking symbols of Chinese influence in Addis Ababa is the futuristic African Union (AU) headquarters. The $200 million complex was gifted to the city by Beijing in 2012.

Though Ethiopia is a clear example of Chinese investment transforming a country’s infrastructure, a number of other African nations have experienced a similar influx of money from Beijing. This financing pipeline has increased dramatically in recent years.

chinese loans to africa

3. Sri Lanka

In the wake of political turmoil, Sri Lanka is increasingly looking to China for loans. From 2000 to 2017, over $12 billion in loans and grants have poured into the deeply-indebted country.

Perhaps the most contentious symbol of the relationship between the two countries is a port on the south coast of the island nation, at a strategic point along one of the world’s busiest shipping lanes. The Hambantota Port project — which was completed in 2011 — followed a now familiar path. Eschewing an open bidding process, Beijing’s government financed the project and hired a state-owned firm to construct the port, primarily using Chinese workers.

By 2017, Sri Lanka’s government was burdened by debt the previous administration had taken on. After months of negotiations, the port was handed over with the land around it leased to China for 99 years. This handover was a strategic victory for China, which now has a shipping foothold within close proximity of its regional rival, India.

John Adams said infamously that a way to subjugate a country is through either the sword or debt. China has chosen the latter.

– Brahma Chellaney

Playing the Long Game

Africa’s economic rise will likely be a major contributor to global growth in coming years. Already, six of the 10 fastest growing economies in the world are located in Africa. China is also the top trading partner on the continent, with the United States sitting in third place.

OBOR spending has also earned China plenty of influence in the rest of Asia as well. If the ambitious megaproject continues along its current trajectory, China will be the central player in a more prosperous, interconnected Asia.

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Politics

Decoding U.S. Election Day in 9 Key Charts

Buckle up your seatbelts—we look at 9 key data-driven charts to get you prepped for this consequential day in U.S. election history.

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After a tumultuous election cycle, the time has come at last for Americans to cast their ballots.

Media coverage has reached a fever pitch, and keeping up with the news cycle can be daunting for anyone. To keep the voting public and interested onlookers informed, we’ve compiled nine key charts that can help in answering key questions that people will have today:

  • Who’ll win the U.S. presidential election?
  • How could swing states flip?
  • When will we know the election results?
  • What are the stakes?
  • What does the rest of the world think?

Let’s start with the biggest—and most challenging—of these topics first.

Who’ll Win the Election?

As the world learned in 2016, answering this question is not as simple as it looks—even when the poll results point to a clear victory.

Chart #1: Biden remains the odds-on favorite

In 2020’s race, the poll results are once again stacked against President Trump. Here’s a look at who’s ahead in aggregated national polls:

National U.S. election aggregated polls

Source: FiveThirtyEight

Although this election cycle has been a wild ride, that volatility isn’t necessarily reflected in the polls. Over the past three months, Joe Biden’s lead in the national polls has not dipped below three percentage points.

Chart #2: Viewing odds through a 2016 lens

That said, after the colossal miscalculation by the media and pollsters in 2016, many people are skeptical of the accuracy of polls. Luckily, there’s a way to look at predictions through a more skeptical lens. As this table from FiveThirtyEight demonstrates, even if the results are as wrong as in 2016, Joe Biden is still predicted to win.

Margin of error in polls 2016

Chart #3: Betting markets also agree

Prediction markets are another way to try to gauge how the election could turn out. Traders on PredictIt are also leaning towards a Biden win on election day. President Trump’s COVID-19 diagnosis in early October served as a pivot point in that market.

Prediction markets for the U.S. election

Chart #4: The Sultans of Swing

There are a few swing states which will be hotly contested, with the candidates focusing their final days of campaigning on these.

Pennsylvania has received the most visits from both Trump and Biden since their last debate on October 22nd, with Trump visiting the state seven times and Biden stopping by four times.

Swing states summary

Swing states have had strong early voting turnouts. In fact, the number of early voters in many swing states is already set to surpass the total number of voters they saw in the 2016 election.

While Arizona and Georgia have voted red for the past five elections, early predictions point to these states possibly turning blue in 2020.

When Will We Know the Election Results?

While the result of the presidential election is typically known on the night of the election itself, this year could see delays due to the tight race and the amount of mail-in ballots.

No matter what, state election disputes need to be settled before December 8th, the “safe-harbor deadline”. After this date, states run the risk of having Congress refuse to accept their electoral votes, with Congress also resolving any left over disputes.

Each state’s electors then meet on December 14th in order to elect the president and vice-president. Depending on how that goes, this interactive election timeline by The Guardian looks at a few nightmare scenarios that the U.S. could get caught in.

Chart #5: Visualizing mail-in ballots so far

Mail-in ballots can slow down the election result due to late ballot deadlines and the pre-processing required for them to be counted. Expect to see a correlation between states with high mail-in ballot numbers and how long it takes them to call their result.

Ballot deadlines depend on the state, with some states accepting ballots up until November 23rd as long as they were postmarked by election day.

While some states can start pre-processing ballots before election day, others can’t start until election day itself. Some counties (including some in swing state Pennsylvania) won’t be starting mail-in ballot counting until November 4th due to limited resources.

Why Are the Stakes So High?

Voters from both parties are heavily invested in who wins this election—a trend that’s been on the rise for years, coinciding with increasing amounts of political polarization.

Chart #6: Voter apathy, no more

According to a recent survey by Pew Research Center, 83% of voters say it “really matters” who becomes the next president. In 2000, only 50% felt so strongly about the outcome of the election.

Voter apathy

To be fair, this year is also unique given a global pandemic—and this has certainly weighed heavily on many voters, creating more urgency than normal.

In fact, according to a survey conducted by Gallup in April 2020, 45% of Americans think Coronavirus/disease is the most important issue the country is currently facing.

Chart #7: Voters See COVID as a Top Concern

Research has shown a correlation so far between COVID-related deaths and reduced support for the incumbent. According to this graph from the New York Times, Trump’s approval rating tends to be lower in counties with higher death rates.

U.S. voting COVID-19

Chart #8: The price of democracy

The exceptionally high stakes could be a reason why this election is expected to be the most expensive to date. Spending is projected to reach over $13 billion, almost double the amount spent in 2016.

U.S. election spending

Source: Center for Responsive Politics

Chart #9: What the rest of the world thinks

Americans aren’t the only ones invested in the U.S. presidential election this year. The whole world is watching, and according to Ipsos, the majority is rooting for Biden.

How would the world vote?

But of course, the world doesn’t get to cast a vote today, making this final chart a moot point.

The real decision makers will be in the American electorate—and the forthcoming result will be on people’s minds for days, months, or maybe even years to come.

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Animated Map: U.S. Presidential Voting History by State (1976-2016)

With this map of U.S. presidential voting history by state, discover patterns that have emerged over the last eleven elections.

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U.S. Presidential Voting History by State

U.S. Presidential Voting History by State

As Americans go to cast their votes, considerable uncertainty remains about which candidate will be elected president. However, history can provide some clues as to how voters may act.

While some states have consistently seen Democrat or Republican victories, other “swing states” have flipped between the two parties depending on the year.

In this graphic, we use data from the MIT Election Data and Science Lab to show U.S. presidential voting history by state since 1976.

Each State’s Winning Party

To calculate the winning ratio, we divided the votes for the state’s winning party by the total number of state votes. Here’s another look at the same data, visualized in a different way.

U.S. Presidential Voting History by State

This graphic was inspired by this Reddit post.

As the voting history shows, some states—such as Alaska, Oklahoma, and Wyoming—have consistently supported the Republican Party. On the other hand, Hawaii, Minnesota, and the District of Columbia have been Democrat strongholds for many decades.

The District of Columbia (D.C.) is a federal district, and is not part of any U.S. State. Its population is urban and has a large percentage of Black and college-educated citizens, all of which are groups that tend to identify as Democrat.

Swing states typically see a close contest between Democrats and Republicans. For example, Florida’s average margin of victory for presidential candidates has been just 2.6% since 1996, by far the lowest of any state. It’s often seen as a key battleground, and for good reason: the candidate who wins Florida has won every election since 1964.

Memorable Election Years

Within U.S. Presidential voting history, some election results stand out more than others. In 1984, President Reagan was re-elected in a landslide victory, winning 49 out of 50 states. The remarkable win has been credited to the economic recovery during Reagan’s first term, Reagan’s charisma, and voters’ opposition to the Democrat’s planned tax increases.

In 1992, self-made Texas billionaire Ross Perot ran as a third-party candidate. He captured almost 19% of the popular vote, the highest percentage of any third-party presidential candidate in over 80 years. While he gained support from those looking for a change from traditional party politics, Bill Clinton ultimately went on to win the election.

Most recently, the 2016 election took many people by surprise. Despite having a strong lead in the polls, Hillary Clinton was defeated by Donald Trump. A total of 30 states saw Republican victories, eager for change after eight years of Democrat leadership.

A Look Ahead

Is it possible to predict the 2020 presidential election? As the last election showed, polls are not a perfect measure. They represent a snapshot in time, may overrepresent certain population groups, and measure voter attitudes rather than behaviors, among other factors.

While there’s no crystal ball, swing states may offer the most insight as to where things are heading. Here are nine states that have been identified as battlegrounds, and how they voted in the 2016 election.

 2016 Winning Ratio2016 Margin of Victory
Arizona48.7% Republican3.6%
Florida49.0% Republican1.2%
Georgia50.8% Republican5.2%
Iowa51.2% Republican9.4%
Michigan47.5% Republican0.2%
North Carolina49.8% Republican3.6%
Ohio51.7% Republican8.1%
Pennsylvania48.9% Republican0.7%
Wisconsin47.2% Republican0.7%

All saw Republican victories, but six out of nine states won by a margin of less than 5%. Trump and Biden’s success in these states may well determine the outcome of the 2020 election.

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