China Export-Import Bank

Despite the serious environmental and social problems surrounding China Exim Bank projects, it merits mention that China is also offering expertise and products that are sometimes better suited to markets in poor countries than Western goods, such as the cheap anti-malarial drug Artemisinin, which the Chinese government has provided for free to many African countries.

While IFIs now prioritize environmental guidelines to protect citizens in developing countries, Bosshard stressed that the strict privatization conditions imposed by IFIs also have caused great instability and harm in some African countries. By only requiring recipient countries to agree to the One-China principle rather than economic policies, China Exim has created a better balance of power between donor and borrowing governments.

Domestic politics within China are notably changing in ways that could promote more responsible investment by China Exim:

• In January 2007, Cheng Siwei, the vice-chairman of the standing committee of China's National People's Congress, declared that Chinese companies domestically and abroad faced sanctions if they shirked their social responsibilities.

• In March 2007, China's National Development and Reform Commission took Sudan (and eight other countries) off the list of resource rich countries that could receive soft loans from China Exim. It has been speculated that the Darfur genocide may be behind this decision. Moreover, in April 2007, The New York Times reported that a senior Chinese official traveled to Sudan to encourage the government to accept a UN peacekeeping force. This is a striking shift from the previous policy of ignoring internal politics in countries where China does business.

• China Exim Bank adopted environmental procedures in November 2004, and in its 2005 Annual Report the bank noted that it would spare no efforts to establishing a harmonious society within and beyond China.

Conclusions

Africans want and need many of the infrastructure projects supported by China Exim Bank. However, the two speakers emphasized that China Exim is ignoring lessons learned from IFIs and is wasting money on unsustainable projects. Moreover they felt that without a stable and accountable government, the prospects for the Merowe Dam being well maintained and supplying power to poor Africans is low. In addition, while China Exim stresses the need to respect other government's sovereignty, the speakers were concerned that it is in fact interfering with internal politics in many African countries by supporting governments that harm their own citizens.

To prevent supporting harmful projects, China Exim should open dialogues with local communities, NGOs, and other ECAs to coordinate their efforts to support projects with sound environmental and social impacts. Askouri reported that China Exim Bank has been unresponsive to letters and visits by LOHAP representatives complaining about the ill-conceived relocation measures and human rights abuses in the dam area. However, in December 2006, Bosshard met with the president of China Exim Li Ruogu, who promised to look into the problems of the project.

It is not likely that China Exim will follow OECD lending regulations; however, Bosshard felt that it would be reasonable for the bank to adopt environmental and social impact standards that match those now required within China, which have been greatly strengthened over the past few years. (For a discussion of these domestic changes in the environmental impact assessment regulations see the lead feature article in China Environment Series issue 8).

Bosshard stressed that China Exim has the potential to rapidly change its standards. The passage of environmental regulations in 2004 is a promising first step; however, these regulations have not yet been publicly released. International Rivers Network (IRN) will be working with Chinese environmental NGO partners to encourage a public debate about China's emerging international role and responsibility for projects such as Merowe Dam. The speakers stated in closing that IRN and LOHAP will continue to reach out to China Exim Bank and other government agencies to promote more dialogue on China's environmental and social impact on Africa.

Drafted by Linden J. Ellis.