Weaponizing capital': US worries over China's expanding role in Africa

The Djibouti government relies heavily on investment capital from China and the two countries maintain close diplomatic ties.

On Tuesday, the future of the port dominated discussions during a hearing of the US House Armed Services Committee, with one senior US general warning that the US military could face "significant" consequences should China take control of the port.

Marine Gen. Thomas Waldhauser, the US' top military commander in Africa, said Chinese control of the port could result in restrictions on its use, potentially cutting off access to a key US resupply route and naval refueling stop.

The port currently constitutes the primary access point for American, French, Italian and Japanese bases in Djibouti. The US base, Camp Lemonnier, is home to an estimated 4,000 personnel, including various special forces troops, and is used as a staging point for US military and counter-terrorism operations throughout Africa, the Middle East and the Indian Ocean.

"If the Chinese took over that port, then the consequences could be significant," said Waldhauser. "When we talk about influence and access, this is a classic example with regards to China, of how we've got to proceed and how we've got to be careful as we move forward.

However, the question of China's role in Djibouti did appear in an article published Wednesday in China's state-owned Global Times, in which US concerns were dismissed as "pointless."

Quoting Song Zhongping, a military expert, the article argued that if a Chinese company were to gain the right to operate the port, "it would be based on business and economic interests between China and Djibouti, and it has no intention at all to make trouble for the US military."

Chinese funding

The government of Djibouti, led by President Ismail Omar Guelleh, has so far welcomed China's role in the country's economy, maintaining that because Djibouti is resource-poor, its development is dependent on maximizing its location, and increasing investment in port infrastructure.

To date, China has provided the East African nation with more than $1.4 billion in infrastructure funding, equivalent to 75% of Djibouti's GDP, according to a 2018 report from the Center for Global Policy Development.

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In addition to investing in the DCT, Chinese state firms have also financed and built Ethiopia-Djibouti Water Pipelines and the Ethiopia-Djibouti Railway.

In the hearing Tuesday, Waldhauser admitted the United States would "never outspend the Chinese" in Djibouti, pointing out that as well as major infrastructure projects, Beijing has also built shopping malls and stadiums.

According to a report by CNA, a US-based nonprofit research and analysis organization, most of the capital that China provides to Djibouti is in the form of loans from the Export-Import Bank of China.

The bank, which is wholly state-owned and is under the direct leadership of the China's State Council, has a mandate from the Chinese government to "help Chinese companies secure contracts and acquire assets abroad," says the report.

On Friday, US Secretary of State Rex Tillerson arrived in Djibouti as part of a cross-continent trip, intended to shore up support among African leaders.

Addressing those debt concerns at a press conference alongside Tillerson, Djibouti's foreign minister, Mahamoud Ali Youssouf, said the country's debt to China "is so far manageable."

"Let me first underline the fact that no country can develop itself without having a strong infrastructure," said Youssouf, "And China is, from that perspective, a very good partner."

The issue of the Doraleh Container Terminal was not raised during the press conference.