The High Price of Chinese Investment

Deforestation, river blockages, air pollution, population displacement, labor exploitation, expropriation, and violence – these are just some of the adverse effects of infrastructure projects undertaken by Chinese companies around the world under the umbrella of Beijing’s so-called “Belt and Road Initiative” (BRI).

Presented as a groundbreaking project when Chinese President Xi Jinping unveiled it in 2013, BRI was initially touted as a cooperative model aimed at preventing neo-colonialism – a sort of “modern-day Silk Road.” Chinese leaders promised developing nations a flood of investment and mutually beneficial arrangements that would thrust regions like sub-Saharan Africa and the South Pacific into the 21st century.

The reality has been starkly different. Far from being a friend to developing nations, China has ensnared them in debt-trap diplomacy, effectively holding their economies hostage while pillaging natural resources and ravaging the environment. Facing economic pressures at home as a result of its failed communist system, Beijing is using BRI to suck the lifeblood from poor nations to stay afloat.

“Regardless of the evidence, they will claim that West is cold-blooded and hypocritical, and they want ‘win-win,’” said Yunteng Qian, a former high-ranking CCP official who defected to the West. “The truth is the opposite.”

Researcher Liz L. Lowe from Georgetown University has found that since the launch of BRI in Africa, GDP in 48 participating countries increased by at most $55,000, which she called “a drop in the bucket when looking at overall GDP of each country.” Her findings correspond with another reputable appraisal which found that BRI economic results “were limited.”

Nonetheless, in 2024, trade between China and Africa reached $296 billion, a 4.8 percent increase and a record high for the fourth consecutive year, accounting for 22 percent of Africa’s total trade. However, the trade balance is decidedly one-sided, with Africa facing a deficit of around $99 billion, while China recorded a surplus.

“The result of this is so damaging for most African countries because it was always a one-way street for China,” said Dr. Jean-Paul Masquellas, a retired French diplomat and economist. Africa purchases of finished products while China focuses on the excavation of mineral resources, making an occasional investment financed by loans from China’s investment bank.

Between 2000 and 2022, 89 percent of Africa’s exports to China consisted of products from the extractive sector, primarily oil, copper, iron ore, and aluminum. In contrast, 94 percent of Africa’s imports from China were manufactured goods.

The Chinese Communist Party (CCP) misleadingly promotes tariff-free imports of select Chinese products—like solar panels and electric vehicles—as beneficial for Africa. While this allows Chinese investors easier access to African commodities, it does not facilitate entry for African producers into established markets or relax trade-hindering regulations.

In a report praising China’s investment in Africa, scholars from Boston University noted this unequal relationship, finding that “Chinese companies and investors may pursue projects that absorb excess domestic production.” Similarly, researchers from the University of Greenwich pointed out that corruption, favorable legislation, inadequate policies, and market monopolization by Chinese firms contribute to waste, debt, and the impoverishment of local populations.

In February, millions of livelihoods were again threatened by a BRI project when a dam collapsed at a Chinese-owned copper mine in Zambia, contaminating a major river with cyanide and arsenic. The flood inundated farms, destroyed crops, and contaminated waterways that lead to the Kafue River, resulting in the deaths of fish and poisoning crocodiles and hippos at least 62 miles downstream.

Over half of Zambia’s 21 million people depend on the Kafue River for drinking water and irrigation, highlighting the scale of catastrophe caused by Chinese malfeasance. Zhang Peiwen, the chairman of Sino-Metals, the company responsible for the disaster, claimed that the water supply had “returned to normal” because his company quickly controlled the spill. He did not tell the truth.

Sino-Metals terminated its contract after learning from a 385-page report by the South Africa-based company Drizit that the spill had released 1.5 million tons of toxins into the river—30 times more than the Sino-Metals’ admitted. The report also stated that 900,000 cubic meters of contamination remained, requiring proper cleanup to adequately protect the local population.

Zambian President Hakainde Hichilema sought help from experts and described the accident as a crisis with “devastating consequences.” But just two months later, the same government claimed the situation was under control – suggesting that Beijing was wielding its economic influence in Zambia to cover up the true scale of the disaster.

An investigative report disputed the Zambian government’s claims, stating the river would recover in 10 to 15 years (you can watch the report here). It alleged that three Chinese companies involved in mining and metal refining had a history of pollution, bribery, and labor safety violations. The documentary revealed that, a year ago, 35 miners died after an unsecured tunnel collapsed in a copper mine. It also linked Chinese firms to illegal sex trafficking in Zambia.

After China’s Chambers of Commerce filed a defamation complaint, Zambia’s Lusaka High Court issued a gag order on the documentary that lasted a month. One report stated that, at the same time, a Chinese firm offered compensation ranging from $17 to $2,000 to victims in exchange for renouncing their right to make further complaints. Pro-China media reports, meanwhile, denied that there was any health threat and insisted that the water was safe to drink.

But even as Beijing was urging locals to drink the water, U.S. Ambassador to Zambia Michael Gonzales said the disaster “appeared to be the sixth-worst in history” and evacuated all embassy staff from the area affected by the spill.

Zambia’s incident comes on the heels of a lawsuit by Brazilian prosecutors, who are seeking $45 million in damages from BYD Co. Ltd., a Chinese electric vehicle giant, along with two contractors. The lawsuit alleges the firms trafficked Chinese workers to build a plant in Camaçari and subjected them to conditions akin to slavery.

An investigation last year led to the rescue of 220 Chinese workers at BYD’s new factory, where they were found living in cramped and unsanitary conditions.

“Some workers slept on beds without mattresses, and their belongings were mixed with food supplies. In one accommodation, there was only one toilet for 31 people,” the Public Labor Prosecutor’s Office stated.

The prosecutors documented several violations, including workers being brought to Brazil on incorrect visas, forced to pay security deposits, having up to 70 percent of their wages withheld, and facing harsh penalties for early contract termination.

Chinese dams on rivers have also caused deforestation and environmental damage in Congo, Ghana, and Sudan. Mining in Guinea and Mozambique has led to water pollution, while Kenya has experienced expropriation and violence that has affected wildlife. In Nigeria, displacement and underground water pollution are significant issues.

This is the real price of Chinese operations labeled as “investment” by the CCP under Xi Jinping. While these projects are a gold mine for the Party’s nomenklatura, they are a living hell for billions around the world.

Ben Solis is the pen name of an international affairs journalist, historian, and researcher.