China’s New Data Protection Law and other things Chinese
Last month we put the Newsletter to bed just as the Chinese announced the adoption of their new data privacy law. This law ensures that data generated in China stays in China – the so-called data localisation principle. This supports other moves to clamp down on ‘unacceptable capitalism’, such as Didi’s attempt to launch on the New York Stock Exchange (Didi has now wisely closed down its presence in the NYSE and opened at the Hong Kong stock exchange). Alibaba, on the other hand, posted an 80% drop in business on Singles Day (the Chinese equivalent of Black Friday), as it continues to feel the effects of state displeasure.
According to the Union of African Chambers of Commerce, Industry, Agriculture, and Professions (UACCIAP), China is the main trading partner of Africa, accounting for nearly 20% of the continent’s foreign trade. But the recent Forum on China-Africa Cooperation (FOCAC) meeting in Senegal noted that this year for the first time, China has cut down investment pledges from $60bn to $40bn. Meanwhile, costs are increasing for Chinese manufacturing due to logistic challenges and power shortages. October saw a 13% increase in costs, although November’s increase had dropped to 8%. These increases will have a direct effect on the cost of Chinese goods globally. This in turn may fuel global inflation, linked also to the continuing logistics issues experienced in the USA and Europe.
The rumored foreclosure on Uganda’s debt to China has also caused a renewed discussion on the size and extent of both Chinese state and institutional loans in Africa. A number of countries have scrambled to repay outstanding loans (such as Kenya which has just paid $256m to offset debt), while the rumour caused a renewed debate on Africa’s indebtedness to third countries.
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