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EU To Ease Digital Rules, Watchdogs Warn Of Big Tech Sway
Europe is set to streamline its AI and privacy laws on Wednesday to simplify the EU’s tougher digital laws in a move critics say will appease Big Tech and U.S. President Donald Trump.
The European Commission’s plans include allowing tech firms to use personal data to train AI models based on legitimate interest without asking for consent, and delaying rules for high-risk AI systems by a year, a draft seen by Reuters shows.
EU antitrust chief Henna Virkkunen is due to present a ‘Digital Omnibus’ to cut red tape and overlapping laws such as the GDPR, the AI Act, the e-Privacy Directive, and the Data Act.
Ambitious Digital Laws
Over the last decade, the European Union (EU) has introduced ambitious digital laws ranging from the General Data Protection Regulation (GDPR) to the AI Act, which business groups say hamper innovation and leave European firms at a disadvantage.
Companies from Google owner Alphabet and Facebook owner Meta to Europe’s Siemens and SAP have all called for a revision of the AI rules to make things easier for business.
Meanwhile, the Trump administration has regularly criticised EU regulations and said it was targeting U.S. firms, charges which the Commission had rejected.
Tech lobby groups had also urged the EU to pause implementation of the AI Act, which entered into force last year with various provisions being phased in.
“The Commission needs to show it is serious about simplifying rules and fostering innovation, while safeguarding Europe’s legal heritage and landmark legislation,” Dessislava Savova, partner at law firm Clifford Chance, told Reuters.
“We don’t expect a regulatory revolution, but we do hope for meaningful, practical changes.”
More Predictable Rules
Changes to the AI Act include exempting companies from registering their AI systems in an EU database for high-risk systems if these are only used for narrow or procedural tasks.
“The Commission appears to be aiming for simpler, more predictable rules that reduce friction for innovators while keeping core EU safeguards intact,” Ahmed Baladi, partner at law firm Gibson Dunn, told Reuters.
The proposals would need to be approved by EU countries and privacy-focused members of the European Parliament before they can be implemented.
Lawmaker Brando Benifei, who led negotiations on AI rules, said on Tuesday that the European Parliament must continue defending European citizens’ digital rights.
‘Biggest Rollback Of Digital Assets’
Privacy activists such as Noyb and civil rights groups see the amendments as a dilution of EU regulations.
An open letter from a group of 127 civil organisations called the proposals “the biggest rollback of digital fundamental rights in EU history”.
And on Wednesday, a group of campaigners deployed four mobile billboards around Brussels, alongside hundreds of posters across the city, urging Commission President Ursula von der Leyen to stand up to Big Tech and the U.S. President.
“It is disappointing to see the European Commission cave under the pressure of the Trump administration and Big Tech lobbies,” Dutch MEP Kim van Sparrentak said in a statement.
(with inputs from Reuters)
Japan: Largest Ever Urban Fire Ravages Over 170 Buildings
A fire ripped through more than 170 buildings and killed one person in a southern coastal city called Oita in Japan on Wednesday, with military and firefighting helicopters scrambling to extinguish the country’s largest urban blaze in almost half a century.
Aerial footage from broadcasters showed houses reduced to rubble and thick plumes of smoke rising from the hilly Saganoseki district of Oita city, which overlooks a fishing harbour renowned for its premium Seki-brand mackerel.
The flames had also spread to nearby forested slopes and an uninhabited island more than one kilometre off the coast, likely due to strong winds, local media reported.
One Oita resident told the Japanese broadcaster NHK that the flames turned the city’s skies red. “The wind was strong. I never thought it would spread so much,” he said.
Cause Under Investigation
The blaze started on Tuesday evening and has burned 48,900 square metres – roughly the size of seven soccer fields – forcing 175 residents in the district, some 770 km (478 miles) southwest of Tokyo, to flee to an emergency shelter, Japan’s Fire and Disaster Management Agency said.
The cause of the fire was under investigation, the agency added.
One person has been found dead, local media reported, citing police sources, while a woman in her 50s was reported to be hospitalised for mild burns.
“I extend my heartfelt condolences to all residents who are evacuating in the cold,” Japanese Prime Minister Sanae Takaichi said in a post on X.
“The government will provide the maximum possible support in collaboration with local authorities,” she wrote.
Largest Urban Fire
The fire has caused power outages at around 300 houses in the district, according to Kyushu Electric Power 9508.T.
The number of buildings and size of the area engulfed in flames make it the largest urban fire in Japan since a 1976 blaze in Sakata, excluding incidents caused by earthquakes.
In 2016, a fire in Itoigawa burned 147 buildings and about 40,000 square metres. No one was killed.
(with inputs from Reuters)
Ukraine Pushes Europe For $163 Billion From Frozen Russian Assets
Ukraine is urging European partners to make a political decision next month to unlock a proposed $163 billion loan backed by frozen Russian state assets, as it confronts a major 2026 budget gap and the fallout from a growing corruption scandal.
European leaders failed to agree on the “Reparations Loan” for Kyiv last month and will discuss it again at a summit on December 18, with Ukraine expected to need its first big injections of financial support from the second quarter of 2026.
A senior official in President Volodymyr Zelenskyy’s administration told that the summit looked to be the last chance for Europe this year to agree to provide the loan for Ukraine, a move Russia said would elicit a “painful response”.
A Hole In Wartime Budget Looms
With little clear prospect of direct U.S. aid under President Donald Trump, Ukraine could run out of money during the first quarter of next year if new European assistance does not come through, economic analysts say.
EU leaders agreed last month to meet Ukraine’s “pressing financial needs” for the next two years but stopped short of endorsing a plan to use frozen Russian assets to fund a giant loan to Kyiv because of concerns raised by Belgium.
On Monday, European Commission President Ursula von der Leyen told European governments in a letter that there were three options to finance Ukraine and that a combination of them was also possible.
Apart from the loan, the options include European Union countries providing grants and the bloc borrowing on markets.
The document estimated that Ukraine’s remaining needs for 2026-2027 amounted to 135.7 billion euros ($157.37 billion).
The Commission’s proposal to use frozen Russian assets would produce a loan of 140 billion euros, covering those needs.
(With inputs from Reuters)
UN Says Afghanistan Needs $129Mln For Quake Recovery
A UN-led assessment says Afghanistan requires $128.8 million to restore housing, schools and key services in its earthquake-hit eastern provinces, warning that reconstruction faces “significant shortfalls” as donor support for the country falls sharply.
The Joint Rapid Recovery Needs Assessment (JRRNA), conducted with the World Bank, EU and ADB, outlines a three-year plan to rebuild homes, health facilities, water systems and farmland in the eastern provinces of Kunar, Nangarhar and Laghman.
It comes as aid to Afghanistan shrinks, with the UN estimating a $3.2 billion need this year and a similar requirement in 2026, less than half of which has been funded.
“The earthquake-hit communities in Afghanistan are already strained by drought, mass returns and a sharp economic contraction,” UN Resident Representative Stephen Rodriguez told Reuters. “There is very limited capacity left to cope with another shock.”
Biggest Challenge
Spokespeople for the Taliban administration and the government’s disaster management authority did not respond to requests for comment.
The JRRNA says the earthquakes caused $86.6 million in damage across 10 districts, affecting 56,000 families, with more than 6,200 homes collapsed, 2,000 severely damaged, and 22 health facilities and 80 schools hit. The full recovery bill is higher at $128.8 million.
Housing is the biggest challenge, costing $54.9 million to rebuild thousands of homes. Education needs $14.9 million, with more funding needed for water, irrigation, farmland and rural roads.
UN agencies have provided emergency tents and cash to thousands of families, with nearly 10,000 households needing urgent shelter support and 7,700 people still displaced.
Rodriguez said the assistance eased immediate pressures but was “nowhere near enough” to move families out of survival mode without longer-term investment.
Tightening Aid
Rodriguez said a major donor cut $80–90 million this year, forcing more than 400 health centres to close in the first half of 2025, adding that basic services had already been scaled back as needs rise. He did not identify the donor.
The UN Development Programme plans to seek $150 million for infrastructure, jobs and private-sector support next year, including $43 million for the reintegration of refugees who have returned, but Rodriguez said it was unclear how much donors would provide.
Afghanistan has also absorbed one of the world’s largest forced returns of refugees. Rodriguez said 4.3 million to 4.5 million Afghans have returned since 2021, with UN refugee agency data showing up to 2.5 million more in Iran and 1.7 million in Pakistan could return if current policies continue.
“The absorptive capacity is already exceeded,” he said, noting that 88% of returnees are in debt and only 4% have salaried jobs. With 400,000 young Afghans entering the labour market each year, Rodriguez warned that delays in reconstruction risk fuelling social tensions and outward migration.
(with inputs from Reuters)
China’s Travel Ban Triggers Massive Tourism Losses In Japan
Within days of Beijing’s travel warning against visiting Japan, tourism businesses across the country are already feeling the strain. Tokyo-based East Japan International Travel Service, which relies heavily on Chinese group tours, has reported an 80% loss in bookings for the rest of the year.
“This is a huge loss for us,” said Yu Jinxin, vice president of the company, which caters mainly to travellers from mainland China. The firm’s rapid downturn reflects the broader economic damage Japan now faces as the diplomatic dispute between Tokyo and Beijing deepens.
The travel advisory followed comments by Japanese Prime Minister Sanae Takaichi, who said that a Chinese attack on Taiwan threatening Japan’s survival could trigger a military response. Her remarks provoked strong backlash from China and prompted the government in Beijing to warn citizens against travelling to its East Asian neighbour.
Billions at Stake as Flights and Bookings Cancelled
Tourism has been one of Japan’s fastest-growing sectors, accounting for around 7% of its gross domestic product, according to the World Travel & Tourism Council. Chinese visitors, including those from Hong Kong, make up about 20% of all arrivals.
The boycott could deal a significant economic blow, with the Nomura Research Institute estimating potential annual losses of about 2.2 trillion yen ($14.23 billion). Since Friday’s travel warning, shares in Japanese tourism and leisure companies have plunged.
More than 10 Chinese airlines have already announced full refunds for Japan-bound flights through the end of December. An airline industry analyst estimated that roughly 500,000 tickets have been cancelled, signalling a sharp decline in tourism flows heading into the winter season.
Diplomatic Rift Shows No Signs of Easing
The crisis stems from Takaichi’s comments earlier this month, which triggered one of the most serious diplomatic disputes between Asia’s two largest economies in years. China’s Consul General in Osaka issued a series of inflammatory remarks on social media, while Chinese state media attacked Takaichi directly.
In response, Japan warned its citizens in China to exercise caution and avoid large gatherings. Beijing has demanded that Takaichi withdraw her statements, but Tokyo maintains they are consistent with existing policy. So far, there are no signs of an imminent breakthrough in the standoff.
Adding to the tension, China has halted screenings of new Japanese films, while Japanese entertainers popular in China have been quick to declare their support for Beijing’s “One China” stance. “China is like my second homeland,” Japanese singer MARiA wrote on Weibo, expressing hope to avoid a backlash.
Industry Braces for Long-Term Fallout
Tour operators fear that a prolonged dispute could have lasting consequences. Yu Jinxin said her company had survived past diplomatic flare-ups, such as the 2012 island nationalisation that sparked mass protests in China, but warned that the current crisis feels different.
“If this lasts for one or two months, we can manage,” she said. “But if the situation continues to worsen, it will obviously have a major impact on our business.”
With no resolution in sight, Japan’s tourism sector once a symbol of its economic recovery now faces one of its most challenging periods in over a decade.
(with inputs from Reuters)
Taliban Trade Minister In Delhi To Push Commerce, Connectivity
Afghanistan’s acting Minister of Industry and Commerce, Nooruddin Azizi, landed in the Delhi on a five-day visit that signals one of Kabul’s strongest economic overtures since the Taliban returned to power in 2021.
This visit marks a major regional realignment, with Afghanistan actively redirecting its commerce away from Pakistan, its historically dominant transit corridor, towards India and Iran’s Chabahar port.
For New Delhi, the visit provides a rare opening to reassert influence in Afghanistan through trade and connectivity, even without formal diplomatic recognition of the Taliban.
At stake is Afghanistan’s ability to keep its agricultural export economy afloat amid border closures and sanctions, and India’s ability to secure reliable access to the country’s high-value perishables, from figs to saffron, while expanding pharmaceutical and manufacturing exports back into the Afghan market.
Heavy Agenda
The acting minister, accompanied by a large team will hold talks with Commerce and Industry Minister Piyush Goyal and senior officials across multiple ministries. Azizi is also expected to attend the India International Trade Fair (IITF).
According to Afghan officials, discussions will focus on: Expanding bilateral trade volumes, particularly agricultural exports to India; increasing Indian exports of pharmaceuticals, machinery and textiles; establishing more reliable transport corridors through air cargo routes and Iran’s Chabahar port; restoring payment channels disrupted since Afghan banks lost access to SWIFT; and, reviving the earlier India–Afghanistan Air Freight Corridor.
This is the second Taliban cabinet-rank visit to India in less than a month, following the October trip by Foreign Minister Amir Khan Muttaqi, and underlines the seriousness of Kabul’s push.
Cargo Rates Cut
Afghanistan’s national carrier Ariana announced a dramatic cut in air cargo tariffs exclusively for India just days before Azizi’s departure. Ariana’s Director General, Mawlawi Bakhturahman Sharafat, confirmed that: “Rates from Delhi to Kabul have dropped from $2/kg to 80 cents/kg and rates from Kabul to Delhi are now $1/kg.”
Sharafat called the discount “unprecedented” and stated that no other foreign destination has received similar concessions, framing it as a strategic gesture to strengthen economic links with India.
Pakistan’s border closures have crippled Afghan trade. The Torkham border, which normally handles roughly 40% of Afghan trade, has been shut for nearly 45 days following military tensions. Afghan officials estimate losses of $200 million per month.
Kabul retaliated by suspending its own trade with Pakistan, deepening the rupture and forcing Afghan traders to reroute thousands of tonnes of perishables.
Afghanistan’s trade with Iran has surged past $1.6 billion in six months, overtaking volumes with Pakistan for the first time. A US sanctions waiver on Chahbahar will enable India-Afghan trade for six more months.
Despite India’s reduced exports to Afghanistan post-2021, Afghan agricultural shipments have grown sharply. India now buys: Figs, raisins, apples, asafoetida (hing), garlic, saffron, nuts, pomegranates, apricots, and walnuts.
For Afghan farmers, India is the most profitable destination after Central Asia.
Afghanistan’s export economy, built heavily on perishables, depends on fast, cold-chain-compatible transport. Air routes to India bypass Pakistan entirely and can operate regardless of border politics.
India’s Strategic Stakes
While India remains cautious about formally recognizing the Taliban, it has steadily expanded practical engagement. It has reopened its embassy in Kabul and continued humanitarian and food aid. It has also restarted development dialogue in healthcare, public infrastructure, and capacity building.
For India, deepening trade through air routes and Chabahar enhances regional connectivity, reduces Pakistan’s role as a gatekeeper, strengthens India’s footprint in a strategically sensitive region and helps Indian exporters (especially pharma) regain lost markets.
Cargo Arrivals
Afghanistan exported 296,000 tonnes of agricultural goods in the first 11 months of FY 2024–25, worth $143 million, much of it destined for India. Dried fruits alone represent over $518 million, while fresh fruits contribute another $640 million.
The new dedicated cargo flights announced last month: Delhi–Kabul, Amritsar–Kabul, and Amritsar–Kandahar, will significantly accelerate:
Perishable shipments from Kandahar (pomegranates, grapes); Dry fruits and nuts from Kabul; Spices, herbs and medicinal plants.
India’s cargo hubs including Delhi, Mumbai, and Hyderabad already have pharmaceutical-grade cold-chain facilities, positioning them to handle Afghan perishables and re-export to third-country markets.
India’s exports to Afghanistan have fallen from $825 million in 2020–21 to $355 million in 2023–24, due to sanctions, banking restrictions, and route closures. Both sides hope Azizi’s visit will help correct this imbalance.
Azizi’s Delhi mission could trigger three major shifts: A formalized India–Afghanistan air freight corridor 2.0, restoring what was lost after 2021; expanded Chabahar-based trilateral logistics, reducing reliance on Pakistan to near-zero; and a joint trade committee to steer investment, especially in minerals, energy and agri-processing.
US Approves $700 Million Missile Deal With Taiwan Amid China Tensions
The United States has approved the sale of an advanced missile defence system worth nearly $700 million to Taiwan, marking the second major weapons package announced within a week. Combined with last Thursday’s $330 million deal for aircraft parts, Washington’s recent approvals bring total arms sales to Taipei to around $1 billion, reaffirming its commitment to Taiwan’s security amid rising regional tensions.
The new package includes the National Advanced Surface-to-Air Missile System (NASAMS), a medium-range air defence weapon developed by RTX. The Pentagon confirmed that a fixed-price contract had been awarded for the procurement of the NASAMS units, with completion expected by February 2031. It said $698,948,760 had been allocated from fiscal 2026 foreign military sales funds for Taiwan.
The system, already in use by Ukraine, has demonstrated strong battlefield performance and is expected to significantly enhance Taiwan’s ability to counter aerial threats. In the Indo-Pacific, only Australia and Indonesia currently operate NASAMS, making it a relatively new addition to Taiwan’s arsenal.
Strengthening Taiwan’s Air Defence
The NASAMS system is designed to intercept aircraft, drones, and cruise missiles at medium range, offering a more flexible defence network. The US had earlier confirmed that Taiwan would receive three of these systems as part of a broader $2 billion weapons package.
RTX, formerly known as Raytheon Technologies, has not yet commented on the latest contract. However, demand for the system has surged worldwide following its proven success in protecting Ukrainian infrastructure from Russian missile attacks.
‘Peace Through Strength’ Message from Washington
Raymond Greene, the de facto US ambassador in Taipei, emphasised America’s unwavering support during an event hosted by the American Chamber of Commerce in Taiwan. “It should be clear today and will remain clear into the future that America’s commitments to Taiwan are rock solid,” he said.
Greene added that the US was backing its words with concrete action. “Our focus is on helping Taiwan achieve peace through strength, and nowhere is this more evident than in our growing defence industrial cooperation,” he noted.
Thursday’s approval of aircraft parts for Taiwan was the first such deal under the new US administration. While Taipei welcomed the move, Beijing expressed anger, accusing Washington of interfering in China’s internal affairs.
Heightened Regional Tensions
The weapons sales come amid worsening diplomatic tensions in East Asia, particularly over Taiwan. Beijing claims the island as its own, while Taipei insists it is a self-governing democracy. The dispute has recently deepened friction not only between China and Taiwan but also between Beijing and Tokyo.
Over the weekend, Chinese coast guard vessels sailed through waters near islands controlled by Japan but claimed by China. In response, Japan scrambled fighter jets after detecting a Chinese drone flying between Taiwan and Yonaguni, Japan’s westernmost island.
Taiwan’s Defence Minister Wellington Koo urged China to abandon the idea of resolving disputes through force. “China should abandon its thinking of using force to resolve things,” he said on Wednesday.
Taiwan has been expanding its defence capabilities, including building indigenous submarines to protect crucial sea routes. Its military frequently faces Chinese incursions in what officials describe as a “grey zone” strategy aimed at testing and wearing down Taiwan’s defences.
Despite lacking formal diplomatic ties, the US is legally obligated under the Taiwan Relations Act to provide Taipei with defensive arms a policy that continues to draw sharp condemnation from Beijing.
(with inputs from Reuters)
Why China’s Purchase Of Insurance Firm Rattled U.S. Intelligence
When China’s Fosun Group bought Wright USA in 2015, almost no one in Washington noticed. The insurer looked niche and low-risk. Only later did officials realise that Wright USA specialised in policies for CIA and FBI personnel—meaning it held personal and legal data on officers whose identities the U.S. government works hard to shield.
Reporting from Insurance Business Magazine and legal summaries later revealed just how sensitive the insurer’s files were: names, employment details and liability histories of federal intelligence and law-enforcement officers.
The situation escalated further when investigations cited by Business Today showed the acquisition had been backed by a US$1.2 billion loan from four Chinese state-owned banks routed through the Cayman Islands. What seemed like an obscure transaction suddenly looked like a data-exposure risk financed through an opaque offshore structure.
U.S. officials eventually forced a reversal of the sale, but the shockwaves from the oversight failure lasted longer than the deal itself.
The Wright USA episode crystallised a problem the U.S. hadn’t fully grasped: national security vulnerabilities don’t just sit in ports, telecom towers or semiconductor fabs—they can sit inside an insurance company’s database. And foreign capital, especially when channelled through layered offshore entities, can quietly gain access to sensitive information before regulators even know what has happened.
The case helped spur the 2018 expansion of CFIUS powers, which for the first time placed data-rich industries such as insurance firmly within national-security review.
This wasn’t happening in isolation. China’s overseas investment footprint had already grown dramatically. As Business Today noted, Chinese outbound investment since 2000 had reached roughly US$2.1 trillion, often moving through complex financing routes involving state-linked lenders. The Wright USA deal became a symbol of the broader challenge: separating commercial intent from the strategic opportunities that such investments can create.
India is now facing a similar debate—one driven less by a single catalytic incident and more by a steady accumulation of strategic caution. After COVID-19 and the sharp downturn in India-China relations, New Delhi issued Press Note 3 of 2020, requiring all Chinese investments to obtain government approval. The move effectively shut down the automatic route for Chinese capital. Today, China’s total FDI stock in India stands at just US$2.5 billion, a minuscule 0.3% of India’s total FDI—remarkably small for a country with nearly US$3 trillion in global outward investment.
But, just as in Washington after 2015, the conversation in India is shifting. The Economic Survey 2023–24 was the first major policy document to suggest rethinking the hard line introduced in 2020. NITI Aayog went further, proposing automatic approval for Chinese investments up to a 24% equity threshold.
Proponents argue that Chinese capital and scale know-how could accelerate India’s ambitions in electric vehicles, battery manufacturing, and chip assembly—sectors where Chinese firms have unmatched operational experience.
Yet India’s dilemma mirrors the American one: some of the sectors where India most needs investment—solar modules, APIs, electronics hardware, advanced batteries—are the very sectors where Chinese dominance already creates strategic dependency. Opening them to Chinese investment risks embedding vulnerabilities deeper into critical supply chains. And because many of these industries are simultaneously offering production-linked incentives, allowing Chinese firms to participate could become politically combustible.
What the U.S. discovered through the Wright USA case has clear relevance for India’s next steps. Ownership, even minority stakes, can create pathways to data access, supply-chain influence or operational leverage. India will need sector-specific filters, not broad assumptions, to distinguish harmless capital from strategically consequential investments.
Both countries are learning the same lesson: in an era where capital can also be a vector of influence, the real challenge isn’t shutting the door or opening it—it’s knowing precisely when, where and how to do either without compromising long-term security.
China Bans Japanese Seafood Imports Amidst Diplomatic Spat
China decides to ban all imports of Japanese seafood amid an escalating diplomatic dispute between Asia’s top two economies.
Tensions between the two countries ignited after new Japanese Prime Minister Sanae Takaichi said this month that a Chinese attack on Taiwan threatening Japan’s survival could trigger a military response.
China has demanded she retract the remarks and urged its citizens not to travel to Japan, resulting in mass cancellations that could deal a sizable blow to the world’s fourth-largest economy.
The latest pain point for Japan comes after Beijing just months ago partially eased restrictions on Japanese seafood that had been imposed due to Tokyo’s decision to release treated wastewater from its Fukushima nuclear power plant in 2023.
Japan Counts The Costs
China had said in June that it would resume importing Japanese seafood products from all but 10 of Japan’s 47 prefectures.
The re-imposition will be a painful blow for many companies eager to re-enter a market that previously accounted for more than a fifth of all Japan’s seafood exports.
Nearly 700 Japanese exporters had applied to re-register for shipments to China, Japanese Agriculture Minister Norikazu Suzuki told reporters on Tuesday. However, only three had been approved to date.
Before the 2023 ban, China was Japan’s top scallop buyer and a major importer of sea cucumbers.
More immediately, China’s travel boycott could have far-reaching consequences for Japan’s shaky economy.
Academic, Cultural Exchanges Cancelled
An annual meeting of scholars from both countries due to start in Beijing on Saturday has also been postponed, China’s foreign ministry said.
An event promoting Japan–China friendship scheduled for November 21 in the western Japanese city of Hiroshima has also been cancelled.
China has suspended the screenings of upcoming Japanese films, and Japanese celebrities popular there have tried to pre-empt any potential backlash with messages showing their support for China.
(With inputs from Reuters)
Beijing Expands Footprint Amid Zambia’s Economic Recovery
Zambia is set to host Chinese Premier Li Qiang, marking the first visit by a Chinese premier to the country in 28 years.
The visit comes at a pivotal moment, as Zambia emerges from a financial crisis, with Beijing eager to access the country’s commodities and develop a bigger market for its exporters.
China is Zambia’s largest official creditor with $5.7 billion owed and is eager to highlight countries that are model members of President Xi Jinping’s flagship Belt and Road infrastructure initiative.
Increasing China’s Presence
Li Qiang’s arrival in Lusaka on Wednesday is part of a push to deepen China’s presence in the copper-rich country as Europe and the U.S. vie to become alternative benefactors now that Zambia’s $13.4 billion in debt is on a more sustainable repayment plan.
“Li aims to bolster China’s presence in a strategically vital country where both President Hichilema and Chinese mining firms need support,” said Eric Olander of the China-Global South Project, noting that a February acid spill at a Chinese-run copper plant—now a major election issue—contaminated the Kafue River.
He added that China this year approved a major refurbishment of the Tazara Railway, widely seen as a counter to the U.S./EU-backed Lobito Corridor. China built Tazara in the 1970s to access Zambia’s copper via Tanzania and continues to invest as Western partners expand their own route through Angola and the DRC.
Investment Over Loans
After the COVID-19 pandemic forced many African countries into debt distress, governments across the continent shifted to seeking investment.
One reason Zambia’s debt restructuring dragged on for three-and-a-half years was that it had a large number of Chinese creditors, limiting its leverage, analysts said.
Chinese companies have invested around $6 billion in Zambia over the past 20 years, mostly into the metal sector, according to data from the American Enterprise Institute.
These companies now face increasing pressure from European and American firms. The European Union’s top official for international cooperation and development announced fresh investments in transport, energy, agriculture and critical raw materials along the Lobito Corridor.
Donald Trump Jr., the eldest son of U.S. President Donald Trump, met Hichilema on Sunday, according to a post on the Zambian president’s X account.
(With inputs from Reuters)