MUMBAI, June 14, 2011 – China’s increasing investments in Africa should not be misconstrued as a threat, argued John Lee, Director of Foreign Policy at the Centre for Independent Studies in Sydney and a visiting fellow at the Hudson Institute in Washington.

"I don't see anything sinister behind what China is doing in Africa," Lee told an Asia Society India Centre audience here. "It's more that because they're SOEs (state-owned enterprises) they have very deep pockets, they're given beneficial loans and things like that by the Chinese government, it's more a commercial competition than anything you should be worried about."

Ajit Ranade, Chief Economist at Aditya Birla Group, joined Lee in discussion for an event co-presented by the Observer Research Foundation.  Between them they also discussed China’s relationships with Sri Lanka, Pakistan and Cambodia, among others, and the effect of growing U.S. hegemony on China’s trade and external relations with other powerful South Asian economies.

Lee also voiced that the key difference between India and China’s foreign investments were fundamentally due to differences in political structure between the two countries. China’s investments are state-owned (and consequently much vaster, in monetary terms, than India’s) whereas Indian investments tend to be down to private companies.

The fear of China's rising power can be attributed to its government structure and decision-making processes, Lee said, which remain, as always, shrouded in mystery.