Dorothy-Grace Guerrero and Firoze Manji (ed) (2008) China’s New Role in Africa and the South: A search for a new perspective. 
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Pambazuka News 282: African perspectives on China in Africa
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CONTENTS: 1. Highlights from this issue, 2. Features, 3. Comment & analysis, 4. Letters, 5. Blogging Africa, 6. Podcasts
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Highlights from this issue
Featured This Week
2006-12-14
IN PART ONE
FEATURE:
- Firoze Manji explains why this special issue of China has been launched as a taster to a forthcoming book.
-Stephen Marks asks what is the true nature of Chinese involvement in Africa? Is it colonialism revisited?
COMMENT AND ANALYSIS:
- John Rocha examines some of the implications for Africa related to both positive and negative aspects and the meaning of China’s involvement for Nepad’s African Peer Review Mechanism.
- Anabela Lemos and Daniel Ribeiro write, after so many years of being colonised by the Portuguese, “are we now being colonised again, in the name of development but under the new flag of ‘economic partnerships with China’?”
- Ali Askouri argues that China's presence in Sudan ought to be challenged on all fronts. “China must be made aware that its opportunistic involvement with dictatorship carries a price for trade and investment inside China”
- John Karumbidza writes that the benefits that Zimbabwe has gained for trading with China include the political preservation of Mugabe reign and personal aggrandizement through corruption and kickbacks by his ZANU PF cronies.
AND IN PART TWO:
- Moreblessings Chidaushe cautions that while China might assist Africa to a certain degree, it is not, will not and should not be expected to solve all of Africa’s problems.
- Michelle Chan-Fishel points out that the Chinese low-price development model comes at a very high cost. “The untold story of China’s rapid economic growth is one characterised by vast levels of income disparity, unfair treatment of workers and lost livelihoods, especially in the rural areas.”
- The question of whether China can ‘prosper where others have failed’ could be inverted: “can Africa benefit in longer term, more sustainable and more representative ways from China’s enhanced attention and links with Africa in ways that departure from established patterns with external powers?,” writes Daniel Large.
- Ndubisi Obiorah points out that while China's rapidly expanding engagement in Africa is enthusiastically welcomed by African governments and some African intellectuals, “China's relations with Africa's governments is often perceived among human rights NGOs and Western commentators as increasingly problematic for governance and human rights in Africa.”
- Kwesi Kwaa Prah speaks to Pambazuka News about the history of Chinese engagement in Africa. You can also hear the interview in a special Pambazuka News Podcast.
- BLOGGING AFRICA: Sokari Ekine reports that the South African Chinese community is going to court to demand that they be racially reclassified as either as a so-called “coloured” or black.
Features
African Perspectives on China in Africa
2006-12-14
Firoze Manji
2006 was the 50th anniversary of the establishment of the first diplomatic ties between China and African countries and saw an increased focus on the relationship between China and Africa. In June 2006, Chinese President Hu Jintao and Premier Wen Jiabao visited ten African countries to promote China–Africa relations. In November, African heads of state met in Beijing to learn of a massive Chinese package of aid and assistance, including preferential loans, cancellation of debts, and numerous other initiatives.
Chinese engagement with Africa has become the topic of serious analysis and debate. In the field of governance, natural resources and markets, China’s presence is everywhere. Suddenly, Chinese influence in Africa has begun to top the foreign policy agenda of African governments. Chinese involvement in Africa has raised concerns about China's commitment to human rights issues and its policy on arms sales to African governments, while in the areas of textiles and natural resource exploitation, Chinese competition has generated some adverse consequences for African industry and the environment. China has been pronounced the new imperial power in Africa, usurping the influence of Western governments. However, a more nuanced approach and understanding of China–Africa relations might be more helpful.
Historically, China has played a different role in Africa from Africa's colonial powers, supporting African countries in various liberation struggles, providing educational opportunities and assisting in healthcare. Moreover, the rise of China in Africa does not just make problems for the continent, it also creates opportunities. As Stephen Marks pointed out in a recent editorial in Pambazuka News www.pambazuka.org/en/category/features/32432, Western corporations and governments now face competition – there is an alternative to the dictates of the international financial institutions – and this can give African states more room for manoeuvre. The African Union as well as civil society need to consider how to react to China's challenge while avoiding ’uncritical acceptance on the one hand or mere rejectionism on the other’.
Despite the clear influence of China, research, policy, debate and analysis on China’s present and future role in Africa remains limited. All too often, the influence of Western policy towards Africa dominates development discourse. What is missing is an integrated overview of Africa’s own response, especially by researchers and activists on the ground and an ongoing forum through which such an integrated response can be developed and sustained.
With the support of Christian Aid and TrustAfrica, Fahamu undertook a work in progress to identify leading institutions, activists and academics within Africa who were working on China. In the course of this review, we commissioned a number of researchers to write papers on the key issues for both this special issue of Pambazuka News (issue 282 of 14 December 2006) and for a book, which we plan to launch at the World Social Forum. Given the relatively short deadlines available to ensure that the book would be available at the World Social Forum, not everyone we approached was able to respond. The articles in this special edition provide, therefore, only a taste of the richness of research and reflection on the subject of China’s emerging role in Africa.
This special issue contains shortened versions of the articles that appear in the book 'African Perpectives on China in Africa', edited by Firoze Manji and Stephen Marks, and published by Fahamu in 2007. To save on space, we have not included references here. The full articles will appear in the book as will the references. We will also make the full texts of the articles available for download in PDF format at Pambazuka News website at http://www.pambazuka.org/en/publications/index.php.
As we have several long articles, this special issue is published in two parts, the second part going out tomorrow in place of the usual Links and Resources.
Our intention in publishing this special edition is both to reflect the current thinking on the subject as well as to help nurture further research and engagement. But in so doing, we know that we are only beginning to understand the shifts in the balance of forces in Africa that are emerging as a result of what some refer to as ‘South–South cooperation’. There are four other players whose role needs further attention: India, Venezuela, Brazil and South Africa. We hope to turn our attention to these ‘new’ players in the coming year.
• Firoze Manji is director of Fahamu and editor of Pambazuka News.
The summit in Beijing
2006-12-14
Stephen Marks
Stephen Marks introduces the articles in this publication by reviewing the billion-dollar glamour on display in Beijing during a summit between African and Chinese leaders in early November. But behind the glitz, what does it all mean for Africa? Is it colonialism revisited, a mad dash for African oil and minerals? Is there a Chinese model of development that can be followed? And what is the true nature of Chinese involvement in Africa?
Heads of state and dignitaries from 48 countries flocked to Beijing in November 2006 to attend the largest international summit ever held in the Chinese capital. And China pulled out all the stops, not only, or not even, to make the VIP guests feel welcome, but also to leave China’s people and the world at large in no doubt of the meeting’s importance.
Bright red banners lined the streets with slogans lauding ‘Friendship, Peace, Cooperation and Development.’ China’s official news agency Xinhua declared that the visitors ‘brought a trend of the mysterious continent to the capital of China’. Giraffes and elephants frolicking on the savannahs were spread over giant billboards on all the capital’s main streets and squares.
But behind the official ‘Africa chic’ and the predictable warm words of the official communiqués, something substantial was going on. The declaration adopted at the end of the meeting on Sunday 5 November was strong on ‘motherhood and apple pie’ rhetoric promising ‘a new type of strategic partnership’ founded on ‘political equality and mutual trust, economic win-win cooperation and cultural exchanges’. But there was impressive substance too.
On Saturday 4 November, China’s Premier Wen Jiabao proposed that China and Africa should seek to bring their trade volume to US$100 billion by 2010. This would more than double the 2005 level, about US$39.7 billion. In the first nine months of this year, China–Africa trade had already surged to US$40.6 billion, up 42 per cent year-on-year.
On the same day China’s President Hu Jintao announced a package of aid and assistance measures to Africa including US$3 billion of preferential loans in the next three years and the cancellation of more debt owed by poor African countries. China, he pledged, would:
• Double its 2006 assistance to Africa by 2009
• Provide US$3 billion of preferential loans and US$2 billion of preferential buyer’s credits to Africa in the next three years
• Set up a China–Africa development fund, which would reach US$5 billion, to encourage Chinese companies to invest in Africa and provide support to them
• Cancel debt in the form of all the interest-free government loans that matured at the end of 2005 owed by the heavily indebted poor countries and the least developed countries in Africa that have diplomatic relations with China
• Increase from 190 to over 440 the number of export items to China receiving zero-tariff treatment from the least developed countries in Africa with diplomatic ties with China.
• Establish three to five trade and economic cooperation zones in Africa in the next three years
• Over the next three years, train 15,000 African professionals; send 100 senior agricultural experts to Africa; set up 10 special agricultural technology demonstration centres in Africa; build 30 hospitals in Africa and provide a grant of RMB 300 million for providing artemisinin and building 30 malaria prevention and treatment centres to fight malaria in Africa; dispatch 300 youth volunteers to Africa; build 100 rural schools in Africa; and increase the number of Chinese government scholarships to African students from the current 2,000 per year to 4,000 per year by 2009.
President Hu even pledged to build a conference centre for the African Union ‘to support African countries in their efforts to strengthen themselves through unity and support the process of African integration’ – perhaps a visible reinforcement of the final statement’s pledge to support ‘the African regional and sub-regional organisations in their efforts to promote economic integration, and [support] the African countries in implementing the ”New Partnership for Africa's Development” programs’.
Early on Sunday morning, the 2nd Conference of Chinese and African Entrepreneurs concluded with 14 agreements signed between 11 Chinese enterprises and African governments and firms, worth a total of US$1.9 billion. The agreements cover cooperation in infrastructure facilities, communications, technology and equipment, energy and resources development, finance and insurance.
There was more good news to come. The summit was followed by a two-day African Trade Fair in Beijing. According to Xinhua ‘Over 170 enterprises from 23 African countries filled a Beijing exhibition hall on Monday with varieties of their local specialties, including minerals, jewelry, textile, fur, spice, tea and coffee.’
But except for textiles, which are notoriously hard-hit by Chinese exports, all the items listed as on display were primary products which Africa was already exporting in colonial times. Perhaps this influenced Xinhua’s choice of Chinese entrepreneurs to interview on their view of future business prospects in Africa.
‘Wang Jianping, president of the Hashan Company in eastern Zhejiang Province, told Xinhua that after the summit, he decided to increase investment in Nigeria from two million dollars to six million dollars so as to boost the development of local shoemaking industry’.
’Sheng Jushan, general manager of the Guoji Group in central China's Henan Province, said his company has just set up an economic cooperation zone in Sierra Leone, which attracts about 20 Chinese small and medium-sized enterprises’.
A similar processing zone in Nigeria, according to Xinhua, ‘when completed and put into operation, will help boost economic activities in the state through processing local raw materials into manufactured goods, especially those that have to be imported now in the country.’
Colonialism revisited?
China’s race for Africa is certainly due in large part to the same causes as Europe’s 19th century scramble – the need for raw materials to fuel industrialisation. As the Economist summarised it before the summit: Its economy has grown by an average of 9% a year over the past ten years, and foreign trade has increased fivefold. It needs stuff of all sorts—minerals, farm products, timber and oil, oil, oil. China alone was responsible for 40% of the global increase in oil demand between 2000 and 2004.
‘The resulting commodity prices have been good for most of Africa. Higher prices combined with higher production have helped local economies. Sub-Saharan Africa's real GDP increased by an average of 4.4% in 2001-04, compared with 2.6% in the previous three years. Africa's economy grew by 5.5% in 2005 and is expected to do even better this year and next’.
In Beijing in 2005 Moeletsi Mbeki, deputy chairman of the South African Institute of International Affairs, spelled out to a conference organised by the Chinese Parliament what many feared might be the result; Africa sells raw materials to China and China sells manufactured products to Africa. This is a dangerous equation that reproduces Africa’s old relationship with colonial powers. The equation is not sustainable for a number of reasons. First Africa needs to preserve its natural resources to use in the future for its own industrialisation. Secondly China’s export strategy is contributing to the de-industrialisation of some middle-income countries ... it is in the interests of both Africa and China to find solutions to these strategies.
Clearly, many of the decisions announced at the summit reflect Chinese awareness of these fears of a ‘new imperialism’. So did the People’s Daily article before the summit indignantly denouncing ‘The fallacy that China is exercising “neo-colonialism” in Africa’ which was ‘apparently aimed at sowing discord between China and Africa’.
And on the eve of the summit the state council, China's cabinet, issued ‘Nine Principles’ to ‘Encourage and Standardise Enterprises' Overseas Investment.' The principles require Chinese companies operating overseas to ‘abide by local laws, bid contracts on the basis of transparency and equality, protect the labor rights of local employees, protect the environment, implement corporate responsibilities and so on.’
Is there a Chinese model?
Like Japan and the smaller ‘Asian tigers’, China did not develop by following the rules of the Washington consensus. Critical attention in the West and also in Africa, has been focused on China’s avoidance of good governance and human rights conditionality now commonly insisted on by the West, and this undoubtedly lies behind much of the enthusiasm for the ‘Chinese model’ on the part of Africa’s more repressive regimes.
But there is also substance to the idea that ‘South–South’ cooperation has merit in its own right. In areas such as rural development and intermediate technology China’s experience does indeed have much to offer that is of greater relevance precisely because China too is a developing country.
Code such as the African Peer Review Mechanism were not intended to be part of an aid conditionality package, and the perception that they are externally imposed has damaged their reputation even in the eyes of campaigners and activists who support their objectives.
Conversely, China’s avoidance of conditionality means that she can move faster to produce visible results on the ground. The statism which still characterises China’s economy means that China can offer a ‘one-stop shop’ approach, in which contracts guaranteeing China its desired access to oil or key minerals, as in Angola, or Nigeria, can be combined with soft loans and much-needed infrastructure projects such as highways and railways, and low-cost, high-impact ‘add-ons’ such as rural development projects, industrial parks for small firms, and training and scholarships.
This integrated approach can be a genuine plus-point, and not only for such regimes as those in Zimbabwe or Sudan. As in this example, the whole deal can be tied up and delivered in visits by top governmental figures, reciprocated by red-carpet treatment for African leaders, as at the recent Beijing summit.
But not all these factors are unique to China, and future analysis would benefit by looking at China’s approach in a wider context, rather than in the one-track contrast with the conventional model of liberal globalisation which characterises conventional Western approaches.
As Chris Melvile and Molly Owen have pointed out China is not the only player in the ‘South–South’ game, or the only one to promote the idea as offering ‘win-win’ benefits. India, Brazil and South Africa have established their own ‘south-south’ links. Each has also been welcomed as an alternative to the old imperialist powers. And each in its turn has been accused of pursuing its own ‘sub-imperialist’ agenda.
And as Chris Alden and Martyn Davies point out: Chinese MNCs are in many respects like other MNCs operating in Africa, for example France’s Elf-Aquitaine or South Africa’s Eskom. In the French case, Elf-Aquitaine has been highly politicised, building up or even defining France’s Africa policy in particular countries such as Gabon or Angola.
The close proximity between French business and political interests manifested by the presence of oil company executives in the inner circle at the Elysee Palace as well as the circulation of key political elites such as Jean-Christophe Mitterrand within political and business circles, has been a feature of France’s post-independence African policy from the outset.
Moreover the modus operandi of foreign policy makers in Paris has been to construct policy around a network of personal relationships with individual African leaders, bolstered by a web of bilateral agreements in trade, finance, development assistance and defence.
The nature of the Chinese multinational corporations
If the role of the Chinese state is not so different to that of at least some western and ‘Southern’ states, how does the Chinese MNC itself differ from its rivals in the way in which it operates as a firm?
China’s government made its position clear in its official policy statement on Africa; ‘The Chinese Government encourages and supports Chinese enterprises' investment and business in Africa, and will continue to provide preferential loans and buyer credits to this end.’
As Mark Sorbara puts it ‘Investing in African extractive industries is a risky business, but China is desperately in need of raw materials to feed its booming economy, hence the government is willing to shoulder most of the risk for Chinese companies looking to invest in Africa.'
But the purpose of this state backing is not only to secure China’s access to raw materials. As Alden and Davies point out: In pursuit of its broader global ambitions, Beijing is intent on ‘picking corporate champions’ that, with the benefit of active and generous support from the state, are being groomed to join the ranks of the Fortune 500. Roughly 180 companies have been designated by the state to benefit from preferential finance, tax concessions and political backing to ‘go global’ and become true multinationals.
This aim to be global players in their own right was made clear by Fu Chengyu, chief executive of China’s oil giant CNOOC after the US Congress moved to block CNOOC’s takeover bid for Unocal, the US’ ninth-largest oil firm: ‘We aim to be a participant in the global industry, like all the international majors, supplying the global marketplace as well.’
The same seems to apply to the China–South Africa deal, concluded at the Beijing summit, to set up a joint company to expand ferro-chrome production in South Africa. Reuters’ report on the deal commented that ‘China has become a big investor in mining and natural resources in Africa as it seeks the raw materials to feed its economic growth, but unlike many Sino-African deals the purpose of Tubatse Chrome is to make money rather than to supply metal to China’. And the chairman of the South African partner was quoted as saying: ‘Sinosteel is a trading organisation, and Tubatse Chrome will be a profit-driven company. If China offers the best price we will sell it to China, but we will sell to wherever we can get the best price.’
Optimists may view this as a good sign. As Ndubisi Obiorah puts it: As global branding and reputation become more important to Chinese companies, they may become less willing to be associated with human rights abuses and repressive regimes in Africa and elsewhere.
As a result, he suggests, Chinese companies could become more vulnerable to ‘naming and shaming’ from NGO’s in Western countries and elswhere.
Optimists may also see some signs of this on the websites of Sinopec and Petrochina, which feature prominently their awards for corporate governance, and their ‘model’ policies on health, safety and environmental protection.
Does this establish the need for a ‘corporate China watch’ to be set up, for activists in Africa and elsewhere to bring this pressure to bear? But in that case why single out China? As Alden and Davies conclude: ‘Indeed even critics admit that if one sets aside the particular cases of Sudan, Angola and Equatorial Guinea, ”the rest of PetroChina and Sinopec activities on the African continent are not especially reprehensible” or at least no more so than many of their Western counterparts.
Perhaps the material distinction is not between Chinese capital and Western, but rather between the merely rapacious, and the more sophisticated. Even these are not two seperate categories, but at least as much two different faces, each of which may be presented as convenient.
In this context, those involved in corporate research could usefully examine the possibility that Chinese MNCs operating in Africa might themselves incorporate some Western capital, perhaps percolating not only through the obvious channel of joint ventures and shareholdings, but also through funds from Hong Kong and Taiwan.
Neil Tottman, head of commercial banking at HSBC China, has laid out aggressive plans for its commercial banking businesses in China, in anticipation of further deregulation of the sector this year. ‘The total volume of business referrals between Hong Kong and the mainland grew at an annual rate of 175 percent between 2002 and 2005. This year to date, volume between Taiwan and the mainland has increased 512 percent over the same period last year.’
The antidemocratic road?
But there is one other aspect of the concept of a distinctive ‘Chinese model’ which is certainly appealing to Africa’s more repressive regimes – the idea that it disproves the argument that democracy is an essential precondition for development. China is widely held to prove the opposite - the need for strong government.
Ndubisi Obiorah quotes a Nigerian example of this invocation of a ‘Chinese model’: ‘leading lights of the Obasanjo faction claimed that an absence of stability and visionary leadership were the principal cause of Africa’s underdevelopment and that it was these same qualities that had enabled Singapore and China to become contemporary economic miracles.’
As Obiorah points out, the rise of India might counter this self-interested vogue for authoritarian government. It could also be pointed out that before 1949 some of the main obstacles to China’s development were to be found in the close ties of ruling elites to forces at home and abroad opposed to modernisation; in archaic patterns of land ownership and authority; and in chronic national disunity and warlordism on a scale whose closest parallel in today’s Africa is the Democratic Republic of Congo (DRC). All of these were swept away by a massive popular revolution ¬– a prospect likely to be at least as unacceptable to Africa’s current repressive elites as a more gradual and reformist path to democratisation!
But the most powerful antidote to the idea that China validates an authoritarian road to development is the growing grassroots unrest in China over the cost of the country’s current economic model in its impact on employment rights, the environment and mounting inequality and social exclusion.
As Dorothy Guerrero has pointed out: China is now the world’s fourth-largest economy and many developing countries envy its record of economic progress. However, China’s phenomenal growth is producing a big misconception in that it is viewed as a big winner of globalisation.
Although it is true that market reforms and China's opening to the global economy gave millions of people there an increased standard of living, more Chinese people are suffering the consequences of its rapid transition to a market-based economy.
The majority of the Chinese people are not too concerned about when China will become the world's largest economy. Rather, they are asking, ‘When will the benefits of China's rise to superpower status start to affect our lives positively?
Even official sources in China and abroad are aware of the social costs of China’s free-market great leap forward. Members of the legislature have warned of the country’s impending employment crisis and the World Bank has confirmed that China’s poor are getting poorer.
As for the environment, no less a figure than Pan Yue, deputy director of China’s State Environmental Protection Administration, sparked controversy with a recent essay On Socialist Ecological Civilisation when he openly charged that: ‘The economic and environmental inequalities caused by a flawed understanding of growth and political achievement, held by some officials, have gone against the basic aims of socialism and abandoned the achievements of Chinese socialism.’
The march of neoliberalism within China and its impact on the Chinese people has advanced hand-in-hand with China’s growing imperialist role abroad. This apparent anomaly of an imperialist power itself subject to growing imperialist exploitation in alliance with local capital is not new – it also characterised Czarist Russia. And difficult though it may currently seem to act on the idea, the connection suggests that an obvious grassroots ally of activist and civil society groups in Africa will increasingly be their opposite numbers in China itself.
• Stephen Marks is a freelance writer and researcher specialising in development and human rights issues.
• This is a shortened version of an article by Stephen Marks . The full version, including references, will be available in a forthcoming book to be published in January by Fahamu and called ‘African perspectives on China in Africa’. The full articles will also be made available as .PDF files on the Pambazuka News website.
• Please send comments to editor@pambazuka.org or comment online at www.pambazuka.org
Comment & analysis
A new frontier in the exploitation of Africa’s natural resources
2006-12-14
John Rocha
John Rocha sets out to answer two questions related to China’s role in Africa: To what extent would China’s growing influence in Africa either advance or undermine the African agenda? And what are the challenges and implications that these hold for African governments, the private sector and the international community?
Introduction
China’s burgeoning influence around the globe has captured the attention of governments, the private sector and civil society. With a large population and recent high economic growth rates, estimated at 9.5 per cent, China now comes only second to the United States of America (USA) in its consumption of oil.
Based on current projections, Chinese demand and consumption for mineral resources is expected to grow exponentially in the foreseeable future, so in an attempt to diversify its source of supply, China has set its sight on Africa as a natural partner.
Within Africa towards the beginning of the 21st century, African leaders adopted NEPAD and transformed the erstwhile Organisation of African Unity (OAU) into a more vibrant African Union (AU). The need to end the continued marginalisation of Africa and reverse the development chasm between Africa and the rest of the world was a core objective. From China’s viewpoint, it was adopting the prevailing global strategy aimed at opening opportunities for foreign investment in China as well as creating new markets for Chinese investments abroad. A key feature of both initiatives is an ardent desire to improve South–South relations in order to strengthen the role of developing countries in international affairs.
Notwithstanding the international communities’ commitment to double total overseas development assistance to Africa by an additional US$25 billion by 2010, the composition, scale and slow pace of delivery is generating a certain level of disillusionment with Africa’s traditional development partners.
There is also a growing realisation that traditional relations and partnerships with the West have not helped Africa overcome the structural obstacles to eradicating poverty and reversing its economic marginalisation. Rather than develop, Africa is haemorrhaging while the rest of the world accumulates wealth at its expense through the unbalanced exploitation of its natural resources and the enforcement of a distorted international economic system. Logically, strengthened cooperation with China is seen as a way of addressing some of these structural imbalances.
Current status and trends in China–Africa cooperation
According to the Chinese Ministry of Land and Natural Resources, there were 158 minerals with identified resources and reserves in China in 2004. However, these resources are insufficient to meet an ever-increasing domestic demand and to sustain China’s dramatic economic growth. For instance, based on projections by the Ministry of Land and Natural Resources, by 2010 domestic crude oil production will be able to meet 51–55 per cent of demand and only 34–40 per cent by 2020; while domestic iron production will be able to meet 38 per cent of demand by 2010 and only 29 per cent by 2020. It is estimated that by 2010 and 2020 the shortage of coal will reach 250 million and 700 million tons respectively. So China is looking to Africa to address some of its short- to long-term needs.
Historically, the availability of cheap raw materials and the prospects for huge returns on investments, particularly from the exploitation of natural resources, has always provided an incentive for the expansion and deepening of political and economic ties with Africa. Africa is blessed with an impressive endowment of mineral wealth, including near-global monopolies of platinum, chromium and diamonds; a high proportion of the world’s gold, cobalt and manganese reserves; and extensive reserves of bauxite, coal, uranium, copper and nickel. Of the proved oil reserves currently estimated, Africa accounts for 7 per cent of the global total. New oil discoveries have been made in Madagascar, Zambia and Uganda while extensive exploration is ongoing in Ethiopia, Kenya and Tanzania. It is estimated that by 2010, the Gulf of Guinea will contribute at least one out of every five new barrels onto the global market.
Currently, China derives a quarter of its oil imports from Africa through its oil interests in Algeria, Angola, Chad, Sudan and increasing stakes in Equatorial Guinea, Gabon and Nigeria. Oil exploration rights were established in Sudan in 1995 by the China National Petroleum Corporation (CNPC) through ownership of a 40 per cent stake in the Greater Nile Petroleum Operating Company where it is pumping over 300,000 barrels per day. Another Chinese firm, Sinopec, is constructing a 1,500-kilometre (932 miles) pipeline to Port Sudan on the Red Sea, where China's Petroleum Engineering Construction Group is building a tanker terminal. China has invested more than US$8 billion worth of oil exploration contracts in the Sudan. In Nigeria, the China National Offshore Oil Corporation (CNOOC) acquired a 45 per cent working interest in an offshore oil mining licence, OML 130, for US$2.268 billion cash; CNPC invested in the Port Harcourt refinery while Petro-China is interested in the Kaduna refinery. ONGC Mittal Energy Ltd (OMEL), the joint venture between the Oil and Natural Gas Corporation and the L. N. Mittal Group, will invest US$6 billion in railways, oil refining and power in exchange for oil drilling rights.
Similar investments have been made in Gabon by Sinopec and Unipec through a joint venture with Total while Pan-Ocean exploits the Tsiengui on-shore basin and is associated with Shell to explore Awokou-1. Gabon is now selling one-fifth of its annual oil output to China.
While Chinese oil deals have captured the attention of the world, much less is being said about China’s demand for the main base metals such as aluminium, copper, iron ore, nickel, zinc and other minerals. In the DRC, Feza Mining, a joint venture between the Chinese company Wambao Resources Corporation and some Congolese businessmen, is finishing a pyrometallurgic plant which, according to the DRC’s Ministry of Mines, should produce 1,000 tonnes of pure cobalt per year.
Features of Chinese investments in Africa
China’s approach to Africa has several distinct characteristics. For example, a key feature of Chinese cooperation with Africa is the strong links between the Chinese government’s foreign policy objectives and the role played by Chinese enterprises. By the end of June 2003, the Chinese Ministry of Commerce had given approval to 602 Chinese enterprises to invest a total of US$1.173 billion in Africa. This had risen to 715 by the end of 2004. The range of activities that these companies are engaged in varies from trade, processing, manufacture, communication, transportation, roads and agriculture, to resources development.
For example in Angola, the US$2bn deal has lead to the rebuilding of national roads, the building of a new airport in the outskirts of Luanda and other major infrastructure development projects. In addition, a US$69 million agreement was signed between Angola's MundoStartel and China's ZTE Corporation and the Angolan Council of Ministers approved broader ZTE operations. These which will see ZTE invest US$400 million, of which US$300 million will be used to modernise and expand Angola Telekom to develop telephone networks in Angola. According to the Angolan government, the remaining US$100 million is to be invested in military communications, the development of a mobile telephone factory and the creation of a telecommunications training institute for Angolan employees. It is the multifaceted character of Chinese involvement in Africa that seems to be a major draw for African countries.
On a positive note, there is no doubt that Chinese investments in Africa are having and could continue to have some positive impacts. China is helping African countries to rebuild their infrastructure and providing other types of assistance to agriculture, water, health, education and other sectors. This could have very positive spin-offs in lowering transaction costs and assisting African governments to address social calamities such as poor health services, energy crisis, skills development, etc. Increased Chinese demand for raw materials has seen an upsurge in commodity prices, putting extra cash in the coffers of many resource-dependent economies. However, African countries should use this windfall to make provision for the future by investing heavily in education and training, diversifying the economy and strengthening the administrative and governance systems – political, economic and corporate – in order to be better able to maintain and sustain the current economic boom throughout the continent.
On a pessimistic note, the NEPAD framework extols the virtues of African self-reliance, ownership and leadership as well as good economic, political and corporate governance as the bedrock of its development agenda. The emergence of China as a key player in Africa could undermine the NEPAD vision since it could make African countries increasingly reliant on China rather than on their own domestic resources and the resourcefulness of their people. At present, China and not NEPAD or the domestic market is being seen as a more reliable source for resource mobilisation. There are also concerns about Chinese funded projects where in some cases, the ratio of Chinese expatriates (labour and enterprises) to locals contracted is as high as 70 per cent Chinese and 30 per cent local. This practice does not help Africa in addressing the problems of high unemployment and the scourge of poverty. Nor does it assist Africa’s private sector to grow both technically and financially. Instead it could entrench African dependence on external assistance.
The emergence of China has raised fears that China’s non-adherence to the West’s approach of imposing aid conditionalities has the potential to nullify all the progress made in fighting corruption and improving governance in Africa – implying that the problem of corruption in Africa is solely an African problem. There is a one-dimensional focus on Africa as the source of the problem whilst ignoring its global character. This brings us to the broader debate on capital flight. While it is correct that the revenue pilfered from Africa by its elites represents a major challenge to the economic growth and sustainable development of the continent, the haemorrhaging of money away from the continent also takes place in other forms. According to Raymond Baker, a renowned researcher on these matters, mispricing and transfer pricing are some of the tricks used to move money out of developing countries.
In my view, the effective and efficient management of public revenue and assets should not be limited to the public declaration of the proceeds accrued by African governments from the exploitation of natural resources. It should also entail ensuring that these transactions produce optimal benefits to the African people. For instance, there are issues related to the repatriation of profits, mispricing and transfer pricing which include but are not limited to the extractive industries. These practices are major contributors to increased corruption and have served as useful conduits for corrupt practices as well as capital flight. In addition, Africa is not only losing money through corruption and other money laundering activities but it is also the victim of a distorted international economic system.
Raising the stakes and the new scramble for Africa
The emergence of China as a dominant player in Africa raises two critical challenges for Africa and the international community. The first one pertains to Africa’s weak administrative systems (poor revenue generation, management and disbursement capacity), the absence of the rule of law and heavy dependence on natural resources. This situation is compounded by the lack of adequately skilled personnel and technological know-how, all of which are necessary ingredients for translating Africa’s natural resources into the development of the continent and its people. It is these acute weaknesses that make Africa susceptible to what is commonly known as the resources curse.
Second, it is abundantly clear that increased economic development over the next few decades, regardless of regional variations, will have a significant impact on increasing demand for vital resources. Consumption, in Africa as elsewhere, is bound to increase with improved standards of living.
Consequently, the dynamics of increased economic growth and development, growing populations, increasing consumption and dwindling resources will generate intense competition over access and control of natural resources. The impact of these developments will be particularly severe in Africa given the acute weaknesses described above.
The way forward
There is a general agreement that Africa’s wide variety of natural resources could be an essential tool in the fight against poverty, underdevelopment and marginalisation. The recent discovery of oil in Madagascar, Zambia and Uganda also demonstrates that Africa’s potential mineral resources are still a mystery to Africa and the world. Africa is a continent yet to be fully explored and its latent economic potential unleashed. However, there is a need for a paradigm shift on the part of Africa’s leadership both within the public and private sectors. The community at large and civil society organisations are crucial in ensuring that Africa’s natural resources are exploited and managed in a manner that contributes to the eradication of poverty as well as sustainable economic growth and development.
First, there is a need to place the broader national interest above short-term personal gain. In most African countries the state or the head of state are the custodians of natural resources on behalf of the people. The constitution enjoins them to exploit and manage these resources for the benefit of the nation. It is imperative that these constitutional provisions are strictly adhered to and implemented with vigour. The institutional, legislative, regulatory and enforcement capacity of the state must be strengthened so that it serves as a deterrent against unscrupulous and opportunistic behaviour. In order to ensure that Chinese or other multinational enterprises investing in Africa conduct their business in manner that enhances social cohesion and economic growth, the conduct of Africa’s leaders, public institutions, businesses and citizens need to be exemplary and beyond reproach.
Second, there currently seems to be no clear regional or continental strategy to deal effectively with the myriad of actors. This is resulting in a fragmented approach which weakens Africa’s bargaining position. In stark contrast, China and all the other actors are coming into Africa with well thought out and packaged proposals that enable them to maximise the benefits from any relationship with African countries. China, in particular, seems to have a purposeful strategy and is successfully delivering on all its objectives vis-à-vis Africa. The question is what is the driving force behind Africa’s sudden economic interest in China? Is it part of a well-calculated approach to unlock the continent’s true economic potential or is it merely a meek response to an unfolding development. Given Africa’s experience with the West before and after independence, the English saying ‘once bitten, twice shy’ is of particular relevance.
Further, while the super cycle of increasing demand for commodities and high prices is undoubtedly generating enormous benefits for African countries and is set to continue, the continent must guard against the Dutch Disease syndrome. Diversifying its economy and export base should be a key priority for Africa. By developing secondary and tertiary industries Africa would generate additional employment opportunities, bolster revenue for the state and enhance economic growth. Despite its major contribution as a supplier of raw materials, Africa’s development prospects are constrained by its heavy reliance on the primary sector as the dominant element in its economies. This situation is compounded by a distorted international system that facilitates the export of raw materials but inhibits and restricts the trade in processed goods from Africa. So far, China does not show any meaningful deviation from this well entrenched international practice.
However, as mentioned earlier, increasing international demand for commodities has resulted in a shift from a buyer’s market to a seller’s market. This is likely to continue for the foreseeable future, driven principally by the Asian boom under the leadership of China as well as India. Essentially, the emergence of new players provides an opportunity for resource endowed countries since they are now in a position of strength and spoilt for choice in trade negotiations.
This opportunity must be fully exploited and maximised if Africa is to extricate itself from the periphery and take centre stage in the global economy. For example, Africa must diversify its economy by identifying strategic niches and insisting on local beneficiation; negotiating better terms of trade at a bilateral and multilateral level as well as using its natural resources endowment as leverage in political and economic negotiations with international partners. However, for this to be effective Africa needs to adopt a more coordinated and integrated approach in its dealings, whether at bilateral or multilateral level. Unlike the Chinese and other major economies of this world that are backed up by strong political and economic clout, Africa’s ability and capacity to leverage is rather limited.
There is also room for enhanced civil society cooperation across Africa. At present community participation in the exploitation and management of natural resources is rather limited. Where it happens, the conduct and practices employed by communities can sometimes be self-destructive, as with the garimpeiros in Angola or the rebels in the Niger Delta. Another major opportunity for civil society is in the area of research and knowledge management. There is an information vacuum and this is having a negative impact on policy development and implementation.
The bottom-line is to ensure that the dialogue between the international community and Africa becomes more constructive and reinforces the NEPAD principles of partnership, mutual respect and benefit. The overarching objective of such a process should be to ensure that Africa’s natural resources are managed in an effective and sustainable manner for the benefit of the continent and the global economy. In other words, continental and global sustainable peace, security, stability and sustainable development should constitute the pillars for future cooperation in this vital sector.
• John Rocha is a senior analyst within the Peace and Security Programme at SaferAfrica where he is leading a process towards the development of minimum standards for the exploitation and management of natural resources in Africa. Rocha has a BA in human and social studies with specialisation in government, administration and development.
• This is a shortened version of an article by John Rocha . The full version, including references, will be available in a forthcoming book to be published in January by Fahamu and called ‘African perspectives on China in Africa’. The full articles will also be made available as .PDF files on the Pambazuka News website.
• Please send comments to editor@pambazuka.org or comment online at www.pambazuka.org
Taking ownership or just changing owners?
2006-12-14
Anabela Lemos and Daniel Ribeiro
From the stripping of forest resources in Zambezia province to concerns about the effects a multi-billion dollar dam will have on surrounding communities, Anabela Lemos and Daniel Ribeiro ask whether, after a long history under Portugese colonialism, Mozambique is not at risk of being colonised again under the flag of ‘economic partnerships with China’. They write that concerns in Mozambique centre around China’s weak social and environmental requirements, disregard for human rights protections, lack of transparency and policy of non-interference.
‘Cahora Bassa is ours’ are the first words Mozambique’s president, Armando Guebuza, said after signing an agreement with Portugal’s prime minister to transfer ownership of the 27-year-old hydropower dam on the Zambezi. The last link to Mozambique’s colonisation by Portugal is finally broken, but are Mozambique’s new economic ties following a similar pattern of exploitation and abuse?
Abusive economic interests are not something new in international relations, with extensive examples of the destabilising and crippling affects they can have on developing countries. These negative experiences have given foreign donors like the World Bank a bad reputation, and forced a number of donors to take social and environmental impacts more seriously and develop policies to address transparency, social justice and environmental sustainability. Past experience has shown that such protections are vital requirements in the quest for truly sustainable development.
However, one of the new overseas investors, the giant China, is rivalling the World Bank for honours as the biggest lender to African nations and undermining the lesson learnt of the importance of transparency, social justice and environmental sustainability. China’s expanding demands for new energy and raw material (as well as markets for its own goods) has made Africa a focus point for obtaining these valuable natural resources and many of its nations are increasingly important economic partners. China is the biggest consumer of zinc, nickel, copper and crude oil and the top importer of tropical woods.
China’s weak social and environmental requirements, disregard for human rights protections, lack of transparency and policy of non-interference in internal affairs of the countries they lend to has resulted in some African governments being shored up with funds while allowing them to avoid local and international pressure to clean up corruption. The result has been dictators maintaining power, centralising wealth, and avoiding true development.
Mozambique is one of the African countries that has latched onto China’s funding approach and grabbed the opportunity of non-interference and weak policies with both hands. Below are some recent examples of the negative results of this relationship.
Logging in Zambezia province
Chinese timber buyers are colluding with Mozambican business people and some members of the Mozambique government and their forest services to strip precious slow-growing tropical hardwoods from Mozambique’s semi-arid forests at a rate that could see the resource exhausted in 5-10 years, according to reports of the trade on timber and wood in the Zambezi. The unsustainable logging begins with Chinese support to timber buyers to acquire ‘simple licences’, which allow logging of a relatively small quantity in a specific area. These licences are given to local Mozambicans, in large numbers (146 in 2003 alone), thus starting a deforestation process often referred to as ‘the Chinese takeaway’.
Once an application has been approved, the licence holder pays for the licence (US$10–40 per cubic meter of forest logged depending on the species). Many of the local licence holders get credit from Chinese buyers to pay these expenses. The availability of this credit is the main factor driving the logging boom, attracting unqualified and unskilled people into the sector. Up to one-third of operators do not repay their debts, and this cost is passed on to other operators, in lower prices paid for the timber. On average the income generated by locals linked to the logging industry is below the legal minimum wage of US$30/month.
The quotas and licences give little indication of the quantity and area of logging; under-reporting is systematic and widespread. Inspections are rare, bribes common, and the computer-based control system of licensing and transport is purely cosmetic, according to reports and local experts. There is only one real checkpoint at Nicoadala, were copies of all the licences of all the operators are filed and were all drivers should stop. Anyone looking into the matter who spends time at the checkpoint will notice that the focus is on villagers with small volumes of hand-sawn timber and established industrial operators, while operators well connected to politicians, the Provincial Forests and Wildlife Services of Zambezia (SPFFB) and the timber buyers are allowed to escape. In 2002, the quota was set at 42,000m3 (1,132,000ha total area of concessions) but SPFFB reported only 33,200m3 (+/- 97,600 logs), of which only 28,400 m3 (+/- 83,500 logs) was exported. However, that year 17 bulk carriers and 27 container ships loaded logs in the port, totalling 51,000m3 (+/- 150,000 logs) based on the port authorities' record (also believed to be an underestimate by local experts).
For example in late October 2004, the bulk carrier Chang Ping docked in the port of Quelimane to load 2,000–2,500 tons of logs, according to the head of the company owning the ship. The local exporter (Madeiras Alman), however, officially declared a total weight of only 1,074 tons (4,715 logs with a total volume of 1,602m3). The ship was in port loading for 10 days into three holds simultaneously for 24 hours per day. Even with slow manual loading, at a rate of 20 logs per hour, and accounting for work stoppages, approximately 10,000 logs could have been loaded.
The manipulation does not stop with the statistics and data, but also involves the regulations. Originally, the main commercial species (Class 1) had to be processed prior to export. However, just as the regulations were coming into force, the ministry, under pressure from the logging industry, passed a special regulation (or ‘ministerial diploma’), reclassifying the commercial timbers to permit their export as logs. Now the unprocessed logs are exported to China, undermining local industry and transferring most of the benefits from one of the poorest countries in the world to what is becoming one of the richest. What is happening in Zambezia Province is replicated or even worse in other provinces such as Cabo Delgado, Nampula and Niassa. Rather than combating illegal logging, China, through measures including the manipulation of forest regulations, false technical information and statistics, bribes and indirect involvement in logging, is actually facilitating illegal logging and hindering sustainable development in the sector.
Mpanda Nkuwa dam
The proposed Mphanda Nkuwa dam is a good example of the problems linked to China’s lack of concern for human rights and the environmental impact of the projects they are financing. The US$2.3 billion Mphanda Nkuwa dam proposal has caused considerable debate in Mozambique with civil society and the potentially affected communities raising numerous concerns. The project's weak social and environmental assessment, high economic, environmental, social and technical risks and many other negative impacts, have put Western funders such as the World Bank off the project. In spite of these problems, early this year the China Ex-Im bank, China's overseas lending arm, agreed to back the construction of the dam project.
The Mphanda Nkuwa dam will have a capacity of 1,350 megawatts and will be on one of Africa’s most dammed rivers, the Zambezi. The dam's electricity will be directed primarily towards industry and southern Africa’s regional grid, completely ignoring the fact that less than 5 per cent of Mozambican’s have access to electricity. The production of the power will cause twice daily fluctuations in the river's flow, which will have adversely the people downstream that depend on the river for suitable and acceptable access to water, fishing, river navigation and flood recession farming.
The dam will also undermine years of restoration work in the Zambezi delta(East Africa’s richest wetland and a Ramsar ‘wetland of international importance’ site), which has been damaged by the mismanagement of the Cahora Bassa dam, just over 70km upstream of Mphanda Nkuwa. A daily flow regime and flood simulation is being suggested for Cahora Bassa dam to better support downstream ecology and meet environmental flow requirements. However, the Mphanda Nkuwa dam flow regime has been based on Cahora Bassa’s present destructive one, and the project environmental impact assessment states that if that is changed it could make Mphanda Nkuwa uneconomic. It is likely, therefore, that the years of work to begin restoring the Zambezi downstream of Cahora Bassa will be dropped in favour of getting more hydroelectricity out of the river.
The recent 7.5 earthquake and several aftershocks in Mozambique have justified already existing concerns about the seismic risk linked to the Mphanda Nkuwa project. The country is in the vicinity of the Nubia-Somalia plate boundary and straddles a highly active fault zone called the Shire trough, which runs southward from the southern point of Malawi almost all the way to Maputo. Thus the country is considered to be in a seismically active zone, but poor records in the area severely constrain scientists’ ability to determine the potential for large earthquakes. For example, the recent 7.5 earthquake was nearly 13 times bigger than had been thought possible along that fault.
The Mphanda Nkuwa dam will be in this seismically active area, just 200km from the heart of the Shire trough fault zone. In addition, the shape of the Shire trough means that the dam’s reservoir could increase the surrounding plates’ seismic potential as a result of the increased weight of the water – a phenomenon known as ‘reservoir-induced seismicity’ or RIS. Furthermore, the Estima fault crosses the reservoir 25 metres from the proposed dam wall. It is thought that this fault is active despite there being no activity in the recent geologic record. Mozambique’s lack of experience with and knowledge of large dams and China’s low social and environmental requirements, coupled with the weak data available for the area, increases the risk and creates the potential for a major disaster.
The China Ex-Im Bank's funding is intended to promote the export of Chinese mechanical and electronic products and high- and new-tech products, to support Chinese companies with comparative advantages, to ‘go global’ with offshore construction contracts and overseas investment projects. The bank’s involvement in Mphanda Nkuwa has removed the pressure on the Mozambique government to improve the social and environmental assessments of this project and has enabled the government to avoid addressing its various negative impacts. If the Mphanda Nkuwa dam project goes ahead in its present form, it will be another example of the negative impacts of large dams and will significantly handicap Mozambique’s development.
Other dam projects in Africa have not set an encouraging precedent. There have been serious human rights abuses around the Merowe dam in Sudan, for example (see the article by Ali Askouri). Its resettlement programme has been very poor, there has been no transparency, and it has a bad record on environmental and social assessment. Closer to home, in Zambia, state utility ZESCO is working with the Chinese company Sinohydro on the Lower Kafue gorge project.
It chose a dam site after a balanced assessment of the economic, social and environment factors. However, we have learned from an inside source that Sinohydro told ZESCO that it was not how they did things in China and that they wanted to see a site assessment that focused only on economic factors. In the end, the original ZESCO site was selected, but the role of the Chinese dam builders in trying to focus only on the economics of the project does not bode well.
We also hear allegations from the coastal fishing communities of illegal fishing from Chinese boats, using longliners and gill nets that not only capture turtles and sharks but are also destroying our coastal zone. It was reported that in October 2005 a Chinese ship docked in Maputo harbour with around 4 tons of illegal shark fins. No information was available on the species of the sharks, where they were caught or the method used. The Chinese illegal fishing boats are taking advantage of our government's lack of interest in or means to control and monitor our coastal area, and are destroying it and the livelihoods of the local communities.
The economic link with China is still a young and growing partnership with numerous investments in the pipeline. The few current investments have shown a tendency towards exploration and abuse. The secrecy of the negotiations, whether it is Cahora Bassa or Mphanda Nkuwa, the conditions of the funding and the disregard of the basic building blocks of development such as equality, social justice, a healthy environment and equity make us wonder if we Mozambicans are taking ownership of our country or just changing owners. What are the costs to our people and land? What will be the heritage of future generations? What is ahead of us? After so many years of being colonised by the Portuguese, are we now being colonised again, in the name of development but under the new flag of ‘economic partnerships with China’?
• Anabela A. Lemos is a Mozambican environmental activist and founder member and director of JA! (Justiça Ambiental). Daniel L.Ribeiro is a Mozambican biologist, researcher and environmental activist. He is a founder member of JA! (Justiça Ambiental) and coordinator of the Water Rivers and Development unit in JA!
• This is a shortened version of an article by Anabela Lemos and Daniel Ribeiro. The full version, including references, will be available in a forthcoming book to be published in January by Fahamu and called ‘African perspectives on China in Africa’. The full articles will also be made available as .PDF files on the Pambazuka News website.
• Please send comments to editor@pambazuka.org or comment online at www.pambazuka.org
China’s investment in Sudan: destroying communities
2006-12-14
Ali Askouri
Ali Askouri charts the high cost of China’s rising involvement in Sudan, placing emphasis on the lives lost and communities displaced in the Southern Sudan and Darfur. He explains the rapidly growing Chinese demand for oil and the involvement of Chinese companies in huge infrastructure projects. ‘The sad truth is, both the Chinese and their elite partners in the Sudan government want to conceal some terrible facts about their partnership,’ writes Askouri. ‘They are joining hands to uproot poor people, expropriate their land and appropriate their naturaul resources.’
Before Sudan's independence in 1956, the nation's economic relations with China were insignificant. Despite good diplomatic relations, the level of cooperation between the two countries hardly figured on Sudan's foreign-trade sheet. From independence up to the early 1990s, Sudan exported cotton, sesame, and metal scraps to China. In exchange, Sudan received small arms, fabrics and other textiles. At one point, however, in the early 1970s, the Chinese built what they called the ‘Friendship Hall’ – a grand conference hall on the Blue Nile's western bank, a few hundred metres from the confluence of the White and Blue Niles at Khartoum. Available data showed that Sudan’s total debts to China up to 2001 totalled US$67.3 million, of which China wrote off 63 per cent in 2001.
In 1989, however, there was a military coup in Sudan. Led by Islamic officers and widely supported by the National Islamic Front, the junta declared a holy war on the Southern Sudanese rebels who were fighting the central government at the time. The main objectives of the coup were:
• to crush the rebels
• Islamicise and Arabise the southern part of the country
• forcibly unite the South with the rest of the country
• establish an Islamic state.
To achieve its objectives the junta set out to exploit the country's vast oil reserves, discovered by Chevron in 1978. The country was opened up for Islamist investment and many Islamic groups came to the country with huge amounts of money. However, it soon became apparent that these groups lacked the necessary technical expertise required for such ventures. Consequently, not long after they had settled, the junta expelled them under various political pretexts.
As a result of a trade and financial boycott by the donor community and international financial institutions, Sudan was facing bankruptcy. To overcome these economic difficulties, the junta began feverishly looking for an influential business partner who could extract oil and mobilise other natural resources to lubricate its atrophying economic muscles. Given its recent human rights records, the human and material costs of any investment were never issues that the junta was going to care about. Indeed, the junta had shown exceptional cruelty towards the civil and political rights of citizens, even those who did not antagonise the junta. It was therefore expected that violations of rights would become excessive when civil and political rights collided with the junta’s declared agenda.
Following its experience with the Islamists groups, the junta wanted its business partner to have the strength and ability to withstand political pressure from Western ‘imperialist’ countries; the stamina and determination not to be bothered by the protests of human rights groups; and, above all, to be a heavyweight international player that Western imperialist countries would find hard to force out of the country through political pressure.
China's long-term strategy for Africa
Numerous events in different African countries since the beginning of the 21st century have show that there is a long-term Chinese strategy to control and exploit Africa natural resources, particularly oil. The Chinese strategy is propelled by China's growing internal demand for oil as a result of its rapid economic growth. The key African countries targeted by the strategy include, but are not limited to, Sudan, Ethiopia, Angola, Chad, Algeria, Equatorial Guinea, Gabon, Nigeria, Zimbabwe, Mozambique and Ghana. Although the current economic development status of these countries cries out for development targeted at improving the lot of the impoverished masses, this is not the motivation of Chinese economic assistance. Following a top-down economic development approach, Chinese economic assistance to these African countries has encouraged elitism, deepened social and class divisions and widened corruption. Economic assistance seems targeted to reward or bolster whomever is in power, regardless of how they got there. While many African societies struggle to further democratic values and strengthen respect for human rights, there is no doubt that Chinese economic assistance is encouraging dictatorships and tyranny in Sudan, Chad, Zimbabwe and elsewhere.
Chinese leaders keep repeating the misleading statement that China does not interfere in the internal affairs of the countries it deals with. This statement is untrue, provocative and insulting to many Africans who are aspiring to further democratic values. China interferes deeply in the domestic affairs of its partners, but always to the benefit of the ruling group. A recent meeting between the Sudanese president and his Chinese counterpart revealed the extent of China interference in domestic Sudanese affairs in favour of the ruling junta. Addressing his Chinese counterpart, the Sudanese president stated: ‘The relationship with China has been fraternal, brotherly and excellent. Our relation with China is built on mutual benefit. China has always supported the unity of Sudan. When our relations became problematic with the international financial institutions, we turned to China. Relations with China have enabled us to overcome economic difficulties.’ The Chinese president has expressed support for the Sudanese president’s concerns about United Nation troops being sent to the Darfur region: ‘China is sympathetic to Bashir’s objections against peace-keeping forces’.
In Sudan, Chinese support for the government has undoubtedly undermined all the efforts of the opposition to effect change in the government, thereby extending its rule despite the clear political indications that the junta would be unable to rule the country without heavy Chinese economic and military support. It is therefore not surprising that Chinese economic aid to the Sudanese junta has come at an extremely high human cost in Southern Sudan and Darfur, where the number of lives lost and communities displaced has become an internationally recognised tragedy.
History of China-Sudan relations
As early as 1992–94, hundreds of Chinese, allegedly employed by Chinese intelligence, started to appear on Khartoum streets selling cheap consumer products directly to the people. Some of these people became involved in house construction while others set up small commercial companies. The tens of thousands of Chinese workers who were later recruited for the construction of the oil pipeline and other mega-infrastructure projects were gradually moved into Sudan this way. In those days the phenomenon of hundreds upon hundreds of young Chinese (mostly men in their 20s) who neither speak Arabic nor English, crowding the dusty streets of Khartoum selling combs and headscarves to people was the talk of the city. Apparently it was hard for the local people to understand how a young chap could fly in from Shanghai to sell combs and deodorants on Khartoum’s streets in order to make a living!
Inside China, the rapidly growing demand for oil pushed China to venture into Africa looking for opportunities. ‘The reality that China faces is that it will need to become a net importer of oil by the year 2000 if it is going to continue with its modernisation plans,’ wrote Cleophas Lado of the University of the Western Cape.
Indeed, endowed with its vast recoverable oil reserves, Sudan was a great opportunity for China. Equally, for the Sudanese junta, China – given its exceptional ability to condone human rights abuses alongside its heavy-weight ability to develop large-scale projects – represented the ideal partner with whom to strike a deal. ‘It is very much a symbiotic relationship between China and Sudan, where China is in desperate need of a secure source of oil over the long term, while Sudan needs the external credit, investment and market for its oil.’
Lado describes a few of China's investments in Sudan: ‘China has invested heavily in the country. China has initiated $20 billion worth of development and infrastructure projects involving dams, hydroelectric power stations, textile mills and agricultural schemes. China has promised to contribute $750 million in the construction of the new Khartoum International Airport, and another $750 million for a new dam on the Nile near in the Northern Province.
Approximately $100 million has been spent by the Chinese on textile plants, and $500 million on a recently constructed oil refinery. China also provided Sudan with over $12 million in soft loans to fund a fishing project in the Red Sea. Other economic ties have involved arms transfers between Beijing and Khartoum. China has supplied the Khartoum government with arms since 1985, with transfers between 1985 and 1989 totalling $50 million. China became one of the GOS's [government of Sudan’s] principal arms suppliers in 1994 and remains so today.
In addition to Lado’s list of Chinese projects in Sudan, China is upgrading the Khartoum oil refinery from 50,000 barrel/day (b/d) to 70,000 b/d at a cost of US$350 million. As part of the Merowe dam project (also being built by the Chinese, see below), the Chinese won a second contract for power towers that will transport electricity from the dam site to Khartoum and Port Sudan. The contract signed by Harpin-Jilin and CCMD is worth about US$460 millions. This is in addition to a bridge project downriver from the dam site costing US$10 million.
While China claims that it does not interfere in internal politics, the distribution of these projects reveals that China is immersed in the internal politics of Sudan up to its neck. However, Chinese immersion in internal politics is meant to appease the ruling elite, with minimal analysis of the economic, social and environmental feasibility of the proposed projects. For China, whoever happens to be in power is a friend of China as long as they will guarantee China access to resources. Indeed, the opportunistic nature of Chinese policy in Africa is very obvious. It has led, as discussed below, to massive internal displacement and is associated with the loss of hundreds of thousands of lives – tantamount to genocide in many parts of Sudan.
Displacement and human rights abuses in oil producing areas
Currently most of Sudan's oil is produced in the Upper Nile area. The Dinka and Nuer people are the main tribes living in the area. To ensure the safety of the oil installations, the government adopted a scorched-earth policy carried out by the army and splinter groups from the Sudan Peoples’ Liberation Movement, used by the government as proxies to carry out its depopulation policy of the area. According to Christian Aid: ‘The inter-tribal warfare that has plagued the south for the last decade has been fomented by strategic arms deliveries from government garrisons. By the middle of last year, hundreds of cases of ammunition had already been delivered to one of the southern factions fighting for control of Western Upper Nile and its vast oil reserves. This is warlordism – as the government and the oil companies call it – but warlordism provoked and encouraged by the government with the express intent of depopulating oil-rich areas.’ The policy was carried out with an intensity that leaves no doubt that the inhabitants must leave or face death and extermination.
The report continues, ‘Since construction of the pipeline to the Red Sea began in 1998, hundreds of thousands of villagers have been terrorised into leaving their homes in Upper Nile. Tens of thousands of homes across Western Upper Nile and Eastern Upper Nile have been burnt to the ground. In some areas, the charred remains of the humble mud huts that got in the way of oil are the only evidence there is that there was ever life in the region.’
Displacement in the Merowe dam project
The Merowe dam (also known as the Hamdab dam) is a massive multipurpose dam project on the fourth cataract of the River Nile in Northern Sudan. The dam, which is expected to cost around US$1.8 billion, is being implemented by a Chinese joint venture between China National Water Resources and Hydropower Engineering and China Water Engineering, known as CCMDJV, according to the dam implementation unit website and other Sudanese and European companies. The CCMDJV contract totalled US$ 60 million. Chinese companies have another contract in the project for power tower networks that extend to Dongola, Atabara, Portsuan and Khartoum. The total amount of the Chinese contract is US$460 millions. The project, according to the dam authority, will displace more than 50,000 small farmers living on the riverbanks.
In February–March 2005, two leading experts on dams and resettlement visited the site and reported: Al Multaga site is located in the desert. The Merowe Dam Project Implementation Unit (MDPIU) is providing support in removing the sand that covers many plots and in irrigating the land. However, two years after resettlement, some 20% of the land has still not been cleared of sand; it is thus unavailable for production. And even with irrigation, the quality of the soil is so poor that farmers cannot sell their products on the market.
In Sudan, it has been the established tradition that major public infrastructure projects are normally guarded by the police force or in exceptional cases by small army units. Staff working on such projects normally live among local people without of any type protection. On the assumption that the Chinese are investing their money to help poor Sudanese, it is odd that they believe the dam site should need security protection 24 hours a day. It is even more puzzling given that in that part of Sudan – where villagers are all connected or related to each other – theft or crime of any sort are unheard of. Villagers still leave their doors unlocked. From what, then, do the Chinese need protection?
The sad truth is, both the Chinese and their elite partners in the Sudan government want to conceal some terrible facts about their partnership. They are joining hands to uproot poor people, expropriate their land and appropriate their natural resources.
Conclusion
Commenting on China’s foreign policy, Lado states: From Sudanese experience it looks that the strategy of China’s foreign policy is not built on initiative and entrepreneurship, it rather exploits the opportunities resulting from the contradictions in the international arena. For China Sudan was the best opportunity that China could dream of given its rising domestic demand for fuel and the growing internal trend among Chinese investors for overseas investment.
The opportunistic nature of Chinese foreign investment, particularly in Sudan, was further exposed when pressures mounted on the Sudanese government to accept peacekeeping forces in Sudan. China failed to veto any United Nation Security Council Resolutions on Darfur, including the referral of Darfur criminals to the International Criminal Court. This has led many Sudanese commentators to question the feasibility of maintaining a strong link with China and whether China is a trustworthy and reliable political ally.
One reason China is the single biggest international player in Sudan is the prolonged boycott by Western countries of the Sudan government. Excluding a vast country endowed with huge natural resources from contemporary international affairs may not be the best strategy. As experience has shown, isolating countries makes them conducive to violence, human rights abuses and civil unrest.
China's huge presence in Sudan needs to be challenged on all fronts. China must be made aware that its opportunistic involvement with dictatorship carries a price for trade and investment inside China. Support for pro-democracy groups needs to be strengthened; investment that observes acceptable international standards on the environment needs to be enhanced. And above all, international justice mechanisms must be made more effective so that perpetrators know that eventually they will face justice.
• Ali Askouri is the director of the London based Piankhi Research Group working in the field of development and human rights.
• This is a shortened version of an article by Ali Askouri. The full version, including references, will be available in a forthcoming book to be published in January by Fahamu and called ‘African perspectives on China in Africa’. The full articles will also be made available as .PDF files on the Pambazuka News website.
• Please send comments to editor@pambazuka.org or comment online at www.pambazuka.org
Can China Save Zimbabwe’s Economy?
2006-12-14
John Blessing Karumbidza
The ‘look east’ policy of Zimbabwean president Robert Mugabe is well documented. But the deeper implications of Zimbabwe’s relationship with China are less well understood. Whether the relationship turns out to be a win-win one will depend much on how effectively Zimbabwe can build institutional and bureaucratic capacity to harness Chinese funds and investment for the benefit of the country, writes John Blessing Karumbidza, who doubts whether this will be the case, raising questions as to whether Mugabe is simply replacing Western colonialism with Chinese imperialism.
‘We have turned east where the sun rises, and given our backs to the west, where the sun sets’ – Robert Mugabe on the occasion of the celebration of 25 years of Zimbabwean independence, May 2005.
That China is a rising global economic player of note in Africa is well established. China’s interest in Africa is part of a calculated plan and policy to ‘go global’. Africa offers a strategic training ground and opportunity for Chinese capital. In an address to the Nigerian Senate in 2005, the Chinese President described China-Africa relations as ‘win-win economic cooperation’. This paper explores what will become of the renewed relationship between China and Zimbabwe, or more appropriately, the Zimbabwe African National Union, Patriotic Front (ZANU PF).
It is arguable that whether the relationship becomes what the Chinese President described as a ‘win-win’ relationship is not entirely dependent on China, rather on whether Zimbabwe has the institutional and bureaucratic capacity to turn Chinese funds and investment to benefit the country. There are reasonable doubts about the possibility of widespread and long term economic benefits to Zimbabwe. Temporary benefits so far include the political preservation of Mugabe reign and personal aggrandizement through corruption and kickbacks by his ZANU PF cronies flowing from Chinese investment.
On the whole, it would not be fair to blame the Chinese for acting to further their interests. It is incumbent upon the government of Zimbabwe and its people (and any other African country for that matter) to put in place a programme and strategy for chanelling funds and direct investment in a way that contributes to growth of its own economy.
Questions about Chinese financing and business involvement in African development programmes include: Are they based on an equal partnership? Are African governments able to negotiate terms of interaction without ‘pawning’ their countries and submitting their people to exploitation?
There is growing concern that China disregards human rights and democracy. It has a reputation for the abuse of workers’ rights, intolerance of political opposition; and dislikes a free press. In the name of non-interference, China justifies doing business with pariah states and dictators – which also means that civil society and the citizenry cannot hold them accountable for flaunting environmental and labour laws.
It is important to note however that this Chinese ‘non-interference’ policy cannot be permanent. The Chinese are well aware of this themselves. Where deals are signed with unpopular dictatorial regimes that could later be revised by a new government, it becomes necessary for the Chinese to protect such regimes. This explains their arming of the ZANU PF government in Zimbabwe. For example, China funded Zimbabwe’s acquisition of military-strength radio jamming equipment to block opposition broadcasts ahead of the 2005 elections.
Liberation ties paying off for China
In seeking to gain a hold on African resources and opportunities for sale of Chinese goods, China should be wary of losing political capital and ‘credibility’ it acquired from supporting African liberation struggles through conniving with dictatorial regimes. Prior to the present day questionable expansion, China had no burden of historical guilt in Africa, unlike the global North. China therefore gives credence to the likes of Mugabe when it claims to be protecting African sovereignty. Whereas British Prime Minister Tony Blair and Bono see Africa as a ‘scar on everyone’s conscience’, still troubled by their historical guilt of the slave and colonial era, the Chinese see Africa as a business opportunity.
The earlier 'ideological' phase of Chinese-African relations was part of a global strategy which by the mid 1970s saw some 15,000 doctors and over 10,000 agricultural engineers from China serving all over the Third World. It is common knowledge that many African countries exploited the cold war and the bi-polar world system by claiming to be socialist to gain assistance during liberation and after independence, going first to the West, then the East for development aid.
By 1977 Chinese trade with Africa reached a record US$817,000,000. The new orientation found institutional expression in the first China-Africa Co-operation Forum held in Beijing in 2000 - a mechanism to promote diplomatic relations, trade and investment between China and African countries. In the same year, China-Africa trade passed $10bn for first time. By 2003 it reached US$18.5bn. By 2004, nearly 700 Chinese companies were operating in 49 African countries. According to some estimates US$30 billion will change between Chinese and African hands this year. More recent Chinese estimates claim that it is already approaching US$40billion.
China is using the UN’s five-point proposal to ‘assist’ developing countries accelerate development, including: ‘Granting zero-tariff treatment for some exports from the least developed countries, increasing aid to the heavily-indebted poor countries and least developed countries and cancelling debts contracted by them, providing concessional loans and effective medicine for treating malaria, and training professionals.’
These steps will increase China’s access to the raw materials, energy and food resources it requires to sustain growth as well as feed its population. Observers have pointed to the fact that ‘more recently China's policy has shifted from cold war ideology to a more classical pursuit of economic self-interest in the form of access to raw materials, markets and spheres of influence through investment, trade and military assistance - to the point where China can be suspected of pursuing the goals of any classical imperialist’. Moreover, the heavy militarisation of the Zimbabwean government through Chinese loans and technology raises suspicions of China’s global ambitions to develop strategic military bases in Africa.
A closer look at the nature and character of Chinese investment in Zimbabwe
For Mugabe, who sees democracy and development as mutually exclusive, the fact that China has been able to raise 400 million of its people out of poverty over two decades, without being subjected to democratic elections and a free press serves as a useful example. Mugabe cites the present world order as a source of conflict and war, and calls for a more positive alternative order.
China was ZANU PF’s main supporter in the 1970s in the war against colonial rule. After independence, Zimbabwe declared itself Marxist-Leninist and announced the intention to reorganise society along socialist lines while courting Western aid and and the IMF.
Since 1980, Zimbabwe has revoked the liberation era ties with China to maintain low profile diplomatic ties, which are now upgraded to a development partnership. As a result of the lack of conditionalities on Chinese loans and funding, Chinese loans in the 1980s went into white elephant projects, such as the construction of the National Stadium.
By the end of 2004, Chinese investments in Zimbabwe were estimated at US$600m. To service the increasing Chinese investment and the 9000 Chinese believed to be living and working in Zimbabwe a bi-weekly flight between Harare and Beijing was launched.. Another US$600m was pledged at the June 2005 Asia Summit; and separate deals between Chinese state and private firms were signed with various Zimbabwean corporations. Renewed and increased China-Zimbabwe relations brought about now familiar circumstances: a Zimbabwean state now considered by the global North as a pariah state; an unprecedented economic slump; unemployment above 75 per cent, inflation heading towards 2000 per cent;, and shortages of consumer goods, most importantly fuel.
European and American travel sanctions, the lack of any IMF rating, coupled with the ANC in South Africa’s conditions of political and economic ‘normalisation’ have taken their toll. In August 2005 therefore, snubbing the efforts of Thabo Mbeki, Mugabe turned to China for funding to ‘revive the economy through increased agricultural production’. This led to Chinese promises for increased economic cooperation in many areas of the economy and an immediate US$200,000,000 to finance agricultural production and three MA-60 passenger planes.
Mugabe fought the 2005 elections on the argument that Zimbabwe must not become a colony again. But it is questionable whether he has not in fact simply replaced Western colonialism with Chinese imperialism. Having ceded control of strategic state firms and massive Chinese takeovers, including of railways, the electricity supply, Air Zimbabwe and Zimbabwe Broadcasting Corporation makes ‘win-win’ economic cooperation between China and Zimbabwe appears doubtful. Given that Zimbabwe has no comparative advantage over China in any sector, this opening up of the economy is most likely to benefit the Chinese perhaps even at the expense of Zimbabweans.
Zimbabwe lacks the institutional and strategic infrastructure to effect requisite economic transformation, and will have difficulty putting Chinese development loans to good use. The failure to revive the agriculture sector since the 2000 land seizures is a major concern.
It is not surprising therefore that the Chinese signed a contract to farm 386 square miles of land when millions of Zimbabweans are still landless. Recent land seizures saw most of the productive land fall into the hands of the elite, while the rural poor remain mostly landless. The Reserve Bank governor’s monetary policy statement emphasised the need for the agriculture sector to pull its weight in the economic turnaround of the country encouraging the new landowners (mostly urban ‘telephone farmers’) that ‘the battle cry is for all those who hold land to view it as an effective means of economic emancipation rather than a status symbol’.
Beyond the rhetoric of ‘the land being the economy and the economy the land’ there is no apparent strategy for the necessary transformation required for agriculture to release its potential for the economic turnaround needed in Zimbabwe. Zimbabwe cannot even benefit from the Chinese Maoist blueprint for rural economic transformation. The joint Chinese ventures in Zimbabwean agriculture amount to nothing more than land renting and typical agri-business relations that turn the land holders and their workers to labour tenants and subject them to exploitation.
There is additional fear that the takeover of strategic national firms by the Chinese companies is a security threat and can be seen as loss of national sovereignty. Most sinister of all is that the Chinese authorities must know that Zimbabwe is more than likely to default on payment of bills; and wishes precisely this, in order to obtain a tighter grip on Zimbabwean assets.
It would be naïve to think that China is motivated by the need to salvage the Zimbabwean economy from its economic abyss; indeed even the government does not itself believe this. It is simply a venture to save political face. For the Chinese, the investment in Zimbabwe is nothing different from Chinese ventures elsewhere on the continent. The current arrangements, simply allows Mugabe to keep the illusion of victory over the West; and enable his cronies in the army, police, government and business to partner with the Chinese in further exploitation of the masses. As in the 1980s, the poor people will be told to tie their stomachs and pull up their socks, and that a revolution is not for ‘cry babies’. For as long as Mugabe reigns over the abyss, the rhetoric of imperialist demons fighting against Zimbabwe will continue to suffice.
In the context of a politicized security system, silenced media and partial judiciary, the Chinese will drain the Zimbabwean economy and future generations will pay for it.
Anti-Chinese xenophobia: Attitudes towards the Chinese in Zimbabwe
When confronted with reports of crime against Chinese nationals (numbering not more than 10 000), Zimbabwe established a Chinese desk at the central police station in Harare. Mugabe has also appointed a Minister for Chinese affairs.
Already, the police officers, the University of Zimbabwe and schools have been asked to offer classes in Mandarin (soon after losing their love of French). Reacting to the new requirement to learn Mandarin, Washington Katema, ZINASU president, snubbed the move as a case of the ‘madness of the Mugabe regime scaling new heights’ and as a political gimmick to lure the Chinese into the country to bankroll the bankrupt regime. These excesses by Mugabe’s regime are likely to fuel xenophobia against the Chinese. Many reports of crime and abuse of women and children, rape and violent crimes against Zimbabwean nationals are yet to receive such a high profile response.
The economic background to the anti-Chinese sentiments is that Zimbabweans are horrified at the prospect of a permanent take-over of strategic state companies in what is generally considered a desperate move to perpetuate the tenure of ZANU PF. Trade unionists are worried that companies are being forced to close having lost their market to cheaper goods imported directly from China, and about the abuse of workers. The Chinese managers are alleged to have a negative attitude towards local people and massive dislike for trade unionists. At will they are known to ‘forget’ to understand English as a means to avoid dialogue with anyone critical of their actions. The Zimbabwe Congress of Trade Unions (ZCTU) was quoted as saying that a Chinese steel company operating in Willowvale in Harare has unacceptable pollution levels but the government treats them with kid gloves.
Conclusion
In the next half a century if all African countries adopted the shift from colonial languages that create a barrier to cultural unity, China could replace them with one language spoken across the continent. Maybe then, a ‘United States of Africa’ – under Chinese ‘prefectship’ – may become possible. After all, China would gain more advantages from a united Africa than from a balkanised continent. China is in Africa to pursue expansion, consistent with its search for global dominance, and to avoid being out-competed by the US. It therefore requires resources, raw materials, and markets, and space for its surplus population.
As far as Africa is concerned however, as long as poverty remains at the centre of the conflicts and crises in Africa, and there is no African reconstruction and development strategy, conceived and funded from local resources, the giant panda will carry on from where the colonialists and imperialists left.
Mugabe’s looking ‘east where the sun rises’, expecting Chinese loans to develop the beleaguered economy remains a fantasy as long as his politics and economics are wrong. Meantime, with Mugabe fixated on Chinese promises, the people of Zimbabwe, especially the middle class that decide to leave the country at the whims of Mugabe, and Chinese take over, in the pursuit of temporary respite in the diaspora, only have themselves to blame.
• John (Blessing) Karumbidza is an economic historian and researcher in rural sociology based at the University of KwaZulu-Natal in South Africa. He is a public intellectual seeking to promote the position that ‘another Afrika is possible’.
• This is a shortened version of an article by John (Blessing) Karumbidza. The full version, including references, will be available in a forthcoming book to be published in January by Fahamu and called ‘African perspectives on China in Africa’. The full articles will also be made available as .PDF files on the Pambazuka News website.
• Please send comments to editor@pambazuka.org or comment online at www.pambazuka.org
China’s grand re-entrance into Africa
2006-12-14
Moreblessings Chidaushe
Moreblessings Chidaushe tackles the issue of development aid to Africa, comparing the approach of the West and the new player, China. What is significantly different, she states, is that instead of the top-down language used by the West, China has instead used language that speaks of partnership and friendship. The West should not see China as a threat to its hold over Africa. Africa should be left to decide who it wants to engage with, she concludes.
This article interrogates China’s new approach to Africa in the specific context of development aid (grants, loans, technical experts). The rationale is to compare the Chinese approach to the traditional western donor approach and analyze the extent to which Africa may or may not benefit from this new approach. Some of the questions it tries to explore are; is China necessarily offering Africa a better development aid option than the west? Where is the new relationship taking Africa? Will Chinese aid move Africa towards achieving the MDGs? Is China a new friend or a new imperialist? What will be the west’s role in this new paradigm? And most importantly is this engagement not just a case of whose turn it is to colonize a continent up for grabs anyway?
Background/context
Chinese-African relations date back to 50 years ago when in 1956, China first established diplomatic relations with Egypt, since then, China has not looked back in advancing its relationship with the continent. To date, it has established co-corporation with 48 African countries (supporting the One China Policy). Africa and China share common historical experiences which have significantly contributed to cementing of what is now described as an “unshakable friendship”. Fifty years of engagement has borne more than 720 Chinese projects in Africa, huge infrastructural projects (TAZARA railway, major highways, stadiums, mining, energy ventures, oil in Angola and Nigeria) 18,000 governmental scholarships, 800 Chinese enterprises, 15,000 medical personnel and much more. Trade between the two parties has risen from an estimated 4 billion in 1995 to 40 billion in 2005 and still growing, trade agreements brokered during the Nov 2006 Sino- Africa Summit point to $100 billion by 2010.
China’s cooperation with Africa has previously not been particularly outstanding. We however begin to note some significant changes taking place around 2000 with the hosting of the first Forum on China-Africa Cooperation – Ministerial Conference in Beijing which received massive participation from the African partners. The Forum principle was based on “carrying out consultation on an equal footing, enhancing understanding, increasing consensus, promoting friendship and furthering cooperation”. China’s gentle and appealing attitude coupled with growing concerns and restlessness about a largely unproductive engagement with the west contributed to a stronger desire by both parties to strengthen the relationship. Furthermore, China’s growing superpower ambitions have resulted in more aggressive efforts to strengthen this relationship especially around the strategic resource endowments in Africa. The climax of these efforts culminated in the development of a policy that was announced in January 2006.
China’s policy on Africa
In January, 2006, China unveiled its new policy on Africa, an all-round, coherent roadmap articulating China’s objectives and strategies in Africa in areas ranging from high-level exchange visits, consultation mechanisms, trade, investment, financial, agricultural, resources, tourism cooperation, infrastructure, debt relief and cooperation in human resources development, science and technology and cultural exchanges and many more.
One of the most striking features of the China-Africa policy document is the language in which it is coined. China uses friendly language and its soft power to appeal to Africa’s hand. The document is coined in a language that provides a gentle, friendly, caring attitude one to which Africa has been wholly enticed. Exploitation, heavy hand top-down relationship has been typical of Africa’s relationship with the west, one approach China has deliberately opted to reverse – presenting itself as a potentially better friend to Africa.
While China has a clear policy to engage with Africa as a block, on its part, Africa’s approach to China still remains largely ad hoc. Although several countries have adopted the “Look East” policies, these are still at individual national levels with each country pursuing maximum benefit for its own best interests and specific needs.
One can’t help wondering if, without a comprehensive and structured policy, African countries are individually smart enough to deal with this growing force of a friend without being shortchanged. Although the relationship is supposedly based on an “equal” partnership – the level of equality in the partnership is questionable given the different contexts of the two parties.
Both simple logic and experience tells that it is impossible to engage on an equal footing as long as the parties are not on the same level. China is coming in as a donor and Africa as a recipient much like it has been with the west. The departure platform is thus already tipped in China’s favor making it difficult for Africa to bargain a genuine partnership – some kind of domination is likely to take place between the two.
A way out would be the development of a comprehensive African policy on China. This would result in more structured, secure and beneficial engagement and indeed potentially create the platform for a win-win situation as is the intention of the relationship.
An African policy on China would have to be developed through a continental body like the African Union with multi-stakeholder collaboration at all levels beginning at grassroots and feeding into regional blocks like SADC, EAC, ECOWAS etc. Such a policy would increase African countries security and benefits in dealing with the superpower wannabe rather than individual approaches easily susceptible to manipulation. Others might argue that different national interests would call for different policies and engagement mechanisms with China. Under such circumstances, individual countries could well be encouraged to develop national policies on China but these should be anchored within the framework of a continental policy, in other words, the various national and the regional policy should be complimentary.
Judging from the African leadership enthusiasm towards the strengthening of Chinese relations, it would seem China is the ultimate solution to the continent’s problems. It is crucial to note that while China might assist Africa to a certain degree, it is not, will not and should not be expected to solve all of Africa’s problems. It remains the responsibility of Africans to craft a way out of their quagmire. A simplistic view of the upcoming Chinese deal reveals that benefit from the Chinese aid is minimal, for example the proposed 100 schools will only translate to 2 schools per country in a continent whose member countries need more than 100 schools each, the same applies for the proposed 100 agricultural experts to be sent to Africa and the 50 clinics.
Thus it is clear that benefits of Chinese aid per individual country is minimal and will not add a significant difference to the achievement of the MDGs in Africa. It is therefore still crucial for Africa to maintain good relations with other partners (west) to compliment efforts towards the achievement of the goals. A huge concern is that currently China and Western relations with Africa are being approached from a competition point of view. A way should be sought to combine these efforts for maximum benefit for Africa.
Development Aid in Africa
A traditionally perceived way out of Africa’s quagmire has been the use of development aid. The crisis of western aid has been that, the more the industry has grown, the more distorted it has become and the more detached from reality it has become. Strategic dynamics have grown to undermine the fundamentals of aid thus it has largely failed to achieve its objectives and thus been rightly criticized. The concern is that there is a rather weak link between the aid intentions, amounts poured into development and the worsening situation on the ground.
China and development aid
Critics and even development practitioners themselves have long made recommendations on how development aid can be improved. They have recommended that Africa needs more grants than loans, less technical aid, cheap loans and aid without conditionalities and they have also called for more trade not aid. This sections examines the extent to which the supposedly better Chinese aid is meeting these recommendations in order to assess the extent to which Chinese aid will be better in addressing Africa’s challenges.
China is itself a developing country but it got freedom earlier and adopted an aggressive approach to its development. Because it has not depended on aid to the same level as Africa, it has since achieved impressive development in the past 50 years. It is no wonder Africa is ready to embrace engagement with China as it considered it as having a crucial experience from which Africa can tap. China chooses to concentrate more on the huge infrastructural investments, production and trade and the turnover from these have proved more beneficial than development aid. Thus, unlike the western approach, China concentrates more on trade and investments and less on charity and social sectors.
While Africa excitedly welcomes China as a better development partner, it is important to be cautious and not go into the relationship blindly, it is critical for Africa to take time to analyze the implications and real benefits of the China policy and engagement with Africa. After all, China has aggressive superpower ambitions which it is advancing and may in the long-term harden its approach/stance to ensure the achievement of its objectives.
The excitement around the “new” Chinese approach brings about the general perception that China is offering Africa a better aid package – but is this necessarily true? Much like the west, China’s development aid to Africa has centered around grants, loans and technical expertise, therefore the two’s departure points are similar. The Chinese approach therefore begs an interrogation to assess any differences between Chinese and traditional western approaches. Currently, the technicalities/dynamics of Chinese aid are not very transparent as the deals are brokered at bilateral (government to government) level. This discussion therefore bases some of its facts on experience on the ground which translates to/implies possible similar existing bilateral agreements between the two parties.
Technical expertise
Technical expertise has remained a major concern of the development industry. As a conditionality, western donors have traditionally attached technical expertise to their development aid.
On technical expertise the Chinese have proved worse than the west. Chinese projects are typically accompanied by droves of Chinese nationals. What has been particularly difficult for locals, is that in many cases the Chinese even import Chinese casual labors, leaving the majority of locals in the cold and yet Africa has an abundance of unskilled labor which could immensely benefit from these projects.
Chinese aid, and especially technical aid should be adjusted to consider such circumstances. While it should be targeted at reducing unemployment in Africa, it is instead targeted at reducing unemployment in China.
Technical aid is thus undoubtedly one of the areas in which Africa will have to battle with in regard to Chinese aid as Chineses labor does not seem to be a negotiable part of Chinese aid. Earlier than later, Africa should draw up its own policy on technical aid/labor to ensure that collaboration with China will assist in reducing the unemployment pandemic typical of the continent.
Trade
Europe has for long been Africa’s largest trading partner – but with the coming in of China, tables are certainly turning. China’s continues to develop insatiable energy needs and Africa is more than ready to plunder its natural resources to satisfy China. The danger of this benefit though is that it is only being calculated in monetary terms at the expense of issues around environmental sustainability and resource depletion, which are crucial to the continent’s future. Both China and Africa should develop policies to safeguard environmental and sustainability concerns of the extraction of resources from the continent. For now, China’s preoccupation is the extraction of Africa’s resources, raising the question of the long-term sustainability of these resources.
The Beijing Consensus
China’s aid commitments as stated in the China-Africa policy were further elaborated/expounded during the Sino-Africa Summit (Nov 2006) where the eastern nation pledged to double aid to Africa to US$5 billion for direct investments ($3 billion in preferential loans, $2 billion in export credits) by 2009 and increasing the number of loans, development projects in health and agriculture and also in debt cancellation. From the above deal, African loyalty in favor of China is set to grow further in the coming years, making the neo-liberal agenda less relevant.
And yet the doubled Chinese aid will come in the form of loans. What is not yet clear to African publics are the conditions under which Africa is acquiring these loans. Admittedly the Chinese loans are cheaper than western loans and come with less political and other conditionalities and penalties unlike the IFI