Assessing Chinas Role in Africa: A search for a new perspective

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Assessing Chinas Role in AfricaA search for a
new perspective

• Firoze Manji
• www.fahamu.org
• www.pambazuka.org

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Rational and nuanced approach

• Threats
• Opportunities
• From an African, rather than Northern, perspective

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China-Africa relationships

• Over 3000 years old - evidenced by ceramics in
  Timbuktu, Sahel, Great Zimbabwe and Mozambique
• 15th Century imperial fleet led by Admiral Zheng
  visited east Africa while on his global
  circumnavigatory expedition
• Today portrayed as the potential domineering
  force in Africa

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Mythologies of China not new

• China is a sleeping giant. Let her lieand sleep,
  for when she awakens she will astonish the
  world.
• Napoleon Bonaparte, 1803

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Nature of Chinas engagement with Africa

• New imperial ogre?
• Alternative paradigm of engagement?
• South-South partner?
• Different model of development?
• Exploiter with no regard for human rights?
• Voracious destroyer of the environment?

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Conditions for Chinas entry

• Structural adjustment liberalization
• Failed promises tightening belts
• Aid, trade, investment conditional
• Decline in the real wage
• Opening up Africas markets (globalization)
• Washington Consensus opened Africa for China

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Conditions for Chinas entry

• No history of colonization
• No history of sponsoring coups
• No history of assassination of African leaders

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China in Africa 3 dimensions

• Foreign direct investment
• Aid
• Trade

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FDI outflows from China
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FDI flows to Africa remain low
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China FDI flows to developing world
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FDI and China

• Only 3 of FDI outflows from China go to Africa
• China is one of the worlds top recipients of
  FDI nearly 72 billion and stock of 318 billion

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Comparison of FDI in Africa
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Greenfield FDI projects

• Of 126 greenfield FDI projects in Africa, Indian
  companies accounted for the largest number
• Malaysian companies dominate in mineral extraction

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Chinas FDI outflows to Africa
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Africa is one of the richest continents in the
world
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China as exporter - comparison
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Trade and China

• Significant growth in trade
• 11 billion in 2000
• 40 billiion in 2005
• 9 annual growth rate
• 5-fold increase in 10 years

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Trade China in 3rd place

• No 1 USA
• No 2 France
• No 3 China

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Africa exports to China

• Oil
• Iron ore
• Cotton
• Diamonds
• Logs
• Volume of trade comparable to trade with India

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Imports from China

• Mainly clothing and textiles
• Sudan
• Ghana
• Tanzania
• Nigeria
• Ethiopia
• Uganda
• Kenya

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Oil

• China net importer of oil since 1993
• China is 2nd largest consumer of petroleum
  products
• USA remains the largest consumer, with 25 of its
  requirements destined to come from Africa by 2009

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Source of oil for China

• Middle East 40
• Africa 23
• Asia 21
• Latin America destined to become big engagement
  with Columbia, Brazil, Argentina, Venezuela and
  China National Petroleum Corp (CNPC) and China
  Petroleum and Chemical Corp (Sinopec)

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Impact of imports
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Aid and China

• 2006 Forum on China-Africa Cooperation
• 1. Double aid to Africa by 2009 (to 1 bn)
• 2. 5 bn fund for Chinese investment in Africa
• 3. Preferential loans (3 bn) buyers credits
  (2
• bn) for trade
• 4. Debt cancellation for 31 HIPCs LDCs (1.4
  bn)
• 5. Train 15,000 African professionals, etc.
• 6. Build 30 hospitals, 30 malaria treatment
  centers, 100 rural schools
• 7. Open special economic zones in 3 to 5
  countries

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US fears

• The most serious worry for the US was expressed
  by the spokespersons of the IMF and World Bank
  who complained that Chinas unrestricted lending
  had undermined years of painstaking efforts to
  arrange conditional debt relief. Concerned that
  China could now offer favourable loans to Africa
  and weaken imperial leverage over African
  economies.
• (Horace Campbell 2007)

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A non-prescriptive approach?

• Chinas official development discourse is
  explicitly non-prescriptive, employing a language
  of no strings attached, quality and mutual
  benefit. It emphasises the collective right to
  development over the rights-based approaches
  focused on individual rights. Once the dust
  settles on the current China-in-Africa fever, and
  notions of Chinas exceptionalism wear off, all
  involved will need to harness hopes to realistic
  vehicles in order to make the most of the current
  potential.
• Daniel Large (2007)

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Potential for development?

• ... 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.
• John Rocha (2007)

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Environmental damage

• while Chinas investments do involve
  socio-economic development, environmental and
  social problems are emerging with a new face.
  Chan-Fishel looks at Chinese interests in Sudan,
  Angola, Nigeria, Zambia, Zimababwe, Democratic
  Republic of Congo, Gabon, Equatorial Guinea,
  Cameroon and Liberia. Chinese companies are
  quickly generating the same kinds of
  environmental damage and community opposition
  that Western companies have spawned around the
  world.
• Michelle Chan-Fishel 2007

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Human rights and environment

• Support for repressive regimesnon-interference
  in internal affairs
• Any worse than Western governments?

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Hypocrisy of the West

• What I find a bit reprehensible is the tendency
  of certain Western voices to start making
  obstructionist statements or start raising
  concerns about Chinas attempt to get into the
  African market because it is a bit hypocritical
  for Western states to be concerned about how
  China is approaching Africa when they have had
  centuries of relations with Africa, starting with
  slavery and continuing to the present day with
  exploitation and cheating.
• Kwesi Kwaa Prah

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Conclusion

• Chinas capitalism has similar demands to Western
  counterparts
• Scale of its intervention is small in comparison
  to those of European and North American powers

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China USA

• Chinas engagement cannot be understood
  independent of the imperial expansion of the US
  in the global economy. Chinese production and
  American consumption, writes Walden Bello, are
  like the proverbial prisoners who seek to break
  free from one another but cannot because they are
  chained together. This relationship is
  progressively taking the form of a vicious
  cycle.

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Conclusion

• Perhaps the material distinction is not between
  Chinese capital and Western, but rather between
  the merely rapacious, and the more sophisticated.
  Each of these are not two separate categories,
  but at least as much two different faces, each of
  which may be presented as convenient.
• (Stephen Marks 2007).

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Thank you

• www.fahamu.org
• www.pambazuka.org

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