China in Africa: It’s Strictly Business

Published on 18th September 2006

China, it seems, is suddenly everywhere in Africa, not just in oil-rich states. This recent interest shown not only by China, but by Russia and Venezuela is a clear indication of a new perspective to the current world order. Africa has recently become more important to large industrial countries, resulting in a state of heightened competition between them to tap the continent’s natural resources and vast potential markets.

 

Sino-African trade grew by 700 percent during the 1990s, and the 2000 China-Africa Forum in Beijing set off a new era of trade cooperation and investment that is producing notable results. From 2002 to 2003, trade between China and Africa doubled to $18.5 billion, and then nearly doubled again in the first ten months of 2005, jumping 39 percent to $32.17 billion. Most of the growth was due to increased Chinese imports of oil from Sudan and other African nations. China's foreign direct investment in Africa represented $900 million of the continent's $15 billion total in 2004. China is now the continent's third most-important trading partner, behind the United States and France, and ahead of Britain.

 

Africa registered 5.2 percent economic growth in 2005, its highest level ever, in part because of Chinese investment. The roads, bridges, and dams built by Chinese firms are low cost, good quality, and completed in a fraction of the time such projects usually take in Africa. If a G8 country had wanted to rebuild the stadium, they would still be holding meetings! The Chinese just come and do it. They don't hold meetings about environmental impact assessment, human rights, bad governance and good governance. Whether it's right or not is debatable; Chinese investment is succeeding because they don't set high benchmarks.

 

Its presence is certainly greatest in the resource-rich countries like Nigeria, Angola and Sudan (where its role has been criticized as contributing to the crisis in Darfur). But China's growing presence is also manifest in less obvious spots. In Sierra Leone, Chinese companies have built and renovated hotels and restaurants. In Mozambique, Chinese companies are investing in soybean processing and prawn production. At the African Union meeting in Banjul, Gambia, the Chinese delegation dwarfed the ones sent by France, Britain and the United States.

 

Chinese companies see Africa as both an excellent market for their low-cost consumer goods, and a burgeoning economic opportunity as more countries privatize their industries and open their economies to foreign investment. Some textile manufacturers, for example, are reportedly investing in African factories as a way to get around U.S. and European quotas on Chinese textiles.

 

Fewer prescriptions and more remedies

 

One of the interesting things about doing business with China is that it's a full-on supplier. They will come in and provide everything that surrounds the development of the country. What China really seems to be offering Africa is some breathing space; a straightforward business relationship between equals based on mutual interest and noninterference in the internal affairs of its allies. Or as the economist Jeffrey Sachs phrased it at a conference in Beijing, "China gives fewer lectures and more practical help."

 

Competition is always the answer

 

But whatever role China ultimately plays, perhaps the most important element it introduces is competition in the aid and poverty ‘business’. The West has for too long relied on the ‘one size fits all prescription and set of ideas, aimed at fixing Africa's problems. The West has to recognise that it cannot consider Africa any more their 'chasse garde' [private hunting ground].

 

China's diplomatic philosophy, which preaches non-interference in other countries' internal affairs, may have important and probably possible consequences for Africa. Chinese foreign policy follows five basic guidelines of peaceful coexistence: mutual respect for sovereignty and territorial integrity; mutual non-aggression; non-interference in each other's internal affairs; equality and mutual benefit; and peaceful coexistence. For African governments it is quite a welcome change from the approach they get from Western governments that manages to be both patronizing and demeaning at the same time

 

Now African countries have more choices; they have the panaceas of the World Bank and the IMF, and at the same time the experience of China. They can compare and choose the best. China's recent history presents seductive possibilities for sub-Saharan Africa. In the past two decades, China has pulled hundreds of millions out of poverty and transformed itself into the world's fastest-growing economy.

 

A strong voice for developing countries

 

If Russian, Chinese, Japanese, European and American companies compete for Africa, the competition between them is in the best interest of Africa. Political partnership between African governments and China has also ensured that decisions made in international organizations are in the best interest of the developing countries and not the industrial ones. Many African countries see China as a counterbalance to the heavy domination of social and economic development of Africa by the big powers, mainly in the West. China is supporting democracy and good governance in Africa through positive encouragement and not by imposing or applying punitive measures.

 

What’s more, the Chinese come to Africa as equals, with no colonial hangover, no complex relationship of resentment. China wants to buy and Africa has something to sell. China’s presence on the continent is many ways like a breath of fresh air, and a way to ending Western domination.

 

Of course, no government can truly be altruist; but even if the motives may be selfish, what is important here, from the African perspective, is that if African leaders act prudently, their countries can gain from this trend, by pushing forward with its own development. China offers an alternative source of support. China's aid and investments are attractive to Africans, precisely because they come with no conditionality related to governance, fiscal probity, or the other concerns of Western donors.


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