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China Helps Recast Africa in Global Economy

Pubdate:2012-11-09 09:08 Source:lijing Click:

CHINA's resurgent interest in Africa has spawned a bewildering variety of worldwide reaction. The response of the West has generally been negative and alarmist. Surprisingly, some in Africa have also uncritically embraced these responses.


Rather than a negative force, China's involvement in Africa has recast Africa's position in the global economy. It has contributed immensely to changed perceptions of Africa from a problem continent to one filled with endless business opportunity.


Africa faces many developmental challenges and without doubt it is the most stereotyped and maligned continent on this planet, and its people the most misrepresented. But it is important to note that Africa's fortunes are on the rise.


Ten years ago the Economist magazine had a cover story that read: "Africa the Hopeless Continent". Late last year the same magazine had a completely different title: "Rising Africa".


According to the International Monetary Fund (IMF), at least eight sub-Saharan countries are among the dozen or so positioned to show the highest growth rate in the world (about 7%): Angola, Nigeria, Ghana, Zambia, Burkina Faso, Ethiopia, Rwanda and Sierra Leone.


It is important for Africa to consolidate these gains and not be distracted by debates framed by countries dealing with their own challenges.


Numerous myths abound regarding China's involvement in Africa. These myths are framed in the narrative that China is the new super-donor or coloniser of the continent. But the fact is that in 1975 China had aid programmes in more African countries than the US Agency for International Development (USAID). China's first official aid project in Africa was in the 1960s, and in 1975 it completed construction of the iconic Tanzania-Zambia railway.


In the 1990s, when other — mainly Western — countries saw Africa as a "failed continent", China filled the void Western investors left.


Other accusations levelled against China fall under the realm of turning a blind eye to human rights abuses to protect economic interests. Critics argue that China uses aid to gain access to natural resources; that Chinese companies prefer to ship Chinese employees to work in Africa rather than hire local workers; that China underpays workers and is recolonising Africa; or that China investments prop up autocratic regimes.


Well, the same critics say nothing of Western governments and companies involved in African countries with questionable human rights records. American and other Western companies abound in Equatorial Guinea and the Delta region of Nigeria, where there are allegations of gross violations of human rights.


China investment no threat to Africa


There also seems to be a constant attempt to present China's expansion as a "threat" to Africa and to the global economy, as though China is a parasitic influence on its trading partners.


The reality is that Chinese investments in Africa are of three types: (a) investments aimed at supplying China with raw materials — oil and minerals; (b) investments aimed at African markets; and (c) investments that aim at supplying international markets such as the European Union and the US, motivated by low labour costs plus favourable trade access given to African countries in those markets.


These objectives are not different from those of Western investors. Yet Chinese investments in Africa are not framed in a comparable manner and there is a problem of the manipulation of knowledge to determine what people should know about the China-Africa issue.


What are the facts? Certainly (a) Chinese-African networks, partnerships and links are growing; (b) China's investment in and trade with Africa is on the rise; (c) Chinese immigration to Africa is on the rise; and (d) Chinese goods are flooding the Africa market, as they are doing in the rest of the world.


The history of co-operation between China and Africa has been well documented by Richard Dowden in his book, Africa. He dates African-Chinese relations to 1414, when Zheng He, the Grand Eunuch of the Three Treasures, made the first of seven voyages westwards to Africa. This was a peaceful visit with no colonisation, slaves or killings.


In the 1960s and 1970s Chinese-African relations revolved around ideology and liberation struggles.


It is said China's total trade with Africa has risen considerably since 2008 and hovers around $120bn. However, that figure does not tell us much unless it is compared with the total amount of African trade with other developed countries, for it ought to be noted that China-Africa trade amounts to only 2% of African trade in total. No one ever produces comparative figures in terms of Chinese investment in Latin America, Asia and Australia. It does not tell us that China's trade with Latin America increased by 32.3% last year to $236.6bn, according to data from the IMF; that China's trade with Brazil, at $84.5bn, is almost equal to its trade with the whole of Africa; or that India's trade with Africa stood at $1bn in 2001 but rocketed to $50bn in 2011.


Some believe Chinese companies dominate African economies. The presumption does not fit the facts. About 90% of the stock of foreign direct investment in Africa still originates from Western European companies, especially those in the EU and the US.


There is also the notion that Chinese investment is predominantly in natural resources. But Chinese companies are increasing their investments in other sectors, such as food processing, manufacturing, and telecommunications (ZTE Corporation, China's second-largest telecoms equipment provider, has 40 offices and about 4,000 employees in Africa).


Another fact seldom noted is that not all Chinese activity in Africa is investment. As a member of the World Bank and Africa Development Bank, China is free to compete in bids and has won numerous tenders in competitive bidding in World Bank-funded construction and supply projects. It may be true that 26% of China's oil requirements are supplied by Africa at the moment (and this is bound to grow in time), but we need to remember that sub-Saharan African oil exports to China amount to only 9% of total sub-Saharan oil exports worldwide. Some 37% of African oil still goes to the US, a fact that is not generally spoken about.


China comes to Africa with no cultural or historic baggage, never having colonised, enslaved or declared war on any African country. It does not subscribe to the West's view of Africa. Dowden states that, "There's still a narrative in our minds in the West that Africa is backward and Africans have got to become like us — ‘we have got to change them' — I think that Africans feel that and the young African generation that's coming through are now very resentful of that."


Of course, China's involvement in Africa is not without problems. There are issues about employment practices and worker conditions, with the Chambishi mine disaster in Zambia and the riots at a coal mine in southern Zambia being over-cited examples. It is also true China has a policy of noninterference, leading to indifference to human rights violations. But to suggest African dictators exist because of China is being disingenuous. Africa's dictators have existed long before China's emergence as an investor on the continent.


Economic development is achieved through the productive employment of labour and utilisation of natural resources. Availability of capital in Africa is a major constraint to economic development. China's strong growth and its hunger for raw materials have provided the foundation for sharp rises in commodities prices over the past decade. What should be of predominant concern is that African states view these earnings as opportunities to diversify their economies and not squander them through corruption and mismanagement. Investors from anywhere in the world seek the maximisation of profits. The Chinese are no exception. The focus on China's enterprises to the exclusion of other nations' investors raises serious questions about the agendas of those who promote such discourse.


What is needed in Africa is to strengthen the legislative framework and the monitoring capacity of government institutions such as environmental, labour and safety agencies to enable them deal with problems posed by investors effectively and proactively. The importance of good governance in economic management cannot be overemphasised. Governance is central to all issues relating to the efficiency affecting government operations and economic development. Investors are not philanthropists driven by a moral code. They are typically large organisations, each with its own set of goals and objectives, driven by profit and strategic interests, both national and corporate. African governments must put in place a legal framework that ensures the pursuit of profit is done within a structure that respects workers' rights and benefits the country. It is African governments that undertake to ensure their people enjoy human rights as articulated by international and regional conventions which African countries have ratified.