Africa and China: Issues and Insights
November 7, 2008, Mortara Center Conference Room, Georgetown University
Key Findings:
"¢ China's presence in Africa results in conflicting sentiments between African elites and populations. While the elites generally have very positive responses, the populations often react much more negatively towards China's economic involvement in Africa.
"¢ Contrary to many prominent assessments, China's interests in Africa encompass a variety of broad motives and are not focused exclusively on acquisition of oil and natural resources.
"¢ Differing definitions of foreign aid, and Chinese and African deliberate secrecy or poor transparency, make China's aid to Africa a complex issue to evaluate. The overall cost to China of its aid to Africa seems much less than reported in many recent assessments.
"¢ The United States needs to identify areas of converging interests with China on Africa, and then proceed to work with China on these points. Possible areas include maritime security, money laundering and drugs, and health and agricultural projects. In addition, the United States should increase American engagement with Africa. On a strengthened foundation of improved US-China and US-Africa relations, the United States will be better positioned to deal with China on significant areas of difference with China over Chinese involvement in Africa
"¢ The intricacy and rapid growth of the Africa-China relationship demonstrate the inadequacy of much recent analysis emphasizing one or a few aspects of China's rising prominence in Africa. More comprehensive and in-depth examination of the Africa-China ties will provide the understanding needed to judge appropriate policies and approaches by Africans, Chinese, and others concerned.
China's Presence in Africa – Conflicting Elite-Popular Sentiments
China's increasing presence in Africa has led to a variety of reactions. On the surface, many Africans have generally positive sentiments towards China's entry into Africa. To them, China presents an alternative to the West and Western institutions that have failed to work effectively to help Africa. In addition, China provides new markets for Africa's natural resources thus giving Africa a boost politically and economically.
However, further investigation into these African sentiments shows that a positive African response is not a consensus. Professor Zewde demonstrated a split between the elite and popular reactions towards China's presence: the elite in African countries have a much more positive attitude towards the Chinese and welcome the Chinese without many conditions. This can be seen in few visa restrictions for Chinese in some southern African countries, enchantment with China's political support and loans without political conditions, and expectations that China's infrastructural projects and other support really helps push along African development.
Ms. Mutisi provided country-specific evidence, revealing the pragmatic and symbiotic relationship present from the point of view of the elites in China's interactions with Angola and Zimbabwe: China needs resources, Angola and Zimbabwe need development. In addition, the countries come to support each other in the international arena.
It is important to point out that not every African country's elite has the same attitudes toward China. For example, historically, Ethiopia is a country that has never been colonized. Therefore, according to conference participants and those in the audience, the government of Ethiopia seems more wary towards the Chinese presence due to a strong, individualistic Ethiopian identity. At the same time, the fact that the Chinese are prevalent in Ethiopia suggests that the Ethiopian government still welcomes the Chinese to a certain extent.
In contrast to the generally positive African elite sentiment, the African population in several respects holds a more negative and cynical view of China's presence in Africa, according to conference participants. Some participants averred popular African sentiment towards China was not always so negative. In fact, Africa felt abandoned by the West after the Cold War and China was welcomed to fill the power vacuum. In some places like Zimbabwe, there was euphoria at China's entrance into the country. For a time, the Chinese presence gave the African people great hope.
Nevertheless, these more positive sentiments have changed. Professor Zewde and Ms. Mutisi both pointed out many complaints from the average African that stem from the economic, political, and social relationships China has with Africa. Economically, Africans resent losing market competitiveness to China's cheap and sometimes low-quality goods to an extent where many people feel that China uses Africa as a dumping ground for its low-quality manufactures. Politically, Africans tend to associate the Chinese with supporting corrupt, tyrannical regimes like those in Zimbabwe or Sudan. Furthermore, the Chinese are associated with corruption, as seen by an incident cited at the conference where a Chinese telecommunications company bribed Ethiopian officials earlier this year.
Socially, Africans resent perceived exploitation of African workers by Chinese enterprises, seeming unrestrained influx of Chinese immigrants, and unwillingness of the Chinese to integrate into African society. Many Africans feel that their governments favor the Chinese excessively. For example, in Zimbabwe, it is illegal to use derogative terms against the Chinese. The dislike many Africans have towards the Chinese produces evidence of increasing xenophobia against what seems to be a new imperialist power in Africa that reinforces oppression and bad governance. The negative sentiments the African people have towards the Chinese were said to be likely to change only as the Chinese presence proves to genuinely encourage indigenous and sustainable development.
Regarding perspectives from China, Chinese elites see strong benefits in involvement in Africa. Africa provides the political support China needs internationally and the resources China seeks internally. The Chinese leaders feel that China has considerable leverage in Africa and seek to enhance their relationships. The Chinese government also acknowledges the importance of the long relationships China has had with many African countries. To many Chinese entrepreneurs, Africa is an opportunity. In fact, many of the grievances the African people have against the Chinese are from actions taken by these private entrepreneurs, not by the Chinese state.
Some of the problems that arise between the African populations and the Chinese reflect an inability to cope with Africa's vibrant civil society, a new type of phenomenon to many Chinese. With this problem in mind, President Hu Jintao during a visit to Zambia encouraged Chinese entrepreneurs to be more considerate of the local African populations. Meanwhile, a contrary view was noted during the conference as it was stated that some opinion leaders in China look to the China-Africa relationship with indifference and even question China's strong involvement with Africa in the first place.
Overall, conference participants suggested constructive paths to remedy problems in the Africa-China relationship. Professor Lyman suggested that China may need to transform its presence to be one that truly seeks sustainable development for Africa, while African countries cannot react to the current situation by shifting to protectionist policies due to popular sentiment. Ms. Mutisi and Professor Zewde both concluded that Africa and China will need to work together to ameliorate the tensions that arise on both sides.
Chinese Business Relations with Africa
China's economic interest in Africa is unprecedented. Increasingly, African leaders are coming to view China as an alternative to western development funding. According to Ambassador Shinn, China gives impressive amounts of low interest loans to many African nations. Another finding indicates that Chinese trade with Africa has grown fast and it is expected to surpass $100 billion no later than in 2010. This will make China Africa's single largest trading partner, surpassing the United States.
In the energy sector, conference participants suggested that China's objective is to extract oil from oil-rich countries in order to meet its high energy demand. According to Professor Brautigam, though oil is a big concern, China is much more involved in other sectors as well. In fact, since investment in oil is very costly and risky, China is participating in many other business opportunities. For example, Chinese trade involvement is extensive and well pronounced. It exports pharmaceuticals, equipment and machinery to many African markets.
Professor Hailu raised the question of whether China abides by international laws regarding its business practices with Africa. One conference participant, a post doctorate student from China, said the Chinese perspective on China-Africa business relations is that China should not be doing such special gestures as canceling African. He added that many Chinese businesses that operate in Africa are not run by the state; they are not nearly as well trained as Chinese officials to deal with relations with Africa; and their economic interests at times diverge from the Chinese state. .
In dealing with Chinese business in the important country of South Africa, according to Ms. Laribee, there were different groups of Chinese business migration to the country. Many Chinese immigrants came in the 1870s; their successors, second and third generation Chinese who identify themselves as South Africans represent an important business group. A significant new group of immigrants came beginning in the 1990s. Ms. Laribee's case study on Chinese traders from China found that there were individual Chinese shops located in various small towns and major cities throughout South Africa. These private entrepreneurs compete with local businesses as well as with other private Chinese businesses. She concluded that these Chinese shops follow a more individualistic and profit-oriented competition rather than forming solidarity with other Chinese shops.
On the issue of competition between Chinese and local businesses, Professor Taylor's findings indicated that many African local businesses tend to be very weak and face strong competition from Chinese businesses. Importation of cheap textiles can have a dire impact on local businesses. There have been cases reported in that a flood of textile imports from China have dismantled the local businesses and have put most of the remaining firms out of business. Along the same lines, Professor Hailu referred to independent analysis of China-Africa business relationship as detrimental to Africa's employment, manufacturing, and ecological conditions. The bilateral agreements signed by individual states and China often do not take into consideration the safety, welfare, and stability of individuals and communities.
Regarding how business deals are made between Africa and China, many at the conference indicated that most negotiations were bilateral. Chinese interests are better served in that respect since it has a greater leverage to seal deals favorable to China. According to Ambassador Shinn, the bilateral negotiations vary from country to country. He said, Angolan labor law regarding Chinese (or other foreign) projects in the country dictates that the projects should be done with 70% Angolans and 30% Chinese workers, but in reality it is 60% Angolan and 40% Chinese workers. In Ethiopia, the workers on Chinese-backed projects are mainly Ethiopians and in Sudan, the workers on such projects are mainly Chinese. These variations reflect the differences between local labor laws and their effects on the number of local and Chinese workers.
According to Ms. Wheeler, many African governments do not negotiate in the best interest of the people. She indicated the difficulty of establishing businesses for locals and the contrasting relatively easy process for the Chinese entrepreneurs to establish their businesses in Africa. In addition, she mentioned a lot of the infrastructure that is being built is geared towards maintaining the Chinese businesses.
Professor Brautigam emphasized that there were different reactions to China's business relations among many African countries. She said the bilateral relationships in strongly democratic African countries do not seem to be controversial (problematic) but are accepted as the Chinese are seen doing popular infrastructure projects and as being involved constructively in many other sectors of the economy.
Chinese Foreign Aid to Africa
Conference participants made clear that the foreign aid China gives to Africa is a difficult subject to analyze. A lack of transparency in both China and African countries makes data collection extremely difficult. Even with these obstacles, Professor Brautigam clarified two major myths regarding China's foreign aid to Africa: the size of China's aid and the reasons behind China's aid.
According to Professor Brautigam, the amount of aid China gives to Africa does not nearly reach the caliber that it is often perceived to be. China generally provides three types of aid – grants from the government, zero-interest loans from the government, and concessional loans from the Export-Import Bank which have much higher interest rates. Often, all three types of aid are considered foreign aid by the Chinese administration, but the concessionary loans should not fall under this category, according to conference participants. Despite widespread publicity to the contrary, China's heavy cooperation with Africa resulting in financial support in return for resources, labor contracts, engineering contracts and so forth often do not constitute foreign aid as defined by OECD and other global standards. The net effect of these variations is to sometime grossly inflate published numbers for Chinese aid.
Regarding the reasons for China's aid, Professor Brautigam disputed the notion that China only pursues aid relationships with oil-producing countries. In fact, China gives aid throughout Africa; the type of aid China distributes in Africa varies. For example, China only gives about 20 countries in African concessional loans because it wants to be sure that the collateral (e.g. oil or other resources) or strength of the borrower is sufficient to guarantee that China will be paid back and earn money from those loans. In contrast, China will target a different set of countries when giving grants.
Meanwhile, according to Professor Brautigam and other conference participants, the aid China gives to Africa has key differences from the aid the West gives to Africa. First, African countries feel much more ownership from Chinese aid than Western aid since Western aid often comes with preconditions and expectations. In contrast, African countries feel that Chinese aid allows Africa to spend money on what Africa wants, such as infrastructure. This brings to question exactly who decides what a country wants – the elite or the people. The type of regime of an African country determines the "who"; democratic countries are seen to allow Chinese aid to fulfill what the people want while authoritarian governments may not. Still in most African countries, democratic or not, Chinese aid goes heavily to infrastructure. There are many incidences of this aid being abused, but that is more of an internal issue in African countries.
Second, China's aid often allows for quick results because China does not go through additional social and environmental assessments that the West requires. Rather, China shortens the process by using the information African countries provide. Third, much of China's foreign aid to Africa results in long term partnerships between the countries, such as providing university scholarships or medical teams. Fourth, some Chinese experts involved in different aid projects live very simple lives in African countries, and learn more about the locals and situations in Africa, thus creating bonds with the Africans.
Gaps between Chinese and western aid practices in Africa are serious and have important implications, according to conference participants. There is a lack of aid harmonization between China and the West over aid to Africa, and Chinese administrators sometimes are wary of close association with what they see as failures of the West in aiding Africa. Because China is not a part of the aid regimes created by the OECD and does not need to follow rules set out by the OECD, it is able to follow aid practices at odds with those of the West, which endeavors to use aid to promote better governance and more sustainable development. Such implications are at the center of Mr. Colombini's ongoing research looking to determine the impact of Chinese aid in undermining Western assistance to African development.
Conference participants judged that greater transparency and collaboration among donors would help to bridge these gaps and reduce uncertainties and concerns over the size and impact of growing Chinese aid efforts in Africa.
Africa and China: Issues and Insights - Asian Studies Program - Georgetown University