Not the biggest investor but the most dynamic - Walden Bello discusses China’s investments in Africa and why China is so popular with African governments.

At the Seventh World Social Forum (WSF), held in Nairobi, Kenya, in late January, the most controversial topic was not HIV-AIDS, the US occupation of Iraq, or neoliberalism. There was a rough consensus on these issues. Aside, of course, from the lively internal politics of the WSF, perhaps the topic that generated the most heat was China’s relations with Africa.

At the “The China Question” seminar, organized by the semi-official “China NGO Network for International Exchanges,” the discussion was candid and angry. “First, Europe and America took over our big businesses. Now China is driving our small and medium entrepreneurs to bankruptcy,” Humphrey Pole-Pole of the Tanzanian Social Forum told the Chinese speakers. “You don’t even contribute to employment because you bring in your own labour.” Stung by such remarks from the floor, Cui Jianjun, secretary general of the China NGO Network, lost his diplomatic cool and launched into an emotional defence of Chinese foreign investment, saying that “We Chinese had to make the same hard decision on whether to accept foreign investment many, many years ago. You have to make the right decision or you will lose, lose, lose. You have to decide right, or you will remain poor, poor, poor.” At this point, Dale Wen, a Chinese environmentalist, intervened: “That’s not true. The Chinese people did not decide to accept foreign investment. Deng Hsiao Ping [the late Chinese leader] decided.” An African in the audience added: “You have to treat us with respect.” Great Promise or Great Harm?

The vigorous exchange at this panel and at another organized by the Fahamu Networks for Social Justice and Focus on the Global South was perhaps to be expected, since many Africans view China as having the potential of bringing either great promise or great harm. One sensed that if the African speakers were hard on China, this was because they desperately wanted China to reverse it’s course before it was too late to avoid the path trod by Europe and the United States.

The debate at the WSF took place amidst a marked elevation of Africa’s profile in China’s foreign policy. President Hu Jintao is now on his third trip to Africa in three years, following the success of the Forum on China-Africa Cooperation (FOCAC), which took place on November 4 and 5, 2006. Attended by 48 African delegations, most of them led by heads of state, the event was the largest international summit ever held in Beijing.

At the start of the meeting, Beijing unveiled a glittering trade and aid plan designed to cement its “strategic partnership” with Africa. The key items in the package were raising the volume of trade from US$40 billion in 2005 to $100 billion by 2010; doubling of 2006 assistance by 2009; provision of $3 billion worth of preferential loans and $2 billion worth of export credits; setting up of a China-Africa Development Fund that would be capitalized to the tune of $5 billion to support Chinese companies investing in Africa; and cancellation of all interest-free government loans owed to China by the heavily indebted and poorest African countries that matured at the end of 2005.

If not yet the biggest external player in Africa, China is certainly the most dynamic. It now accounts for 60 per cent of oil exports from Sudan and 35 per cent of those from Angola. Chinese firms mine copper in Zambia and Congo-Brazzaville, cobalt in the Congo, gold in South Africa, and uranium in Zimbabwe. Its ecological footprint is large, says Michelle Chan-Fishel of Friends of the Earth International, consuming as it does 46 per cent of Gabon’s forest exports, 60 per cent of timber exported from Equatorial Guinea, and 11 per cent of timber exports from Cameroon.

China is popular with African governments. “There is something refreshing in China’s approach,” said a Nigerian diplomat who asked not to be identified. “They don’t attach all those conditionalities that accompany Western loans.” Justin Fong, executive director of the Chinese NGO, Moving Mountains adds, “Whether accurate or not, the image Africans have of the Chinese is that they get things done. They don’t waste their time in meetings. They just go ahead and build roads.” An African development specialist working with a western aid organization claimed that Chinese projects are low-cost affairs compared to western projects. “Labour costs are low, they integrate African labour, so some transfer of skills takes place, and the Chinese workers live in the village, and this means living like the villagers, down to competing with them for dog meat!” This characterization of the Chinese impact would be disputed by many observers. However, most NGO’s are nuanced in their assessment of China. They acknowledge that China has a different trajectory in Africa than Europe and the United States.

Whereas the West began by exploiting Africa, China initiated its relations with Africa with “people-to-people” medical and technical assistance missions in the sixties and seventies, the most famous of which was the now fabled building of the Tanzania-Zambia (Tanzam) Railway. But with China’s rise as a modernizing economic superpower after the definitive decision in 1984 to use capitalism as the engine of growth, the old solidarity rationale has been replaced by a dangerously single-minded pursuit of economic interests—in this case, mainly oil and mineral resources to feed a red-hot economy growing at 8-10 per cent a year.

If African governments were accountable to their people, say NGO critics, Chinese aid could play a very positive role, especially compared to World Bank and IMF loans which come with conditions to bring down tariffs, loosen government regulation, and privatize state enterprises. But with non-
accountable, non-transparent governments, such as those in Sudan and Zimbabwe, say the critics, Chinese loan and aid programs instead, contribute to consolidating the rule of non-democratic elites. No conditions, in effect, means intervention on the side of the governing groups.

The Sudan is one country non-accountability and non-transparency is most evident. Using its membership in the United Nations Security Council, China has prevented a multinational peacekeeping force from being constituted that would protect people in Darfur who are being killed or raped by militias backed by the Sudanese government. One African diplomat sympathetic to China asserts, “China’s strong backing for the Sudanese government has discouraged African governments that are trying to push it to accept an African Union solution to the problem.”

China has very substantial interests in Sudan. These are set out in detail in an important collection of studies launched at the WSF entitled “African Perspectives on China in Africa”, edited by Firoze Manji and Stephen Marks. China obtained oil exploration and production rights in 1995 when the China National Petroleum Corporation (CNPC) bought a 40 per cent stake in the Greater Nile Petroleum Operating Company, which is pumping over 300,000 barrels per day. Sinopec, another Chinese firm, is building a 1500-kilometer pipeline to Port Sudan on the Red Sea, where a tanker terminal is being constructed by China’s Petroleum Engineering Construction Company. Chinese investment in oil exploration is estimated by analyst John Rocha to reach $8 billion.

Chinese interests go beyond oil. Its investment in textile mills is estimated at $100 million. It has emerged as one of Sudan’s top arms suppliers, with one deal being a barter arrangement whereby it would supply $400 million worth of weapons in return for cotton. It is active in infrastructure building, with its firms constructing bridges near the Merowe Dam and on two other sites on the River Nile. It is involved in key hydropower projects, the most controversial being the Merowe Dam, which is expected to ultimately cost $1.8 billion.

The construction of the Merowe Dam has involved forced resettlement of the Hambdan people living at or near the site and repression and an armed attack on the Amri people who have been organizing to prevent the authorities’ plan to displace them to the desert. Local police and private agencies now provide 24-hour security to Chinese engineering detachments, but civil society observers say the aim of these groups is less protection of the Chinese than repression of the growing opposition on the ground. As Ali Askouri, director of the London-based Piankhi Research Group, puts it, “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.”

Chinese and Sudanese officials tend to be dismissive of such criticism, which they often attribute to the machinations of western powers who are alarmed at China’s becoming the top international player in a country that they had long treated as being in the West’s sphere of influence but whose dismal record of colonial plunder deprives their statements of any moral authority. Defending its close relations with the Sudanese government, a Chinese Foreign Ministry official, Zhai Jun, noted the contrast of African governments’ reception of China and the West: “Some people believe that by ‘taking’ resources and energy from Africa, China is looting Africa…… If this was so, then African countries would express their dissatisfaction...they would approach China, as they did...countries that exploited the continent in the past.” Chinese officials are, however, wrong to think that African NGO’s are merely parroting the rhetoric of self-interested western governments. In fact, civil society groups are just as critical of such Western governments, considering them as hypocritical. Commenting on the remark of a World Bank official to the effect that “Chinese handouts without reforms” would not be beneficial to Africa, John Karumbidza, a contributor to the “China in Africa” volume, acidly remarks that “It is the case...that this same bank and Western approach over the past half century has failed to deliver development, and left Africa in more debt than when they began.” Other problematic partnerships being based on actual events, the criticisms are unlikely to go away, not only in Sudan but in many other countries where China has a deep involvement with controversial regimes.

With relations with the west and even South Africa deteriorating over his political record, President Robert Mugabe of Zimbabwe has increasingly turned to China, which one of his key ministers has characterized as an “all-weather friend.” Chinese investment in mining, energy, telecommunications, agriculture, and other sectors was estimated at $600 million at the end of 2004, with another $600 million pledged in June 2005. The price, however, has been high, according to critics, who claim that Mugabe’s government has handed de facto control of key strategic industries to the Chinese. A contract with China to farm 386 square miles of land while millions of Zimbabweans remain landless has also come under fire, with rural sociologist John Karumbidza blasting it as amounting “to nothing more than land renting and typical agri-business relations that turn the land holders and their workers into labour tenants and subject them to exploitation.”

The Nigerian government is another problematic Chinese partner, according to civil society activists. China has extensive interests in Nigeria, particularly in oil exploration and production. John Rocha notes that the China National Offshore Corporation (CNOOC), has acquired a 45 per cent working interest in an offshore enterprise, OML 130, for $2.3 billion; the China National Petroleum Corporation (CNPC) has invested in the Port Harcourt refinery; and a joint venture between the Chinese Oil and Natural Gas Corporation and the L.N. Mittal Group, plans to invest $6 billion in railways, oil refining, and power in exchange for rights to drill oil.

These interests have led to an increasingly close alliance of China with the faction of the ruling People’s Democratic Party dominated by President Olusegun Obasanjo. This relationship has a controversial security dimension. As Ndubisi Obiorah, another contributor to the “China in Africa” volume who is also director of the Center for Law and Social Action in Lagos, notes: “The Nigerian government is increasingly turning to China for weapons to deal with the worsening insurgency in the oil-rich Niger Delta. The Nigerian Air Force purchased 14 Chinese-made versions of the upgraded Mig 21 jet fighter; the navy has ordered patrol boats to secure the swamps and creeks of the Niger Delta.” Not surprisingly, the rebel Movement for the Emancipation of the Nigerian Delta (MEND) has warned Chinese companies to keep out of the region or risk attack.

With their integrated political, military, economic, and diplomatic components, China’s “strategic partnerships” with governments such as those of Nigeria, Sudan, and Zimbabwe increasingly have the feel of the old US and Soviet relationships with client states during the Cold War.

The role of Civil Society is important in effecting change and many activists do not discount the possibility that things may yet be turned around. Though critical of current Chinese policies, Humphrey Pole-Pole of Tanzania appealed at the WSF Nairobi meeting, for a “win-win-win” strategy—that is, “a win for China, a win for African governments, and a win for African people. This is not impossible.” The key to such a change may be the growth of Chinese civil society organizations, some of which are increasingly independent of and indeed critical of government policies within China, according to Dorothy Guerrero, coordinator of Focus on the Global South’s China program: “If the Chinese government and business interests in Africa are to be moderated by concerns for local people, the environment, human rights, etc., it is of extreme importance that the international voices arguing for this are joined by a constituency of people within China who are also concerned about such principles.” She added that links must be forged between African and Chinese NGO’s and it was for that reason that representatives of Chinese civil society went to Nairobi.

But closer ties are not enough, said Justin Fong. Mechanisms have to be devised that could be effectively used to press for accountability on the part of the Chinese government. One point of vulnerability he identified is the practice of Chinese government entities, such as the China Export-Import Bank, of seeking co-financing for their Africa projects from international banks such as HSBC and Citigroup. When it came to controversial projects, he suggested, pressure might be indirectly placed on the Chinese by lobbying these institutions, which are more sensitive about their image than Beijing.

Others were sceptical that such tactics, which might have worked with Western governments and businesses, would succeed with China. But whatever their differences, African and Chinese civil society activists, have a consensus on one thing, it will be a hard, uphill struggle to change the Chinese juggernaut’s direction in Africa.

For further information read: "African Perspectives on China in Africa" published by Fahamu and can be obtained through their website - Fahamu.org

* Walden Bello is executive director of the Bangkok-based research and advocacy institute Focus on the Global South.

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