China in Africa - the new imperialism?

China’s increased presence in Africa is part of a wider effort to ‘create a paradigm of globalisation that favours China’ [1]. In the past China’s African presence benefited from a shared history as an object of European imperialism and its ideological commitment to anti-imperialism and national liberation. China’s declared principles of respect for national sovereignty and non-interference in internal affairs appealed not only as a contrast with the suspect motives of former colonial powers, but for less elevated reasons to rulers threatened with internal dissent.

But more recently China’s policy has shifted from Cold War ideology to a more classical pursuit of economic self-interest in the form of access to raw materials, markets and spheres of influence through investment, trade and military assistance - to the point where China can be suspected of pursuing the goals of any classical imperialist.

The new orientation found institutional expression in the first China-Africa Co-operation Forum held in Beijing in 2000 - a mechanism to promote diplomatic relations, trade and investment between China and African countries. In the same year, China-Africa trade passed $10bn for first time [1]. By 2003 it reached $18.5bn. According to some estimates it is on course to reach $30bn this year [2]. More recent Chinese estimates claim that it is already approaching $40bn [3].

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By 2004, nearly 700 Chinese companies were operating in 49 African countries [4]. The December 2003 Forum in Addis Ababa, attended by Chinese Premier Wen Jiabao and UN Secretary General Kofi Annan, attracted 250 African businessmen and 150 from China.

The earlier ‘ideological’ phase of Chinese-African relations was part of a global strategy which by the mid-70s saw some 15,000 doctors and over 10,000 agricultural engineers from China serving all over the ‘third world’. In Africa China undertook ambitious infrastructure projects such as the Tanzam railway between Tanzania and Zambia, in parallel with a Western-financed road system. Chinese influence was also promoted through provision of technical expertise, doctors, scholarships and aid. Today over 900 Chinese doctors still work in African countries [5]. Military assistance was concentrated on ideological allies [including at different times Ethiopia, Tanzania, Uganda, and Zambia]. By 1977 trade with Africa reached a record $817m [6].

China’s aid policy

There are areas of continuity with earlier Chinese policy however. Low-interest loans have been extended at non-commercial rates, and leveraged a second time or forgiven at China-Africa Cooperation Forums - earning China diplomatic support at the UN [eg over Taiwan].

Chinese medical, agricultural and engineering teams continue to operate in many African countries.
‘Since 1963, some 15,000 Chinese doctors have worked in 47 African states treating nearly 180 million cases of HIV/AIDS. At the end of 2003, 940 Chinese doctors were still working throughout the continent. Beijing prefers technical support over financial aid to African countries for obvious reasons. Financial aid stretches resources and diverts capital from significant needs at home, therefore investments in trade and projects that have a chance at providing returns are more popular than direct aid and loan programs.’ [1]

The continued emphasis on educational opportunities and the provision of expert assistance helps in identifying China as a paradigm of ‘soft power’. But the 15,000 African students who have studied in China since independence [6] have obviously brought China some commercial as well as political returns.

China’s economic role

‘Almost every African country today bears examples of China's emerging presence, from oil fields in the east, to farms in the south, and mines in the center of the continent. According to a recent Reuters report, Chinese-run farms in Zambia supply the vegetables sold in Lusaka's street markets, and Chinese companies - in addition to launching Nigerian satellites - have a virtual monopoly on the construction business in Botswana’. [2]

‘The 674 Chinese state companies involved in Africa have invested not only in booming sectors such as mines, fishing, precious woods and telecommunications, but also in others that the West has neglected, even abandoned, as less profitable. As a result, Zambia’s Chambezi copper mines are being worked again and supposedly exhausted oil reserves in Gabon are being explored. In 2004 Chinese investments represented more than $900m of the $15bn of foreign direct investment (FDI) in Africa. Of the thousands of projects under way, 500 are being exclusively directed by the China Road and Bridge Corporation, a state enterprise, helping to place 43 Chinese companies among the 225 global leaders in the area. In Ethiopia China is involved in telecommunications; in the Democratic Republic of Congo it has done work for Gecamine, the state-owned mining company; in Kenya it has repaired the road linking Mombasa and Nairobi; and it has launched Nigeria’s first space satellite. As an incentive to Chinese nationals, eight African countries have been officially designated tourist destinations.’ [6]

For China, Africa represents:

- A key source of raw materials, especially crude oil of which China is now the world’s second largest consumer, with over 25% of its oil imports coming from Sudan and the Gulf of Guinea [6].

According to Chinese Customs figures reported by the BBC in January 2006, in the first 10 months of 2005 trade between China and Africa rose by 39% to over $32bn, largely fuelled by imports of African oil, mainly from Sudan. According to the US Energy Information Administration [EIA] China accounted for over 40% of the total growth in global oil demand over the past four years. [7]

- A market for cheap Chinese-made products.

- Opportunities for investment in infrastructure [hydro-electric plants, pipelines, factories, hospitals]
especially in potential markets where western firms are deterred by political considerations such as sanctions or political instability.

Indeed, where Western firms may be deterred by domestic pressures from NGO’s or by the impact on corporate image of a connection with repressive or corrupt regimes, China benefits by a ‘double whammy’ - its freedom from such pressures makes it a more attractive partner for some regimes, and the absence of competition from Western multinationals creates the possibility of larger profits. [1]

Sudan

‘China, through the China National Petroleum Corporation (CNPC), is the most visible and significant investor in Sudanese oil exploration, transportation and production infrastructure. These investments enabled Sudan to begin exporting oil in 1999 and eventually become a net oil exporter. Though Sudan's current production capacity of 310,000 barrels per day (bpd) is relatively insignificant compared to the global production of approximately 82 million bpd, its product is of a high quality. Such so-called "light-sweet crude" is in short supply in global markets, and sells at a premium over Middle Eastern crude which has a higher sulphur content. China's investment in Sudanese oil production capacity has resulted in Sudan's output now amounting to five percent of China's total imports. Significantly, China is Sudan's single largest customer of oil, taking over half of Sudan's exports in 2003.’ [1]

Though China won its original oil exploitation bid in Sudan in 1995, it was Washington’s decision to cut ties two years later which gave China its opportunity to step in. While Washington still maintains partial oil sanctions against Sudan, China has become Sudan’s biggest trading partner, taking 60% of the country’s oil exports, amounting to 9 per cent of China’s total oil needs.

“We started in Sudan from scratch” said Li Xiaobing, a Chinese Trade Ministry deputy director dealing with Africa. “When we started there, they were an oil importer, and now they are an oil exporter. We've built refineries, pipelines and production." He dismissed a question about Sudan's human rights record, saying, "We import from every source we can get oil from." [8].

In return China has used the threat of its Security Council veto to stall or dilute resolutions on Darfur. According to China’s assistant Foreign Minister Zhou Wenzhong: “I think the internal situation in the Sudan is an internal affair, and we are not in a position to impose upon them.”

This combination of infrastructure investment, trade and political support at the UN constitutes what has been called a ‘complete package’[5].

The favour is reciprocated. According to Awad al-Jaz, Sudan’s Energy and Mining Minister, “the Chinese are very nice. They don’t have anything to do with politics or problems. Things move smoothly, successfully”[5].

Angola

China’s ability to offer a complete package free of extra-commercial conditionality is also illustrated by Angola, now China’s second-largest trading partner in Africa, which buys 25% of its oil production.[6]

At the end of 2004 the Chinese export bank Eximbank approved a $2bn credit for rebuilding infrastructure destroyed in the civil war. In return China would receive 10,000 barrels of oil a day.

The line of credit - at 1.5% over 17 years - might look disadvantageous to China in the short term, but Chinese companies will secure the lion’s share of lucrative contracts for national reconstruction. Local people are unhappy. As independent economist José Cerqueira pointed out: “There is a condition in the loan that 30% will be subcontracted to Angolan firms, but that still leaves 70% which will not. Angolan businessmen are very worried about this, because they don’t get the business, and the construction sector is one in which Angolans hope they can find work.” [6]

The availability of the Chinese loan is believed to have encouraged Angola to resist pressure from the IMF and Western countries to improve the transparency of its oil sector and make other reforms in what has been described as Africa’s most corrupt country. A planned donors’ conference was postponed in mid-2005. But China’s ambassador to South Africa described the pressure for transparency as a condition of the conference as ‘uncalled for’. [5]

Nonetheless Angola was to see a rare example of China intervening to ensure that its assistance was not put to improper use. On 9 December 2004 Chinese pressure forced the business go-between Antonio Pereira Mendes de Campos Van Dunem to resign from his post as secretary of the Angolan council of ministers after the British watchdog on transparency, Global Witness, announced that the money was in danger of being diverted to other uses. Some of the money went to fund government propaganda for the 2006 general election [6].

Despite this diversion, the line of credit has also made possible the funding of railroad repair, road building, office construction, and a fiber-optic network [9].

Zimbabwe

In Zimbabwe, China has also taken the opportunity provided by Western disengagement and pressure for change, to offer itself as an alternative source of no-strings assistance and investment. As part of what Robert Mugabe calls his ‘look East’ policy, China delivered 12 fighter jets and 100 trucks to Zimbabwe’s army when the country was subject to a western arms embargo [10].

In 2004 a delegation of 100 Chinese businessmen headed by Wu Bangguo, chair of China’s legislature, agreed joint venture deals in mining, transportation, communications and energy. [2] In addition, China was reported to have sent crates of T-shirts for supporters of the ruling party in the 2005 elections, and provided a radio jamming device located at a military base outside the capital to prevent independent radio stations from broadcasting during the election campaign.

China was also reported to have designed Robert Mugabe’s new 25-bedroomed $9m mansion, and donated its special cobalt-blue slate roof tiles. [10] In the words of Emerson Mnangagwa, speaker of Zimbabwe’s Parliament: “With all-weather friends like the Peoples Republic of China...Zimbabwe will never walk alone.”

Sierra Leone

A football stadium in Freetown, originally donated by China in the 1970s, in the earlier, ideological phase of China’s relations with Africa, has now been joined by a Chinese-built government office block, parliament building and military headquarters. Chinese firms have also invested in a sugar plant, a tractor factory and an industrial complex, as well as renovating and managing the biggest hotel.

"We like Chinese investment because we have one meeting, we discuss what they want to do, and then they just do it," Sahr Johnny, Sierra Leone's ambassador to Beijing, told the BBC’s Lindsey Hilsum. "There are no benchmarks and preconditions, no environmental impact assessment. If a G8 country had offered to rebuild the stadium, we'd still be having meetings about it."

But Hilsum found that this was precisely what worried local anti-corruption campaigners, among them Zainab Bangura of Sierra Leone's National Accountability Group. "We've spent 15 years working on conventions against corruption, and now the Chinese come in and they haven't signed up to any of it. They're secretive and they only deal with governments - they don't consult civil society or anyone. I'm worried that African governments will see China as an alternative to G8 countries, because with the Chinese they don't have to worry about good governance and all that." [4].

China - the new imperialist?

Moeletsi Mbeki, deputy chairman of the South African Institute of International Affairs, has called the trade relations between South Africa and China "a replay of the old story of South Africa's trade with Europe."

While admitting the benefits of trade, he points out that exports from China and Hong Kong to his country are double those from Africa and almost double what South Africa exports to China. "We sell them raw materials and they sell us manufactured goods with a predictable result - an unfavourable trade balance against South Africa."[2]

In a classic re-run of the trade relations established by European imperialism, South Africa, like other African states, exports raw materials to China while importing cheap Chinese products which compete with, and undercut, local industries. The South African trade union federation COSATU has called for restriction of Chinese imports and has urged retailers to stock a minimum of 75% of locally made goods. [4].

South African campaigners can point to Chinese exports of textiles to South Africa, which grew from 40% of clothing exports to 80% by the end of 2004. But local industry also suffers from the growth of low-cost Chinese exports to the USA and Europe, which cuts off prospective African exports in those markets. This effect has been particularly aggravated since the end of the Multi-Fibre Agreement [MFA] . ‘Once the MFA expired in January 2005, however, Chinese exports to the United States soared and African exporters found they could not compete. More than 10 clothing factories in Lesotho closed in 2005, throwing at least 10,000 employees out of work. South Africa’s clothing exports to the United States dropped from $26 million in the first quarter of 2004 to $12 million for the first quarter of 2005.’ [5]

In October 2005 trade union representatives from the clothing, textiles, footwear and leather sector from Ghana, Kenya, Malawi, Madagascar, Mauritius, Namibia,
Tanzania, Nigeria, Lesotho, Swaziland, Zambia, Zimbabwe and South Africa met in Cape Town to discuss the effects of the phasing-out of the Multi-Fibre Arrangement (MFA). They concluded that the African continent has lost more than 250 000 jobs over the past few years, as cheap textiles and clothing imports from China have flooded the domestic African markets. [11]

They called for African governments to impose temporary safeguard measures allowed under China’s accession to the WTO which provide for limitations of 7.5% on China’s percentage of the domestic market until 2008. The USA and EU have already concluded such limitation agreements which will have had a beneficial knock-on effect on African producers, by slowing down the pace at which Chinese exports to the USA and EU can displace African exports.

In the words of the Eurpean Commission, their agreement ‘also provides a window for adaptation for producers in developing countries whose textile exports to the EU were being displaced by a surge in imports from China’. [12]

Perhaps in anticipation of such a quota being imposed, China’s ambassador to South Africa recently announced that China will ‘voluntarily limit the export of garments and some textile items to South Africa’ [13]. SA officials confirmed that talks were still continuing, and China had offered to help with training in the clothing and textile industries.

The announcement got a cautious welcome from the industry and from the South African Clothing and Textile Workers Union (SACTWU) whose members had lost some 60,000 jobs between January 2003 and November 2005. Industry sources claimed clothing imports from China had risen 40% in the previous nine months.

In Zambia only 20 local textile factories remain out of 250 20 years ago, and Chinese competition is blamed [14] Leonard Hikaumba, president of the Zambian Congress of Trade Unions, bemoaned what he called the dumping of cheap textiles and electronics goods by Chinese exporters. "The beneficiaries of these are the exporters, not us," he said. [15]

In Nigeria the textile and clothing workers union estimates some 350,000 jobs have been lost directly because of Chinese competition and 1.5m indirectly over the last five years. According to the Union’s secretary-general,"Most warehouses in Lagos have been converted to churches because there are no manufactured goods to warehouse."[15]

The Kenyan clothing industry has also warned of further job losses as Chinese imports crowd local producers out of the domestic market as well as the European market, where quotas on Chinese imports [see above] are due to be relaxed. Firms in Kenya’s Export Processing Zone [EPZ] reported at the end of 2005 that 14 factories had closed with the loss of 7000 jobs since January that year with the remainder operating at 50% capacity [16].

China’s policy on arms sales has also caused concern. The Beijing Declaration, adopted at the first China-African Cooperation Forum in October 2000, provided that China would co-operate in stopping the illegal production, circulating and trafficking in small arms and light weapons in Africa. However Chinese weapons, even including land mines, have appeared in Burundi and the Congo, quite apart from the legal sales of weapons to such regimes as Zimbabwe and Sudan. Three small-arms factories were said to have been built by China outside Khartum, whose output was subsequently found among arms captured by southern rebels.

The way forward

It would be wrong to suggest that China’s impact only raises problems, or is merely a re-run of past imperialisms. The fact that Western corporations and government now face competition can give African states more room for manoeuvre, and an alternative to accepting the dictates of the IMF. Naturally, NGOs, human rights campaigners and trade unionists have concentrated on cases where this room for manoeuvre has been exploited by repressive regimes seeking to avoid pressure exerted on Western governments to impose some minimal human rights or environmental conditions. But that does not mean that the ‘Chinese option’ could not also be exploited to widen the room for all African states, not only those abusing human rights.

In this respect, China’s willingness to advance a loan to Angola regardless of IMF conditions could prove a beneficial precedent in other cases. And China’s willingness to invest in sectors which Western investors have neglected, such as cotton production in Zambia, should be welcomed even if China sees them as ‘loss-leaders’ for more directly self-interested involvement.

Indeed at least one US Africanist has sketched out an optimistic [some might say utopian] scenario in which the USA and China co-operate on a programme to further human rights and sustainable development in Africa as in the long-term interests of both.

‘The question then is does China want to be seen in Africa as the defender of rogue states, the more aggressive seeker of Africa’s natural resources, without regard to transparency, development and stability there? Is there room for developing some rules of the road, some common objectives, some ways in which Chinese economic gains for Africa (and itself) can come side by side with building more stability and democracy there? Are there incentives – more joint ventures, more common work on both the exploitation and preservation of natural resources in Africa (e.g., the rain forests) – that the United States can offer? In sum, are there more areas of win-win situations in Africa for both the United States and China? It is better to explore these possibilities than to start down the path of trying to limit Chinese influence, for the odds are against that happening any time soon.’ [5]

However remote the prospect of these counsels proving acceptable in the corridors of power in Washington and Beijing, African civil society needs to consider how to react to China’s challenge which avoids uncritical acceptance on the one hand or mere rejectionism on the other. There are lessons to be learnt from the experience of other nations in the ‘majority world’ in engaging with China’s economic dynamism in ways which turn a problem into an opportunity, and encourage the emergence of what Chris Alden has called ‘an Africa that can say no’ [17].

Regimes stigmatised in the West as ‘rogue states’, often with good reason, will not be willing or able to insist on much conditionality in return for a Chinese lifeline. But that should not prevent African civil society from researching and advancing a package of measures which could be put forward as a necessary conditional component of Chinese investment packages. These could include training prorammes, technology transfer, the fostering of local management skills, and the reservation of a proportion of Chinese investment and infrastructure projects for local firms and labour.

The experience of a number of Latin American states may provide a model here. Brazil, Chile, Mexico and Venezuela have all experienced increased Chinese trade and investment but have combined this with positive trade balances, due in part to bilateral agreements giving preferential access for key sectors or products.

Most recently, Brazil and China have agreed that China will set quotas for eight types of Chinese textile exports to Brazil, according to the Brazilian Trade Ministry's Web site. The products account for 60 percent of Brazil's textile imports [18]. Further research and exchange of information would show how much of the Latin American experience could be generalised to provide policy conclusions applicable in an African context.

Recent signs that China may be considering similar quotas for South Africa are encouraging, as is the accompanying talk of assistance for retraining and restructuring. But it is not unduly cynical to see such initiatives as an attempt to forestall stronger measures. A more comprehensive package, negotiated Africa-wide, is needed; especially since quota agreements under the WTO will expire in 2008, and are in any case open to abuse by ‘quota hopping’. [12]

Further work could also indicate the potential for integrating into a single package, as Alden has suggested, such issues as:

- Building on China’s existing commitment to bilateral debt write-offs;
- Raising China’s dumping practices before the WTO’s dispute machinery; or tying Chinese action on this and other trade issues to further raw material agreements;
- Promoting gains for local consumers and the local economy in all trade and investment deals;
- Building on China’s existing commitment to AU peace-keeping in Darfur, and on the commitment in the 2000 Beijing Declaration to control illegal arms sales; and seeking to extend the commitment to more responsible regulation of China’s own lawful arms sales.

Research is also needed into the feasibility of the suggestion that the existing China-African Cooperation Forum be used as the institutional forum for such a process, with an agreed code of conduct reinforced by an annual review process, and even a parallel civil society forum, similar to hat introduced at South Africa’s suggestion into the Non-Aligned Movement’s summits.

A closer study of China’s own policy-making processes and the development of Chinese thinking might indicate if the prospect of China accepting and participating in such a process is more than merely utopian. As Chris Alden concludes:

‘While stability is recognised to be a prerequisite for development, the proximity of Beijing or its parastatals to African governments that systematically abuse rights of its citizens only compromises the achievement of this long-term aim. After all, China need only hearken back to its own experience of decades of banditry before 1949 to recognise the devastating effects that externally fostered conflict can have upon society and the prospects for economic development.’

* Send comments to [email protected]

* Stephen Marks is a freelance writer and researcher specialising in
development and human rights issues.

References

[1] Economic growth and soft power: China’s Africa Strategy
Drew Thompson
http://www.jamestown.org/print_friendly.php?volume_id=395&issue_id=3170&article_id=2368982

[2] China’s African Safari
Paul Mooney
YaleGlobal, 3 January 2005
http://yaleglobal.yale.edu/article.print?id=5106

[3] New highlights in China-Africa comprehensive cooperation
http://english.people.com.cn/200601/14/print20060114_235306.html

[4] The Chinese are coming
Lindsey Hilsum
New Statesman
4 July 2005
http://www.newstatesman.com/200507040007

[5] China’s Rising Role in Africa: Presentation to the US-China Commission
Princeton N. Lyman
July 21, 2005
http://www.cfr.org/publication/8436/chinas_rising_role_in_africa.html

[6] China’s trade safari in Africa
Le Monde Diplomatique
May 2005
Jean Christophe Servant
http://mondediplo.com/2005/05/11chinafrica

[7] China-Africa trade jumps by 39%
BBC News 6 January 2006
http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/2/hi/business/4587374.stm

[8] China in Africa: all trade with no political baggage
New York Times, August 8 2004
http://www.globalpolicy.org/socecon/develop/africa/2004/0808africantrade.htm

[9] Boston Globe 24 December 2005
http://www.boston.com/news/world/asia/articles/2005/12/24/china_scooping_up_deals_in_africa_as_us_firms_hesitate?mode=PF

[10] A rising China counters US clout in Africa
Abraham McLaughlin
Christian Science Monitor March 30 2005
http://www.csmonitor.com/2005/0330/p01s01-woaf.html

[11] http://www.pambazuka.org/index.php?id=29776

[12] The Emperor's New Clothing Deals
Business Day (Johannesburg)
February 21, 2006
http://allafrica.com/stories/printable/200602210354.html

[13] Textiles: China Voluntarily Cuts Back Exports to South Africa
20-01-06
http://www.agoa.info/news.php?story=629

[14] http://www.panos.org.uk/global/tradingplaces_feature2.asp

[15] ‘Tsunami of cheap goods’ overwhelm African jobs
Reuters, 20-12-05
http://www.nzherald.co.nz/category/print.cfm?c_id=151&objectid=10360687

[16] http://www.textileandapparel.com/story/2005/11/22/202435/17

[17] Leveraging the Dragon: Toward "An Africa That Can Say No"
Chris Alden
eAfrica, 1 March 2005
http://yaleglobal.yale.edu/display.article?id=5336

[18] Domestic textile exports to face quotas in Brazil
China Economic Net 13 Feb 2006
http://en-1.ce.cn/Business/Macro-economic/200602/13/t20060213_6065807.shtml