China keeps it going

Jeffrey Sachs, economic adviser to UN Secretary General Ban Ki-Moon, expressed the hope that ‘China can lead the world out of this crisis first’.

‘"They did not have as big a bubble as in the United States or Europe. China has got lots of foreign exchange reserves, it's got a trade surplus, it's got lots of investment. China has the wherewithal to start the recovery first. If that succeeds in this year, then that would spread to other economies", said Sachs, in Dar es Salaam for an IMF meeting.

But he did feel that the crisis could delay or dash chances of meeting UN Millennium Development Goals by 2015, especially if richer nations reacted to the crisis by slashing overseas aid or investment.

However there was little evidence of China’s economic interest in Africa slowing down as a result of the global crisis. Despite IMF criticism of the terms, China has confirmed that it will proceed with its plan to spend $9 billion on mining and infrastructure in the DRC. China’s biggest single investment in Africa will give Congo roads, railways, hospitals and schools in return for long-term supply of metals worth $50 billion at current prices.

In Algeria, China’s private telecoms company, Huawei Technologies ‘are developing two mobile phone networks for the former state monopoly, Algerie Telecom, and its private-sector rival, Djezzy, owned by Egypt’s Orascom’.

Zambia’s President Banda launched the $400 million Kariba North Bank generating project funded 85% by China’s Eximbank and built by Sino Hydro, China’s biggest power company.

In Mozambique China pledged an additional $2.5 million beyond what was originally budgeted to ensure that the new National Stadium being built by China would be ready in time for the 2010 football World Cup - bringing the overall cost to a new total of $60 million. While one of China’s oil majors, CNOOC, announced that implementation of the OML 130 project in Nigeria’s Akpo area has started ahead of its planned schedule. With CNOOC holding 45% interest in the project, it represents one of the ‘largest deep water projects to be undertaken’.

But there was also no sign that concern and debate over the downsides of China’s involvement were abating either. As Liberia prepared to sign a 25-year $2.6 billion mineral development agreement with the China-Union Company, there were fears from campaigning NGOs about provisions for resettling communities and the fiscal clauses, as well as over the capacity of both state organs and civil society to ensure effective oversight of the terms of the deal, which is reported to be due to create 3,000 jobs.

And a leading primatologist told a US Congressional briefing of her fears that China’s appetite for raw materials in the Congo basin was leading to deforestation and the destruction of crucial wildlife habitat.

In Namibia economist Julius Likela rehearsed familiar issues from discussions elsewhere in Africa in his paper ‘Whither Chinese-owned businesses’. He concludes that ‘It is important for local businesses to find out why and how the Chinese managed to penetrate the domestic market and adjust their trading methods, products and services accordingly. With or without government protection, indigenous entrepreneurs should learn to live with evolving competition’

At the same time, in a sign that major Chinese firms are seeing the need to be perceived as socially responsible, a leading Chinese telecoms equipment firm announced that it was joining the UN-sponsored Global Compact, a 7,000-member global corporate citizenship initiative based on ten principles which participating businesses are pledged to uphold in the areas of human rights, labour, the environment and anti-corruption

But how does China see its economic role in relation to the world economy, and especially Africa? Some light has been thrown on this from the nine-day annual meeting of China’s parliament, the National People’s Congress. As Western press coverage pointed out, this body bears little resemblance to the parliamentary assemblies of multi-party democracies. And this is unlikely to change, judging from the speech of its chairman Wu Bangguo, who went out of his way to stress at the body’s opening session that “we will never simply copy the system of Western countries or introduce a system of multiple parties holding office in rotation", and called for the leadership of the Communist Party to be strengthened.

However the annual meeting does provide a platform for senior government figures to present their platform and perspectives in keynote speeches, much as directors of a company present their reports to the annual shareholders meeting. It can also provide a focus for various organisations to make representations to the authorities, as when the environmental group Friends of Nature sent a letter to delegates to this year’s meeting asking them to ensure that the government’s economic stimulus package was used to pioneer a green low-carbon economy and not on polluting technologies which would undermine the government’s declared objectives on combating pollution and saving energy.

Fringe speeches and press conferences by government figures add to the significance of the event as an insight into policy trends, especially for those prepared to read significance into he nuances of official language.

Thus when Premier Wen Jiabao’s two-hour speech on the economy repeated his commitment to his $585 billion economic stimulus package the Financial Times reported that markets were disappointed that there were no new details in the speech. Markets had earlier risen on reports that the speech might contain a new stimulus plan.

However a report in the independent economic journal Caijing gave details of a revamped version of the stimulus package unveiled at a fringe meeting of the NPC by the Director of the National Development and Reform Commission which included a cut in funding for infrastructure investment and a big increase for rural public works and social programmes.

Reuters however saw the same report as indicating an increased policy emphasis on energy saving and green technology despite the budget reallocation, with tighter climate change targets for each province.

China’s Foreign Minister Yang Jiechi also held a press conference on the sidelines of the legislature meeting. For those prepared to look behind the deferential questions and standard replies, there were some interesting pointers. A central thread was the key role of continuing economic development in China’s foreign policy. As Minister Yang put it, ‘First, we should stay focused on one overarching objective, that is to make every effort to serve the goal of ensuring steady and rapid economic development in China’.

In this context he also stressed the central role China gives to the upcoming round of multilateral meetings and the need for concerted economic action - welcome news for President Obama, with whom he noted that relations have ‘got off to a good start’

There was also an interesting stress on the need to ‘strengthen consular protection to safeguard the lawful rights and interests of Chinese nationals and companies overseas. As more and more Chinese are travelling abroad and more and more Chinese companies are doing business overseas, we must do an even better job in consular protection’. Also ‘we will provide services and guidance to Chinese companies as they go global...we will continue to protect the lawful rights and interests of Chinese nationals and companies abroad’.

It may also be significant that in response to a question from a Russian agency about Sino-Russian relations he appeared to go out of his way to comment that ‘China, Russia, Brazil and India are countries with important influence in today's world. They are called the "big emerging countries". We face a lot of common challenges in many areas and also share many development opportunities. Leaders and foreign ministers of those four countries have met to exchange views. I think it will be useful to continue such practice’.

He also made specific and warm reference to the importance of Africa - and of African political support for China internationally. ‘We highly appreciate the tremendous support from our African friends and brothers on Taiwan, on Tibet-related issues, in hosting the Beijing Olympic Games and in our fight against natural disasters. Leaders from some African countries told the Chinese leaders that our countries are so poor that we have nothing to give you and all we can give you is a sincere heart. We are deeply touched by these words. We are very close brothers and friends. Not long ago, President Hu Jintao visited some African countries. During the trip, he made it clear that China will continue to support African development and support greater say and representation of African countries and the African continent as a whole in international and regional affairs’

He also took a swipe at claims that China’s interest in Africa is motivated only by an affection for her raw materials. ‘I would like to say that in developing foreign relations, China is not a country that sets its eyes only on the wealthy and oil-rich countries while looking down on those countries that are poor or without oil. You may ask African countries without rich oil and gas reserves whether they have a better impression of China or other countries. Our energy and resource co-operation with African countries is based on mutual benefit’.

And he expressly linked the two themes of international economic co-operation and aid to developing countries; ‘To maintain steady and fast economic development in China is in itself the biggest contribution China makes to the international co-operation in meeting the financial crisis. Another important contribution we have made is that we have increased assistance to other developing countries, particularly African countries. And we have called upon other countries to honour their commitments to assistance’.

All of which sounds like good news for Africa. But complacency would be misplaced. The more China’s continuing role contrasts with other actors pulling in their horns, the greater the need to ensure that African governments and civil society are in a position to make the relationship work for Africa. Perhaps the upcoming G20 Meeting in April would determine how ‘close brothers and friends’ China and Africa really are.

*Stephen Marks is Research Associate and Project Co-ordinator with Fahamu’s China in Africa Project and Sanusha Naidu is Research Director with Fahamu’s China in Africa Project

* Please send comments to [email protected] or comment online at http://www.pambazuka.org/.