Monday, 2 July 2012

China's 'Bread and Butter Question' and the New Scramble for Africa

This is an edited text of a paper submitted to 'Contribute' Magazine, the publication of UQ's United Nations Student Association

In January this year, an interesting guest attended the opening ceremony of the new African Union headquarters building in Addis Ababa, Ethiopia: Jia Qinglin, the fourth ranking member of the Politburo Standing Committee of the Communist Party of China. Amazingly, the entire US$200 million construction project (everything from raw materials to interior furnishings) was bankrolled by the Chinese government. This is a profound exemplification of the Sino-African union in the changing economic and political landscape of the twenty first century.

The isolationist foreign policy of the Middle Kingdom is no more. Indeed, since the economic reforms and Open Door Policy of Deng Xiaoping (1978), China has been at the forefront of the global economy and international trade. Since 1999, the ‘Go out Policy’ has become the primary framework defining China’s investment in, and exploitation of, expanding regional and international markets. As the example of the Chinese donation of the new African Union headquarters suggests, Africa has been the major focus of China in recent years. China needs the continent’s natural resources to augment its (already) unprecedented industrial growth. Channelled through its state-owned enterprises (and defined by a large migratory flows of Chinese nationals), Chinese capital has often crowded out any local or regional economic actors. Although the ‘Go out Policy’ has been at the fore of Chinese economic activities in Africa, the so-called peaceful rise (marked by soft power, non-interference and responsible world leadership) also characterises the Sino-African relationship. At the opening ceremony of the new African Union headquarters, China reaffirmed this commitment: Jia Qinglin remarked, “China will firmly support African countries in their efforts to uphold sovereignty and independence and to resolve African issues on their own.”

China has reignited the scramble for Africa and is seemingly reigning as the Rhodes Colossus. In recent years, it has been the largest single source of financial aid and foreign investment for Sub-Saharan Africa. Last year, trade amounted to US$120 billion, surpassing the United States and the European Union. This this comes at no coincidence, given China’s newfound status as the world’s largest energy user, according to the International Energy Agency. The resource extraction has been further complimented by a large inflow of Chinese nationals into the continent (with Chinese state owned enterprises now dominating the economic landscape). Sanou Mbaye, a former senior official of the African Development Bank, states, “more Chinese have come to Africa in the past ten years than Europeans in the past 400. First came Chinese from state-owned corporations, but more and more arrive solo or stay behind after finishing contract work.” The new Chinese entrepreneurial movement has excelled with government support. Notwithstanding the continental disincentives of civil wars, institutional corruption, political instability and (recently) the GFC, China has been capitalising on the lack of Western competition. Indeed, negotiations with African governments (particularly those with records of human rights abuse) have proven remarkably straight-forward for Chinese investors. Chinese investment is afforded protective security by African governments through legitimate reciprocal trade agreements, but also through corruption. Suffice to say, these cacophonous relations show no signs of quietening down. On the diplomatic front, China has more embassies and diplomatic postings in Africa than the United States and European Union combined. In 2000, the Forum on China–Africa Cooperation (FOCAC) was established and its 2006 ministerial meeting was the largest diplomatic forum in both modern Chinese and African history.

In the wake of the United States’ waning influence and Europe’s economic woes, many consider that the Middle Kingdom is heavily engaged in neo-imperialism throughout Africa’s postcolonial states. In 2006, then UK Foreign Secretary, Jack Straw, criticised China as neo-imperialist, remarking, “most of what China has been doing in Africa today is what we did in Africa 150 years ago.” In 2011, US Secretary of State, Hillary Clinton, warned Africa of a “new colonialism”. Although not explicitly naming China, she did urge greater scrutiny of its investments in Africa. Nevertheless, the character of Sino-African relations is markedly different from that of the continent with European and American relationships. Now, it is investing in industry and infrastructure and importing resources and goods; though this largely centres upon the extraction of largely finite resources, China has also invested in telecommunications, financial services, and energy infrastructure. Sino-African relations are officially guided by the policy of ‘mutual benefits’ and bilateral economic cooperation. Drawing upon this policy’s profoundly positive developments, Ethiopian Prime Minister Meles Zenawi recently stated, “The future prospects of the [Sino-African] partnership have never been brighter. China’s amazing re-emergence and its commitments for a win-win partnership with Africa is one of the reasons for the beginning of the African renaissance.”

In exchange for these developments, China has received large contracts from African governments and priority with respect to to the extraction of natural resources. In 2007, China signed a US$9 billion dollar mining agreement with the Democratic Republic of the Congo, constituting 68 per cent of the latter’s annual mining revenue. In return, the Congo received hospitals, schools and 6000 kilometres of railway and road infrastructure all financed by China. Without Chinese textile corporations, unemployment in the South African town of Newcastle would be over 80%. Workers are paid approximately US$200 per month, which is greater than in China, but still less than South Africa’s minimum wage. The local unions have tried to shut these textile factories down, but a majority of the workers consider a poorly paid job to be better than none at all. 

Whilst many Africans perceive the West’s demeanour as condescending, the Chinese ostensibly manage their relationship with Africa as a serious business partnership. As Faida Mitifu, the Democratic Republic of the Congo’s Ambassador to the United Nations said, “There are people who still consider Africans like children who can be easily manipulated. The good thing about the [Sino-African] partnership is that it’s sincere and give and take.” On the surface it does – in fact – seem that China is improving Africa’s wellbeing through its trade, investments and financial aid.

Whilst the official policy guiding Sino-African relations is of ‘mutual benefits,’ the primary rationale for Chinese involvement is out of economic necessity and hunger for resources. Consequently, whilst official government statements report on the positive friendship, there are widespread claims of human rights abuses, poor working conditions and environmental degradation leading to a wave of anti-Chinese sentiment and xenophobia on the continent. As evidenced by oil spills in Sudan and Gabon, weekly deaths in Zambia’s Chinese-controlled mines, slapdash construction in Guinea and endemic corruption in some African governments, China has inflicted substantial harm across the continent.

Amongst other continental statesmen, the Environment Minister of Zimbabwe has been an active critic of the Chinese, calling them “makorokoza”, a scornful local term for criminals. Thus, to avoid condemnation from African governments, the Chinese have engaged in bribery and coercion. Chinese managers have bribed government ministers and even taken some on ‘study tours’ to massage parlours in China. Obstructionist African midlevel officials are sacked and workers who assemble in groups are dispersed with rubber bullets. In the rare event that cases do end up in local courts, there have been reports that witnesses are intimidated and judges being paid off.

China has become just as embedded in the African continent as the minerals and oil that its state-owned companies are extracting. Whether through massive migration of Chinese nationals or the perpetual presence of state owned enterprises, China is seemingly, at least to some Western officials (such as Clinton and Straw) and local African populations, colonising the African continent. But this begs the proverbial question: is this really neo-imperialism and, akin to the Scramble for Africa of the late 19th and early 20th centuries? On balance, the answer is ‘no’; there is a lack of cogency between the plethora of Chinese corporations and the heterogeneity of Chinese private entrepreneurs. China is simply being a rational economic powerhouse and seizing the opportunity to exploit the resources and markets in Africa to fuel its own economy.

This points to an even more important question – is a Chinese monopoly on Africa’s natural, economic and political capital good for the world economy? Obviously a monopoly in any market is detrimental, but is China alone to blame for crowding out other regional and international actors? Arguably Western nations are equally if not more to blame – Europeans and Americans exploited the natural resources of the continent through imperialism and are responsible for the some of the most intense ethnic violence in history. Many Africans have felt that the West has abandoned their plight. Indeed since the 1980s, with increased civil wars and ethnic violence, and with the global financial crisis since 2008, there has been an apparent lack of political and corporate willingness in the West to invest in infrastructure and industry on the Africa continent.

Although China’s monopoly on African markets and industries may be regarded as a form of economic imperialism, it fundamentally differs from the character of historical European colonialism in Africa. The driving forces of European colonialism were administrative, political and cultural. European nations attempted to maintain cultural hegemony over African colonies, importing customs from food to sports and entrenching political and legal institutions. The British implanted the common law system and cricket in Kenya; the French implanted language and pastries in the Ivory Coast. Not bound by such administrative or cultural hegemony, the underlying motivations for Sino-African relations are marked by a deep paranoia over energy security by the Chinese government.

China has decidedly operated like a private corporation in a Western nation – prioritising profit and only caring about social responsibility and public administration when it serves a purpose. It has rationally sought to exploit African resources for its factories that are fuelling the global economy and making the cheap products that we in the West consume. Surging foreign direct investment from China has substantially affected Africa’s economic prospects and continental infrastructure networks. Indeed, according to Johnnie Carson, the United States Assistant Secretary of State for African Affairs, “China is a very aggressive and pernicious economic competitor with no morals. China is not in Africa for altruistic reasons. China is in Africa for China primarily.” During the nineteenth century, the British Empire was widely regarded as a mercantile powerhouse ‘upon which the sun would never set’. Today, it is perhaps more appropriate to reason that ‘the sun never sets on Chinese investment’. Notwithstanding speculation as to the future character of its political hegemony in Africa, Beijing’s insatiable appetite for natural resources will define the growing presence of Chinese investment throughout the African continent.

Tasman Bain is a second year Bachelor of Arts (Anthropology) and Bachelor of Social Science (International Development) Student at the University of Queensland. He is interested evolutionary anthropology, public economics and philosophy of science and enjoys endurance running, reading Douglas Adams, and playing the glockenspiel.

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