Business is Global
Linkname | Linkname | Linkname | Linkname | Linkname 

Countries : Asia : China Last Updated: 25 Mar. 2008 - 7:18:47 PM

Posted in: China
Why Beijing is winning in Africa
By [unknown placeholder $$]
2 Feb. 2007 - 11:03:04 PM

Email this article
 Printer friendly page

The Chinese are rapidly developing a successful capitalist economy — it would be a shame if the commies took over... New visitors to Beijing might be tempted to utter this paradox, especially at Christmas when the shops and tourist hotels are decked out in western festive paraphernalia. The most upmarket shops boast Eu-ropean mannequins, predominantly English signs and western fashions. Senior communist party officials seem rather embarrassed when westerners ask about the great revolutionary leaders of the past: Mao is as long dead as Marx.

I attended a conference in Beijing in late December on Sino-Africa relations. The senior party cadres and professors politely applauded my lecture on why China is doing better in Africa than the west. Nevertheless, except perhaps for SA, no African state is strong enough to deal equally with China. On a divided, demoralised continent, Beijing can cherry-pick almost at will.

Western perceptions

Beijing’s economic, military and diplomatic growth has been so striking that it has often caused knee-jerk reactions in Europe and the US.

There are two main schools of thought:

The peaceful China. Its new strategic cosmopolitanism is geared to expanding its national interest — not ideology — primarily to secure energy sources and to improve its trading patterns with the European Union and the US. Africa is merely a proving ground; and

The difficult China. China’s outreach is part of an exclusionary policy, working with illiberal and rogue states. North Korea is a prime example. It develops trade patterns which ignore all human rights issues.

This undermines western conditionality strategies, which aim to improve conditions in autocratic states, especially in Africa.

China could manipulate its dollar surpluses to bring down the US economy, though that would not be in Beijing’s interest, particularly at a time when it’s stealing western intellectual property worth tens of billions of dollars annually. Pirated DVDs of the new James Bond film, at less than a dollar, were on sale even before it reached western cinemas.

Chinese foreign policy is sufficiently nuanced to allow a variety of interpretations. Washington’s policy towards Beijing contains elements of mutual economic co-operation but also strategies, especially with Japan, which could counter perceived Chinese military threats.

China and Africa

The western threat perception is based on economic penetration and a concern that long-established western principles of conditionality — aid and trade in exchange for good governance — are being destabilised.

China’s trade with Africa has risen four-fold in the past four years. It is now said to be $40bn.

China has overtaken the UK to become Africa’s third most important trading partner, after the US and France. Because its oil needs are expected to double in 15 years, China has invested in particular in Sudan, Angola and Nigeria. It is also investing in forestry in Equatorial Guinea, mining in Zambia and construction in Botswana, for example.

China involved itself in Africa for ideological reasons in the 1960s and 1970s and helped with large-scale projects; the Tan-Zam railway is perhaps the best example. But this time the motivation is primarily about business, not politics.

Some western experts argue that the Chinese are now “voracious capitalists”, who are generating a new scramble for Africa.

This is a two-way street. China may be pushing its Africa policy hard, but African leaders, increasingly scornful of western conditionality, are welcoming the far less judgmental Chinese way of doing of business.

What the west did wrong

Forget about the western campaigns that speak about “making poverty history”; instead “make lecturing African leaders history”.

Western aid hasn’t worked, especially when it is accompanied by pious and ineffective lectures and double-counting (for example, including debt relief as part of aid budgets). Giving more aid to Africa is like telling an alcoholic he needs a stiff drink to help kick his addiction. The continent was going backwards for many years until the 5% growth rate of the past three years. Chinese trade may well have played a role in this achievement.

Fading rock singers’ alliances with Prime Minister Tony Blair’s messianic vision may stir the soul of voters in the UK, but they are unlikely to benefit Africa’s poor. Opening western markets would be a more effective strategy.

What Africa needs is not liberal kindness but investment by business. But at present only very big western companies — and the Chinese — tend to take the risk. The oil majors have shown that Africa need not be stable to make a profit. Nigeria and Equatorial Guinea demonstrate that oil brings in money, but it rarely benefits the “masses”. Nigerian leaders in 40 years ripped off $400bn (from oil and aid money) — that’s six times the amount the US Marshall Plan spent on successfully rebuilding western Europe after the Second World War.

After more than a trillion dollars of western aid, many African citizens are poorer than ever. Western governments tried to impose good governance by lending or giving money with strings attached. But donors need to recognise that they cannot “buy” policies with their own money and expect African governments to “own” these same policies, which are imposed on them, and which often don’t work (although they can — sometimes — at the very local, “African-owned” level).

There is simply no correlation between aid and economic growth. Africans don’t need to be told that aid merely saps initiative. Africa, like any other region, wants to finance its rec-overy though its own resources and through direct foreign investment. But annual capital flight roughly equals aid inflows; every year Africa’s brightest talents leave, while tens of thousands of foreign “experts” briefly and often clumsily replace them. This is the economics of the madhouse.

For the African worker, there is one thing worse than being exploited by western capitalism (or Chinese neocapitalism) and that is not being exploited — ie no work. Foreign business investment in Africa is nakedly self-interested, but it should be extended beyond extractive and agricultural industries. Yes, debt relief will help (though it also makes African governments less creditworthy) but more important is the curtailment of European and American domestic protectionism — even though the West preaches free trade to Africa.

Direct western military intervention, like the billions of aid dollars, is equally counterproductive. The first priority is to keep out the guns and aid gurus, and let more businesses in (and African governments could start by dumping all the red tape, which deters economic development).

Western governments can help by encouraging the African diaspora to return; Western banks should also play a role in repatriating more of the billions that corrupt dictators have stolen from their people.

China’s mistakes

My friend Lindsey Hilsum, the bureau chief in Beijing for Britain’s Channel 4 TV, has produced a number of powerful reports on China and Africa. The essence of her critique, during the visit of 40 African heads of state to Beijing in November, was this: African leaders “are just thrilled that China wants to talk about trade, investment and brotherhood rather than pesky subjects western leaders like to bring up such as human rights, good governance, corruption, genocide and all that”.

Yes, China’s support for Sudan over Darfur and for Robert Mugabe’s regime has been criticised in the western media. And China has supplied large arms shipments to Sudan and Zimbabwe, including fighter aircraft — though it still lags the western arms deals on the continent.

China has also been criticised for dumping cheap goods on Africa. This is particularly true of textiles and clothing. In a replay of trade structures imposed by European imperialism, SA exports raw materials to China while importing Chinese products which compete with, and undercut, local industries. South African trade unions have called for restrictions of Chinese imports.

Following its experience in Latin America, China has responded to these concerns and has agreed to limit exports of some garments and textiles to SA. China has also been criticised for bringing its own workers and displacing African employment on major construction projects. Chinese purchase of retail outlets has also caused resentment in Botswana and in Zambia, for example.

What China has done right

African leaders are generally much happier to deal with the Chinese (despite the complaints from trade unions). Even President Festus Mogae of Botswana admitted: “I find that the Chinese treat us as equals. The west treats us as former subjects.”

Because the Chinese are not imposing any ideology, it’s willing buyer, willing seller. Above all, the phenomenal growth rates in China and the fact that hundreds of millions have been lifted out of poverty is an attractive model for Africans, and not just the elderly leadership. Young, intelligent, well-educated Africans are attracted to the Chinese model, even though Beijing is not trying to spread democracy (unlike the disastrous American policy in Iraq).

China is effectively building on its soft-power model (again compared with the awe and shock tactics of the US army). More than 900 Chinese doctors work in Africa. Educational support is also extensively provided. Instead of aid that is often diverted into elite pockets, China has made a habit of providing iconic infrastructure projects, from new parliaments to football stadiums.

Nor does China import an army of fat-cat “expats” with their families. Chinese workers usually live in austere accommodation and work hard for long hours and at salaries much lower than European or UN personnel. The Chinese are sometimes condemned for importing strict labour regimes but their work ethic would be a useful inspiration in many African states.

African renaissance

China’s one-party system necessarily precludes its proselytising for democracy. It stands by its economic record, an undoubtedly alluring model for many Africans. China’s experience suggests that the removal of poverty must precede the introduction of democracy.

Instead of considering a triangular zero-sum relationship of the west and China contending for African goodwill (and oil), there are many ways of co-operating, via the New Partnership for African Development and an array of other organisations. But first the west needs to escape from the instinctive notion that its polices are progressive in Africa, while Chinese actions are negative and harmful.

Africa needs trade, not aid. And China, for all its immediate selfinterest, is providing just that. China wants oil now but it is also playing a long-term game.

Its skilled diplomats know that they require some stability and effective governance in its trading partners — even in Zimbabwe.

There are more Chinese living in Nigeria now than Britons during the height of the empire. And in 2005, Angola’s energy minister said that as many as 3-million Chinese could move to his country in the next five years. That figure seems highly improbable but even if it were quarter true, it would smack of a new imperialism.

Unfashionably, some western experts have called for a new United Nations trusteeship for failed states in Africa, and former colonies such as Mozambique are bending over backwards to get old and new white colonialists back. But Africa is not attractive to European settlers any more.

If China’s energy shortage and population surplus can help rebuild a largely derelict continent, then Beijing should be applauded, not castigated. While the European Union views Africa as a burden, China sees a market.

The so-called African renaissance can come only when African leaders invest by preference in private capital growth in their own countries, not Swiss banks. China pulled itself up by its own bootstraps by relying largely on internal investment as well as smart foreign trade; Africa must not rely on external investment from China through selling its oil.

Despite the dangers of a new imperialism, China might still provide an opportunity for Africa which Europe and the US have simply failed to deliver.

This article was first published in "Business Day".
Dr Moorcraft is the director of the Centre for Foreign Policy Analysis,
London .
The Website of the CFPA is
(c) 2007 Dr Paul Moorcraft

© Copyright 2007 by Negotiation.Biz

Top of Page

Latest Headlines
Why Beijing is winning in Africa