China in Africa: A Primer

Image source PANOS PICTURES

Ever since I started talking about the developing this website, I have been talking to people about "China in Africa" and (almost) everyone has an opinion on the subject, I have also read a lot of opinion pieces in the newspapers and internet. The most common attitudes aired in print and in conversation are that; "Chinese companies are there for the natural resources"; "China wants to secure African oil"; "it's a neo -imperialism"; "Chinese companies are looking for new places to set up factories"; "the Chinese bring over their own workers, and treat the African workers they do have like slaves". There are more positive attitudes; people often believe that China will bring the benefits of increased trade and investment, tangible project building and an alternative to the aid focussed approach of the West. While some people temper their comments, or point to the benefits that China is bringing Africa, fresh trade and investment opportunities. These are viewpoints which often see Africa as a victim and China as a neo-imperialist aggressor. But I will attempt to outline the complexity of the relationship and show a balanced point of view.

In reality China's relationship is multi-faceted, what else could it be, the relationship between a country with over 1.3 billion people and a continent of 53 countries could not be anything less.

Why is it complex? Because for a start "China" is not a single actor, different regions, companies and government agencies all who have varying agendas and aims, engaging in turn with over 50 states on the African continent with varying agendas, who rarely act in concert. The relationship is often depicted in semi-abstract geo-political terms of influence and power, but below this is there is a myriad of individual business relationships, Chinese companies investing and trading across the continent and parallel political ties between China and African countries. Business and political ties exist alongside burgeoning cultural ties - such as large scale Chinese immigration to Africa, and vice-versa, with some Africans moving to China. So a better title for the article would be; A primer: China's complex relationships with (a lot of) African countries (but that is not such a snappy title) .

Broadly speaking the last 10 years China has started trading and investing in Africa at a massive scale not seen before, which is now outstripping the efforts of former colonial powers, the USA and Japan, while the UK and other Western countries have been focussed on aid and debt reduction, the Chinese have been focussed on trade and investment, which is either a highly beneficial "win-win" situation for the continent or neo-imperialism with a side order of environmental disaster. The Chinese have been involved in Africa for a long time, but it is really the last ten years that China's economy has become so involved in the African economy, before that economic relations were less important and political aims such as diplomatic recognition over Taiwan were more important.

Originally the Chinese were primarily interested in natural resources from Africa to supply factories back home, but over time direct investment has grown in infrastructure, often as part of a natural resources deal and there are now signs of a Chinese involvement in developing a manufacturing base on the continent, which could kick-start a significant African manufacturing sector.

China's influence over the continent is not clear cut, economic power does not always translate to political influence, the US has been the largest investor and trading partner with the continent for many years, but this has rarely translated into direct political support. Many African countries remain suspicious of the US (for instance widespread opposition to Africom stationing troops on the continent).

While African governments and very often its people have a positive view of China, as it is considered a successful developing country, and as many commentators report, the Chinese government do not try and preach to African countries about human rights and democracy. Chinese companies have been criticised for a perceived lack of environmental standards and for using workers from China, rather than locals.

Why has China targeted Africa? It is certainly true that Africa has been in relative terms been pretty much completely ignored by the rest of the world in terms of FDI and trade - the continent received about 2% the world's total FDI throughout the 1990s and 2000s, so lack of competition is certainly a factor. Africa is well stocked with the natural resources China requires for its industry. China has developed stronger economic links with other parts of the globe, such as Middle East (now the biggest oil importer from Saudi Arabia), Latin America and Central Asia. So in some respects, there is no "targeting" of Africa, it just that the massive expansion in China's economy has naturally led to deeper economic and political relations with the rest of the world.

Does is matter to us in the West? Overall Africa is currently experiencing growth at an average rate of 4-6%, it was relatively unscathed by the world financial crisis and there is a growing consensus that this growth story will continue, which will mean opportunities for western companies already operating in the continent and for those looking for new investment and trade opportunities. Of course it could all go wrong (again), natural resource prices could collapse, large countries revert to civil war and the region revert to the 1980s, no one knows for sure. But assuming Africa follows an upward path; China could be the dominant player in a region with high growth prospects, a young population of consumers and a deposit of useful minerals and raw materials. In addition the UK and other EU countries have invested large sums in development aid to the continent giving us a stake in the future of the continent. The ultimate success or not of Chinese engagement in Africa will an interesting development story in its own right.

What does China bring to Africa; firstly a market for its raw materials, the development of infrastructure, such as roads and dams. As mentioned African growth rates are improving and many Critics contend that China dumps cheap goods on African countries undermining local industries; they bring in their own labour do not help to reduce unemployment rates. While

The flip side is that China is investing throughout the world, buying up assets, in North and South America, Asia and Europe, so the wider picture is that Africa is just a small part of the "going out" strategy for China. Chinese companies have cash to spend and assets are relatively depressed in many markets. Takeovers by Chinese firms have run into controversy as they represent a state-capitalist system and the fact that many Chinese companies are owned by the government make many people uncomfortable, particularly if the company is operating in a strategic sector.

There is also a diplomatic dimension, the competition between the Taiwan and the People's Republic of China, with only 4 minor countries now recognising Taiwan, this is a battle which is largely complete.

The arguments will continue to rage over whether Chinese involvement in Africa is positive and what significance it has, but what is certain is that the "China in Africa" story is set to be one of the dominant themes in the continent for years to come.