THE AFRIKA MARKET EDITORIAL ON CHINA – AFRICA BUSINESS RELATIONS
BY : ‘JIDE ADESINA
Figures show that the Chinese economy grew by 7.4% last year – an enviable number for the US and Europe, but for China it represented somewhat of a slowdown
China is facilitating economic development in African countries not only through government-directed investment but also through the market forces unleashed by Chinese value chains.
The drastically diverging perceptions of China’s role in Africa are an interesting phenomenon. The polarization stems from the focus on different aspects of China’s activities on the continent. For example, dragon-slayers emphasize China’s selfish quest for African natural resources and how it sabotages international efforts to keep unpalatable African regimes in check. On the other hand, panda-huggers applaud China’s contribution to Africa’s economic development through infrastructure projects and revenue creation.
Unfortunately, neither reflects the nuanced, mixed nature of what China means to Africa. China enjoys unique financial and political advantages in promoting Africa’s growth through vast financing with little or no strings attached. However, these short-term benefits should not form a cover-up for the potential long-term negative consequences associated with neglecting issues of governance, fairness and sustainability.
On the positive side, China’s economic engagement in Africa has created significant benefits for African countries. Most importantly, Beijing has considerable capacity and willingness to provide financing to fuel Africa’s growth. During his recent trip, Xi reconfirmed China’s commitment to provide another $20 billion in financing to Africa. China usually attaches a significant amount of such funding to infrastructure projects, which forms the foundation for Africa’s industrialization and economic development. Many of these projects require large investment and long pay-back terms that traditional donors are reluctant to provide.
It is true that China does not emphasize the governance side of the story. This is a reflection of China’s own philosophy on the prioritization between economic development and political progress. Many Chinese officials, analysts and businessmen find the West’s overwhelming emphasis on democracy, governance, transparency in Africa amusing. To the West, they would ask an innocent but critical question: “for people who do not have food on the table, what’s the point of having democracy?” Using its own experience of subjugating political liberalization to the “higher cause” of economic development, China finds its approach to Africa as one that prioritizes the provision of basic elements of development, completely legitimate and fully justified.
In this way, China’s intention in Africa is benign. Beijing has no intention to colonize the continent, dictate the politics or economy of the local countries or deprive them of development opportunities. On the contrary, China truly sees itself as Africa’s “brother” and hopes to help African countries develop through infrastructure projects. Beijing seeks an approach different from that of the West, one that avoids the “meddling” with the internal affairs of African countries through conditional aid. In the last several years, China has contributed significantly to the economic growth of some of Africa’s poorest nations. China wants to see a prosperous Africa, which is beneficial to China’s interests as well.
However, this does not mean China is being altruistic. Helping Africa is important, but China would not do so if it had nothing to gain. Indeed, China emphasizes that any bilateral relationship has to be mutually beneficial. And China’s investment in Africa does pay itself back in multiple ways economically: development and exploitation of Africa’s natural resources, access to local market, employment opportunities for Chinese labors and service contracts for Chinese companies on infrastructure projects that China funds. When Chinese officials emphasize that China also invests substantially in countries that are not rich in natural resources to defuse international criticisms, they often forget to mention that China also has its eyes on other things that these countries can deliver, such as their support of Beijing’s “one China” policy, of China’s agenda at multilateral forums and of China as a “responsible stakeholder”. While there is nothing wrong with not being altruistic in one’s motives, it should be noted that China is not helping Africa in exchange for nothing.
In analyzing the nature of China’s activities in Africa, another important voice to examine is that of Africa itself. Many African countries and officials welcome China’s approach and fiercely defend China internationally. This seems like fairly powerful pushback to western criticisms of China’s role in Africa since African countries should know what they need more than anyone else. Africa’s approval of China poses an intriguing question for those in the West who disapprove of China’s activities in Africa: should the West reexamine its approach to Africa in order to better address what African countries truly need?
China’s economic presence in Africa makes a major contribution to the stability, peace and development in Africa, a South African independent political consultant says.
China’s search for much-needed raw materials, markets and employment for its people cannot be interpreted simply as neocolonialism resulting in a scramble for Africa’s raw materials, Stephen McQueen, an independent political consultant, said in an interview with Xinhua.
“To dismiss as such, is a misrepresentation of the realities.”
The African continent is blessed with many raw materials but it needs the skills, training, funds and infrastructure required to create an environment conducive for the development of Africa’s full potential, more particularly for the local beneficiation and utilization of its raw materials, which will be of enormous benefit to Africa.
Moreover, Africa has a vibrant, young, growing population yearning to learn and earn, to labor and to provide a better life for itself.
“The new Africa will not tolerate an approach that smacks of neocolonialism, and will be very protective of its own business interests,” and it has proved that China is not taking this approach, McQueen said.
The enormous increase in Chinese involvement in Africa over the last 20 years has resulted in much major economic and infrastructural development, and Africa is today better placed to take advantage of any economic recovery which may follow, he added.
“Chinese involvement in Africa is neither a self-serving exploitation to obtain raw materials, nor a philanthropic mission, ” said McQueen.
He said China has developed a “business is business” approach, it wants to be seen as a partner in overcoming difficulties.
A “new type of strategic partnership” has developed in Africa following a number of summits held between China and African countries. The plan is based on “pragmatic cooperation, equality and mutual benefit.”
The consequences of this plan have, inter alia, been the growing of aid to Africa, the setting up a China-Africa Development Fund and the encouraging of Chinese companies to invest in Africa.
To this end preferential loans have been granted, Chinese markets have been further opened by increasing the number of items from Africa which receive zero-tariff treatment in China. In the process, thousands of African people have been trained and many hospitals and schools have been built.
Trade between Africa and China is no new phenomenon. The two sides have developed their ties into full-scale trading relations. China has been Africa’s largest trade partner since 2009, with the volume reaching 166.3 billion dollars in 2011 and nearly 200 billion dollars in 2012.
Africa’s desire is not only the exporting of these raw materials, but more importantly the transformation of these materials in Africa, resulting in the creation of employment locally and increasing trade from Africa to the other parts of the world.
In assisting Africa, in a spirit of partnership, to overcome its own challenges and in helping Africa to become a hub of investment and trade, China has helped Africa strengthen its independence and build a healthy interdependence – the result of a partnership approach, McQueen said.
China has large reserves of funds and thousands of skilled engineers available and is clearly ready to get involved in Africa in order to enhance its contribution to the development of Africa.
“Chinese involvement in Africa in a structured, well-planned manner, focussing on the development of essential infrastructure and the creation of a larger market in and through Africa will assist transform Africa to speed its goal of sound economic development,” McQueen said.
“This can only be advantageous to both Africa and China to play a positive and constructive role, characterized by a spirit of partnership to the benefit of all.”
Speaking of challenges confronting Africa-China cooperation, McQueen said the biggest challenge facing Africa is how to convert “extractors of raw materials” into “transformers of raw materials” on the continent. This will help in the creation of employment locally which is imperative for the long-term stability of Africa.
“Building roads and railways to harbors and connecting major cities in Africa will enhance the trade that is needed to grow the African economy.”
China’s Model for Aid to Africa More Diversified
Compared with the methods that Western countries have used to developing resources in or promoting aid to African states, China seems to have taken an opposite, more diversified approach to growth in Africa. Just as a Japanese scholar put it, China is steadily constructing a unique and stable path for providing aid.
Economically speaking, there are three major models that guide how aid is given, including a pure-aid model, a pure-investment model, and one model that combines commerce and aid.
The pure-aid model is primarily a continuation of the assistance that China had previously extended toward Africa. Between 1950 and 1970, China initiated a large number of purely aid-based projects in Africa. Examples of these projects include the Tanzania Zambia Railway as well as some large-scale farms. In agriculture, investments tend to be large, risks tend to be high, and profitable returns require a long timeframe, so it is difficult for such investment to introduce market mechanisms. In light of this, China will continue to provide the aid that it has in the past for a number of African agricultural projects. Overall, this type of project will account for a very small portion of total projects.
The pure-investment type is primarily focused on manufacturing and extracting energy resources. With regard to the latter, China’s need for resources is structurally changing. State-owned enterprises such as PetroChina, Sinopec, and CNOOC are extracting oil in countries in West Africa such as Nigeria and also in countries in East Africa such as Sudan. Angola is already China’s second biggest source of petroleum, and the petroleum that China has extracted in Sudan accounts for 5 percent of the country’s total oil exports. Corporations such as the China Nonferrous Metals Group are also extracting minerals in countries such as Zambia and the Democratic Republic of the Congo. It should be pointed out that while China is importing resources from Africa that does not mean that China has taken possession of (or occupied) these resources. Chinese enterprises are involved in the extraction of Africa’s natural resources primarily as participating shareholders, and it is actually the United States and European countries that have taken the majority share and operation rights of the oil fields and mineral resources. Even India has done this more frequently than China.
When it comes to manufacturing, small privately run Chinese enterprises have been increasing their investments in Africa. This includes the shoe industry and the manufacturing of small commodities. Comparatively, the manufacturing industry needs to become more competitive in the worldwide market, for example when it comes to the cost of labor and meeting the needs of the market. Since the African market environment is still in need of improvement, China’s pure-investment type projects have had quite a few difficulties. At the same time, however, these projects are gradually maturing in spite of these troubles.
It is the combination of commerce and aid that has greater Chinese characteristics. This is especially true when it comes to infrastructure construction, for example railroad construction projects in Angola and Kenya or a light rail construction projects in Ethiopia. Infrastructure projects have the dual properties of serving as both commercial products as well as public goods. When China is carrying out infrastructure construction projects in Africa, it will often use preferential credit provided by the Export-Import Bank of China or the China Development Bank. An important example of this is what scholars have been calling the “Angola Model,” in which China helps Angola with commercial loans for infrastructural construction, which are guaranteed with oil. Past experience has proven that this type of model is highly sustainable.
The latter two developmental models have resulted from an important shift that China has made over the last decade. These approaches have had greater and more positive effects for Africa’s development in terms of the globalized economy’s industrial chains. Careful analysis shows that aid provision alone will not necessarily produce the best results, because such a model would likely lead to African countries becoming dependent, while at the same time weakening progress in these countries’ industrialization and modernization.
Regulatory Dilemmas Faced by Chinese Enterprises Abroad
The African continent has an area of 30 million square kilometers and includes more than 50 countries. Chinese citizens in Africa chiefly live in the southern part of the continent, especially in South Africa. In the 1990s, Chinese business people (including many hailing from Fujian) went to South Africa, the continent’s most developed region, in search of opportunities for development. For the past two decades, Chinese people have established an extensive presence in the country’s mining, machine-production, electronics, science and technology, and small commodity industries. They have also established a large number of China-town residential districts.
Another place where Chinese people arrived relatively early and established a broad presence is Nigeria in western Africa. With its population of 200 million, the country offers an extensive market. Early in the 1970s, the four great families of Hong Kong began searching for commercial opportunities there. From the 1980s onward, increasing numbers of mainland Chinese business people, contracting companies, and oil companies have come to Nigeria. Now, the country’s steel factories, plastic factories, ceramics factories, furniture factories, construction companies, and oil companies all exhibit the influence of Chinese business people.
Countries such as Angola, Sudan, Zambia, and Ethiopia have also attracted great numbers of people from China. At the outset, Chinese people went to these countries for natural resources, but as time progressed, their presence began to expand into infrastructural construction, agricultural demonstration centers, small commodities markets, and other industries. This represents one of the most important changes in China’s economic diplomacy toward Africa in the past decade, namely that Chinese business people have broadened their involvement from solely energy-related natural resources to a number of different sectors involving production along various value chains.
In addition, the African continent has its own complex history of colonialism. Chinese populations have expanded from African countries in southern and eastern Africa once under Great Britain’s influence to countries in western Africa that used to fall under French influence. Chinese enterprises and business people that are active on the front lines in Africa urgently need individuals that have mastered the French language.
As economic diplomacy between China and Africa becomes more diversified and the number of Chinese people in Africa continues to increase, the next issue that needs to be addressed is overseas regulation. A small portion of Chinese enterprises have already become more conscious of the importance of learning about local laws and regulations, learning about legal hiring practices, studying local languages and cultures, and thereby slowly becoming integrated into local communities. But even so, a large number of Chinese enterprises in Africa are still like “untended sheep”, loosely dispersed and not overseen closely by a central authority. In a large number of African countries and regions that have yet to establish mature systems for regulating markets, the issue of how Chinese enterprises operating in local markets should be regulated remains a topic in need of further discussion and exploration.
Chinese Influence in Africa Still Limited
Many different aspects of China’s economic diplomacy toward Africa are gradually developing, including its contours, the personnel involved, aid programs, and also investment amounts. In the eyes of a number of foreign scholars, this diplomacy has brought China not only economic gains, but also great political and diplomatic benefits. For example, China has been able to host great international events, including the 2008 Summer Olympics in Beijing and the 2010 World Expo in Shanghai. This would not have been possible without strong support from China’s African brothers and sisters on the international stage.
However, as an economic latecomer, China’s overall influence in Africa is significantly less compared with that enjoyed by developed countries like United States, Japan, and others in Europe. In addition to the influence stemming from many years of colonialism and the influence of mass media, differences in how aid is provided is another important reason for this difference.
When USAID designs an aid program or plan, policy issues are an important factor. They are typically based on strategies that African countries or regional organizations have adopted. These aid programs also conduct detailed research on the goals proposed in these plans, make targeted suggestions for aid programs to local governments, provide technical advice, and assist in implementing these strategies. European countries, the United States, and Japan have emphasized that aid needs to be embedded in African countries’ development plans. These policies are evaluated meticulously.
Currently, China’s strategic planning and research toward African countries is still insufficient. China’s aid programs, such as training seminars, hospitals, schools, demonstration centers, and cooperation zones, are generally first designed and planned out by the relevant departments and committees in China, and then African countries are asked if they need such programs. In such cases, African countries will often feel that they are receiving something for free and will gladly accept. However, many of these aid programs are divorced from these countries’ internal governmental systems, and it is very difficult to include these programs in their national planning. Therefore, on the one hand, African countries feel that they can get along with or without such programs. On the other hand, China’s influence on the policies of African countries is limited. For example, after the agricultural demonstration center in Tanzania was established, there was a shortage of individuals ready to take part in training. This was because the local government did not have the enthusiasm or the energy to mobilize individuals to participate.
Sources : Africa- China Business Reports
Wikipedia & global Post
Coinage Institutes
FRENCH VERSION
Les chiffres montrent que l’économie chinoise a augmenté de 7,4 % l’an dernier – un nombre enviable pour les États-Unis etl’Europe, mais pour la Chine, elle représentait un peu d’unralentissement
La Chine est facilitant le développement économique dans lespays africains non seulement à travers les investissements axéssur le gouvernement, mais aussi par les forces du marchédéclenchées par les chaînes de valeur chinois.
Les perceptions radicalement divergentes du rôle de la Chine enAfrique sont un phénomène intéressant. La polarisation résultede la mise au point sur les différents aspects des activités de laChine sur le continent. Par exemple, dragon slayers-soulignent lequête égoïste de la Chine pour les ressources naturellesafricaines, et comment il sabote les efforts internationaux visant àmaintenir les régimes africains désagréables en échec. Enrevanche, panda-huggers salue la contribution de la Chine pourle développement économique de l’Afrique par le biais de projetsd’infrastructure et de la création de revenus.
Malheureusement, ni reflète la nuancée, mélangé la nature de lasignification de la Chine vers l’Afrique. La Chine bénéficied’avantages financiers et politiques uniques dans la promotionde la croissance de l’Afrique par le biais de vastes financementsans condition peu ou pas. Toutefois, ces avantages à court terme ne devraient pas constituer une couverture pour lespotentiels conséquences négatives à long terme associés ànégligé les questions de gouvernance, équité et durabilité.
Du côté positif, l’engagement économique de la Chine en Afriquea créé des avantages importants pour les pays africains. Plusimportant encore, Pékin a une capacité considérable et la volontéde fournir un financement pour alimenter la croissance de l’Afrique. Au cours de son récent voyage, Xi a reconfirmé lesengagement de la Chine à fournir un autre $ 20 milliards dans lefinancement à l’Afrique. La Chine accorde généralement unequantité importante de ce financement aux projetsd’infrastructure, qui constitue le fondement pourl’industrialisation et le développement économique de l’Afrique.Nombre de ces projets nécessitent de grand investissement et lesmodalités de remboursement depuis longtemps que lesdonateurs traditionnels sont réticents à fournir.
Il est vrai que la Chine n’insiste pas sur le côté de la gouvernancede l’histoire. Il s’agit d’une réflexion de la philosophie de la Chinesur l’établissement de priorités entre développementéconomique et du progrès politique. Plusieurs responsableschinois, des analystes et des hommes d’affaires trouventécrasante mettant l’accent de l’Occident sur la démocratie, lagouvernance, la transparence en Afrique amusant. À l’Ouest, ilsdemanderaient une question innocente mais critique: « pour lespersonnes qui n’ont pas de nourriture sur la table, ce qui est lepoint d’avoir la démocratie? » À l’aide de sa propre expérience desoumettre la libéralisation politique à la « cause supérieure » dudéveloppement économique, la Chine trouve son approche versl’Afrique comme celui qui priorise la fourniture des élémentsfondamentaux du développement, tout à fait légitime etpleinement justifié.
De cette façon, l’intention de la Chine en Afrique est bénigne.Pékin n’a aucun l’intention de coloniser le continent, de dicter lapolitique ou l’économie des pays locales ou de priverd’opportunités de développement. Au contraire, Chinevéritablement se considère comme “Frère” de l’Afrique et espèrepouvoir aider les pays africains à développer par le biais deprojets d’infrastructure. Beijing demande une approche différentede celle de l’Ouest, ce qui évite le « ingérence » dans les affairesinternes des pays africains à travers l’aide conditionnelle. Dans lesdernières années, la Chine a contribué significativement à lacroissance économique de certains des pays les plus pauvres de l’Afrique. La Chine veut voir une Afrique prospère, qui estavantageux pour les intérêts de la Chine aussi bien.
Cela ne signifie pas, cependant, que la Chine est d’être altruiste.Aide à l’Afrique est importante, mais la Chine ne le ferait pas sielle n’avait rien à gagner. En effet, la Chine souligne que touterelation bilatérale doit être mutuellement bénéfiques. Etl’investissement de la Chine en Afrique paie lui-même retour demultiples façons sur le plan économique : développement etexploitation des ressources naturelles en Afrique, l’accès aumarché local, des possibilités d’emploi pour travaux chinois etcontrats de services pour les entreprises chinoises sur les projetsd’infrastructure qui finance de Chine. Lorsque les responsableschinois soulignent que la Chine investit égalementconsidérablement dans les pays qui ne sont pas riches enressources naturelles à désamorcer les critiques internationales,ils oublient souvent de mentionner que la Chine a également lesyeux sur d’autres choses que ces pays peuvent offrir, tels que leursoutien à la politique “une seule Chine” de Pékin, de l’ordre du jour de la Chine à des forums multilatéraux et de la Chine commeun “acteur responsable”. Bien qu’il n’y a rien de mal ne pas êtrealtruiste dans ses motifs, il convient de noter que la Chine n’estpas aider l’Afrique en échange de rien.
La présence économique de la Chine en Afrique apporte unecontribution majeure à la stabilité, la paix et le développement enAfrique, a dit un consultant politique indépendant sud-africain.
Recherche de la Chine pour les matières premièresindispensables, des marchés et des emplois pour ses habitants ne peut être interprété comme simple de néocolonialisme, ce qui entraîne une ruée sur les matières premières de l’Afrique,Stephen McQueen, consultant politique indépendant, a déclarédans une interview à Xinhua.
« Pour faire disparaître comme tel, est une déformation de laréalité. »
Le continent africain est doté de nombreuses matières premières,mais il a besoin de la formation, des fonds et des infrastructurenécessaires pour créer un environnement propice audéveloppement du plein potentiel de l’Afrique, plusparticulièrement pour la valorisation locale et l’utilisation de sesmatières premières, qui seront des atouts énormes à l’Afrique.
En outre, l’Afrique a une population dynamique, jeune etcroissante envie d’apprendre et de gagner, au travail et à assurerune vie meilleure pour lui-même.
“La nouvelle Afrique ne tolérera pas une approche qui a desrelents de néocolonialisme et sera très protectrice de ses propresintérêts commerciaux”, et il s’est avéré que la Chine n’assume pascette approche, McQueen a dit.
L’augmentation énorme de la présence chinoise en Afrique aucours des 20 dernières années a entraîné beaucoupdéveloppement économique et d’infrastructure majeur, etl’Afrique est aujourd’hui mieux placé pour tirer parti de toutereprise économique qui peut suivre, a-t-il ajouté.
“La présence chinoise en Afrique est une exploitation intéresséed’obtenir des matières premières, ni une missionphilanthropique,” a déclaré McQueen.
La Chine a développé une approche « affaires sont les affaires »,dit-il, il veut être considéré comme un partenaire à surmonter lesdifficultés.
Un « nouveau type de partenariat stratégique » a mis au pointpar suite de l’Afrique un certain nombre de sommets qui s’est tenu entre la Chine et les pays africains. Le plan est basé sur la «coopération pragmatique, l’égalité et avantages réciproques ».
Les conséquences de ce plan ont été entre autres, la culture del’aide à l’Afrique, la mise en place d’un fonds de développementChine-Afrique et de l’incitation des entreprises chinoises àinvestir en Afrique.
À cette fin prêts préférentiels ont été accordés, marchés chinoisont été davantage ouverts en augmentant le nombre d’élémentsd’Afrique qui reçoivent un traitement tarifaire zéro en Chine. Dece fait, des milliers d’africains ont été formés et nombreuxhôpitaux et écoles ont été construites.
Le commerce entre l’Afrique et de la Chine n’est aucun unphénomène nouveau. Les deux parties ont développé leurs liensdans les relations commerciales à grande échelle. La Chine estplus important partenaire commercial de l’Afrique depuis 2009,avec le volume atteint 166,3 milliards de dollars en 2011 et deprès de 200 milliards de dollars en 2012.
Désir de l’Afrique est non seulement l’exportation de cesmatières premières, mais plus important encore la transformationde ces matériaux en Afrique, ce qui a entraîné la créationd’emplois localement et accroissement du commerce d’Afriquepour les autres parties du monde.
Pour aider l’Afrique, dans un esprit de partenariat, à surmonterses propres difficultés et à aider l’Afrique à devenir une plaque tournante du commerce et des investissements, la Chine a aidéAfrique renforcer son indépendance et une saineinterdépendance – le résultat d’une approche de partenariat,McQueen a dit.
La Chine a de grandes réserves de fonds et des milliersd’ingénieurs qualifiés disponibles et est clairement prête às’impliquer en Afrique afin d’accroître sa contribution audéveloppement de l’Afrique.
“Mettant l’accent sur le développement des infrastructuresessentielles et la création d’un marché plus vaste dans et à travers l’Afrique aidera la présence chinoise en Afrique d’unemanière structurée et bien planifiée, transformer l’Afrique pouraccélérer son objectif d’un développement économique sain,”McQueen a dit.
« Cela ne peut être avantageuse à la fois l’Afrique et la Chine àjouer un rôle positif et constructif, caractérisé par un esprit departenariat dans l’intérêt de tous. »
