Introduction
Africa has been abused for its natural resources for centuries. America and Europe stole its logs, extracted its oil, robbed its diamonds, and captured and exploited its people in the violence-ridden Transatlantic slave trade. As the newest economic powerhouse, with its sudden rise and massive potential, China is now becoming a big political player in the international arena. Its ascension demands a vast amount of resources to continue its industrial revolution.
This requirement has brought about billions of dollars of investment in Africa, stretching from the West to East, from Guinea to Kenya. These investments, usually for the improvement of national infrastructures, have secured joint ventures and contracts for Chinese state-owned companies. Unlike the Western powers in the early stages of their global hegemony, China has been investing primarily in oil, gas and logs in a peaceful manner. India, on China’s tail, is also catching up with the West too. The impacts of these two countries’ (who Kaplinsky refers to collectively as the Asian Drivers) involvement in Africa have already been tremendous.
This essay will analyse these impacts in two parts. In the first part, it will assess the effects on the international arena: what Chinese involvement means for global macroeconomics and how this has provoked a visibly fearful reaction from the West, especially in Washington. In the second part, this essay will evaluate the economic and social repercussions for the African continent. India’s role in Africa will be mentioned sparsely to allow for an in depth study of China’s involvement.
This essay makes assumptions in regards to the general effects of Chinese investment and strengthening of diplomatic ties with African elites, but will highlight the impacts with a deeper investigation of Angola and Sudan. Perceptions of impacts differ between the Chinese, Africans and West (which will be considered mainly to be embodied by the Washington consensus) and these dissimilarities will be referred to throughout. On the whole, this essay argues that with African resources, China will continue in its rise and will challenge the unipolar world headed by America. In the next 50 years, there will be increased tension between the leaders of the North and South as sustainability and resource security become bigger issues.
Part 1 – Impacts on the International Economic-Political Arena
The West in a Cold Sweat
As China’s economy grows, the West becomes more nervous. Already, academics in Europe and America have expressed their concerns in regards to China’s development. Western dominance in political and economic affairs is threatened by not only China, but also by Brazil, Russia and India, who are collectively referred to as the BRICs. Of all of these emerging economies, China is at the spearhead of BRIC success. It is ahead of the rest in regards to growth, and is the biggest Asian investor in Africa, only behind America and Britain, with India catching up. In the last 20 years, China has also become the third largest trading nation in the world as its exports have spiralled from US$50bn to US$800bn. The amount and extent of investment and trade increase has brought China’s role in the global economy to the attention of many Westerners worried about the impacts this might have. One of these impacts is a turn away from Western-controlled institutions like the World Bank and the IMF.
Since the end of the Cold War, these international financial institutions were the only viable source for loans and credit for cash-strapped, debt-ridden, poor countries. However, now that China has the ability to invest large sums of money in foreign lands, poor countries such as Angola and Sudan now have a choice. China offers another option for African states to choose from when it comes to financial aid and foreign direct investment (FDI).
This simple matter of choice is a huge opportunity for African leaders. Instead of having to accept IMF conditionalities government officials can turn to the Chinese for non-interventionist aid and investment. The non-interventionist policy which Chinese presidents and premiers have spoken of repeatedly has been crucial to the success of Chinese proposals for investment.
While the IMF try to impose economic and political liberalisation worldwide through aid conditionalities, the Chinese offer vast amounts of money with total disregard of the political situation. The quasi unilateralist bias of the United States within these financial and also governance bodies is now put at risk. This points to, what Humphreys and Messner refers to as, the “newly emerging multipolar constellation of power.” Soon there will be a shaking-up of global governance and a change of rules in the global economic system.
As “Chindia” (China and India) becomes as powerful as the US and Europe, the international landscape will experience a revolutionary overhaul. Leadership will become multi-stranded with China in the coming decades becoming more involved, important and assertive in making decisions for the global-community. This highly possible change (despite academics, government officials and financial institutions alike believing that China’s rise to the top is a foregone conclusion, the recent unpredicted destabilising of the world economy shows that these opinions are speculation) has left the West in a cold sweat. Their fears have led to an increased condemnation of China on cases which the US itself is guilty of.
Washington and the Western community have particularly condemned China for their non-interventionist policy because it not only permits, but also economically assists undemocratic regimes. Often, these regimes operate over grave human rights abuses and are led by undemocratic dictators such as President Bashir in Sudan and President Mugabe in Zimbabwe. This moral challenge on China’s role in Africa, however, fails to take into consideration the Asian Driver’s key role in convincing Bashir to let in UN military mission into Darfur.
The provision of arms for the Congolese government, too, help the military to quell rebellions and fight for stability in the region.
And whilst the Chinese officials have often spoke of this non-interventionist policy, it is becoming increasingly clear that the term is simply rhetoric. The proclamations work as a call for South-unity and outwardly shows a respect for state-sovereignty. Threats from the Chinese to send their navy to fend off pirates disrupting activities in the Horn of Africa do not only validates the inability to stick to a non-interventionist policy, but also displays that the Chinese are willing to take naval and military action to protect their interests in Africa.
The statements made by President Jintao during the Forum on China-African Co-operation (FOCAC) in 2006 do not match China’s political and financial decisions. Alden points out, too, that the Chinese have always had one specific conditionality attached to their investments and aid, which is for the participating African states to severe ties with, and to erase any recognition of, Taiwan. In 1997, Chad accepted aid from Taiwan which led to the immediate withdrawal of China’s assistance.
China does have one recurrent political conditionality and this has had an effect on aid and investment in Africa.
In terms of conditionalities, then, China can be seen to be a similar face to America. Melber goes as far to suggest that there is no change at all, and that the Chinese are simply Western capitalists and governors with yellow faces. However, there is a clear distinction between the two: Chinese investments have worked, while aid from America has had little success in bringing the changes it promised and US aid which does reach Africa often stays in the hands of the elite. In Angola, Chung Fong Holding repaired the once-broken iron and steel producer Siderugia Nacional. In Sudan, China has kick-started an oil boom which has played a substantial role in increasing its GDP growth to 12%.
Alden speaks of “symbolic diplomacy” and “prestige projects” as if the billions of dollars of investment into roads, telecommunications, airfields and governmental buildings, the provision of technical training programmes which educate Africans how to maintain new equipment, and even Chinese governmental scholarships to the young people of Africa, are mere symbols.
However, the motivations behind China’s involvement in Africa are transparent (to secure resources) unlike the reasons behind America’s major political and economic decisions (suspicions in the East grew during the invasion of Iraq, for example, and there is still uncertainty amongst both academic and political circles in regards to the intentions of this attack). And if both Africa and China are advancing through their mutually beneficial deals, then why should China’s investments be seen as merely symbolic?
Today the Chinese are doing what the Americans and Europeans have been supposedly trying to do decades. According to Mohan and Power, the aid pouring into Africa from China is purely currency to buy favours from the African decision-makers.
Yet, if the investments in the infrastructure of African states are helping Algeria, Gabon, and Zimbabwe develop, it is difficult to argue against Chinese investment. China needs resources, Africa has them. Africa needs the means for development, and China is providing them with it. The relationship which has developed between the two over decades has been one of mutual benefit.
Our Environment!
The major global issue which many European- and America-based activists have portrayed China as a villain is the state of the environment. Giles, Humphreys, Kaplinsky, Large, Messner and Power all mention the environmental impact of China’s economic expansion and its overseas natural resource projects which contribute to ever increasing environmental damage. China is the second highest greenhouse gas emitter in the world, just behind the US. What is fascinating about this is not that China is emitting harmful gases more than most of the world’s economies, but that America is the highest.
During the 2008 Beijing Olympics, many reporters and news-stations criticised China for its smog and its poor environmental conditions when the world’s major power, America, continues to contribute more to the degradation of the environment in terms of amount of greenhouse gases emitted. China’s involvement in Africa has led to an increase in polluting factories and industries, but the perception that the Chinese are the most guilty perpetrators is both unreasonable and hypocritical.
It would be doubly hypocritical, however, to suggest that the Chinese contribution to the harming of the environment is unworthy of detestation and therefore one of the impacts must be for environmentally friendly industries to be established, if not, simply less harmful factories and improved technologies. China also criticised for its human rights abuses by transnational political organisations and Western activists. According to reports, China has been compromising the rights of locals in African states for project expansion. The human rights issues, and other social impacts on Africa, will be discussed Part 2, below.
Part 2 – Impacts in Africa
MADE BY CHINA
Africa has experienced huge changes since China began its barrage of ventures. There have been infrastructure overhauls and a continued investment in health and education facilities. Thousands of Chinese immigrants have crossed continents to work for their homeland’s companies abroad, while others have set up shops selling cheap goods across African towns. Most of the new roads and airfields were built in, around and between oil rigs. Davies calls it an “infrastructure corridor” whose purpose is to improve access to resources. Large goes one step further by declaring that without these new or rebuilt infrastructures, oil production in Southern Sudan would have been impossible, if not, extremely difficult.
The Congo lack a proper infrastructure too, and again billions of dollars were pumped into Africa to improve it. China has also funded the civil service in Sudan and provided technologies for improved communication in Ethiopia. In between 1990 and 2005, total Chinese investment in Africa was US$625m and in 2003 China wrote off US$1.27bn of Africa’s debt. During the FOCAC in 2006, Hu Jintao promised the doubling of aid by 2009, US$5bn for the China-African Development Fund and billions of dollars in loans. The figures are astounding and can immediately lead to the perception that China is helping African development. However, looking at the social problems exposes a different story.
War-torn? Conflict-ridden? The Chinese are here to save you.
One problem with investing in a war-torn region is instability. Business decisions at the highest levels of Chinese politics have taken decisions which have potentially high gains, but come with massive risks. One instance which exemplifies the risks such investments may entail is described by Large: “The military targeting of Chinese oil interests in the GNPOC field of Defra, Kordofan, Southern Sudan by the Justice and Equality Movement (JEM) in October 2007 was followed by a week-long ultimatum to Beijing to withdraw.”
The oil exploits of China in Africa has led to a widening of the rich-poor divide, and this has led to social instability. Civil wars continue and are proliferated by Chinese-African ties because of an opaque system of investment which hides the amount of money reaching the hands of the elites. A recent report in The Economist recognises this problem which plays a part in most developing countries. While money is being poured in by China, it is the elites who gain by funds which increase their wealth: what Henning Melber refers to as “self-enrichment schemes.” Those outside of the elite membership have nothing to show for except new roads to walk on, having no financial means to afford a car to make use of the new Chinese roads.
On top of the rich-poor divide which is classically explained by Marxist theory (the different experiences of the bourgeoisie and the working class), there is a social divide between Chinese migrant workers and local African communities. According to Alden, the workers operate in a “closed society,” which has created distinct separations and has led to resentment and cases of conflict.
In Angola, Ferreira explains that there has been a proliferation of racism. As these two communities come together, there seemingly has been nothing but clashes. However, Chinese involvement in Africa could be seen as the start of a multicultural society. If the right domestic policies were implemented, which encourage the Chinese and African groups to merge and work with each other, Africa could experience the advantages of a multitude of multicultural metro-poles similar to those experienced in London, Paris and New York. Ethnically diverse cities inspire human unity through better understandings of different cultures and an appreciation of difference.
Like the predictions of the academics and commentators who pit China as the next biggest power, this is mere speculation, but there is great potential for the Chinese and Indian involvement in Africa to have an impact on global social understanding. It could also lead to better South-South political and economic relationships. At best it would signal unity amongst the developing countries with China and India being models for success.
The “North-South” divide would really, then, lose the hierarchical connotations that come with it, with Chindia heading the South and the likes of America and Great Britain heading the North. At worst, however, it could signal increased divisions in the South, with competition and possible conflict not only between the US and China, but with Brazil, Russia and India all fighting for their own interests.
This competition between China and India, for example, has already been played out in Angola. In 2004, companies from both states entered a bidding war for a majority holding in a petroleum deal. China beat the Indian oil company, ONGC-Videsh, to secure first Angolan oil deal.
Also, the tension between African local communities and Chinese investment has increased due to Chinese manufactured imports flooding towns and cities. Africa provides another mass market for consumer goods, which has provided many with cheap, satisfactory-quality products. But this has also proven detrimental to African manufacturing businesses, such as the Sudanese craftspeople, who have called for the government to install protectionist policies to stop the Chinese from establishing a new foreign monopoly.
Due to limited space, it is not possible to go through the impacts in a similar vain to the one above. However, in his article in the Special Issue of the IDS Bulletin, “Introduction: The Impact of Asian Drivers on the Developing World,” Kaplinsky offers a number of other complementary and competitive, direct and indirect impacts which is easily accessible and recommended for a brief illustration of some of the other consequences of the Asian Drivers’ impact.
Conclusion
The rise of China heralds a unparalleled opportunity for Africa. The recent spate of joint ventures, FDIs and aid provisions have already signalled a change for Africa. Unlike previous attempts by the global financial and governance institutions, whose policies have been defined by US interests, China has delivered already by investing vast sums into infrastructure which has proved to be a key component in the development of today’s developed nations.
Western paranoia continues to colour the words of a multitude of articles in newspapers and reports on American new-stations, and this says more about the potential of China to overtake the US as the global dominating power rather than representing valid causes for concern. The perceptions of the impact of Chinese, and also Indian involvement in Africa are blurred between a mesh of individual interests, but there is little doubt that China has built the foundations for Africa to move towards greater things.
