China In Africa

Although contact and trade between China and Africa dates back to the 15th century and indirect trade some 3000 years, China has not played the same role of dominance and destruction in Africa as the traditional colonial powers. China's modern engagement begins after the 1949 revolution. During the cold war period China supported Africa's liberation movements the impact of which however was undermined by the destructive effects of the cold war on Africa and rivalry between China and the Soviet Union in their dealings with the continent. Chinese involvement in Africa has been relatively limited for the past few decades during the time of domination of the Washington Consensus. This is changing. Most agree that this renewed engagement in Africa is driven by China's economic needs for raw materials to fuel industrialization and markets. In this way it has similarities to the European scramble for Africa in the 19th Century and subsequent colonial and neo colonial periods and is quite different from China's previous engagement which tended to be more ideological.

If China's motivation for engagement with Africa is now similar to that of the West, what are the likely direct and indirect impacts into the future and how different will these be from what Africa has come to be used to from the West?

The indirect impact of China's growth, and India's for that matter, has already been significant for Africa. China has grown by 9% per year for the last 10 years. China's need for raw materials is indeed very large. China alone was responsible for 40% of the global increase in oil demand between 2000 and 2004. As a number of observers have commented, the change in foreign engagement by China is quite visible at the point at which China became a net oil importer towards the beginning of the decade.

Africa has certainly started to gain indirectly from the growth of China and India's economies and markets. As these economies demand huge quantities of raw materials the price of these commodities has gone up. Africa as a supplier of raw materials has benefited. According to the African Economic Outlook Sub-Saharan Africa's real GDP (i.e. after inflation) increased by an average of 4.4% in 2001-04, 5.5% in 2005 and is expected to increase further in 2006/7, as compared with 2.6% between 1998 and 2000. But growth has not been equal, with the same publication pointing out that oil exporting countries faired better than other countries. The other caution is that whilst there has been significant economic growth this has been slow to impact on social indicators.

Opinions on the potential impact of more direct forms of Sino-African engagement are quite divided. One argument says, it is a bad thing that will lead to erosion of rights and a swamping of Chinese goods and labour into Africa taking African opportunities for local industrial development and jobs. This opinion is explained by deputy chairman of the South African Institute of International Affairs Moletisi Mbeki in 2005, saying, "Africa sells raw materials to China and China sells manufactured products to Africa. This is a dangerous equation that reproduces Africa's old relationship with colonial powers. The equation is not sustainable for a number of reasons. First Africa needs to preserve its natural resources to use in the future for its own industrialisation. Secondly China's export strategy is contributing to the de-industrialisation of some middle-income countries."

Others feel that China presents a new development model for Africa. This view tends to see China as a salvation for Africa in terms of infrastructure development and relatively condition free loans to cash strapped African Governments still labouring under years of failed policy interventions of the international finance institutions such as the International Monetary Fund, the World Bank and many western donors and their agencies. Whilst China's growth in influence clearly is beginning to provide an alternative to the Washington consensus, that has achieved nothing but deepening poverty and misery in Africa, there are also some cautions being sounded here.
 
One such caution states that the undemocratic nature of China which is still enjoying significant growth would serve as a support for undemocratic regimes in Africa who are able to argue that democracy is not a precursor for development. Zimbabwe's Look East campaign a case in point, Sudan another questionable engagement. It of course depends on whether you define development in terms of social indicators or GDP. Liberal democracy is not a human development precursor, as Cuba has repeatedly demonstrated and neither is it a guarantee against human and labour rights abuses. Other commentators have pointed to the fact that China's non interference (respect of sovereignty policy) in effect interferes very deeply on the side of ruling elites in divided societies. As such some have argued that India as another rapidly emerging giant, with stronger democratic tendencies also provides alternate models which should be examined.

Another caution in regard to the Chinese model as applied to Africa lies in China itself. Stephen Marks in African Perspectives of China in Africa refers to "Even official sources in China and abroad are aware of the social costs of China's free-market great leap forward. Members of the legislature have warned of the country's impending employment crisis and the World Bank has confirmed that China's poor are getting poorer. As for the environment, no less a figure than Pan Yue, deputy director of China's State Environmental Protection Administration, sparked controversy with a recent essay On Socialist Ecological Civilisation when he openly charged that: 'The economic and environmental inequalities caused by a flawed understanding of growth and political achievement, held by some officials, have gone against the basic aims of socialism and abandoned the achievements of Chinese socialism.' The march of neo-liberalism within China and its impact on the Chinese people has advanced hand-in-hand with China's growing imperialist role abroad." The unemployment crisis he refers to as reported in China's daily on line is 34.5 million people new entrants to the labour market between 2006-2010. To balance this impression, bear in mind China's economically active population is around 760 million, approximately half of whom are agriculturally based, while the total population is 1.3 billion, again about half of whom are agriculturally based. China measures unemployment in urban areas. Unemployment in urban areas has increased from 3.1% in 1999 to 4.2% in 2005.

Dorothy Guerrero makes a similar point arguing, "China is now the world's fourth-largest economy and many developing countries envy its record of economic progress. However, China's phenomenal growth is producing a big misconception in that it is viewed as a big winner of globalisation.

 Although it is true that market reforms and China's opening to the global economy gave millions of people there an increased standard of living, more Chinese people are suffering the consequences of its rapid transition to a market-based economy. The majority of the Chinese people are not too concerned about when China will become the world's largest economy. Rather, they are asking, 'When will the benefits of China's rise to superpower status start to affect our lives positively?"

Another argument that has been raised is the human and labour rights abuses commonly associated with Chinese investment. The reality is whilst the track record of many of these companies is appalling it is probably in terms of global impact quite small in comparison to the violations committed all over the world by western MNCs. While some companies have reformed their public image in fear of loosing market share or investment this has largely meant the use of subcontracted supply chains where the pressure around production targets and delivery guarantees the abuse of worker and social rights in any event. The corporations then cynically deny responsibility. Similarly China increasingly makes noises about improving human and labour rights issues as they become more integrated global players. On the eve of the First Africa summit the state council, China's cabinet, issued 'Nine Principles' to 'Encourage and Standardise Enterprises' Overseas Investment'. The principles require Chinese companies operating overseas to 'abide by local laws, bid contracts on the basis of transparency and equality, protect the labour rights of local employees, protect the environment, implement corporate responsibilities and so on'. As state backed companies from china begin to brand and become global players they too will become more sensitive publicly to these issues as result of market influences.

In both instances though, the system that drives these superficial changes is itself brutal, quite literally inhuman, always answering to the logic of competition and increasing returns. In time there will be little to distinguish these investment forms save perhaps the tendency for China to want to export labour along with investment and development initiatives.

There is also a position that the west has never done as well as the economies developing in the east in providing goods cheap enough for Africans to buy. Bicycles, blankets etc. The West has however dumped huge quantities of used clothes, used cars, used parts, used machinery, used computers and the list goes on, on Africa. All have made these commodities more accessible to people, still allowing a tidy profit off of the waste of these societies. Against these two sets of goods, cheap consumer goods from the vast and often super exploitative factories of the east and the scraps of the societies of the west, African industrial development has not progressed. People must buy these cheap things as they have no jobs to buy anything else whilst the price of the things we really need; houses electricity, water and health care go up and become more unreachable. People live in debt to buy the few consumer items they can and in the mean time the social fabric of communities is constantly broken down by competition for scarce jobs and resources. The rolling back of public service provision has only aggravated this situation.  

Whilst there are clear similarities to be found in the motives, practices and potential impacts of Chinese and Western contemporary engagement with Africa the introduction of an alternate power centre (for trade and development engagements) and rising commodity prices certainly presents some significant strategic opportunities for Africa. The stranglehold International Finance Institutions and economic imperialist nations have had on economic policy for over two decades is being challenged. More capital should be available as well as technical cooperation. Increased prices mean a stronger bargaining position in trade terms as well. Achieving positive social benefits from this window of opportunity will however very much depend on Africa's ruling elite making decisions and taking actions that serve the people and not those of their own pockets and/or egos or the interests of the traditional and emerging global economic dynasties. Internal trade and development must play a central role in spreading the benefits across countries in Africa to avoid these opportunities simply creating new enclaves of wealth and power in an otherwise sea of poverty and destitution. Civil society in Africa has an historical role to play in ensuring this.