Africa’s engagement with China Kariba South Power Station
Kariba South Power Station

Kariba South Power Station

Analysis Ronald Chipaike
THE single most important issue in Africa’s international relations in the 21st century has been its strategic partnership with China. Although Chinese engagement with Africa goes back to the 1950s, it is from the late 1990s that we see movements towards the establishment of a framework for mutual negotiation between the two parties in the form of the Forum on China Africa Cooperation (FOCAC).

In this regard the visit to the continent by then Chinese President Jiang Zemin in 1996 was important. However, before delving into the gist of this submission, it should be emphasised that Africa’s relationship with China is indeed a special one. For example, in 1971, Africa voted resoundingly in the UN General Assembly to pave the way for the People’s Republic of China’s replacement of Taiwan as the legitimate representative of Chinese people in the UN Security Council.

In 1970 China financed the Tanzania-Zambia Railway Line (Tazara or Tanzam) to provide (mainly) Zambia with an alternative route to the port of Dar-es-Salaam for the purposes of exporting its copper.

The Chinese provided an interest free loan of about $600 million towards this project which they built and completed in a record time of five years (1970-75). It should be highlighted that Western states as well as International Financial Institutions (IFIs) had refused to fund this project citing the reason that it was not economically viable.

The Chinese are also credited with supporting guerilla movements against white minority rule especially in the Southern African countries of Angola and Zimbabwe. In Zimbabwe, the Chinese support of Zanu-PF during the liberation war set the base for “fruitful” post-independence engagements between the two countries.

Perhaps, another issue to note that marks the special relationship between Africa and China is that when the Chinese government ruthlessly quashed pro-democracy protests in Tiananmen Square in 1989, African leaders defended Beijing’s actions on the basis that it was a domestic issue that did not need external Western interference in its resolution.

This was after severe Western criticism of the Beijing regime’s heavy handed handling of the whole issue.

The birth of the FOCAC in 2000 not only marked the resurgence of the China-Africa partnership, but became a sign that ideological issues (that had dominated the cold war) would now play a lesser role and strategic economic considerations would now take centre-stage.

Diplomatic issues including the need for Africa’s support at multilateral forums, however, still remain important.

China’s goals in engaging Africa, from 2000, have specifically been tailored to a number of issues: its need of energy resources (especially oil) since the country became a net oil importer in 1993; its thirst for Africa’s abundant mineral wealth, its desire to carve a niche market for its labour intensive (and sometimes low quality) goods as well as its desire to open avenues for its State Owned Enterprises (SOEs) and private sector companies to invest and gain experience-pursuant to China’s go-global policy.

In the FOCAC, the Chinese have made various development assistance pledges since 2000 and these pledges have been increasing exponentially over the years.

For, example, at the Beijing FOCAC meeting in 2006, President Hu Jintao promised that Africa would receive $5 billion in concessional loans and preferential credits as well as $5 billion for the China Africa Development Fund.

At the FOCAC meeting in Egypt in 2009, Premier Wen Jiabao promised that Africa would receive another $10 billion in concessional loans for 2010-2013.

In 2012, Beijing provided another $20 billion for African development assistance. In December 2015 at the Johannesburg FOCAC summit, President Xi Jinping announced an unprecedented pledge of $60 billion to support agriculture, infrastructure development as well as human resources training in the continent.

Additionally as a result of FOCAC, Chinese bilateral trade with Africa reached about $300 billion at the end of 2015, compared to the continent’s two way trade with the USA which was about $50 billion.

Brief look at some African countries

At the moment Angola, Ghana, Ethiopia and to some extent South Africa appear to have visible national strategies on how to engage China in mutually beneficial ways.

For example, a visit by this author to Ethiopia in October 2012 for a China-Africa Think Tanks Forum, showed that the East African country’s elite has put in place a robust policy framework that has allowed significant Chinese development assistance to be quickly harnessed for massive infrastructural development projects such as power plants, roads and railways.

In addition, owing to investment incentives availed to the Chinese by the Ethiopian government (leading to establishment of Export Processing Zones/ Special Economic Zones), China has become one of the largest investors in Ethiopia.

Export Processing Zones have significantly contributed to Ethiopia’s export earnings and employment creation although the problem of low wages and poor labour standards still persist.

Additionally, despite the fact that Ethiopia is landlocked and lacks strategic minerals (such as oil), the Ethiopian People’s Revolutionary Democratic Front government have managed to leverage on their position as a regional peace guarantor and as Africa’s diplomatic capital to be able to attract both Chinese and Western development assistance.

In this way they have managed to sustain an average economic growth rate of 10.7 per cent per year and to lift thousands of people out poverty each year, a feat which has led various observers to classify Ethiopia as a developmental state.

Indeed, it has been forecasted that if Ethiopia continues on this trajectory, it could attain middle income status by 2025.

Angola also appears to have elaborate strategies in their engagements with China. Despite the low international oil prices affecting African oil producers and significant levels of elite corruption, Angola has managed to leverage on their reserves to attract significant Chinese development assistance as well as providing a counterbalance to traditional Western partners.

In fact they have created an environment in which oil operates as a magnate to attract both Chinese and Western financiers for the purposes of infrastructural development.

They have used what is called the “Angola model” which uses oil (and or) other mineral resources as collateral in development assistance engagements.

Although this method has its own challenges, it has given Angola the much needed post-war reconstruction finances which the IMF and the World Bank were hesitant to provide in the first place.

Billions of dollars’ worth of infrastructure deals have been agreed to in areas such as health, education, agriculture and general poverty alleviation.

By 2010, China had extended more than $10.5 billion in this way to Angola.

In Zimbabwe, bearing in mind that some of the development assistance arrangements are shrouded in opacity and secrecy, as well as the concern that the country’s debt burden is increasing, Chinese financing is playing a key role in addressing power challenges.

The $320 million loan for the construction of the Kariba South Hydro Power Station as well as the provision of a $1.2 billion dollar facility for the expansion of the Hwange power station are significant cases in point.

This also dispels the notion that Chinese financing in Africa only flows to oil producing nations. Other examples can be drawn from other “smaller” and relatively less resource endowed countries in Africa such as Benin and Rwanda.

Challenges

While attending an Africa-China conference in Lagos Nigeria in March 2016, one theme seemed to permeate most of the discussions; the fact that African states have the potential to exert more agency and extract more benefits in their engagements with China.

However, for this to happen, there is need for African countries to come up with national, sub-regional and continental strategies on how they should engage China in a mutually beneficial manner.

We came short of stating that Africa is yet to have a strategy with which to engage China and to me, this is Africa’s greatest undoing. Instead of having a common continental position, African states choose to compete against each other.

Instead of directing the Chinese to engage African states together in a multilateral forum, Africa states choose to negotiate individually at a bilateral level for different projects.

Possibly, to some African states, a common approach to engaging China is perceived to bestow investment advantages to those countries that have relatively better economic infrastructure (roads, railway, and power) than to those without.

So far, the African Union has failed to rally African states towards a common negotiating position with the Chinese and this gives credence to the view that Africa does not yet have a China strategy.

Besides the reported AU-China infrastructure financing Memorandum of Understanding signed in January 2015 (which had scant details and no price tag), nothing tangible has been done in this direction. The need for combined negotiating positions is especially important in view of the pressing need to encourage regional integration.

However, just like at the continental level, African sub-regional organisations do not as yet have elaborate strategies for engaging and leveraging from their relations with China.

Instead of negotiating for development assistance that can be channeled towards addressing regional energy and communications infrastructure deficits, African states are choosing to focus internally. This stance militates against the avowed attempts at establishing sub-regional economic growth nodes in the continent.

Another pertinent issue that confronts African states in their engagement with China is the lack of diversified economies. Overdependence on commodity exports leaves the continent prone to international price fluctuations.

Recently, China has sought to reorient its economy from goods production to knowledge production through innovation. This means China is transitioning from the “made in China” to the “designed in China” phase. Already, significantly owing to Chinese economic slowdown, African commodity economies are feeling the pinch.

In Zambia, copper mines are closing and in South Africa, it is estimated that 19,000 jobs may be lost in the mining sector this year alone.

Thus, going into the future, there is gradually going to be reduced Chinese appetite for African commodities, hence the need for economic diversification. Africa should take advantage of its engagement with China to tap valuable skills and technologies that can be used in value addition and beneficiation.

Maybe as a recommendation, added to the resources-for-infrastructure deals, African states should also adopt resources for skills or resources for technology deals. This can lead to the acquisition of important scientific knowledge that is important for Africa’s economic diversification.

About the writer: Ronald Chipaike researches on Africa-China relations and teaches international relations at Bindura University of Science Education (Zimbabwe). Email: [email protected]

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