The Aid and Development Game: China in Africa

china africa 450x335 The Aid and Development Game: China in Africa

Since 2000, China’s economic inluence in Africa has grown dramtically.

In 2007, the New York Times ran an op-ed regarding China’s growing economic engagement in Africa. The op-ed went on to call China a “rogue donor” for its giving of aid, and labelled Chinese aid practices in Africa “nondemocratic in origin and non-transparent in practice, and its effect is typically to stifle real progress while hurting ordinary citizens.” Since then, other journalists and pundits have written about the hidden dangers of China’s growing presence in Africa.

Stories about China in Africa include China abetting genocide in Darfur by supplying arms in exchange for oil; propping up the Mugabe regime in Zimbabwe; swooping in to undo the anti-corruption work of the IMF and the World Bank in Angola and Nigeria with offers of no-strings-attached loans; all while ignoring environmental, safety, and labour standards.

However, upon a closer examination of the Sino-African relationship, the dynamics become less sinister. China is on the rise and with its ascending world power comes the will and the need to exert itself overseas. Yet, despite the recent increase in activity between China and Africa over the past 10 years, their interaction is not new. Early contact dates back to the 15th century with the voyages of Chinese explorer Zheng He journeyed to the East African coast and in the 1970s China threw its hat in the ring and tried its hand at the aid and development game. The Chinese government established some links with African governments of the time, most notably in Zambia, where the Chinese helped finance the construction of the Tanzania-Zambia railway. Chinese involvement throughout the 1970s served as a way to spread its own particular communist ideology and to garner international recognition for Beijing over Taipei in multinational organizations. However, the original ambitiousness of Chinese development projects was quickly outpaced by the economic turmoil and social unrest that China faced through the late 1970s and 1980s. Chinese involvement in Africa was nearly slowed to a halt, but the infrastructure for a burgeoning relationship remained in place.

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African workers listen to their Chinese foreman in a processing factory

Over the course of the 21st century, Chinese involvement in Africa has steadily increased. When the first China-Africa Cooperation Forum was held Beijing in 2000, China has dramatically increased its Official Development Assistance to Africa. In dollar terms, annual aid flows from China to Africa increased from about $310 million in 1989–1992 to an estimated $1 to 1.5 billion in 2004-2005 according to the IMF. Also, China has increased its presence in Africa by providing debt relief to heavily indebted and poorly developed African countries. From 2000 to 2009, 312 debts of 35 African countries were cancelled by China, exceeding 18.9 billion yuan (approximately $2.85 billion U.S.), according to a Chinese government white paper. Yet, despite the overall increase of aid in monetary terms, trade relative to aid had decreased to merely three or four per cent by 2006, compared to 20 per cent in the early 1990s, a sign of the changing nature of the relationship between Beijing and the African continent.

Yet, despite increasing aid flows, the most significant aspect of the China-Africa relationship over the past decade has been the growth in trade. Since 2000, China-Africa trade has grown at an average annual rate of 33.5 per cent. In 2009, due to this surge in trade, China became Africa’s largest trading partner, outpacing the United States and the European Union. Trade between the two surpassed $120 billion U.S. in 2010, and in the past two years China has given more loans to poor, mainly African countries than the World Bank.

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Chinese involvement in Africa has become increasingly commercial

Due to Chinese demand and rising world prices for raw goods, China’s interest in African raw materials is a key component of its trading relationship. Raw materials such as oil, gas and minerals form the majority of African exports to China. While manufactured goods, machinery and transportation equipment comprise key Chinese exports to Africa. This breakdown points towards a trade dynamic between developing nations based on comparative advantage, rather than any sinister quest to subvert democracies and promote Chinese autocracy, as some Western pundits have suggested.

China’s growing engagement in Africa has been welcomed by many African leaders, who see it as an opportunity to fuel economic growth through direct investment and large-scale infrastructure projects. Yet China’s increasing presence continues to be viewed with suspicion from critics in the West and in Africa. As a response, China has tried to distance itself from the moniker of “Rogue Donor”.  More recently, China can be seen to be deemphasizing its relationship with the Mugabe regime and in 2007, China played a large role in allowing the deployment of AU troops in the Darfur region of Sudan. Furthermore, there is no evidence to show that China singles out authoritarian regimes to have relations with. Rather, China maintains similar relations and partnerships with 48 out of Africa’s 52 countries and demonstrates no preferential treatment towards dictatorships or democracies.

However, growing Chinese involvement is not without its concerns. Environmental and social standards have been central to African dissent about growing Chinese involvement and are two areas where China holds a poor track record. Poor labour standards, corrupt corporate practices, and environmental responsibility are key areas that could evolve as China’s engagement in Africa continues. As illustrated by China’s own development path, a country may pay a heavy price unless the environmental impact of exploiting resources is dealt with early on. Similarly, histories of corruption and poor social practices in African countries have already had detrimental effects and without reform, the benefits of Chinese trade and investment may be lost.

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The composition of Sino-African trade is similar to that of the U.S. and EU. Image courtesy of The World Bank

China’s spectacular growth has made it an increasingly important player in global commerce and finance, and responsibilities come with influence. Growing trade and increasing FDI are vital for sustained growth and development in Africa and are crucial for furthering Chinese commercial interests on the continent. Addressing environmental and social concerns is important for China’s international image and for the full benefits of the Sino-Africa relationship being reaped.

Yet, it is important to place China in Africa in the context of the aid and development game. China’s use of aid, trade and investment is not new, but is a continuation of the trends carried out by the U.S. and the European Union by more effective means. China may not be deserving of much of the bad press it has received in recent years for its activities in Africa, but it is no saint. It is—like other players in Africa—complete with its own self-interests and need for new markets to further its own cycle of growth.

In the end, ensuring that Chinese aid and trade are a positive force rests with the African governments themselves. African governments have a duty to make sure that competition for all projects is fair. Chinese involvement has ended what has essentially been a Western monopoly in Africa, but increased and equal competition amongst developer companies and nations will allow African governments to endorse development projects that are in their interests, and this will bring growth and stability to the long-troubled continent.

Comments

  1. True, Chinese activity in Africa may be able to bring some prosperity and much needed development to the continent. However, I think that you underplay the effects of corrupt business practices and lax labour conduct by Chinese companies in Africa. They are actually quite abusive. I think that this article could have used a bit more on that. Besides that, I liked it quite a bit.

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