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Home > Westward Ho: Asians March Into Africa – Part I

Westward Ho: Asians March Into Africa – Part I

New trade routes are taking hold, linking Africa’s rich resources with the industrial needs in Asia and South America, and this two-part YaleGlobal series analyzes the emerging economic, political and security partnerships. The 2008 global economic crisis and slow recovery for the US and Europe have only reinforced the South-South partnerships, shifting trade relations and fueling economic growth throughout the hemisphere, explains author Johan Lagerkvist in the first article of the series. China took the lead as Africa’s major trading partner in 2009, he notes, and this year Chinese loans to Africa will exceed those from the World Bank. There’s some wariness among Africans about an onslaught of new foreign investors, but as Lagerkvist concludes, Africans are more empowered than in previous centuries to monitor their foreign relations and chart their destiny. – YaleGlobal

Westward Ho: Asians March Into Africa – Part I

To fuel its own growth, China emerges as Africa’s major trade partner
Johan Lagerkvist
YaleGlobal, 16 March 2011
Game change: China’s soft loan builds Zambia’s national stadium (top); Chinese supervisors are arrested for shooting African mine workers

LUSAKA: “Africa is ripe for take-off” is one of the more pleasant of mantras reiterated by China’s Communist Party leaders. To some extent, the attitude expresses the approach of other Asian powers – from South Korea to India. But massive Chinese involvement in Africa is likely to be the most influential factor in shaping the continent’s economic take-off and governance.

The search by Chinese state-owned companies and other Asian multinationals for raw materials in Africa and Chinese financing Africa’s construction boom contribute to better development prospects for the world’s poorest continent. New South-South cooperation, or SSC, particularly Asian-African partnerships, are deepening economic and political relations with African countries and in turn redrawing Africa’s geo-economic boundaries and geopolitical map.

To sustain their industrialization, Chinese, Indian and Malaysian oil companies such as Sinopec, Indian Oil Corporation and Petronas are competing for access to existing and untapped oil reserves, primarily located in Nigeria, Angola, Equatorial Guinea and Sudan. Holding high the rhetorical banner of SSC yields a bargaining chip in contrast to traditionally exploitative Western multinationals. South Korea increasingly targets African countries for joint exploration of energy and natural resources. The Koreans have just embarked on a solar-energy aid program in Mozambique that’s set to bring power, about 500 kilowatts per plant, to the Niassa countryside.

A South-South expanding corridor was reinforced after the 2008 global financial crisis.

This South-South expanding corridor was only reinforced in the aftermath of the 2008 global financial crisis. In 2009 China surpassed the United States as the African continent’s major trading partner. Last year, between January and 31 November, Sino-African trade reached $114.8 billion as opposed to US-Africa total trade in 2010 of $113.2 billion. According to the latest World Bank forecast, economic growth for Africa is projected at 5.3 percent in 2011.

To a large extent, this growth is rooted in the voracious Asian appetite for natural resources. But China invests in manufacturing, too, as much as 22 percent of Chinese investment directed to this sector. Significant investments and preferential loans from Chinese banks and sovereign wealth funds go into package deals to build crucial infrastructure connecting markets and people. Between 2008 and 2010, China provided more loans to the developing world than the World BankBank did – $110 billion.

These intercontinental transformations have far-reaching consequences for a world order long dominated by Euro-Atlantic and Japanese military and economic power. For Africa, arguably, China’s growing role for Africa’s development is by far the biggest game-changer in foreign relations of African countries since gaining independence and the collapse of the Soviet Union. For China, Africa holds a special place in terms of political loyalties and mutual support exchanged in multilateral forums focusing on climate change and human rights, its abundant natural resources, and emerging markets for inexpensive goods.

To a large extent, growth is rooted in the voracious Asian appetite for natural resources. But China invests in manufacturing, too.

The inroads by China and other Asian countries today portend a remarkable shift in trade relations and aid paradigms, triggering a rise in prices for raw materials. Currently, copper stands at an all-time high, contributing to economic growth and employment in copper-rich Zambia.

Given the statistics on economic growth, one would expect African populations to view China favorably, and indeed, polling figures from Pew Institute studies conducted in 2007 and 2010 show that a majority in Sub-Saharan Africa is favorably disposed to China’s presence.

Nevertheless, more qualitative studies show that China’s presence does not make everyone happy. Critics have highlighted how China’s foreign aid is directed toward Chinese construction companies, thus not contributing real job growth.

Zambia is a case in point, with discontent emerging due to ongoing labor discord between Chinese managers and Zambian miners. A 2009 study conducted by Zambian labor unions concluded, “Chinese FDI has had modest impact on national development but with overall negative impacts on the labor market.” Adding to the negative view are violent accidents and confrontations in the mining sector. The latest incident, in October 2010, two Chinese company bosses at the Callum mine in Maamba opened fire on a group of Zambian mine workers who demanded wage increases. Thirteen people were injured. Out on bail since October, the managers have yet to appear in court.

Critics highlight how China’s aid is directed toward Chinese construction firms,
thus not contributing real job growth.

Obviously Asian-African state-to-state relations are asymmetrical in terms of power distribution. Therefore, relations are bound to have far-reaching implications for new economic dependency as well as national sovereignty.The problem is not that China brings an authoritarian political agenda to Africa. It doesn’t, as there’s no evidence of a direct ideological Chinese imperative. Nonetheless, it’s evident that China’s principle of non-interference in the affairs of other countries means that the grip of authoritarian ruling parties over civil society will strengthen in the short term.

The most intriguing question is if a more liberal Chinese approach to the principle of non-interference and state sovereignty is in the making. Reports of how China has maneuvered to rescue more than 30,000 stranded PRC citizens from Libya indicate a further, albeit slow, erosion of China’s traditional stance on strict respect of sovereignty ongoing since the 1990s. China took the unusual step to vote for a UN resolution that included a travel ban and froze assets of Libyan leader Muammar Gaddafi, an opening for a charge at the International Criminal Court. This issue is not just about evacuation of civilians. An interfering China will not necessarily be viewed favorably by competing Western countries or local African states.

In fact, it can be argued that Chinese investments already shape contradictory attitudes at both ends of the Sino-African spectrum. Take the special economic zone in Chambishi, Zambia’s Copperbelt, operated by NFC Africa Mining, a state-owned Chinese company. In 2011 the Chinese government’s white paper on economic and trade cooperation with Africa praised its success: “So far 13 companies have moved in; they engage in mining, prospecting, nonferrous metals processing, chemical engineering, and construction, having made investment worth US$600 million, and providing more than 6,000 jobs for local people.”

China will have a heavy impact on both the economic and political future of African countries in coming decades.

I asked ministerial level officials in the capital Lusaka and local officials in the Copperbelt region in August about progress of the Chambishi zone, and opinions ranged from skepticism to despondent irritation. One economist argued: “On paper the zone looks good, and if implemented it would also be good. But later on the initial Chinese contractor for the zone, said it was no longer feasible – it was too expensive. So now they wanted Zambia to borrow money from China to pay for the buildup.”

I put the same question to a local official in the city of Ndola, capital of the Copperbelt, and he replied, “I can tell you that in fact everyone is in the dark. No one seems to be in charge – that’s the problem. You know, even if you are a boss from cabinet office they still won’t let you into their zone! Even when the minister of the Copperbelt was to attend an enterprise presentation, the Chinese delegation did not care about translation.”

Should such remarks be dismissed as trivial complaints coming from sidelined local officials? Or do they indicate that China, commonly perceived as an alternative to the West that expands policy space in Africa, may contract local policy and harm states’ sovereign authority over their economic and political affairs?

Adding to political and strategic risks, this issue is likely to top future agendas. Barring a collapse of Chinese-style authoritarian capitalism, China will have a particularly heavy impact on both the economic and political future of African countries in coming decades.

However, there’s room for optimism. After the forced, unfair absorption of African resources and lives into global processes during the colonial and Cold War eras, this time Africans are more free to negotiate their own destinies and take-off.
 

Johan Lagerkvist is senior research fellow at the Swedish Institute of International Affairs. He is author of “After the Internet, Before Democracy: Competing Norms in Chinese Media and Society.” Click here to read an excerpt. Email: johan.lagerkvist@ui.se or @Chinaroader

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