China is dramatically expanding both economic and political involvement in Africa in a bid to secure energy supplies, access to basic commodities and new markets for its manufactured goods.
But it isn’t all business: African leaders looking for development models to replace the economic liberalism of the Washington Consensus are increasingly looking to China’s industrial revolution for inspiration.
It doesn’t hurt that China is an emerging superpower, a substantial counterweight to the perceived hegemony of the United States and its European allies, not least at the upper levels of multilateral institutions.
“We may have been a bit slow to react, but it is certainly the big thing we are all watching now,” one Western diplomat told the Mail & Guardian. It is certainly hard to ignore the figures. Trade between China and Africa grew 50% between 2002 and 2003 to $18,5-billion. It is expected to hit $30-billion next year.
Record prices for commodities such as oil, iron ore, aluminium, copper and bauxite, driven by breakneck industrial expansion in China, are a boon for cash-strapped governments, as is Beijing’s willingness to provide material assistance without the kind of political conditionality that accompanies loans from the International Monetary Fund or grants from Western donors.
The South African government is pushing for expanded ties with China, including negotiations toward a free trade agreement, which Minister of Trade and Industry Mandisi Mphalwa says will begin later this year. And this week the political shift eastward was on display at the Afro-Asian Summit in Bandung, Indonesia, where Minister of Foreign Affairs Nkosazana Dlamini-Zuma said discussions with Asian countries were more comfortable than partnerships with the north.
Greg Mills, the director of the Brenthurst Initiative — a think-tank on African economic development backed by the Oppenheimer family — reckons the Chinese boom and the attendant risks will require economies that can rapidly respond to change.
“Only the most flexible economies will reap the greatest benefits from the significant industrial restructuring now under way. For example, those countries in the East Asian region that are currently restructuring their economies to meet this challenge … will stand to gain most. The same argument will apply to South Africa.”
South African officials concede there is considerable unease over the impact of Chinese imports on the manufacturing sector, which they view as central to job-creation efforts, but for now those worries appear to be trumped by the perceived opportunities, and the strategic imperative of building south-south economic cooperation.
Despite the growing warmth of relations, in the contest for resources China is a relative latecomer, with the consequence that is has had to turn to some of the more politically marginal parts of the continent to secure a foothold. That, some Western diplomats warn, may undermine African Union and New Partnership for Africa’s Development commitments to link economic assistance to democratic reforms and improved governance. They point to Sudan, Zimbabwe and Angola as particularly worrying examples.
In Sudan, state-owned Chinese firms are outbidding all comers for oil prospecting and drilling rights. Ten percent of all Chinese oil imports now come from Sudan, where China National Petroleum Corporation is the largest foreign investor.
“They have very long timelines, and are prepared to make bids that, frankly, aren’t commercial,” one observer, who has experience in Khartoum, says.
In return for its access, China has threatened to use its veto in the United Nations Security Council if the world body takes a tough line on the atrocities committed by government-backed militias in Darfur. It is also a supplier of weapons to the government.
Similarly in Angola, where the economic benefits of a booming offshore oil sector have largely failed to filter through to the poor, and where the MPLA government is accused by numerous watchdog organisations of massive corruption, the Chinese have recently granted a US$2-billion line of credit. A loan on that scale would certainly have come with conditions on fiscal reform if it had been made by a multilateral institution.
The quest for energy security, Mills points out, is an inevitable feature of the world after September 11 2001, but the experience of countries that have been at the heart of efforts by the US to diversify its oil supply away from the Middle East, is hardly encouraging for citizens in China’s new client states. Living standards in Nigeria have fallen since its emergence as a major producer, and in Equatorial Guinea oil revenues fund a brutal dictatorship.
Mills sketches two scenarios in a forthcoming paper. In the “bad” scenario the US and China compete for African resources with scant regard for governance standards, which actually worsen as oil money is pumped into military spending, with the tacit or overt support of jittery global powers.
In the “better” alternative, investors in both countries appreciate that genuine security of supply will come from improved governance, transparency and development, while African countries make it clear that they prefer to deal with companies that support those aims.
In a sense this is a contest between President Thabo Mbeki’s vision of a reinvigorated Africa, confidently taking its place in a multi-polar world, and a renewed scramble for the continent’s resources that leaves scorched earth behind it. Despite the warmth on display in Bandung, it isn’t at all clear that the Chinese have traded real politik for the “African renaissance”.