Chinese construction companies are active in Angola’s capital
There was perhaps no more pointed a rebuke to Chinese investment policy in Africa than that given by United States Secretary of State Hillary Clinton during her visit last week to South Africa when she told reporters after meeting International Relations and Co-operation Minister Maite Nkoana-Mashabane: “In our strategy towards sub-Saharan Africa, we are working to build a partnership that adds value rather than extracts it.”
Clinton, without having to mention China by name, played into the stereotypical vision of other powers on the African continent and the widespread perception that their only interest in Africa is “extractive” – read exploitative.
This is not the first time Clinton has taken such a swipe at the Chinese in Africa. Last year, in an equally thinly veiled assault on the Chinese, Clinton was reported to have said: “We saw that during colonial times it is easy to come in, take out natural resources, pay off leaders and leave.” In response Beijing has resorted to the old Cold War rhetoric about US imperialists. The war of words between Washington and Beijing over China’s role in Africa continues, but there are real differences between the old and the new.
Whether it is chicken farmers in Zambia, hundreds of thousands of Chinese workers in Angola or large numbers of mainly unwelcome Chinese wholesale traders in Botswana, the perception is that China’s relationship with Africa is exploitative, with the Chinese only interested in the resources and profits they are able to extract from the continent.
The perception of the Chinese in Africa has deteriorated from 20 years ago when they were widely seen as having played a vital role in the continent’s decolonisation and the end of apartheid. Even Beijing is keenly aware that something has to be done to improve the perception of China, not only among the average people but also among the political classes, or it will undermine the growing commercial relations China has with countries on the continent.
In a response to these perceptions Chen Deming, China’s minister of commerce, recently wrote in Zambia’s Daily Mail newspaper: “In Malawi, rows of cotton cultivated by local farmers with instruction from Chinese experts are budding; in Ethiopia a shoe factory that was built with investment from the China-Africa Development Fund is teeming with local workers; in the Democratic Republic of Congo, a hydropower station financed by credit from China has just been inaugurated.”
Disastrous military interventions
In Africa the US seems, at least for now, to have learnt from some of its earlier, more disastrous direct military interventions, such as that in Somalia in the 1990s. The US now knows that the best visible symbols of American presence are the ubiquitous bags of mealie meal emblazoned with the Stars and Stripes that are so commonly seen in famine relief projects. The most tangible commercial presence of the US in Africa has, despite some setbacks, been the African Growth and Opportunity Act (Agoa) of the Bush-Clinton era. This has created tens of thousands of jobs in those African countries where a garment and textile industry has proven, often with Chinese ownership, to be profitable.
Although the deployment of US troops in Africa is set to increase to 3000 in 2013, the burly US marines are mostly tucked away in Djibouti. With the notable exception of its mainly indirect intervention in Libya, the US is less and less seen as an overt commercial or military presence on the continent.
Clinton could have been speaking of her friends and allies in Europe when she made her implied comparison with US commercial policies in Africa. The European Union’s main commercial instrument in Africa is the Economic Partnership Agreement, which has been in negotiations for a decade. The interim agreement, which was signed in 2007/2008 by several Southern African Development Community (SADC) countries desperate for market access for beef, sugar, fish and garments compares unfavourably with the unilateral generosity of Agoa. In it, the Europeans basically forced African, Caribbean and Pacific countries to abandon export taxes on minerals and infant industry provisions as a means of assisting industrial development and beneficiation of their raw materials. SADC negotiators assure the public that what will eventually materialise in the final partnership agreement will be far more generous to Africa than the current provisions. However, Europe’s greed for unprocessed resources, even at the expense of Africa’s development, has left an indelible impression that Europe, like China, wants raw materials and will use its considerable commercial leverage to achieve this.
For modern Europe, being seen as a rapacious and unprincipled power in Africa interested only in the consumption of African unprocessed resources is merely an extension of 250 years of history but it is certainly not why the European Commission claimed they negotiated the partnership agreement. They, like the Chinese, say they are here for “development”.
At last month’s Africa-China Summit Premier Hu Jin Tao promised to double aid to Africa to $20-billion over the next three years in the form of concessional loans. But this is not the big news. More debt and aid are hardly likely to solve Africa’s problems. It was the statement by Zhong Jianhua, China’s special envoy to Africa, who was quoted as saying: “As China’s economy transitions, shifting labour-intensive industry to regions outside of China offers production opportunities … African countries should seize this opportunity. They can step into a track that China has taken in the past to develop their own industry.”
Breathtaking silence
At least publicly, the Chinese offer was met with a breathtaking silence from African policymakers.
China has made no secret of the fact that it will be shifting labour and energy-intensive industries offshore. Partly with Chinese investment, a minerals-energy complex is slowly emerging in the SADC countries that will be able to facilitate a movement of industries that were previously located in China.
China should rather focus on developing financial instruments that will point their investors towards Africa and change the reality and perception of Chinese investment to one based on the long-term development of Africa rather than extraction.
Unlike the US and the European Union, which have long ago given up using the sorts of fiscal levers that are common in China, Beijing is readily able to develop an instrument that will provide incentives to Chinese processing firms to move to Africa. This is a real commercial opportunity for resource-rich countries such as Botswana and South Africa to lever resources against China’s forthcoming shift in industrial policy. But in the final analysis it is up to China to show that it is serious about an industrial policy that sees its investors move to Africa and beneficiate and not just extract unprocessed African resources.
It is up to African leaders to ask that the Chinese begin the negotiation of such an investment instrument as soon as possible, in such a way that China will demonstrate through deed and not rhetoric that its commercial and trade relations with Africa are fundamentally different from those of Europe or the US.
These are the views of Professor Roman Grynberg and not necessarily those of the Botswana Institute for Development Policy Analysis where he is employed