On his first state visit overseas, Chinese President Xi Jinping arrived in Africa in March 2013, in a gesture to celebrate the closeness of the economic ties that have made Beijing the continent’s largest trading partner. During the high-profile tour, Xi signed deals worth billions of dollars in assistance for the African countries of Tanzania, South Africa, and Congo.
This is not a new occurrence. Chinese investments in Africa span across many sectors and are not confined to the Chinese government and state-owned companies. Several private Chinese companies have also invested heavily in Africa. For example, Huawei, a leading Chinese global telecom services provider, has invested a total of USD 1.5 billion and employs 4000 workers in Africa alone. The past decade’s trade figures also attest China’s growing trade ties with Africa, having grown from just USD 9 billion in 2000 to USD 200 billion in 2012.
China’s interest in Africa has been driven by the appetite for Africa’s natural resources in order to sustain its rapid growth. The Africa policy of the Chinese Communist Party is rooted in ‘development’ and what it calls ‘mutually beneficial cooperation’. Unlike the United States, which insists on tying its developmental aid with democratic reforms, China’s ‘non-interference’ policy towards Africa has been dependent on only one principle: the recognition of One China. Basing itself on its role of champion of the developing world, China has hitherto explained non-interference as respect for African states’ autonomy when it comes to creating their own development programs, and a desire for their support in establishing a new and rational economic order.
On Africa’s part, the reason behind the continent’s compliance to China’s advances is logical enough – for countries desperate for aid and resource infrastructure, the interests of a rising superpower are always welcome, especially when those interests come with large sums of money and infrastructure development.
But with the passage of time, both countries are beginning to see that the way ahead will not always be smooth sailing. Africa’s growth will almost certainly be hampered by drastic shifts in geopolitical and economic trends pertaining to China.
Geopolitical Factors: China’s relationship with certain African regimes has often been a source for international controversy, the prominent example being that of Chinese commitments in Sudan and Zimbabwe. Further, Chinese resource diplomacy on the continent has been led by Beijing’s drive to procure vital raw material and natural resources that are required for its own development. Hence, much of the intense diplomatic conflicts for oil involving the United States and China take place on the African continent. The case of Nigeria, Sudan and South Africa are prime cases in point.
China’s Economic Slowdown: When one acknowledges that the African economy has benefited hugely from Chinese trade and investment, one must also acknowledge that it will be as largely vulnerable to any economic shocks that may jolt China. Recent estimates by the IMF indicate that China’s GDP growth is projected to slow down to 8.8% in 2013, from an average of more than 9% over the past three decades. This is bad news for countries in Africa, because not only is China heavily involved in purchasing commodities from Africa (Chinese diamond purchases from Botswana alone account for half of the latter’s GDP), but the country is also a prime mover in the extraction of minerals from various African countries. The situation is compounded by the fact that the Chinese slowdown comes at a time when the European Union is still struggling with debt issues, all of which have also dented Africa’s export industries.
Other Risks: A growing number of small-scale Chinese private firms are setting up in Africa, without the direct endorsement of the Chinese government. This growth of private investments in sectors outside the traditional Chinese areas of investment in natural resources has fuelled a good deal of resentment among local investors and people. In many African countries, Chinese traders have forced local shopkeepers out of business. This resentment was given a voice by Botswana’s president, Ian Khama, in a recent interview with one Johannesburg-based Business Day newspaper, when he said, “We have had some bad experiences with Chinese companies in this country. We are going to be looking very carefully at any company that originates from China in providing construction services of any nature.”
For China, it is no longer simply about resource diplomacy. Beijing’s activities in Africa have long been tagged under the phrase ‘colonialism’, and Xi Jinping’s tour of Africa this year appears to be designed to signal a paradigm shift away from pure economics. The ruling Chinese Communist Party-run Global Times quoted Xi as telling a meeting of African leaders in Durban that China will actively participate in the mediation and solving of hotspot issues in Africa, besides encouraging Chinese enterprises to expand their investments in Africa.
But it will take a while for African leaders, let alone the African people, to be convinced of China’s purer intentions in the continent. Just last month, Lamido Sanusi, governor of Nigeria’s Central Bank, wrote an opinion article published in the Financial Times, in which he argued that Africa was willingly opening itself up to a new form of imperialism. In sheer economic terms, China has done more than enough to fulfill the expectations it had for its relations with Africa when it first entered the country. The task ahead now is far more arduous – to demonstrate that China is not by any means repeating the old practices of European powers. In other words, Beijing must match its deeds to its words.