Chinese characters paint the streets across Africa. There are Chinese supermarkets, corner shops owned by Chinese families, posters with Chinese CEOs shaking the hands of local leaders, or breaking the ground at a new construction project, and from March 25th to April 1st this year there was Xi Jinping, on his first world tour since becoming leader. Amid criticisms of neo-colonialism and exploitation for natural resources, Xi said, “The development of China will be an unprecedented opportunity for Africa, and Africa’s development will be the same for my country.”

Since the end of the Cold War, Western countries’ interest in the continent has waned, leading African countries to “look East’”. Over the past decade, China and other Asian countries have made huge investments in Africa, while the West has stood on the sidelines and watched their influence fade. China is now Africa’s largest trading partner.

Economic cooperation

In order for Africa to attain sustainable development it needs trade and investment. While many Western countries have shied away, China has answered the call. Total trade reached near to 220 billion USD in 2012, while Foreign Direct Investment in Africa stood at around 40 billion USD, according to Derek Scissors of China Investment Tracker at the Heritage Foundation.

China does want raw materials and in many countries it has invested heavily in the extractive industries. In Zambia it is the copper industry. In Angola it is in oil. In other places, it is iron ore or diamonds or nickel. Raw materials are the nucleus, but investment has only spread from there. China not only invests in extraction but also in industries connected to it. China also invests in manufacturing industries such as textiles, in construction, and in transport—all areas where Africa is desperate for investment. In 2005 Hu Jintao established the Chambishi Special Economic Zone in Zambia, which provided investment incentives for Chinese companies. In two years, 50 Chinese enterprises had pledged investments of up to 900 million USD. Rather than a simple snatch and run, China’s need for raw materials has supported development in other areas.

The difference between Western and Chinese aid

Chinese aid is shrouded in secrecy so it is difficult to know exactly how much China gives. But what is clear, is that the West and China see aid very differently.

Traditional Western donors define aid as funds and technical assistance, given on strictly limited concessional terms, primarily to promote economic development and social welfare. Chinese aid is usually in the form of mixed credit, combining concessional loans, and seller’s and buyer’s credit. Where Western donors combine aid with the private sector, China provides aid to state-run projects in both industry and agriculture, as well as providing for critical infrastructure projects, such as schools, hospitals, government buildings and roads.

Aid from the West is “earmarked” for specific projects, often after little consultation with recipients. Earmarking is about selling it in the home country’s government rather than providing for genuine needs. Conditions are also added, such as for good governance, democracy and encouraging civil society. In comparison, China’s only condition is that the African government recognizes Taiwan as part of China. 

Perhaps the key, and often overlooked, difference is that aid from China is connected to commercial interests. Investment and aid are not separate. China has delivered thousands of tons of maize, machinery as well as technical training and assistance to Zambia, and has been sympathetic about repayment; many loans have been cancelled or repaid in natural resources. However, not all loans have been cancelled; in 2008 the debt from the TAZARA railway, the railway that connect Zambia and Tanzania made up almost 40% of Zambia’s total debt to China. If recipients don’t see aid as reciprocal, their debts to China could overwhelm their economies.

“A smoking dragon in sheep’s clothing”

Much of Western media is highly concerned with China’s growing presence in Africa. At the most extreme end, China is seen as a predator creeping its way in under the cover of darkness to steal Africa’s natural resources and usurp Western countries historical hold over the continent. China doesn’t want to help Africans. It wants to rip copper and iron out of the ground, suck out all the oil and then head home, leaving Africa with none of the resources and none of the profits from them. As if that wasn’t enough, it then sells manufactured goods back to Africa at cheaper prices than local goods. It doesn’t even care about good governance (the brain child of Western development). African leaders just watch on and fill their pockets with gold as their people lose their jobs to imported Chinese workers—your basic rape and pillage scenario.

The hypocrisy of this argument is hard to swallow. Exploitation was the name of the game for many in the West, for many years. The moral high ground is rocky at best. Western countries have enjoyed taking a leading role in Africa for over a hundred years. However, their strategies for creating economically and politically liberal states on the continent have improved little and in some cases worsened the situation.  

‘How do we solve a problem like Africa?’

Africa is often spoken of as the perpetual victim—a problem that everyone else needs to solve and knows how to solve—yet Africans are left out of the conversation. Results from a 2007 Pew Centre Research Survey showed, that when asked, many Africans actually see Chinese investment as beneficial. In Senegal 86% said China’s role in their country made things better, in Kenya 91% felt China’s involvement was improving their country. This is compared with the 56% and 74% respectively that said America’s involvement was helping. With a history of Western involvement, many are skeptical of “noble ideas”. China is a new choice. The Chinese rhetoric is strictly “we do business” and the results are one of business. As one would expect from such a mantra, while there have been economic success stories, a fair share of problems have come up that need to be resolved.

A main concern for local populations is with the use and treatment of labor. Reports of China shipping in workers, instead of using local labor, have caused friction with locals. In countries like Angola and Democratic Republic of Congo—countries that have for decades been torn apart by war—it is hard to find skilled laborers who can do the job. In these cases China has sent over its own workers. However, for many projects China does use local labor. According to a 2012 article by Dambisa Moyo, in Zambia, the ratio of African to Chinese workers has exceeded 13:1. But, as you may imagine, while Zambians make up the majority of the workforce, Chinese nationals hold managerial positions.  

In recent years there have been an increasing number of protests because of terrible working conditions and low pay. In 2004, protests over safety standards at Zambia’s Chambishi Mine erupted into national condemnation of Chinese activities after 46 local workers were killed. In 2010 Chinese managers shot into a crowd of protesting workers and 13 people were injured. The charges against the managers were dropped soon after, and the managers sent back to China.

Human rights abuses and poor working conditions must be dealt with if Chinese companies want better relationships with their workforce, but responsibility cannot solely be China’s. These incidences also speak to a need for African governments to improve labor laws, and fine companies that don’t adhere to them. Governments need to implement regulations and safety checks to protect their citizens from abuses. Case in point: Chinese companies working in South Africa do adhere to labor laws, because the South African rule of law is stronger. It is naïve to think Chinese companies will implement these checks themselves, if local government does not force them to. 

Conclusion

Quoted in a New York Times piece, the Tanzanian president Jakaya Kikwete argued that China is the same as everyone else, “We look for investments, technology, markets and development assistance. This is all we are getting from China. Our relationship with China is about that. With the U.S. is about that, with Europe is about that, with Japan is about that, with India is about that. So if the issue is neo-colonialism then it is with everybody”.

China’s style of involvement is different. Unlike the West who only works with countries they deem fit, China works with anyone. Strong democracies, weak democracies and authoritarian regimes are all possible trading partners. China is learning how to interact and policies are constantly changing to fit the situation.    

As China becomes more engaged, we are likely to see more problems, but if China is willing to adapt and African leaders demand long-term benefits for their citizens, then maybe there will be new problems rather than old ones on repeat.
 

Related links
China in Zimbabwe: Fragile Truce?
Out of Africa and into China, emigres struggle
African Students Speak About Their Experiences In China

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Keywords: China in Africa investment in Africa Chinese aid investments in Africa