Tuesday,21 November, 2017
Current issue | Issue 1306, (4 - 10 August 2016)
Tuesday,21 November, 2017
Issue 1306, (4 - 10 August 2016)

Ahram Weekly

China in Africa: A model for emerging states

Despite its Western detractors, China’s involvement in African development has been largely beneficial and not politically motivated, writes Haitham Nouri

world
world
Al-Ahram Weekly

In the wake of Israeli Prime Minister Benjamin Netanyahu’s visit to East Africa and his summit with seven regional leaders including five from Nile Basin states, the Arab press — particularly the Egyptian press — has made much noise about Tel Aviv’s role on the continent.

But there has been no notable Israeli role in any of the many proposed dams in Africa or in the Nile Basin. In fact, no major Israeli project in the region has come to light. Even in the weapons trade, Israeli arms deals in Africa are worth no more than $400 million, most of them small arms.

This is largely because Israel is becoming a Middle East centre for computer software. Israeli political tours in Africa are simply an attempt to mobilise African support in international forums in Israel’s battle against the rights of the Palestinian people.

By contrast, China has been the foreign country with the biggest presence in Africa for decades, especially since 2000 when Beijing launched its plan to step out into the world through its major corporations.

International Rivers, an organisation that monitors the environmental, social and economic impact of dams, announced that China is overseeing hundreds of dam projects around the world, of various sizes and purposes. According to the organisation’s most recent report, issued in November 2014, China had participated in the construction of 16 large- and medium-sized dams around the world by 2000. By the time the report was issued, that number had jumped to 358.

Most of these dams (267) are for the generation of electricity, while the rest are used for irrigation, the provision of potable water, or flood control.

But these numbers are deceptive. Only 80 dams have actually been built, while 93 are under construction, but absent any confirmed data about many of them, according to tables published by International Rivers. A total of 134 of these dams are simply proposals, and the organisation has no information about many of them.

In the Nile Basin, China has only built two small dams in Ethiopia and another large dam in Sudan, the Merowe Dam in the north. Four other dams are under construction in Ethiopia, Sudan, Uganda and Kenya. Only the Ugandan and Sudanese dams are within the Nile Basin, while the dams in Kenya and Ethiopia are outside the basin, along rivers not considered tributaries of the Nile.

China, Italy and Norway are supporting the Ethiopian Grand Renaissance Dam project, whose technical design is a matter of contention among Egypt, Sudan and Ethiopia. Experts, irrigation ministers and leaders from the three countries have engaged in prolonged negotiations over the project.

All dams along the Nile Basin are hydroelectric in nature. Irrigation dams are not useful in states along the Nile headwaters, which receive heavy rains, and have little economic benefit.

Of course, these African dams require huge sums of money to build, sometimes hundreds of billions.

China is not only building dams on the African continent. It is involved primarily in infrastructure projects, such as roads, water and electricity plants, athletic fields, and even government buildings for ministries, parliaments and conference halls.

Chinese investments increased from $16 billion annually in 2005 to $30 billion in 2015. The peak year was 2013, with direct investments reaching $44 billion.

Chinese investments are focused largely on energy (the construction of electricity plants, dams, oil infrastructure and pipelines), mining and transportation (railroads, roads and ports).

According to the American Enterprise Institute and the Mercator Institute for China Studies (as quoted by The Wall Street Journal), Nigeria has attracted $32 billion in Chinese investments, followed by Algeria with $19 billion, Ethiopia with $17 billion, Angola with $16.5 billion, Egypt with $12 billion and South Africa with $9.5 billion.

China is also building extensive railroad lines. It began in the 1960s when it constructed a railway to move copper from the mines of landlocked Zambia to the port of Dar Es Salaam in Tanzania. The line was completed in 1974. Today, Beijing is planning on extending this line to link the Indian Ocean from Dar Es Salaam with the Atlantic Ocean at the port of Lobito in Angola, passing through Zambia and the south of the Democratic Republic of Congo. It will be the longest cross-country rail line on the continent when completed.

China is also developing the Imperial British East Africa railroad line that currently links Kenya and Uganda, with a planned extension to Juba, the capital of South Sudan, and the Rwandan capital of Kigali.

It is developing the Addis Ababa-Djibouti line as well, along with the coastal railway from the Cameroonian-Nigerian border in the east to Lomé, the capital of Togo, in the west.

Of course, these railroads would be worthless without large ports from which to export cargo that moves along the lines, so China is also constructing seven ports in East Africa, including in Eritrea, Djibouti, Kenya and Tanzania, as well as another six in West Africa (Gabon, Cameroon, Nigeria, Togo, Ghana, Benin and Ivory Coast), four in the south (Mozambique, Angola and Namibia), and the Egyptian port at Port Said.

But all these investments constitute no more than 3.2 per cent of total Chinese investments around the world, more than 70 per cent of which are in China’s neighbouring countries, a zone of crucial importance for Beijing.

According to statements made by Chinese Premier Li Keqiang during his visit to the African Union in 2014, the Asian giant plans to increase its investments on the continent to $100 billion by 2020 and boost trade from the current $160 billion to $400 billion.

The next year, in December 2015, Chinese President Jinping signed several contracts during his African tour, giving several African states easy-term loans worth billions of dollars through banks and Chinese investment funds.

According to Steven Kuo, a financial analyst and economic risk expert for Africa, Chinese investments in infrastructure “are very welcome” by African governments eager to meet the demands of the rising middle classes in major African capitals and cities.

Chinese investments are welcomed for other reasons, first and foremost the low costs associated with projects carried out by Chinese firms compared to their Western peers, especially since the continent needs some $900 billion for basic infrastructure construction.

Moreover, Beijing does not interfere in African state affairs by pressuring them to implement better governance or transparency or to improve their human rights records, unlike Western states.

In addition, World Trade Organisation policies that lowered tariffs and opened up African markets had the effect of threatening industry, agriculture, and mining in African states, thus spurring a turn to Beijing.

Of course, not all Chinese investments have been beneficial for Africans. The textile industry in South Africa was severely harmed by cheap Chinese products. But Chinese investments did help Ethiopia to revive its shoe and textile industry. Addis Ababa has achieved one of the highest economic growth rates in the continent in recent years.

At the same time, China is seeking to secure its needs in primary resources, required by its developing industries. Because of this, the Western press typically portrays China as a new imperial power looting the wealth of the continent, giving it only infrastructure that helps stabilise corrupt, dictatorial governments.

But this does not appear to be entirely fair. While Beijing does invest in countries ruled by corrupt or dictatorial governments, many Western countries invest in these same states. More importantly, China invests equally in countries with good and bad records on transparency and anti-corruption efforts, according to a study issued by US researcher David Dollar, published by the Carnegie Institute.

Beijing is investing in 46 of 54 African countries, the other eight countries being highly unstable, such as Somalia and the Central African Republic. Moreover, studies have shown that small and medium Chinese firms invest little in natural resources in Africa, preferring industrial enterprises in many African states.

In contrast, major Western corporations invest more than their Chinese counterparts in African oil, for example, in Nigeria, Angola and Gabon.

According to Deborah Brautigam, a professor at Johns Hopkins University, Huawei, a pioneering technology company, established an institute to train Africans in the Nigerian capital of Abuja. The institute has admitted hundreds of engineers and technicians from around the continent, refuting the claim that China is only interested in natural resources.

China is also more interested in environmental issues compared to other developing countries that invest in Africa, such as India and Brazil. The Chinese dam building agency released policies that reject dam construction that does not take environmental impacts into account. In fact, China cancelled a contract for a dam project in Gabon that did not meet environmental safety standards.

Another widespread claim is that Chinese only employ their own nationals in their companies, as evidenced by the one million Chinese businessmen and workers who have come to the continent over the past decade.

But a 2015 survey of 400 Chinese companies operating in more than 40 African states, conducted by the Institute for Emerging Markets Studies at Hong Kong University, found that more than 80 per cent of the labour force in most of these companies is local, while Chinese people occupy senior management and technical posts. The workforce in some companies is 99 per cent local, which helps to transfer Chinese knowledge and expertise to the countries where they operate.

In Ethiopia, more than 4,800 workers and technicians are involved in the light rail project in the Addis Ababa suburbs, while some 4,000 Ethiopians are employed at the Huajian shoe factory, some of whom received technical or administrative training in China.

Rumours abound about Chinese migrants in Africa, who are said to be seeking to take advantage of local citizens. In fact, most of them are workers who live in special camps.

At the same time, China has showed no political ambitions in Africa. It failed to stop the civil war in South Africa that had a negative impact on the flow of oil in the young country, in which China is heavily invested.

Meanwhile, Chinese agriculture has not been as successful as Chinese infrastructure projects. A palm oil agricultural venture in Democratic Congo failed when the producer found no roads and difficult river transport conditions, as well as attempts by local gangs to steal the modest crops. The business shut down as a result.

Although China is Africa’s biggest trade partner, African Union countries combined could come out ahead of Beijing. In addition, India is striving to catch up to its competitor, especially considering Indian immigrant communities in Kenya, Tanzania and South Africa. Brazil, too, is working to carve out a presence in Portuguese-speaking countries such as Angola and Equatorial Guinea.

But what sets China apart is that it is not following in the path of Western imperialism. It is benefiting from the wealth of its African allies and their support in international forums against the Western world in exchange for development much needed by the continent’s countries.

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