Africa has traditionally been characterised by conflict and underdevelopment, and unfortunately when Cold War scrambling subsided to civil conflict and dictatorship rule, development was only really achieved in a few limited regions. However, Africa’s mineral wealth has been recognised, and subsequent investments have begun to flow freely. The question at hand though is, will this investment continue and be enough to eventually lift up the economies of Africa, or will it subside once the novelty has worn off? This discussion paper will discuss the growing involvement of China in the economic development of the African continent, questioning if this infatuation is healthy for Africa, or if it will benefit only the already deep-pocketed Sino behemoth?

The development of Africa

The United Nations Development Group (UNDG) has offered a guideline definition of development as being an evolutionary process through which states progress in an effort to modernise.⁽²⁾ The involvement of a state’s citizens is fundamental as the ultimate purpose of development is to offer a choice, be it income, access to knowledge, political freedom, personal safety and security, and a guarantee of human rights. However, this guideline still remains vague. For this reason, a seminar held in Colombo, Sri Lanka in 1986 named the criteria that a state would have to possess to be seen as being developed, namely that the state should possess an economic component capable of dealing with and equally distributing the creation of wealth, a competent measure of social well-being, respect and value placed on human rights, political freedom, democracy and enfranchisement and finally a recognition of culture, identity and self-worth among citizens, as well as a meaning to life and a collective history.⁽³⁾

However, there is no single formula or model that leads the development of a state and no specific institutional, cultural, political or economic values that are required, and neither can the shape, size or formation of Government, geography, military strength or ideological preference denote the course a state will take along its developmental path.⁽⁴⁾

Many African states have only in the last 50 years managed to free themselves from colonial rule. Gaining this independence was a long-fought struggle, and once granted their autonomy, the new Governments in most cases turned to authoritarian and totalitarian regimes, resulting in a continent rife with dictatorships, conflict, minority rule, civil disturbances and even genocide. These, among others, offered good reasons for the developed powers to stay well away from both the markets and borders of Africa.

For example, South Africa experienced sanctions as a result of its policy of apartheid, Rwanda was ignored for fear of the acknowledgement of the genocide that took place in 1994, and the Angolan Government was even assisted in its civil war by states seeking access to the oil reserves off the coast of Cabinda. Africa was easier ignored. That was of course until dramatic fluctuations in commodity prices caused a rapid and unprecedented boom in African oil and gas investments, and a mad scramble for its other natural resources.

China’s motivation for its involvement in Africa

The industrialisation of the Chinese economy has taken place at an incredible speed not seen anywhere else in the world, achieving an estimated growth rate of 9.1% in 2010 and a contribution to the world economy sizable enough to ensure that the world should sit up and take notice.⁽⁵⁾ However, as astonishing as this rate of development is, what is also interesting is the lack of any real natural resources present on the Chinese mainland. Hence, China is forced to rely heavily on the import of almost all its energy, metal and textile primary commodities.⁽⁶⁾

Thus, China’s ambitions in Africa are clear. By the year 2008, there were over 800 Chinese state-owned companies present in Africa, mostly aimed at extractive industries.⁽⁷⁾ China’s long-term strategy in Africa is ultimately to remove its own economy from the effects of the London- and New York-based commodity markets, preferring to acquire these commodities at source and offering the recipient Governments’ loans and aid in return for long term supply contracts.⁽⁸⁾ Critics have labelled this relationship a ‘resources grab’. China has even gone as far as cementing its relationship with Africa in national policy with the 2006 official release of the China-Africa Policy White Paper.⁽⁹⁾ The relationship between China and Africa is hinged on a number of main issues, three of which are discussed below.

Chinese banks, loans and grants

Despite the one-sided nature of trade between China and Africa, China has maintained its relationship with the African states through its sizable investments and development loans that are granted without any preconditions or requirements of political, social or even economic stability. For example, the development grants given to Rwanda without questioning the state of human rights and the US$ 200 billion that was given to Angola to reduce poverty, without any pressures for poverty to actually be reduced.⁽¹⁰⁾ These actions can seriously undermine efforts by the international community to link aid with principles of good governance.

Other examples of China’s interesting business ethics include their bids for mining and oil rights that are accompanied with promises of hydro-electric power plants, rail and road infrastructure, the development of shipping and trading ports,⁽¹¹⁾ and also the support of Beijing in any international forums or organisations. Another tactic used by the Chinese is its policy of debt relief for African states, otherwise known as effectively turning loans into grants by merely writing off debt. In the year 2000, China cancelled an estimated US$ 1.2 billion in debt from 31 African states, and forgave another US$ 750 million in 2003.⁽¹²⁾ These amounts are only estimated as China no longer records the aid it issues to African states, thereby making an official tally impossible.⁽¹³⁾

All these efforts by the Chinese to enter into the financial systems of the African states have now been made much easier given the 20% stake in South African-based Standard Bank, owned by the Chinese state-owned Industrial and Commercial Bank of China.⁽¹⁴⁾ Africa’s largest financial services company, this purchase was completed in March 2008 and effectively granted China access to 17 African states in which Standard Bank maintains a presence.⁽¹⁵⁾

Chinese arms sales

China’s “non-interference” policy simply reflects its indifference to conducting business with states that possess dubious human rights records.⁽¹⁶⁾ Africa is simply a market, and a particularly lucrative arms market at that, especially in the cases of Zimbabwe, Sudan and Ethiopia. Between 2004 and 2006, Zimbabwe alone purchased six jet aircraft for “low intensity military operations”, 12 jet fighters, 100 military vehicles and a radar system that was installed into President Robert Mugabe’s private mansion in Harare and this was despite the ongoing call for sanctions against the state following the human rights abuses that had been rife since well before 2000.⁽¹⁷⁾

However, these actions have not been confined to just a select number of states. China is Sudan’s largest supplier of tanks, bombers, machine guns and other weaponry, and also supplies arms to both Ethiopia and Eritrea, all of which are regarded as high-conflict zones.⁽¹⁸⁾

China and Africa’s natural resources and infrastructure development

Africa is a rich source of oil, gas and other vital minerals. Oil in particular is of noteworthy importance as China possesses no supplies itself, and as mentioned above, does not wish to pay prices determined in London or New York. At the same time, the Chinese have made an effort in simplifying the method in which they are able to not only extract, but also access these resources. China has introduced to Africa what is considered the Chinese developmental model, which makes use of so-called Special Economic Zones (SEZ) that dedicate certain areas to particular industries, intending for them to become the new nodes of development and growth.⁽¹⁹⁾

According to the Chinese plan, Chambishi in Zambia is to be dedicated to metals, Mauritius is dedicated to shipping and trading, and Dar es Salaam, Tanzania and Benguela, Angola should be developed to become trans-shipping hubs for the east and west coasts of Africa, while the Tanzam and Benguela railway lines bisect the continent, making the shipping of the natural resources of Africa easier than ever.⁽²⁰⁾ One issue with the Chinese development of infrastructure in Africa is however, that they are not of an acceptable quality, and tend to overshoot their completion deadlines. The Tekeze River Project in Ethiopia and the Asmara Oratta Hospital in Eritrea are examples of such. In both instances, the projects were not completed in time, costing the Ethiopian and Eritrean Governments millions in delayed fees, and once finally completed, they have begun to show foundational cracks and crumbling.⁽²¹⁾ This poor workmanship is in no way sustainable to neither host Government nor investor.

Concluding statements

The level of economic activity that occurs year on year between Africa and China is high; however, the sustainability of this growth should be considered. China, as is noticed from their trade policies regarding weaponry and their quality of construction, does not approach the African development issue with the attitude required for a continual development course. Rather, they are seen to be draining Africa of its resources.

Africa is a continent fundamentally different from any of the other states, regions or continents in the world. It is blessed with incredible resources, while also cursed with volatile ideological beliefs, which were encouraged by previous attempts by foreign states at colonial rule. Therefore, Africa’s further development is most likely to succeed only if Africa follows policies of democratic, equitable, rules-based, and non-discriminatory bilateral and multilateral trade and financial agreements that pursue sustainability in particular, as well as fair and sustainable Government policies that will work towards preventing future exploitation and abuse.

NOTES:

(1) Contact Megan Erasmus through Consultancy Africa Intelligence’s Asia Dimension Unit ( asiadimension@consultancyafrica.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).
(2) Tadesse, D, ‘Africa's emerging global partnerships: Their implications for the Continent's development aspirations’, ISS Paper 189, p4, 2009.
(3) Ibid.
(4) Ibid.
(5) CIA World Factbook - Peoples Republic of China Profile, https://www.cia.gov.
(6) Goldstein A, Pinaud N, Reisen H, & Chen M, ‘China and India: What’s in it for Africa?’ OECD: Paris, pp 4, 13, 2006; Davies M, ‘China’s Development Model Comes to Africa’, Review of African Political Economy, Vol. 35 (115), p134, 2008; Tadesse D, ‘Africa's emerging global partnerships: Their implications for the Continent's development aspirations’, ISS Paper 189, p 8, 2009
(7) Davies M, ‘China’s Development Model Comes to Africa’, Review of African Political Economy, Vol. 35 (115), pp 134-137, 2008.
(8) Ibid.
(9) Eisenman J & Kurlantzick J, ‘China’s Africa Strategy’, Current History, pp 221-222, May 2006.
(10) Ibid.
(11) Ibid.
(12) Ibid.
(13) Ibid.
(14) ‘China Africa linkage to spur on economic growth’, Standard Bank News Centre, 9 February 2011, http://corporateandinvestment.standardbank.co.za.
(15) Ibid.
(16) Tadesse D, ‘Africa's emerging global partnerships: Their implications for the Continent's development aspirations’, ISS Paper 189, p 8, 2009.
(17) Eisenman J & Kurlantzick J, ‘China’s Africa Strategy’, Current History, pp 221-222, May 2006.
(18) Ibid.
(19) Davies M, ‘China’s Development Model Comes to Africa’, Review of African Political Economy, Vol. 35 (115), pp 135-136, 2008.
(20) Ibid.
(21) Eisenman J & Kurlantzick J, ‘China’s Africa Strategy’, Current History, pp 224, May 2006.

Written by Megan Erasmus ⁽¹⁾