Forest from the Trees: Development, Trade & Investment and the China-in-Africa Discourse

Barry Sautman, HK Univ. of Science & TechnologyYan Hairong, HK Polytechnic University

China-in-Africa Discourse

• Emerged around 2004• Spread out from US, UK, France• Mainly focuses on China’s claimed

negative influence on African governance• Other focus: effects of PRC trade &

investment on Africa’s development• Exemplified by February, 2007 New York

Times editorial, “Patron of African Misgovernment”

New York Times says China:

• Takes African resources; gives big money to corrupt, authoritarian African leaders

• Partners with genocidal Sudanese leaders and Zimbabwe’s despotic president

• Impoverishes Africans by exporting cheaply-made goods

• Lends money to African governments without applying social and environmental standards

• Exploits Zambian miners.

Raises Question: Is Africa’s Right to Development:

• mainly impaired by China’s “neo-colonial” or “amoral” activities in Africa or by Africa’s imbrication in US-led neo-liberal system?

• China and West have many common practices in Africa. Also have differences that make China’s presence often more appealing to Africans.

Discourse of China’s Imports from Africa

• 1995: US$3 billion; 2007: $70+ billion• China-in-Africa discourse focuses almost

exclusively on oil• China’s purchases from Africa: oil 62%; ores &

minerals 17%; agricultural raw materials 7%; others 14% (US: oil 80%; other primary products about 17% manufactures, about 3%).

China, West and Oil

• China: oil from Africa = 14.5% of all oil PRC consumed in 2006; US: oil from Africa = 13.2% of all oil US consumed.

• China: received 8.7% of Africa’s oil exports in 2006; US: 33%; Europe: 36%

• China: 70% of oil imports used for industry; US: 70% of oil imports for motor vehicles.

China’s buys much African oil with infrastructure loans

• Builds infrastructure at much lower cost than West

• More than $8 billion loaned to Africa in 2006

• World Bank, IMF, US, UK criticize China for indebting Africa

• Africa still in debt $300 billion to Western states and institutions

PRC loans to Africa

• Western loans at commercial rates; China’s loans at very low or no interest

• Example: infrastructure loan of billions to Angola at 0.25%, repayable with oil

• PRC loans for infrastructure thought to be less subject to being skimmed than Western all-purpose loans.

Transparency Issue:

• Western oil firms pay hundreds of millions in “signature bonuses” for African oil blocks, but refuse to reveal amounts

• Western governments make such revelations voluntary

• China can’t compete with Western oil firms in Africa, so has relations with all producers, including Sudan.

Darfur Issue:

• China vilified as accomplice of Sudan regime in genocide in Darfur

• Only US speaks of genocide in Darfur. UN, EU, MSF, Africanists disagree

• China instrumental in persuading Sudan to agree to UN forces in Darfur

• US has ties with Sudan military & intelligence leaders.

China’s Exports to Africa

• Discourse portrays China’s exports as poor quality basic consumer goods

• PRC-made imports are much cheaper than other imports to Africa

• Cheaper also than locally-made goods, made expensive by poor infrastructure

• Only seven African countries receive significant share of imports from China

• Basic consumer goods almost always < a fifth of PRC imports to African countries

• PRC imports mainly displace other imports; little effect on local production

• As to African exports, discourse focuses only on textiles & clothing (T&C)

• African T&C industry in sharp decline before Chinese T&C came to Africa.

African T&C damaged by forced trade liberalization

• Influx of 2d-hand and new clothing from N. America and Europe

• African T&C has high transport and utility costs, low productivity, lack of skilled labor

• Up-tick for African T&C with US African Growth & Opportunity Act (AGOA)

• Downturn when quotas on PRC exports to developed countries ended on 01/01/05.

• Recovery from downturn by most national T&C industries through finding niche markets

• Quotas on PRC T&C exports to S. Africa• S. Africa T&C decline mainly due to strong rand

and informalization of T&C production• Balance of gains and losses to Africa through

PRC trade less negative than discourse asserts• Main decline in T&C due to Western-imposed

trade liberalization.

PRC investments in Africa

• Valued at some $8 billion in 2006 (of perhaps $130 billion total FDI in Africa)

• No recent breakdown on sectors, but from 1979 to 2000: manufacturing 46% (T&C 15%); resource extraction 28%; services (mostly construction) 18%; agriculture 7%

• Some 800 major PRC enterprises in Africa, 100 of them large SOEs

Discourse focuses overwhelmingly on Chambishi copper mine, Zambia• “The Chinese” portrayed as super-

exploiters, compared to whites and Indians

• Zambian NGOs find that privatization of mines is main cause of deterioration of miners’ living standards

• Working, living conditions, at Chambishi deplorable, but other Zambian mines also worse since privatization.

Coal Mining Team: Tanzania

• White South African and Canadian mines oppose raising super-low royalty rates

• Chinese mine-owners pay higher royalties, taxes• Discourse often quotes Zambian opposition

leaders who endorse racial hierarchy among mine-owners and are backed by Taiwan

• Profits for Chinese enterprises in Africa much lower than for Western firms

• PRC enterprises, but not Western firms, mainly equity joint ventures

• Chinese firms less concentrated in resource extraction, more in infrastructure and manufacturing than Western firms

• PRC represented in discourse as backing authoritarian regimes to protect extraction

• But Western states back most African despots, militarily and politically.

N’guema (despot of Equatorial Guinea) received by US Secretary of State Rice at White House, 2006

Trade in Money and People

• 40% of Africa’s private wealth in Western banks, due to corruption and tax evasion, but no capital flight to China

• Many African professionals lost to Africa through emigration to West, while China trains African professionals

Conclusion

• China-in-Africa discourse de-contextualized, because not comparative

• Reflects Western elites’ perceptions of national interests (strategic competition with China) and sense of moral superiority

• Western government “democracy and “good governance” rhetoric seldom challenged in discourse

• Discourse proponents search for all examples of negative Chinese activities in Africa

• Many Africans wary of binary of “civilizing” Westerners versus “amoral” Chinese

• Discourse heats up because China’s actions in Africa not fully compliant with tenets of Western neo-liberalism

• Many African’s reject discourse as diversion from reality of Africa’s subordination in US-led system with built-in exploitation and human rights violations.

National Leaders on Africa

• “The African has never really entered into history. They have never really launched themselves into the future. The African peasant has lived according to the seasons, whose life ideal was to be in harmony with nature, only knew the eternal renewal of time. In this world, where everything starts over and over again, there is room neither for human endeavor, nor for the idea of progress.”

• -- Nicholas Sarkozy 2007

• “We all know that African countries used to have a tradition of eating their own adversaries. We don’t have such a tradition or process or culture and I believe the comparison between Africa and Russia is not quite just.”

• -- Vladimir Putin 2005

• “The people of China and Africa have created great and brilliant cultures in the long course of history and have made important contributions to the civilization and progress of mankind.”

• -- Hu Jintao, 2007

Drive Out New & Old Colonialism from Africa!

US and Chinese officials on Africans and AIDS

• “[Africans] don’t know what Western time is. You have to take [AIDS] drugs a certain number of hours each day or they don’t work. Many people in Africa have never seen a clock or watch their entire lives. And if you say one o’clock in the afternoon, they don’t know what you’re talking about.”

• -- Andrew Natsios, head, US Agency for International Development, arguing against providing anti-retroviral drugs to Africans, 2001. [Note: A subsequent study found that Sub-Saharan Africans are better at following drug regimens than North Americans. Edward Mills. “Adherence to Anti-Retroviral Therapy in Sub-Saharan Africa and North America,” Journal of the American Medical Association, Aug. 9, 2006; vol 296: pp 679-690].

• “China must learn the lessons from countries like South Africa.”• -- Hao Yang, Deputy Director, AIDS Control and Protection Office of

China’s State Council, 2007