China-Africa Relations in an Era of Great Transformations

Li Xing, Abdulkadir Osman Farah

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9781138254664
• eBook ISBN:
  9781317167341
• Topic: Economics
• Subtopic: Political Economy
• Index: Economics

This collection juxtaposes a variety of approaches about China and Africa, and their interrelations seeking to go beyond early, simplistic formulations. Perspectives informed by Polanyi advance nuanced analysis of varieties of capitalisms and double-movements. It seeks to put contemporary China-Africa relations in critical, comparative context and in doing so, it will go beyond descriptions of inter-regional trade and investment, large- and small-scale sectors, to ask whether structural change is underway. Already it is apparent that the growing presence of China in Africa presents the latter with some novel options but whether these will generate a new embeddedness remains problematic. Highlighting the 'varieties of capitalisms' in the new century, given the undeniable difficulties of extreme neo-liberalism in the US and UK by contrast, to the apparent ebullience of the emerging economies in the global South, this book examines such implications for international relations, international political economy, development studies and policies.

Chapter 1
Beyond Debating the Differences: China’s Aid and Trade in Africa

Ashley Kim Stewart and Li Xing

Introduction

Both Africa and China are vital actors in the international system – Africa partially because of its incredible and valuable energy, mineral and other natural resources and because of its flourishing economies (many of which appear to have escaped the global financial crisis comparatively lightly), and China because of its escalating economic and manufacturing significance in the global economy. They are both increasingly investing in their partnership with one another – bilateral China-Africa trade having reached US$110bn in 2010 (Pant, 2012). As well as China, seven out of the top-ten forecast fastest-growing economies in the world in the next few years are sub-Saharan African countries (The Economist online, 2011), and so the value of the Sino-African relationship to the rest of the global market is also bound to continue to increase along with the value of their relationship with one another (Alden et al., 2008). China’s growing competition in Africa also seems to have re-attracted the Western attention towards the continent which had begun to wane somewhat as the Afro-pessimism of the 1980s took hold.

Alarm bells have been sounded by commentators and traditional aid actors in the West (Zhang, 2011), but the same event – China’s increased presence in Africa – had, until relatively recently anyway, been almost universally lauded by both African and Chinese ones as an extremely positive development. African voices with reservations have now begun to swell too, and, although it is obvious that many of the commentators – Western ones especially – have had relatively little accurate information on the subject (Bräutigam, 2011a), it is clear that the largest part of the Western discourse about the Sino-African relationship sees it as detrimental to the vast majority of African people. This is a view which is simply not shared by many African intellectuals and economic actors, and neither is it shared by the Chinese.

This absence of agreement furthers the debate that is already so extensive, as without a very clear understanding of the nature of China’s interests and motives, speculation about the extent of the threat that it poses to the existing system in Africa has been able to run riot. China is challenging the status quo of the rules of the game (including both policies and practices) of the existing international aid system, as well as the norms and values embedded in existing international trade regimes.

Therefore, with the intention of understanding the implications of this transformation on the international world order, and by focussing specifically on aid (and the interconnected subject of trade), this chapter aims at clarifying the debate about the Sino-African relationship by attempting to provide a slightly more holistic picture of its nature, extent and consequences.

This chapter is comprised of the following sections in order to do this: first, a brief outline of the history of China’s aid relationship with the African continent is made, followed by a summary of the debates about the Sino-African relationship so as to more fully scrutinise the nature and context of these disputes. Thirdly there is a concise description of the structure and scope of Chinese aid and trade in Africa – especially as it differs from the more-familiar Development Assistance Committee (DAC) model of the Organization for Economic Cooperation and Development (OECD). Next, there is a proposal for a framework for the purpose of understanding the impact of China’s rising presence on the various relationships and institutions within the traditional international aid system. And finally, there is a discussion of the impact that China’s presence is having within this framework, as the international aid system is characteristic of how Africa has traditionally associated with the West (and the rest of the world) since its independence, and this is now being quite fundamentally altered.

The History of the Sino-African Aid Relationship

The relationship between Africa and China has continuously deepened and strengthened since the founding of the People’s Republic in 1949. Previously, the relationship was heavily coloured by ideologically-driven motivations during the Cold War in the 1960s and 1970s, during which China maintained liberation and anti-colonial independence movements on the African continent (Shaw, 2010) and gave aid – especially to formerly socialist countries – to build infrastructure like railroads (notable among which was the TAZARA Railway turnkey project), stadiums and hospitals, while consolidating relations “through a steady stream of expert engineers, teachers, and doctors” (Thompson, 2005). China’s aid to Africa can be dated back as early as 1956 (Li, 2007) and in 1964 during a tour of ten African countries, then-Chinese Premier Zhou Elnai announced the Eight Principles of Chinese foreign aid in Somalia (Bräutigam, 2011a). This, at the time, was seen to be opening a new chapter in China-Africa relations. The relationship was not unidirectional, however, and without the support of various African countries the People’s Republic of China would not have been able to win the vote to claim its seat from the Republic of China (ROC, otherwise known as Taiwan), on the United Nations Security Council in 1971.

Post-Mao China-Africa relations have aimed to “combine pragmatic economic and political aims” (Thompson, 2005) for the purpose of creating what China calls a “harmonious world” – at home it promotes a “harmonious society” – with the Chinese maintaining their intention of creating an international environment which is “peaceful and conducive to their continued economic growth and stability at home” (Thompson, 2005). While trade and diplomacy with Africa are partly driven by China’s rising economic strength and subsequent demand for raw materials, both sides are becoming increasingly necessary to each other in a multitude of ways. For example, in exchange for Chinese support and trade contacts, African governments have also offered China their political backing.

Recently, the close long-term Sino-African relationship has been reaffirmed at the 2000 and successive Forum on China-Africa Cooperation (FOCAC) meetings with the Beijing Declaration of the Forum on China-Africa Cooperation (FOCAC, 2000), and again at the 2006 China-Africa summit in Beijing, moving the Sino-African relationship into what Zhang (2011) calls its “partnership phase”. “By the end of 2005 China had helped to establish more than 720 projects for Africa, offered over 18, 000 government-sponsored scholarships, and dispatched more than 15, 000 medical workers who treated 170 million patients in Africa” (Yao, 2006). By 2009, China had abolished tariffs on over 440 lines of African imports to China (State Council, 2011) and also cancelled ¥18.96 billion (≈US$2.79 billion) worth of debt – mainly in the form of zero-interest loans – for 35 African countries. In November 2006 at the biggest diplomatic gathering ever hosted by China: the China-Africa Summit, Chinese President Hu Jintao committed China to “[forging] a new type of strategic partnership and strengthen[ing] cooperation in more areas and at a higher level [sic]” (Yao, 2006), among which are doubling its assistance to Africa, cancelling debt, setting up a China-Africa development fund, further opening China’s market, offering condition-free loans, and training African professionals.

Today, when Chinese and African leaders visit one another, their delegations contain investors and financiers, entrepreneurs and cultural consultants, and “promoting political and economic commerce” (Thompson, 2005) while deepening cultural exchanges that develop the Sino-African relationship.

Contextualising the Sino-African Relationship and Aid

Western rhetoric of the Sino-African relationship (by far the most widespread and familiar outlook) is rife with clichés: that China is hell-bent on pursuing the African natural resources it needs to import to fuel its growing economy, that accepting the “new kinds of aid” it is offering will have terrible consequences for Africa, and that China is supporting “rogue states” “to counter Western pressures on African states to improve human rights and governance” (Sautman, 2006: 1), thereby undermining both the international aid system and the world order.

China’s increasingly-visible presence in Africa over the past five decades, especially in the areas of aid and trade, has generally been extolled by both African and Chinese governments (and political commentators) as an extremely positive development. However, a large proportion of the Western discourse about the Sino-African relationship sees it as potentially having a more negative impact both on Africa itself and on the international world order, sometimes even going so far as to call it “Chinese neo-colonialism” or, rather ironically, “Chinese imperialism”. Of course, things are not so clear-cut and the Chinese are quick to point out that Western governments have hypocritically supported other authoritarian regimes and undemocratic leaders in Africa and elsewhere when it has suited them in the past. However, slinging the mud back – while a good diversionary tactic – does nothing to actually answer these accusations.

Researchers such as Ali Zafar (2007) have accused Chinese aid of being truly unlike Western aid, which, by contrast, has mainly focussed on social development and healthcare. While such scholars are making valid observations about the dissimilar focus of Chinese aid, the consequences of this disparity in attention are not necessarily undesirable as far as many African scholars are concerned (Firoze and Marks, 2007). China also often stands accused of not being bound by the Western standards of not exploiting workers, or abiding by the sanctions imposed on governments that are human rights abusers, and of encouraging African governments to borrow irresponsibly large amounts that they cannot repay. Generally, however, these warnings have not been borne out, as is clear from governance and debt-sustainability indicators (Dahman-Saïdi and Wolf, 2012).

China is now an inextricable part of the aid system in Africa and elsewhere. According to Poul Opoku-Mensah (2010: 71), “while in the recent past aid politics was discussed without reference to China, current discussions cannot ignore China”. However, aid is being complicated by Chinese participation. The OECD-DAC definition of official/overseas development assistance (ODA) is only of official governmental flows, not all of aid (and it excludes both aid from non-governmental organisations (NGOs) and other flows that may count towards development, such as export credits or bilateral trade agreements). China’s involvement in the aid system in Africa is particularly interesting because China’s approach to aid and development is so different from the current model proponed by the traditionally Western-dominated aid system.

While it seems that there isn’t yet a Chinese government agreed-upon definition of aid (Davies, 2011), it is clear that China thinks of development aid quite differently to the way that the DAC does (Zhang, 2011), integrating ODA and other official flows (OOF) much more closely. This makes it difficult to separate definitions of aid from trade, as the new approach that China (along with other “emerging” or “South-South” development partners) is taking in Africa, often by combining several types of finance into single “packages” (Dahman-Saïdi and Wolf, 2012) or “bundles” (Weissenbach, 2011) – what Dahman-Saïdi and Wolf (2011) refer to as “Chinese development investment” – is quite different from that that would be recognised purely as aid ODA in the OECD-DAC model. To attempt to define this aid solely along OECD-DAC lines would be an oversimplification of the nuanced nature of both development cooperation and China’s philosophy on it.

Both the variety of the types of aid that China is offering to Africa (Firoze and Marks, 2007) and their general approach in offering this aid are quite different to the traditional Western aid which has been on offer thus far (Kitissou, 2007; Munyi, 2012), for example, “Chinese aid and economic cooperation programs emphasised infrastructure, production, and university scholarships at a time when traditional donors downplayed all of these” (Bräutigam, 2011a: 13).

This is challenging current notions about the content and implementation of aid (Bräutigam, 2011a), and also of the economic cooperation that invariably stems from this aid cooperation with China. Certainly, the Chinese presence is having large ramifications on the current aid system. As alarming as this seems to have been to Western commentators, in fact, less that 27% (depending on how it is calculated) of the approximately US$5.6 billion that China provides annually to Africa is comprised of types that would usually be recognised as ODA, namely grants and zero-interest loans (Dahman-Saïdi and Wolf, 2012). Most of China’s aid consists of modestly concessional loans that are provided by the Export-Import Bank of China (Eximbank) and subsidised by the Chinese Ministry of Finance, and non-concessional finance at market rates, often levied against natural resources and are usually on a resource-for-infrastructure basis (Dahman-Saïdi and Wolf, 2012). The last kind of finance is not comparable to aid at all, but, as the infrastructure often includes elements like processing plants that boost the receiving country’s economy and manufacturing sectors, it is bound to be having a discernible impact on development.

A common criticism of Chinese aid is that the type of aid that China gives tends to be targeted towards project aid rather than programme aid, a tactic which was tried and deemed a failure by DAC donors who then started to change their strategies 50 years ago as it became clear that projects – especially infrastructure projects (although extremely popular with the aid recipients themselves) – need to be accompanied by long-term financial and logistical support and training if they are going to be maintained. It is not yet entirely clear what the longer-term effects of China’s choosing to support projects rather than programmes will be.

Another difference is that the sectors on which the majority of China’s focus is on are also very different to those which have been under the spotlight for DAC donors. For example, 61% of China’s concessional loans go to financing infrastructure projects (State Council, 2011), while only 12% of ordinary ODA does (Dahman-Saïdi and Wolf, 2012), and while education is the primary target for the vast majority of DAC ODA, only 3% of Chinese concessional loans go to it (Dahman-Saïdi and Wolf, 2012). However, the large numbers of scholarships for African students that have been living in or educated in China (Firoze and Marks, 2007) should be kept in mind.

This difference in approach, however, need not be seen as a threat to the traditional aid model, as it is – in spite of the claims of detractors – not necessarily negative simply on the basis of being unlike what the DAC consensus has been. It is also possible to view China’s approach as African governments have done: as helping to fill in the gaps left by the DAC approach, or as Dahman-Saïdi and Wolf (2012) put it, having “sectoral and modality complementarity”. Aning’s pithy précis of their approach is: “the Chinese are not just about everywhere, they are in most places Western nations are not” (2010: 152).

African rhetoric about China’s influence on the continent has been almost overwhelmingly positive, except for a few dissenting civil-society and trade-union voices. More recently, though, critical voices have been mounting, and have been joined by a wider variety of official concerns which are now being expressed (African Union Commission, 2009; Munyi, 2012) to balance or even counter the enthusiasm that African governments have often had about China’s involvement in Africa.

As well as China’s long and well-documented history with the African continent (strongly emphasised in Chinese rhetoric), the two also share a common historical experience: that of having fought for and achieved independence from Western nations intent on colonising them, and of now being developing nations (Zafar, 2007). Although this status is contested by some Western critics and even the WTO (Harpaz, 2007), both the International Monetary Fund (IMF) and the World Bank are in agreement about China’s emerging or lower middle income status relative to the size of its population. China has continued to classify itself as a “South” country too, and negotiates with African governments and the African Union (AU) from the perspective of being a still-developing country, in spite of its incredibly fast-growing economy. China does seem to be content to straddle both lines here, choosing to play both the developed country card (such as when wielding power in NATO and UN talks) and the under-developed country card (such as when negotiating African agreements) when it suits her.

While many of the large financial investments that China has made in Africa have had undeniably positive effects in some countries, such as by the increasing commodity prices precipitated by China’s ever-growing demand for the raw materials which abound in Africa (Kaplinsky and Morris, 2012; Mawdsley, 2007), there has been concern about local African markets simply not being able to meet the same prices for products for locally-produced goods as Chinese-exported ones because of less-efficient labour and misplaced claims of the ever-increasing number of Chinese workers in Africa (Bräutigam, 2011a).

Another concern, particularly of African civil-society movements, is that of the protection of human rights and the need for democratic governance. There are reports of human rights abuses of Afr...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• List of Figures and Tables
• Notes on Contributors
• List of Acronyms
• Introduction From “Politics in Command” to “Economics in Command”: China-Africa Relations in an Era of Great Transformations
• 1 Beyond Debating the Differences: China’s Aid and Trade in Africa
• 2 Chinese Normative Communities of Practice: Comparative Study of China’s Relational Governance of Africa and Central Asia
• 3 Greening Chinese-African Relations?
• 4 Capitalist or Villain: Chinese SOEs in Africa
• 5 Europe and China in Sub-Saharan Africa: Which Opportunities for Whom?
• 6 Indian and Chinese Soft Power in Africa
• 7 Geopolitics, Transnational Spaces and Development: Reflections on the Involvement of the US and China in Somalia
• 8 China and Brazil’s ECA Activity: The Case of Angola
• 9 South Africa’s Accession to the BRICS: Towards the 2013 Summit
• Index