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China in Africa

Zed Books Ltd

China's new foreign policy towards Africa

China's growing public presence in Africa has captured the world's imagination. The recent foray of Beijing, once a fervent participant in the cold war in Africa, into the continent has been characterized not by ideological considerations but by a singular focus on resource acquisition and commercial opportunism. Two-way trade, which stood at less than US$10 billion in 2000, had surged to over US$50 billion by the end of 2006, making China the continent's third-largest trading partner after the United States and France. In the same period China's share of Africa's exports jumped from 2.6 to over 9.3 per cent and it has become the leading trading partner for several of the continent's commodity-based economies. Nothing symbolized Africa's importance to the Chinese economy so succinctly as Angola becoming China's largest foreign supplier of oil, passing Saudi Arabia in 2006. Africa has featured prominently on the Chinese diplomatic circuit, benefiting from no fewer than five major tours between 2005 and 2007 by Chinese leaders, as well as a heads-of-state summit in Beijing in November 2006. And while a decade ago there was little evidence of China in Africa, today there are hundreds of major Chinese businesses, bolstered by tens of thousands of Chinese labourers, retailers and even tourists.

At the core of China's rapid entry into African markets is its deliberate promotion of a foreign policy of 'no political strings' which, when coupled with Beijing's willingness to provide aid and concessionary loans, has proved to be tremendously appealing to African leaders. Capital-rich, technologically proven and harbouring a sense of political entitlement, China has embarked on a global search for untapped resources, new markets and reliable diplomatic partners in which Africa features prominently. And while African resources are vital to the health of the Chinese economy, the continent also occupies an important place in China's global ambitions as well. China's emergence as a key player in Africa, the impact of its presence and its challenges to traditional Western pre-eminence in African economies all form critical components of this dynamic new relationship.

This chapter will investigate Chinese foreign policy towards Africa by, first, examining the drivers and instruments of China's contemporary engagement with the continent as well as the wider context within which its Africa policy has developed. Second, the chapter will focus on the key structure and institutions involved in shaping China's Africa policy. Third, it will assess the ideological sources of China's contemporary involvement, including the role of history in constructing a foreign policy that would appeal to both African needs and interests. Finally, it will conclude with a preliminary analysis of the impact of China's foray into Africa among African elites.

The development of China's foreign policy towards Africa

Though the official rhetoric of continuity speaks otherwise, the fact is that from the opening of official ties with Egypt in 1956, China's engagement with Africa has been episodic, shifting from periods of intense activity in the 1960s and early 1970s to outright neglect for much of the 1980s. To understand the changing dynamics in China's approach to Africa, it is necessary to place it in the context of Chinese foreign policy from the inception of the Communist Party government in 1949 to the rediscovery of Africa in the contemporary period.

Since the founding of the People's Republic of China, the leadership has wrestled with the dilemmas posed by a need to restore the country to its historical standing as a leading power against the backdrop of its own considerable development challenges. Caught between its aspirations and the realities of technological backwardness and poverty, the new government sought to carve out a position as the world's leading developing country within the context of the dismantling of European empires under the shadow of its own alliance with the Soviet Union. As relations with the post-Stalin Soviet Union deteriorated, China's claims to Third World leadership – manifested in Mao Zedong's 'Three Worlds' policy – put it at the forefront of ideological and military support for revolutionary regimes and anti-colonial struggles. Notably, this claim to leadership was not exercised through engagement with the standard bevy of Third World organizations such as the Non-Aligned Movement, but 'at an aloof distance'. This period of support for revolutionary change in the Third World was followed by the self-imposed isolation of the Cultural Revolution. Relations with far-flung areas like Africa were severely curtailed as the Chinese political system turned on itself in a struggle for both the leadership of the country and the economic direction that it should ultimately take.

In 1978 the new leader, Deng Xiaoping, set China on a gradualist road of capitalist-oriented development that produced three decades of nearly double-digit growth and a rising in living standards that has brought a ninefold increase in per capita income to US$1,700 in 2005. In the course of this phenomenal economic growth, the number of those suffering poverty in China was reduced from 280 million in 1978 to 140 million in 2004. Bolstering Deng's foreign policy was, with the notable exception of the contentious issue of Taiwan, a benign relationship with the United States and a welcoming approach to foreign direct investment (FDI). The shock of the emergence of a nascent democracy movement and the subsequent crackdown in Tiananmen Square in 1989 instigated a debate within the Communist Party as to the direction the country should take, a situation that was resolved only with Deng's 'Southern Trip' in 1991. Deng's recommitment to transforming the economy was coupled to an admonition on the best approach to foreign policy: 'Observe calmly, secure our position. Hide our capabilities and bide our time. Be good at maintaining a low profile, never claim leadership.' This became the new watchword for Chinese foreign policy, helping the country to weather the international firestorm of criticism in the aftermath of Tiananmen and reasserting its standing as a leading foreign investment haven. China's emerging capitalist economy (or, as the official jargon preferred to call it, 'socialism with Chinese characteristics') moved into higher gear as the reforms were extended to other regions. Running alongside this renewed commitment were considerable developmental challenges arising out of the torrid streak of economic growth, from increasing inequality between the prosperous coastal belt and the interior to the decrepit condition of the loss-making State Owned Enterprise system. In particular, the certainties of self-sufficiency – a central pillar of Chinese policy since 1949 – in a host of areas vital to development such as energy, strategic minerals, forestry resources and even food production no longer could be maintained. Even the famous Daqing oilfields, whose discovery and exploitation had inspired ideological campaigns in the 1960s, were beginning to run low under the combined weight of accelerating Chinese needs, technological shortfalls and general mismanagement. At the same time, China's economic development had begun to produce significant foreign currency reserves and, tied to their growing technical and managerial expertise, the possibility arose that Chinese themselves would be able to address these resource deficiencies. The situation was ripe for outreach to a new source of energy and natural resources – Africa.

Chinese engagement, African resources and new markets For Africa, China's transition from an oil exporter to an oil importer in 1993 was a significant milestone in its development. Chinese officials recognized that, in order to maintain the roaring pace of its economy, the country would need to have secure sources of energy as well as other critical resources. China's current strategy of engaging developing countries and locking in their resources through government-to-government agreements is an outgrowth of this recognition, coupled with their appreciation of the dangers of political instability from Middle Eastern sources. It is for this reason, inspired primarily by the American-led military intervention and occupation of Iraq in 2003 as well as the serious disputes over Iran's nuclear programme, that Africa is in the process of assuming greater prominence in China's global strategic calculus. Already, over 31 per cent of all of China's oil requirements are sourced from Africa, and that is set to expand further with the purchase of significant stakes in Nigeria's delta region.

Africa's relatively unexploited energy sources, timber, agriculture and fisheries offer the Chinese a unique opportunity to lock in through formal or informal means a steady supply of key resources. Big projects, such as the investment in Sudan's oil industry from 1996 onwards, whereby the China National Petroleum Corporation has transformed an energy sector plagued by war and Western sanctions into the country's leading export (with China as its top destination, providing nearly 10 per cent of its oil requirements), are clearly at the forefront of China's interests in Africa. With a 40 per cent share of the Sudanese government's Greater Nile Petroleum Corporation, China's leading oil multinational has demonstrated its ability to manage all facets of a petroleum extraction operation to international industry standards. Indeed, industry analysts have pointed out that PetroChina's position in Sudan has served as an important platform for attracting the interests of oil-rich countries in both Africa and the Middle East. Equivalent investments, if not as significant to Chinese domestic consumption, have been made by Chinese multinationals in Nigeria, Angola and Gabon, as well as purchases of shares in Algeria's natural gas fields. Linked to these investments are projects aimed at improving the physical infrastructure of these countries, especially roads and port facilities, which enhance the attractiveness of Chinese ventures to African governments as well as improving the export efficiency of these enterprises. Here Chinese companies have often successfully outbid their Western counterparts (as well as those of other developing countries such as India, Brazil and South Africa) through the traditional strategies of linking investment to tie-in projects and providing lower labour costs in the form of less costly managerial staff and by introducing their own contract workers.

Energy resources are the most important focus of China's involvement on the continent, and occupy the bulk of the thrust of its investment and diplomacy, but other forms of resource-based commercial engagement with Africa play an important part in shaping trade and investment ties, among these commercial logging in Equatorial Guinea and Liberia, cotton and sisal plantation agriculture in Tanzania, the rehabilitation of transport infrastructure in Botswana, new investments in textile manufacturing in Zambia and Kenya and the installation of sophisticated telecommunications systems in Djibouti and Namibia. Some of these ventures are promoted and managed not by high-profile Chinese multinationals but by small and medium enterprises. For example, in China's third-largest trading partner in Africa, Nigeria, non-oil exports topped US$500 million in 2004 based on the sale of agricultural products such as cotton and timber products, both of which involve Chinese companies or joint ventures. Chinese construction firms have played an increasingly prominent role in infrastructure development in all corners of Africa, often gaining a foothold in local markets through close bidding on Chinese government-sponsored projects. The Chinese government has established eleven Trade Promotion Centres around the continent and Chinese businesses are actively encouraged to see Africa as a trade and investment destination. Over 800 Chinese companies are doing business in 49 African countries, with 480 involved in joint ventures with African firms. Thousands of Chinese retail trading shops are now strung across much of the continent, selling low-cost and low-value products made in China directly to Africa's rural population. The product of individual entrepreneurship, these shops are generally family owned and staffed and rely upon a supply chain stretching back to Hong Kong and the mainland. Criminal gangs from Hong Kong have moved into Africa as well, joining other unscrupulous traders who use front companies to illegally export everything from timber, diamonds and products based on endangered wildlife back to China.

The result of all this economic activity is a sharp increase in trade between the two regions. Total trade between China and Africa stood at US$10 billion in 2000, rising to US$18 billion in 2003 and exceeding US$50 billion in 2006. Moreover, Chinese investment in energy resources has played a key role in propelling African growth figures into an annualized rate of over 5 per cent in 2005. While oil is the top item imported from Africa, hardwood timber occupies the second spot, with Liberia, Gabon and Equatorial Guinea serving as leading exporters and though oil-rich Angola has become China's top trading partner in Africa, supplying 18 per cent of its total imports of petroleum, even countries like Ethiopia, with only limited natural resources, have seen their trade with China double from US$150 million in 2003 to US$300 million in 2005. In the course of this dynamic development, China has become the continent's third-largest trading partner after the United States and France and a leading investor, topping US$15 billion in 2004 alone. At the same time, substantial trade deficits with China characterize all but a few countries, such as Angola, Gabon and Zambia, whose escalating resource trade with China offsets the uninterrupted flow of imports of Chinese-manufactured products.

History and solidarity in the forging of China's Africa policy

Since the Chinese leader, Jiang Zemin, visited the African continent in 1996 and officially set relations on a non-ideological footing with an emphasis on resource acquisition, the challenge of Chinese foreign policy towards Africa has been to frame this new approach in terms that would appeal to sceptical African governments. In their favour, in contrast to Western countries, was a solid record of support for independence (though one blemished by occasionally backing the 'wrong' liberation movement, as in Angola and South Africa). Moreover, though acknowledged as small in overall quantity, China's construction of the TanZam railway and the role of barefoot doctors and agricultural specialists in West Africa were remembered positively in Africa. The last challenge facing the Chinese government was to communicate the fact of China's rise as a major economic power and the accompanying capacity of its emergent multinational corporations to compete successfully with long-established Western partners.

Four quotations capture the Chinese government's attempt to construct a relationship with African states, which is founded on a mutual development agenda, shared values and, in the global context, a common analysis of threat. Drawing from public statements on China-Africa relations made by Chinese officials over the past decade, the Policy White Paper declares: 'Sincerity, equality and mutual benefit; solidarity and common development: these are the principles guiding China-Africa exchange and co-operation.' Coupled with this is Premier Wen Jiabao's declaration that 'We do offer our assistance [to Africa] with the deepest sincerity and without any political conditions.'

The emphasis on self-interest mingled with shared experiences and developmental aims is seen to be the 'common project' that encapsulates the rationale for a renewed engagement between China and Africa. A leading Chinese scholar on African affairs, He Wenping, adds, 'Common sense about human rights and sovereignty is only one of the common values shared by China and Africa.' This suggests that the Chinese government sees an abiding cultural as well as political context, born of a common historical experience of the international system felt both by Chinese and Africans, for interpreting the relationship between individuals and the state.

And finally Wen Jiabao, the Chinese premier, stated at the China Africa Cooperation Forum in Addis Ababa in 2003 that the broader global strategic purpose of forging closer ties with Africa was to counter Western dominance. He said pointedly, 'Hegemony is raising its ugly head.' This position certainly resonates with many African elites, for whom the unadulterated use of conditionalities by Western donors has been seen as a threat to their own position.

These fundamental principles form the basis of the new terms of engagement as expressed by China. As presented, however, they still did not address what is an unprecedented and concerted surge of investment, political ties and migration by Chinese interests into Africa. For this, the authorities in Beijing turned to the historical past for inspiration.

Remembrance of things past As Beijing is adamant in pointing out, China's contemporary engagement with Africa is not 'new' but in fact has its roots in policies pursued since the mid-1950s as well as earlier historical precedents. Africa in the cold war era was seen primarily by Chinese leaders as a terrain for ideological competition with the Soviet Union and the United States, as well as the remaining European influences. This took the form of Chinese diplomatic and military support in southern Africa, for example, for liberation movements that were ideologically committed to Maoist China as opposed to the Soviet Union. Moreover, Chinese officials recognized that, with their numerical advantage in the General Assembly and anti-colonial perspective, independent African states held the key to removing the Republic of China from its official status as occupant of the coveted permanent seat on the UN Security Council.

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Excerpted from China in Africa by Chris Alden. Copyright © 2007 Chris Alden. Excerpted by permission of Zed Books Ltd.
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