China, Africa show lessons
learnt with $20 bn
pledge By Gavin du Venage
To some, China's recent pledge of US$20
billion in loans to Africa is cynical checkbook
diplomacy designed to placate increasingly noisy
criticism of its ongoing dragon safari. It more
likely represents the maturing of a relationship
for which, in its early days, neither party was
quite prepared.
The promised credit was
announced by President Hu Jintao in Beijing at the
recently concluded Forum on China-Africa
Cooperation; he also called for coordination
between the two to defend against the "bullying"
of wealthier countries.
His remarks were
juxtaposed against a more guarded tone from some
of the African attendees, who at previous summits would
have wholeheartedly
endorsed the developing relationship.
South Africa's President Jacob Zuma
probably spoke for many when, in his address to
the forum - and to President Hu, who was present -
he warned that the current commodities-heavy trade
from Africa to China, and the reverse flow of
manufactured goods, needed to change.
"Africa's commitment to China's
development has been demonstrated by the supply of
raw materials, other products, and technology
transfer," Zuma said. "As we all agree, Your
Excellency, this trade pattern is unsustainable in
the long term."
He also touched on the raw
nerve of colonialization, which continues to shape
Africa's role with the rest of the world.
"Africa's past economic experience with
Europe dictates a need to be cautious when
entering into partnerships with other economies."
He added: "We certainly are convinced that China's
intention is different to that of Europe, which to
date continues to attempt to influence African
countries for their sole benefit."
His
remarks were widely reported as a sign of a
cooling relationship, just as Hu's loan
announcement was seen as a beginning of a "charm
offensive".
The reality probably lies
somewhere in between. Trade between Africa and
China before 2000 was minimal to the point of
being non-existent. African exports to China in
2000 were less than $4 billion, according to the
Trade Law Centre in Stellenbosch, while China's
total investment in Africa was less than $500
million. In 2009, China overtook the US to become
Africa's single largest trading partner and
China's investment in the continent is now
approaching $16 billion.
Almost overnight,
African countries found themselves courted by a
power that had seemingly endless financial
resources and a disinclination to saddle
agreements with political demands. A river of
money began flowing out of Beijing and few, if
any, questions were asked by grateful African
states about long-term strategic implications.
For its part, China had to engage with a
continent of 53 countries, each with its own
political culture and at widely varying degrees of
development. It had to painstakingly set up
government-to-government institutions and lay the
groundwork for an environment in which its
companies could operate.
"It has been as
much of a learning curve for China as it has been
for us," says Matthew Macdonald, a research
analyst at The Centre for Chinese Studies at
Stellenbosch University. "People forget that China
is also a new economic power, and is learning to
wield this power as it goes along."
Once
Chinese companies began winning contracts, they
flocked to Africa in droves: more than 2,000
Chinese enterprises have invested or started
businesses across the continent. While many are
state-owned companies, the majority are not.
Regardless of their ownership, activities
of these companies reflect on China, even though
Beijing has little control over their offshore
behavior. Just as outsiders often see Africa as a
monolithic entity rather than a geographical union
of disparate countries, Chinese activities on the
continent are often viewed as being directed from
Beijing.
For the Chinese authorities,
managing its image across the breadth of Africa
has been made more complicated by the wave of
regime changes - by bullets and ballot - that have
taken place over the past few years.
"The
unspoken first rule of Chinese engagement in
Africa is not to interfere with domestic
policies," says McDonald. "The uprisings in
various countries have shown that this has its
drawbacks."
China has reportedly lost
around $4 billion in Libyan investment following
the toppling of the Gaddafi regime; it also lost
substantial oil holdings in Sudan, an important
supplier, when the south ceded to become an
independent country last year. Previously, China
had ignored Western-led sanctions on the Sudanese
government, and when the country split in two,
Beijing found itself having to deal with former
rebels-turned-government who now viewed China as a
hostile sponsor of their former oppressor.
If there's a single lesson to be drawn
from this, it's that warm government-to-government
accords cannot entirely be a substitute for public
support. China seems to be aware of this. Its
so-called charm offensive appears to be about
building its image among ordinary Africans, rather
than a public relations exercise aimed at Western
critics, or paying off African politicians.
This would explain Hu's commitment at the
forum to import more non-mining products from
Africa, as well as to invest more in African
industry. China also pledged to increase the
number of duty-free goods it will take from the
continent.
The expansion of agricultural
centers and the dispatching of doctors will also
present a different China to Africans more
accustomed to seeing Chinese people as competitors
at local markets or overseers in mines.
Such initiatives are of course also widely
used by Western non-government organizations,
particularly those with links to European or US
governments. It is not always clear how successful
they can be in respect of image building. Rock
stars Bob Geldoff and Bono, who have saved
countless lives through humanitarian campaigns
against hunger, are vilified by many African
intellectuals and leaders who accuse them of
peddling the image of Africa as a disaster zone,
keeping investors away and thus making its
problems even worse.
Still, China and the
raucous collection of African states are now
moving towards a new phase in their understanding
of each other.
"The political and economic
environment has fundamentally changed over the
past decade," Xue Lan, professor of Public Policy
and Management at Tsinghua University told a forum
at the International Development Research Center
in Canada recently. "International relations are
also going to have to change."
Gavin
du Venage is a business writer in South
Africa, specializing in commodity and investment
analysis.
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