China and Africa grosso modo are often seen as standing at two ends of the spectrum of developing countries, the former having acquired enormous industrial capacity in short order, and the latter not. In this view, a great potential for exchange exists between the two: manufactures and infrastructur
China and Africa grosso modo are often seen as standing at two ends of the spectrum of developing countries, the former having acquired enormous industrial capacity in short order, and the latter not. In this view, a great potential for exchange exists between the two: manufactures and infrastructure in exchange for raw materials. Certainly the two do not exist in a vacuum; to think about how this potential may be realized in the coming decades, it is useful to think about them in the larger international arena.
An ideological axiom stands at the starting point of any such review: China and the African countries have a shared history of anti-colonialism, the iconic moment of which was the Afro-Asian Bandung Conference of 1955, which included China to force international recognition of the People’s Republic. Across Africa, as in parts of the Middle East, China has often been seen as an all-weather friend, having maintained hospitals and road construction crews with expatriate Chinese staff in countries of these regions for decades. America, in contrast, comes when it needs you, and then disappears, they say. Can China and Africa deepen relations as if the West does not exist? The extent to which they can do so is a cause of anxiety in Western capitals, especially Washington.
In the nineteenth century, Africa presented few states strong enough to resist the Western states with their newly organized nations, industrial economies and militaries. There were hardly any African states capable of imposing terms or even playing European powers off each other. As a consequence, Europeans were able to gang up, or agree to disagree, in carving the continent up in the “scramble for Africa” without stepping on each other’s toes. The 1885 Berlin Conference formalized this European agreement. A consequence of this combined European power is the fact that Africans have made do with very unequal terms in their dealings with the West. That continues to be the case today, and sets a welcoming stage for Chinese entry into Africa.
Strangely enough, the NATO victory in oil-rich Libya has renewed fears of Western colonial ambitions in Africa. In the Libyan adventure, European leaders exhibited a startling enthusiasm for waging war for economic capture. NATO aggression in Libya may be seen as a gamble, spending a limited amount of public money (and large quantities of US ammunition) for big payoffs. Since European governments have no room for fiscal movement, having been saddled with high public debts to provide public goods to populations suffering from decades of falling real income and wealth transfer to the rich, Libya is one rare fiscal success they can point to, promising windfall profits and opportunities in the coming decades. Insofar as China continues to maintain a stance of non-interference and opposition to regime change, the African welcome will remain warm in contrast.
On the ground, the clusters of European quarters and clubs in African suburbs today have a distinctly colonial feel to someone from Asia who is familiar with similar places from home, now repopulated by the Asian nouveau riche. Western NGO employees tooling around in Toyota Land Cruisers similar to those favored by Arab sheikhs are viewed with envy as a hard-currency elite across Africa.
Across the Pacific, China and the United States are enmeshed in a nexus of manufacturing, consumer goods and debt. A dynamic has been at work creating imbalances that are well known and understood, but difficult to shift from either side. Call it an addiction. Despite the instincts of American politicians to play to the gallery, there are limits to aggressive moves against China on trade or currency issues even in a US election cycle.
In East and Southeast Asia, the US maintains an advantage over China from World War II, providing a security umbrella for South Korea, Japan, Taiwan, Malaysia, Singapore, the Philippines and Indonesia. Here, within its maritime backyard, China is very constrained, geostrategically. Attempts to redress this strategic imbalance by, for example, purchasing Unocal, the American oil company with large Southeast Asian oil holdings -- a purely economic action on the free market -- have been thwarted by Congress on political grounds. Chinese frustration has given way to aggression, for example toward its close neighbors in the South China Sea over a number of small islands in areas with potential energy deposits.
Nevertheless, and especially in relation to Southeast Asian neighbors at a further remove, such as Singapore, Malaysia and Indonesia, there is much room for the expansion of exchange, especially in commodities with elastic supply and for which there are substitutes, such as palm oil. These conditions make for a buyer’s market and put China in a position to grant favors. Reciprocally, these countries present a huge market for Chinese manufactures.
Thus China appears as a military threat to its closer maritime neighbors, but as an economic opportunity to those further away in Southeast Asia, who have little experience of aggression from a Chinese state. In fact, the opposite has obtained historically: In island Southeast Asia, China appears as a benign, distant state power, going back to the theme of Bandung, offering lots of room for mutual economic benefit. In this regard, it is striking that the overseas Chinese have remained a domestic problem within the new nations, when that problem could have been easily internationalized into a bone of contention with China. On the sidelines of Bandung, Chou En-Lai settled the issue of overseas Chinese dual nationality with the leaders of Cambodia, Thailand and Indonesia.
These two aspects of Chinese relations with Southeast Asia -- stressing economic opportunity over political dispute with more distant neighbors, and surrendering jurisdiction over Chinese overseas to foreign sovereigns in their places of domicile -- will probably bear on the evolution of Chinese relations with African states in the long run, as both state-linked Chinese firms and individual Chinese traders set up shop in Africa.
More generally, the issue for China is how to expand relations with a non-Chinese partner that benefits from being under the US security umbrella. A primary mode for such expansion is to keep it expressly within the domain of the economy. Both sides have shown themselves to be very flexible, in the interest of expanding their mutual spheres of exchange under a watchful and possibly jealous American eye. The main issue for Southeast Asians in the pursuit of this expansion is to keep their region off the table of Chinese-US rivalry, through maintaining talk shops such as ASEAN and APEC.
And here Africa is different from Southeast Asia. Africa is fast becoming a focus for US-Chinese rivalry, though not always in explicit terms. Competition is taking place over limited resources such as energy and mining, while military protection, which usually accompanies major American energy interests, has been expanding in more shadowy ways. The US has been quick to militarize perceived threats to its domination over energy resources, especially in places whose peoples are not held in high regard by the US citizenry, such as in the Arab and African lands.
Indeed, America has been heavily militarizing Africa as an easy, low-budget byproduct of its wars in the Persian Gulf and South Asia. US forces have been moving toward East Africa, by way of Yemen, Djibouti, Somalia, anti-piracy operations in the Gulf of Aden, and anti-terrorist action and regulation up and down the Swahili coast. The military jurisdiction of the US Central Command stretches across the “arc of instability” from Somalia to Kyrgyzstan, along the very axis from Africa to China.
Thus, in terms of big power rivalry, Africa presents the worst of all worlds:
Over the last decade, the US has moved rapidly to pre-position military forces in Africa. The Pentagon formed an Africa Command in 2007, and Liberia has offered to house it. The Pentagon built up its base in Djibouti for drones and other assets, and undertook anti-piracy operations in the Gulf of Aden and Arabian Sea. All these moves may be seen in light of competition with China: The US had been neglectful of Africa and is now spending a little militarily to secure its long-held advantage in the face of a seductive newcomer rival.
Given this heightened US sense of US-Chinese rivalry in Africa, what is striking is the diversity of Chinese experience and engagement in Africa, and the lack of any monolithic or unified Chinese policy on or presence in the continent.
China has not set itself up as the opposite pole to the US or Europe in Africa. Its support of the Sudanese government in Khartoum is its most active political commitment. But here China has shown flexibility, as in its willingness to deal with South Sudan as that newly independent country emerged, rather than holding the line as a partisan of its long-time partner in Khartoum.
China has gone into places that have been inaccessible or unattractive to Western oil majors due to war, as in Angola, or natural physical obstacles, as with deep drilling, heavy oil and low-value/high-cost fields. In these places, Chinese experience in “eating bitterness” in mining and low-wage labor enables them to scrape the bottom of the barrel beyond Western interest and, in some cases, build up successfully from there.
The Western model of development in Africa has always been driven by completely unequal terms of politics and trade. Africans have enjoyed little bargaining power. In practice, in both colonial and post-colonial times, this disparity has meant essentially a privatization of profits and socialization of costs, on both the African and Western sides.
On the Western side, in colonial times, it was cheap for states to provide the public goods of regime change, colonial takeover and security because of the Berlin Conference agreement, the “weapons gap” between the West and the rest, and the lack of strong states in Africa. In fact, relatively strong states could be built in Africa, for instance Muhammad Ali’s Egypt, by creating one out of an Ottoman satrapy and making it both strong with modern arms and dependent on Western credit. This model became the norm in post-colonial Africa, where loans for infrastructure were provided by Western consortia or international bodies like the World Bank, which funded infrastructure that benefited the extractive process undertaken by Western firms leading to private profits, while African populations were saddled with the obligation to pay off the public debt. This use of international agencies like the World Bank after World War II is similar to colonial arrangements of Western mutual cooperation and low cost to individual Western governments. Final costs in both periods are borne by African people in the form of a public debt. Not only is the result private profit and public cost; it is private Western profit and public African cost.
In this extreme situation, organized on the cheap by Western governments with the connivance of corrupt African state clients, it is not difficult for Chinese companies to offer better terms of politics and trade to both African peoples and governments. African governments, after all, are now subject to intense Western pressure in the name of good governance, failed states, and the right to intervene to protect peoples under threat by their own governments. And while the link between the Chinese state and state-linked companies has been loosened considerably in the past two decades, it is that arena where the maintenance of coordination between state and state-linked companies has the biggest payoff. In this sense, the opportunity presented in Africa of unequal Western terms probably strengthens the hand of Chinese policymakers who advocate strong state-corporation links.
Here, Chinese building of infrastructure and provision of soft loans, forgivable ones or outright grants has been widely used. The most dramatic example is probably Angola, where the Chinese went into a war-torn country and came out with one of their largest African oil suppliers. One question for this realm of venture is whether Chinese firms extend benefits of better terms to African populations, in addition to African state elites. They very well might, because African state elites, by being given better terms by Chinese (in comparison to being pushed into a corner by their Western counterparts), have more room to extend benefits to populations and indeed to garner greater legitimacy.
The economic cooperation extends to areas like science and education, where the Chinese state is expanding assistance in helping and educating African scientists and students in China. This activity is a long-standing one for the Chinese government, and has potential for growth as Chinese policymakers work at how to expand such progress outside of a command economy, where Chinese companies seek independence, and strain to maximize independence from and influence over Chinese state policy.
At the same time, this new situation creates opportunities for corruption in China, of Chinese corporations corrupting officials who oversee or regulate them. Here Chinese-African relations have the potential to generate disasters. The corruption of Western state-linked elites has been a constant in Western relations with Africa, revealed in 2005 in the dramatic undoing of Mark Thatcher, son of former British prime minister Margaret Thatcher, as he sought to fund the overthrow of the government in Equatorial Guinea in order to set up a new one more amenable to his business interests.
In textile manufacture, Chinese companies have been less flexible than in extraction and mining. Operating on lower margins, with less Chinese government support, they are able and willing to pack up and leave. Here, Chinese companies have been more rigid in relations with African labor, as in the case of the Tanzanian textile mill.
Chinese wholesalers and importers enter Africa on a private, family basis. They are self-funded and sell on a cash basis. This state of affairs is different from nineteenth-century developments in Southeast Asia, where British manufacturers, faced with overcapacity and a financial glut, sold on credit and thereby created a whole class of indigenous Chinese and Indian middlemen. It is also different from nineteenth- and early twentieth-century East Africa, where Bombay merchants financed Indian traders in upcountry Africa. It is more similar to West Africa, where Lebanese Shi‘a trade on a private, independent basis.
The Southeast Asian experience suggests that the Chinese government will not allow Chinese overseas to become problems between states, and will not intervene on their behalf. The Chinese traders are on their own, unlike Westerners, which is both a blessing and a disadvantage. It is a blessing overall because the lack of a special status in Africa provides room and incentive for great flexibility and development of social and cultural relations within Africa. Like areas outside of direct colonial influence in Southeast Asia such as Borneo, the east coast of Malaysia and the ports of Sumatra, such Chinese traders on their own are always vulnerable to the larger state of play domestically and internationally, and will have to live more by their wits. In the longer term, local Chinese communities may develop in Africa, as they did in Southeast Asia over centuries.
Great arbitrage opportunities exist, with profits being made by traders from both sides, from factory sourcing to importation and wholesale distribution on the China side, and wholesale to retail to consumer sales on the African side. African consumers are also able to afford desired manufactured goods, when they come at cheaper Chinese prices. The advent of Chinese consumer imports has also given rise to an outgoing African entrepreneur class, venturing to Chinese emporia in Dubai and further east to Yiwu in China with suitcases of cash.
In the short term, this consumer and trading expansion conveys new benefits to both Africans and Chinese. In the longer term, however, cheap Chinese manufactures in exchange for African raw materials threatens to repeat a nineteenth-century cycle of industrial polarization into powerful industrial countries and weak raw materials suppliers. Unlike in the nineteenth century, however, the terms of trade no longer favor industrial products over commodity inputs across the board. The expansion of the China-Africa axis of trade itself contributes to this transformation, feeding into an international situation of dynamic instability that seems ever more prone to militarization.
There is great room and need for the development of intellectual capacity to understand and inform this shifting of weights and turning of geographical axes in the world today.
