Africa | February 3, 2017 at 9:00 am

China’s Investment in Africa: The New Colonialism?

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Africa is no stranger to exploitation. After decades of colonial rule under major Western powers, the continent was left with a legacy of harsh, imperialist rule that set it back years in modernization. As a result, it has become the focus of mountains of developmental assistance from countries hoping to foster social, institutional, and infrastructural change, totaling over 300 billion USD since 1970 alone. This assistance was often conditional, with aid dependent on a country’s human rights track record. The West however, has ceased to be Africa’s only option when it comes to aid and development. Recently, a number of African countries have become increasingly drawn to China’s “no-strings attached” development assistance and promises of growth. While these policies certainly create economic gains for Africa, the vestiges of colonialism evident in this relationship raise questions about the true cost of realizing these benefits.

A Double Edged Sword?

Currently the continent’s largest trading partner, China relies on African markets for a steady flow of natural resources to sustain manufacturing. The African resources China imports are varied, covering everything from oil, to iron ore, timber, and copper. In exchange for broad access to resources, China exports cheap manufactured goods back to its trading partners, builds much needed infrastructure, provides foreign direct investments, and loans out billions of dollars. In 2014 alone, the value of this trade totaled over $200 billion. Furthermore, over half of China’s foreign aid is distributed in Africa.

Though advocates of this inflow of money claim it spurs development, critics of China’s policies in Africa paint a picture of trade imbalances that are handicapping the nations involved, while grossly advantaging China at the expense of the African people. These critics believe that China seeks to establish itself as a new colonial power.

Infrastructure programs funded by the Chinese government, for example, are often carried out by Chinese workers. Instead of giving local companies and citizens a vital opportunity to grow experience and capital, these contracts overwhelmingly benefit Chinese corporations and bring in massive profits. The Chinese Ministry of Commerce reported $50 billion in new contracts in 2015. The following year, the China Railway Construction Corporation (CRCC) announced over $five billion in contracts within Africa.

Chinese goods are also flooding African markets, overwhelming local producers with large volumes of cheap products that are difficult to compete with. Moreover, in industries that do employ African workers, companies are still not exempt from criticism. In 2011, Human Rights Watch released a scathing review of treatment of Zambian workers in Chinese owned copper mines, claiming unsafe working conditions, exploitative hours, and threats to those that posed complaints.

Partnership or Colonialism?

Despite criticisms of colonialism, this relationship has provided Africa with significant benefits. China, for its part, has gone out of its away to deny claims of colonial abuses. Wang Yi, China’s Foreign Minister, insisted in a 2015 tour of Kenya, that “[China] absolutely will not take the old path of Western colonists, and we absolutely will not sacrifice Africa’s ecological environment and long-term interests.”

Indeed, this relationship is not as black and white as it may first seem. Dirk Willem de Vilde, a Senior Research Fellow and head of International Economic Development at the Overseas Development Institute (ODI), told the HPR that “on all the infrastructure indicators, African countries are way behind compared to other countries. There is a huge infrastructure gap that is holding back development in many African countries at the moment.”

In an attempt to rectify this, numerous infrastructure programs funded by Chinese developmental assistance have created much needed roads, bridges, railways, schools, and hospitals that are beginning to bridge this gap. Chinese doctors played an important role in addressing the Ebola outbreak in 2015, and, despite criticisms of exploitative labor treatment, the Chinese saved mines that had been deteriorating under previous investors, which expanded facilities, rescued jobs, and created thousands of new ones. Beyond this, there has been significant investment in services and manufacturing as well.

Based on these benefits, Willem de Vilde characterizes the relationship differently than some of its critics, noting that “There is mutual interest… If there are good policies and institutions in place, [African countries] can use the investment well to grow their economies.” He does not believe that China is engaging in neocolonialism.

It is difficult to paint the relationship between China and Africa with one broad brush— Africa itself is made up of diverse countries that each strike independent deals with China and go through their own economic ups and downs. Despite this, the continent as a whole has seen positive change as a result of Chinese policies and developmental aid.

A Mutual Benefit

Africa is reaping economic benefit, but there is no doubt that China’s interest in the continent goes beyond mere altruism. Economically, both the private and public sector in China are benefiting from this developing relationship. Chinese companies get new business investments, and the country as a whole gets steady access to much needed natural resources.

Beyond these obvious gains however, China also receives a number of less easily quantifiable benefits. Yong Deng, an Associate Professor in the Department of Political Science at the United States Naval Academy in Annapolis, spoke with the HPR about these benefits, stating that, “China feels that it is entitled to a Great Power status, so maintaining that in a global world order is always a long-term foreign policy goal.” According to Deng, “In terms of great power rise… Africa carries an enormous amount of diplomatic weight in [shifting] China’s diplomatic and political influence away from U.S., Western dominated world order.”

In a move that clearly demonstrated these objectives, construction of China’s first ever overseas military base officially began on the African continent in April of 2016. Located on the coast of Djibouti, the naval base is located less than ten miles away from US AFRICOM, the United States’ largest African military base, and it offers China strategic access to the Red Sea and Indian Ocean.

China has also been using its aid strategically. While China’s aid is proportional to how poor a country is, there is a strong correlation between the amount of aid given, and the support for China’s foreign policy objectives. In fact, AidData calculates that for every 10 percent increase in voting support within the United Nations, China increases aid by an average 86 percent. This strategy is working. African countries have supported China in its foreign policy pursuits on numerous occasions. For example, in 2014, South Africa denied entry to the Dalai Llama, and in early 2016, Kenya deported 50 Taiwanese nationals to China.

Furthermore, last month, after Sao Tome and Principe broke off relations with Taiwan and re-established diplomatic ties with China, the Chinese Foreign Minister proclaimed that “China is willing to provide support to the economical and social development of Sao Tome and Principe within its capacity.” Concurrently, the Director of External Politics in Sao Tome and Principe said that the nation “hope[s] more and more Chinese interests will invest in Sao Tome and Africa.”

A Bumpy Ride

Sustaining this growth in the long run is the next big challenge. Given that much of the recent economic success has been due to Africa’s increased access to Chinese markets, as China’s economy slows, projections for African growth do as well. In 2015, Chinese imports from Africa dropped 40 percent, and price fluctuations in oil and food prices have made economic prospects grimmer than before. Successful development cannot only depend on the prosperity of foreign actors; it will require meaningful policy initiatives that focus on long-term economic sustainability.

Unfortunately, many African nations have missed a vital opportunity to enact this change while their economies were showing promising growth. Willem de Vilde commented on this, stating that, “many African countries haven’t been using that wealth that was created on the basis of natural resources for economic transformation. They haven’t really upgraded their country’s infrastructure, or skills levels to a sufficient degree.” African countries will need to “start promoting other sectors such as manufacturing or services”.

Despite this slowdown however, African nations are weathering the situation. Whether countries will begin to seize more opportunities to diversify their economies remains to be seen, but they may soon need to renegotiate trade contracts to promote more investments in energy infrastructure and manufacturing, as their long-term growth prospects will depend on it.

Moving Forward

However you characterize the relationship, there is no question that both China and African nations stand to benefit. Any drawbacks notwithstanding, there is much reason to hope for continued economic benefits to both parties, and growing infrastructural improvement throughout Africa. In 2015, China and Kenya launched a joint solar energy venture, investing in training local technicians on new technologies and expanding solar capacity. That same year, a loan package worth over $100 million was announced to support youth job training.

China’s investments have already begun to change how the West approaches development deals—causing a shift from a focus on pure lump aid to new systems like Aid for Trade, where developing countries receive focused trade capacity and infrastructure building assistance. If China is ultimately successful in bringing about a new surge in African economies, something the West has tried and failed to achieve for decades, then the global conversation on development will be rewritten. At the same time, China find itself one step closer to achieving the “Great Power” status it so longs for.

Image Source: Flickr/U.S. Department of State

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