From: wolda002@umn.edu
Date: Thu Dec 10 2009 - 22:17:06 EST
Africa is getting a better deal from Beijing
By David Pilling
Published: December 9 2009 22:14 | Last updated: December 9 2009 22:14
A few years ago, Lukas Lundin, a mining executive, rode his motorbike 8,000
miles from Cairo to Cape Town. His journey, which took just five weeks,
meandered through 10 countries, including Sudan, Ethiopia, Malawi, Zambia
and Botswana. He was amazed to discover that 85 per cent of the roads he
travelled were tarred and of high quality. Many had been built by Chinese
companies.
That was 2005. Since then, China’s interest in Africa has intensified. In
November 2006, Beijing hosted a lavish Sino-African summit at which it
promised more than 40 of the continent’s leaders a new era of
co-operation. Giant elephants and giraffes appeared on hoardings across the
capital to mark the occasion.
Beijing has offered more than long-necked symbolism. In 2006 alone, it
signed trade deals with African countries worth $60bn. Investments, which
often include a resources-for-infrastructure element, have poured in thick
and fast. China’s stock of foreign direct investment has shot well past
$120bn (€81bn, £74bn). In 2006, Angola temporarily overtook Saudi Arabia
as China’s main supplier of oil, and Africa now accounts for nearly 30
per cent of China’s oil imports.
Nor is China’s interest limited to oil and minerals. In 2007, Industrial
and Commercial Bank of China, the biggest bank in the world by deposits,
paid $5.6bn for a fifth of South Africa’s Standard Bank. Only last month,
at yet another Sino-African jamboree, this one in Egypt, Beijing pledged
$10bn of new low-cost loans to Africa. It also promised to eliminate
tariffs on 60 per cent of exports and to forgive the debt of several
countries. Trade between Africa and China has already risen spectacularly:
last year, it jumped 45 per cent to $107bn, a tenfold increase over 2000.
Beijing’s engagement with Africa has caused much hand-wringing. Western
donors decry Beijing’s supposedly scruples-free approach to investing in
countries such as Sudan. In some African countries, too, China’s growing
shadow has provoked anger. Nigerian radicals likened an attempt by the
China National Offshore Oil Corporation (CNOOC) to secure 6bn barrels of
oil to being attacked by locusts.
Such objections are overdone. They are often disingenuous. China is no
philanthropist, but its rise may still represent Africa’s best hope of
escaping poverty. In the eight years to 2007, before the financial crisis,
African countries were growing, on average, by more than 4 per cent a year,
far higher than previously. That was thanks partly to better economic
management, debt relief and increased capital flows (some from China), but
also to the higher commodity prices driven by Chinese demand. Dambisa Moyo,
the Zambian economist who riled western donors with her book Dead Aid,
says: “China’s African role is wider, more sophisticated and more
businesslike than any other country’s at any time in the postwar
period.”
Much of the criticism of China’s influence rings hollow. As Chinese –
and Japanese – officials point out, the west’s record is less than
exemplary. European contact with Africa can best be summed up as decades of
naked rapaciousness followed by a spectacularly unsuccessful attempt to
make amends. During the cold war western governments supported dictators
and kleptomaniacs across the continent, from President Mobutu Sese Seko of
what was then Zaire to Uganda’s murderous British-trained Idi Amin. More
recently, in the name of conditionality, benefactors have rammed frequently
disastrous economic fads down the throats of hapless recipients. With
donors like that, who needs enemies?
China’s pragmatism may produce better results. First, an emphasis on
infrastructure means that, even if deals are corroded by corruption, at
least the recipient country ends up with a road, port or hospital. (OK, or
perhaps a soccer stadium.) Much Asian growth, including that of China
itself, was predicated on infrastructure. Officials in Tokyo often contrast
Japan’s own business-oriented approach to south-east Asia – where
countries such as Thailand, Malaysia and Indonesia benefited greatly from
Japanese trade and investment – with dubious development strategies
pushed by the west in Africa.
Second, China’s approach is built on trade. Ms Moyo argues that genuine
business opportunity is more likely to catalyse development than
government-to-government aid that is prone to being siphoned off. Robert
Zoellick, president of the World Bank, told the FT there was Chinese
interest in helping to create low-cost manufacturing bases in Africa.
Third, and crucially, China is not alone in seeking opportunities on the
continent. As well as the west, India, Brazil and Russia are also vying for
business. That ought to give resource-rich African countries the ability to
haggle for better terms, though of course there is no guarantee that
increased funds will not simply line bigger pockets.
It would be wrong to be wide-eyed about China’s investments. Some Chinese
businesses are rightly condemned for lax safety standards and for shunning
African labour. Critics are doubtless right that Chinese money has helped
prop up unscrupulous regimes in Khartoum and Harare. Yet China is hardly
alone in dealing with thieves and villains. Whatever its side-effects, a
scramble to invest in Africa has got to be better than the European
precedent; a scramble to carve it up.
More columns at www.ft.com/davidpilling
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