The China International Fair on Trade in Services, ending on June 1, 2012, signified yet another move forward in Sino-African relations. The week-long conference served as a platform for leaders such as Zimbabwean Prime Minister Morgan Tsvangirai to reaffirm the credibility of Chinese and African trade relations. During the event Tsvangirai stated, “I do not believe China is plundering our resources” or “robbing” the continent of its materials. Despite statements of Western condemnation of the nature of China’s engagement, plans to deepen economic ties with Africa will certainly progress, and likely in a similar manner, with the Forum of China-Africa Cooperation scheduled for July 18-19 in Beijing.
As Africa’s largest trade partner, China continues to tighten its economic grip on the continent’s raw materials, propelling resource rich regions into zones of industrial production and manufacturing. The increased presence of Chinese investment in Africa offers important potential for technology transfer, infrastructure development and an overall economic boost to the continent that has been notably stagnant in previous decades. Yet the burgeoning of Chinese ventures in some of Africa’s most volatile regions reveals a more insidious complexion, particularly as it relates to human rights standards, promoting good governance, and a broader developmental agenda. More importantly however, the prolific growth of Sino-African relations signals a significant, long-term shift in the power structures away from an Africa predominated by Western hegemony and towards economic relations devoid of colonial legacies and a liberal democraticizing project.
The lack of such characteristics has made China a heavy hitter economically, and the state’s alternative ‘no-strings-attached’ engagement approach has found fertile ground in Africa. In the last decade, China’s trade with Africa has grown at an annual rate of 28 percent. With bilateral exchange reaching $160 billion, China now receives one-third of its oil imports from Africa. This includes major petrol transactions with Angola, Sudan, the Republic of Congo, Nigeria, and Equatorial Guinea. This resource exploitation has been equally beneficial for African governments, particularly in the case of local elites. Trade relations have been supplemented by credit lines and soft loans to regimes without conditionalities or prescriptions for economic and governmental reforms. The latter strategy derives from the Communist Party of China’s apolitical foreign policy of non-interference in the domestic matters of African countries. Such a policy has enabled the government to accrue commercial interests in areas untouched by the economic reach of the West for reasons of political instability and domestic unpopularity. In this regard, China has a substantial advantage. Yet Beijing’s apolitical stance towards pariah states has had repercussions on the social developmental trajectory of African countries that could imperil trade relations in volatile regions.
Carrot and No Stick
China’s willingness to do business with some of Africa’s most nefarious leaders has undermined and in some cases reversed decades of democratic reforms. As it now surpasses the World Bank as the largest lender to the developing world, China has challenged the viability of enforcing good governance, transparency measures and human rights. China’s extensive presence in Sudan has been the most palpable example. In exchange for two-thirds of its oil, China has provided Sudan with tanks, small arms, military aircraft and more recently, debt relief totalling $70 million. More broadly, Beijing has cancelled 1.3 billion dollars in debt for 31 African countries in an effort to open the channels of trade in the areas of energy, agriculture, finance and infrastructure.
China’s diversified investments, accompanied by alms to autocratic governments such as Zimbabwe and Sudan, not only counteract IMF and World Bank anti-corruption programmes but appear to be more broadly shifting the incentive structures established for these governments. With China’s continuous need for resources, African states have found themselves little reason to adhere to the carrot and stick stratagem of the West. While international outcry over negligible human rights standards have been loud, China’s practices have had more palpable results at the regional level, particularly with the increasing frequency of Chinese nationals being kidnapped.
Such attacks provoke questions regarding the consequences of Chinese industrial procurements at the local level of these host countries. As China’s state-owned companies typically supply their own labour for infrastructure development and other projects, the African people, suffering from high levels of unemployment, in many countries, bear the brunt of this bilateral pitfall. In fact, a recent study by the UN Economic Commission for Africa showed that even with China’s investment, the continent’s economic performance has not secured unemployment reduction or is it likely to in the future. What’s more is that increased trade relations has flooded domestic African markets, replacing local goods with cheap Chinese imports that have made it impossible for local manufacturers to compete, exacerbating job loss and fostering anti-Chinese sentiments. The long-term social effects of this progression will be greatly felt. In South Africa alone, the inability of local textile companies to compete has resulted in over 120,000 jobs lost in the last five years.
The more important question that remains, is whether China can afford to continue its ‘apolitical’ policy of non-interference. Its apathetic posture to Africa’s abundant malgovernance has clearly gained clout amongst leaders, but can China withstand growing resistance from the African populace? The recent electoral success of Zambia’s new president Michael Sata was largely driven by his criticism of and response to popular dissatisfaction with Chinese investment in the country’s copper mining industry. If this becomes a trend for African voters, China may have some important lessons to learn about divorcing business from politics.