international analysis and commentary

The Chinese presence in Africa: pure economic geopolitics

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Since his election in 2013, President Xi Jinping made it clear that China would have a say in African development over the coming decades. In fact, from peace processes to infrastructures, and from security affairs to aid, China’s investments in Africa are no longer a geopolitical mystery. Western powers are worried about the long-term effect of such a grandiose strategy. The Chinese leader has offered substantial assistance to a continent that was fruitlessly turning to its usual partners for help and growth. In 2015, the world turned a blind eye to what was unmistakably an official declaration by Xi Jinping of a Chinese plan for African development that would consist in $60 billion in projects for the following years.

Chinese investments initially reached the Horn of Africa, where Beijing first helped build the necessary infrastructures for commerce, especially in Kenya. Their economic ties started as early as 2006, when former President Hu Jintao singed an oil-export agreement, thus allowing Chinese state-owned companies to penetrate the country. Then came commercial agreements. When the China National Offshore Oil Corporation (CNOOC) became a big player in the local market, the engagement went on to build ports and harbors to ship raw materials eastward and products westward. At the same time, Beijing invested in developing Nairobi’s infrastructures (railways and highways overall). It also issued loans at advantageous rates, whose conditions were better than those of the International Monetary Fund. China is supporting the Grand Ethiopian Renaissance Dam, a new hydroelectric dam in the Blue Nile that has caused international controversy and will greatly impact the geography of the region. Dozens of development projects were put in place at different times.[1]

These investments are not really mindful of regional disputes and are instead pure economic calculus. Regardless of the rising tensions between Kenya and Ethiopia, they have entered the latter with the same strength and possibly the same plan. First, the Chinese promise much-needed infrastructures, and then offer commercial treaties aimed at exploiting natural resources to the benefit of Chinese companies; at the same time, these companies find an ideal ecosystem to enter the local market (both state-owned like the massive China Railway Engineering Corporation, and private).

The nature of those investments is cynically business-to-business and informed with an overly simplified economic approach. For the Ethiopian government, Chinese support provides much sought-after legitimacy vis-à-vis its constituencies and external stakeholders; but it also ensures electricity, transport and employment opportunities for the people. It stimulates economic growth and gives credibility to promote exports to neighboring countries. China’s approach is welcome by comparison to Western aid providers who often, in exchange for their contribution, prescribe changes in the political structure.

A glaring example is the instauration of ambiguous commercial relations with Sudan. Beijing is the largest economic partner for Khartoum, and their partnership began long before the War in Darfur. Chinese sought (and found) copper, iron, cobalt, and most of all petroleum. It is no coincidence that they first helped develop proper infrastructures, notably a railway from the capital to Port Sudan, in the Red Sea. In exchange for a favorable market habitat, China has long protected Sudan in international affairs and organizations, such as the UN General Assembly (leveraging on influence and follower countries) and most of all the UN Security Council, where it vetoed many reprimenda for human rights abuse. After all, in realpolitik international organizations are nothing but arenas for economic priorities.

On top of purely economic engagements (like the ones in Niger and Nigeria for crude oil), China is also developing long-term strategies to unlock the geographical potential of the continent. One of the strongest partnerships in place is with Angola where investments are all-encompassing, and account for more than $8 billion per year – and growing. Companies benefit from advantageous bilateral trade agreements to extract raw natural materials, like cobalt, copper and manganese. At the same time, the China Railway Engineering Corporation (CREC) is building new infrastructures to get those materials out of the country: a new airport in Luanda and most of all an extensive railway from the Katanga region (in the Democratic Republic of Congo) to the Angolan shores. This project is one of the most ambitious in the world in terms of financial investment, regional impact and economic potential, and is said to challenge South African supremacy in transports in the region.[2] Some reports reveal that as many as 200,000 Chinese workers live in Angola today.

This unparalleled courtship of African governments is stark in contrast with the lack of action by Western and most of all European governments. However, the Chinese are less demanding than Europeans when it comes to the respect of human rights, or to agreeing to work standards. Officials do not ask for civic norms or respect of values, let alone compliance with the policies set forward by the International Monetary Fund or by the World Bank. This allows for speed and agility in forming win-win partnerships. African governments need Chinese money, and Chinese companies need African resources. Also, to a lesser extent and in the  shorter-term, the African people need Chinese jobs.

Western powers have failed to understand that the Chinese new deal is also benefiting the population, or at the very least instilling a positive sentiment towards Beijing for having bought a jobs and hope (although this comes at a price for work conditions and the environmental). China has managed to fill the void that the West had created in Africa, first taking their natural resources and then leaving a hole in the business and development model of the continent. Western powers shied away from Africa when they started perceiving its instability and migration flows as source of troubles for their own societies. Beijing, instead, saw in that very instability an opportunity for business.

Footnotes

[1] Austin Strange, Bradley C. Parks, Michael J. Tierney, Andreas Fuchs, Axel Dreher, and Vijaya Ramachandran. 2013. China’s Development Finance to Africa: A Media-Based Approach to Data Collection. CGD Working Paper 323. Washington DC: Center for Global Development