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Does crisis give China new opportunity in Africa?

October 8, 2008

chinese-workers-in-kenya.jpgWith the West reeling from the financial crisis and pulling back some of its investment in Africa, could China step into the breach and expand its footprint on the continent - a presence that already worries Western powers?

On the face of it, China, which is relatively unscathed by the crisis, has a golden opportunity to exploit Western disarray and increase its financial and political penetration of the continent. Already there are signs that Africans are starting to look away from the West and towards other emerging markets, especially China, as they watch the banking chaos in the traditional capitalist markets.

This could have a lasting impact on Africa’s perceptions of East and West as they see Asian financial structures surviving better than those in Europe and America.

China’s economy is still robust, despite the turmoil elsewhere, with GDP growth this year expected to reach 8.5 to 9 percent. Its thirst for African commodities, especially oil, is unabated to fuel Beijing’s rapid industrialisation drive. Western governments and aid groups accuse Beijing of turning a blind eye to misrule, corruption and human rights abuses as it invests in Africa, including in controversial countries like Sudan, whose Darfur region is suffering a deep humanitarian crisis. But many Africans welcome China’s refusal to interfere in political issues, in contrast to Western attitudes.

Experts say it is questionable whether China has the capacity to get more deeply involved in Africa economically because of its existing huge exposure and the diversification of investment on the continent to include other emerging market countries like Brazil, India and Russia. Not to mention the huge petrodollar funds of Gulf states. They say that in any case economic contagion will reach China which has vital export links with the West. 

But will the spectacle of the Western capitalist system in disarray push African countries to look even more towards the East, finally breaking their strong ties with former colonial powers in Europe and with the United States. What do you think?

Comments

China would always be welcome to Africa, African growth was a myth but has become a reality due to Chinese engagement. We welcome equal partnership and not conditional and unfair trade practices. Aid is destructive and encourages reliance.

Posted by Nduka Tolefe | Report as abusive
 

It is understandable that China invests so many money in Africa.African countries and China exchange commodities they hold for ones they don’t have,.They are normal international trade .

Posted by Yue Chengyi | Report as abusive
 

It is just plain churlish not to accept the Chinese re entry [There is c16th Chinese porcelain at Fort Jesus in Mombasa] onto the Continent. The Chinese made the demand equation more balanced and by committing to term contracts they unleashed investment and a more competitive environment for Africa. There is no doubt that China and its companies will take the long view and use this as an ideal opportunity to leverage the relationship.

Aly-Khan Satchu
http://www.rich.co.ke

 

The African continent had been potrayed as a basket case by the Western media who were happy with our corrupt leaders stashing away their ill gotten loot in their banks, Africa wants fairness and non conditional trade, China has shown that it is very capable of being a very balanced partner irrespective of what the biased media says, Africa is experiencing progress on all fronts and this is as a result of multipolar world.

Posted by Nduka Tolefe | Report as abusive
 

It is natural for China to penetrate Africa. They are not invading,like the Europeans, they are not looking for servants like the US, they are doing business with the intention of improving economically and socialy both China an Africa.

Posted by Remy del Coro | Report as abusive
 

The growth of Chinese economic engagement with the African continent will be similar to that of the West’s economic activity which extracts raw materials and exports them. The rich resources that the African soil and earth provide will continue to be exported for the growth of other countries (namely China) and the general population will not benefit from these resources. Foreign Direct Investment (FDI) is badly needed in the region however the way China is going about its economic practices ensures that (relative) equal distribution of wealth and enhancing social conditions will not be figments of its model. Building further on the economic model that the West setup will not give Africa an advantageous edge in the world or enhance its development.

Posted by stephan | Report as abusive
 

stay

Posted by stephan | Report as abusive
 

A bigger issue is the development of Africa. Much of Africa is in poverty and many places do not have access to clean water, education, and health services just to name a few.
Little things can make big changes. Visit http://drink1give10.com/

Volvic and Unicef are working together to provide 10 liters of clean water to Ethiopia for every 1 liter sold!

Posted by Jennifer | Report as abusive
 

To Jenifer and Stephan, the Chinese are buying raw materials but they are also investing in industry and infrastructure, don’t mix unfair European trade practices with a mutually beneficial Chinese trade, to Jenifer, Africa does have drinking water, Africa is not a country but a continent. Your Aid agencies in the West are always asking for donations and only a very small faction of these donations reach their intended recipients,have you ever been to Africa to know that they don’t have drinking water, you latch onto lies and innuendo, then open your mouth without engaging your brain.

Posted by Nduka Tolefe | Report as abusive
 

it seems to me that there is a fact that is unknown to many people, so let me let you in on a sectret. If most countries were to develop (Africa, Asia and Latin America) we would need resources equivalant to three worlds. This is simply not possible and sooner rather that later things could get very nasty.

Posted by peter | Report as abusive
 

We will regret it, Africa’s corrupt leaders love the no-strings-attached attitude of China who in turn likes to be left alone. Common guys, what the hell is China doing in Sudan? What about Congo? Don’t pretend you don’t know! You think they like our dark skin – they are amongst the most racist of all peoples against Africans, but Africa is useful to them in terms of cheap labour and minerals and other resources. China IS the new invasion and we will regret it – but by that time it’ll be too late to do anything about it. Africa doesn’t have any policy about how to manage Chinese investment on the Continent, we’re divided as usual. Meanwhile China has a very strong and coordinated policy for Africa. Sometimes I think we deserve the short end of the stick, we keep grabbing it!

Posted by Pk | Report as abusive
 

Pk, Cmon.

If you say that every country that tries to trade with you is invading you, you’ll never get anywhere. Should you be vigilant and protect the interest of your people? Yes.
African leaders should think carefully in the years to come, they should only engage in trade where there is mutual benefit. It should make use of up-coming economies to drive prices of commodities up and lower supply if needed, they should withstand foreign pressures as in the long term that’s the only way they’ll benefit.

They need to establish an effective and realistic solution to deal with the debt crisis through which they are controlled, and they should stop taking aid as soon as possible. African countries need to start trading with each other and increase trade with Asia, Russia, Latin America and the Arab peninsula.

Above all there is defenitly and new scramble for Africa. Howeverthis time it’s different, this time Africa can and (i hope) will benefit.This time Africa must work together and start learning how to play it’s cards!!!

P.S: Don’t get me wrong democracy is a great thing. But it is a bit hypocritical that most democratically elected governments in Africa are controlled by (mainly) the west through aid and trade and forced to make decisions that would adversily affect their people. for example cut public spending, cut imports increase exports, its a very sad case. That’s not very democratic, or is it?…

Posted by peter | Report as abusive
 

The Chinese involvement in Africa is set to grow fast and they could easily move into the openings that are left by the West. We have already seen several trends, including Chinese investments into banks here, such as $5.5 bn to get into Stanbic’s 18 country African network, and significant other banking expansion. Chinese are heavily into the construction industry, and now competing for international contracts as well as the Chinese ones. (These points are not mine, but from a seminar by the SA Institute of International Affairs, see for instance http://allafrica.com/stories/20080929008 6.html). One figure for Chinese immigrants to Africa was three-quarters of a million, but maybe the real figures are different.

The important issue is how well will Africa manage this engagement, and in whose interest? Whether aid, trade or investment, the benefits to Africans depend on their negotiation and management skills, irrespective of whether it comes from West or East. If aid projects are irrelevant, one could always send them away. Similarly contractors can do a good job or a lousy one depending on how well they are policed. Nobody needs to expect handouts, we are all people and should sit at the same table. Maybe if Africa concentrated on building more intra-regional trade, it would feel more confident in dealing with old and new “superpowers”.

 

China’s engagement with Africa is greatest thing that has ever happened to our various nations. With Chinese engagement, African nations now have the opportunity to cut business deals that will benefit their people. This was never possible in our master and servant relationship with USA and European nations(Africa’s erstwhile colonial plunderers and oppressors).
In exchange for our resources to fuel her roaring economy, China has granted relatively fair trade concessions, invested massively in african infrastructure- schools, power stations, railway systems, highways, hospitals,etc. In Ghana, the chinese are partly funding and building 400 megawatt-power station worth 600 million dollars in exchange for 38,000 tonnes of Ghanaian cocoa. Unlike the americans who invest mainly in oil, the Chinese are not limited to natural resources. They also invest in other sectors such as IT, Banks, real estate, etc. According to UN Conference for Trade and Development (UNTAD), Chinese investment in the continent by 2005 stood at 1.6 billion dollars. Thanks to favourable tax-free agreements, trade between Africa and China is growing at 50% annually. This has led to a 400% growth from 2002 to 2005 and this follows 700% growth in the decade of the 1990s, and this is poised to continue. China has surpassed Britain in terms of trade and is poised to surpass the U.S. and France in 2010. Trade between the continent and China are mutually beneficial since it is churning out goods which are increasingly affordable to Africans and indeed, ordinary chinese people as well. In the long term, technology transfer may turn out to be the greatest gain Africa has accrued from its relationship with China because Chinese companies-unlike their western counterparts- are usually happy to include exchange of technical know-how in many of their business deals. A good example is the technical partnerships forged between Chinese firms and some entrepreneurs in the industrial clusters of Eastern Nigeria.

Posted by chimaoge okezue | Report as abusive
 

Western media love complain about China’s penchant for cutting business deals with African states without demanding “democracy” and “human rights.”, and how the West’s engagement with Africa was “wonderful” because Western nations lecture “human rights” and “democracy” to African nations.
Now I must say that Western media is OSTENSIBLY right in their observations of Chinese “methods” in Africa.
I use the term, “ostensibly”, because I know that human rights and democracy has nothing to do with Western concerns about China’s involvement in what was once the West’s “undisputed back-yard” since USSR stiffened in 1991. Despite my reservations about political oppression in China, I respect the Chinese for their non-hypocritical approach to issues unlike the double-speaking Westerners. China is transparently a totalitarian state and therefore cannot preach “democracy” or “human rights” to any African State. Any attempt by the Chinese to preach these two wonderful concepts will be regarded as hypocrisy and the Chinese have no wish to be branded hypocrites. China’s communist regime has always held the view that “economic prosperity of peoples is more important than democracy and human rights” and has steadfastly held to that opinion since 1949. Despite this arguable opinion, they (the chinese) have never tried to impose their views on any other nation. They are in Africa for business,period!
Now, Western nations and their media like to boast about exporting “democracy” and “human rights”, but conveniently forget that they only preach these two wonderful concepts when it suits their purpose. US and European government officials are never tired of stressing human rights and democracy in the world while they hypocritically prop pro-Western dictators in various countries across the world. Western love for democracy and human rights did not prevent Western overthrow of radical democratic governments in Latin America and D.R.Congo. Democracy and Human Rights, did not stop US government from supporting the botched coup attempt against the democratically elected Venezuelan government in 2002. These principles have woefully to persuade America to withdraw support from corrupt Gulf Arab dictators. For 4 years, these cherished Western principles of democracy and human rights failed to stop US and UK support for the brutal regime of Islam Kamirov in Uzbekistan. In fact, it was the embarassing revelations of the now sacked British Ambassador to Uzbekistan not the cherised principles that finally forced USA to speak out against Kamirov’s love of immensing dissidents in vast tanks of boiling hot water.
Western government officials condemn Mugabe regime, but are in love with the far more brutal dictator of Equitorial Guinea. Within the space of a few days, Gordon Brown (the British PM) rolled out the red carpet for Saudi Royalist dictator King Abdallah who loves buying British weapons worth about 5.4 billion dollars and then boycotted Africa-EU summit because the Zimbabwean ruler was attending. Gordon claimed human right abuses in Zimbabwe as the reason for the boycott. Apparently in Gordon Brown’s reckoning, King Abdallah was a democrat and there was no need for the UK to urge the King to respect human rights of Saudis (especially women) before the 5.4 billion dollar deal to buy British military arsenal was signed. But Mugabe who made the unforgiveable “mistake” of not limiting his brutality to only Black Zimbaweans is an “evil autocrat” not worthy of sharing a multilateral trade summit table with an Honourable British Prime Minister.

Posted by chimaoge okezue | Report as abusive
 

Africa-China trade benefits both parties. China get material it wants, Africa get fair price for those material plus hardwares like roads, railways, hospitals, schools, power plants and civic buildings. These hardwares will enable Africans to develop their countries themselves so they don’t have to depends on the mercy of other countries’ so-called aids.

With China on the table, African countries now have a big bargain chip and can demand other countries play more fair and to pay more for their resources.

win-win for both side.

Posted by Tom | Report as abusive
 

Hey People, ever wonder why china is interested in Africa ?? 2 things..profit and counter western influence.
Corrupt politicians like chineese not because china doesn’t enter in to African politics..but china supplies ships filled with weapons to corrupt leaders and criminal organisations.Chineese companies are poison coming to africa with sugar coating.Just remember they make more profit than africans do.

Posted by Om | Report as abusive
 

China could not care less about the people of Africa…China has a huge population to take care of and Africa is easy pickings.

Posted by oldewok | Report as abusive
 

Om,
Your post reeks of Western propaganda

Posted by chimaoge okezue | Report as abusive
 

With the West’s attention somewhere else China is definitely going to expand its influence in Africa. If China is not bothered about human rights, corruption, etc. – and most people would agree on that – then surely if follows that the ordinary African would not get the maximum benefit from present or future (increased) China – Africa trade.

By propping up Africa’s corrupt and oppressive regimes, how can that possibly benefit our people? It brings no comfort to me to know that Chinese government abuses its the same Africa’s dictator abuse us.

Posted by Wilbert Mukori | Report as abusive
 

I urge prominent leaders of the continent to engage more carefully with the new giant from the East as Africa relations with China is very promising and could prove to have great potential in the near future. Amidst the global financial crisis and consequent shakeup of markets, Africa, whose resources range far beyond any other continent, has an advantage to prosper after this financial storm. The Chinese have understand and known of this potential for centuries, and even though their motives are more suited to further their own’s country development, the leaders of Africa’s communities must establish or broker meticulous deals to ensure that Chinese prospects in Africa are mutually beneficial.

It can work. We must strive toward this new development with confidence and care.

Posted by OMARI JABARI | Report as abusive
 

Wilbert Mukori, China cannot be A trading partner and ruler of Africa at the same time, over the years we have had western involvement and dictators flourished. Mugabe was Thatcher’s darling before he went into flip mode, Mobutu was a Belgian darling,Taylor was an American friend(who conveniently escaped from a USA prison),Biya and Bongo were French darlings, . Stop kidding yourself, a lot of dictators were close to western governments because they were doing their bidding, sanctions or conditions never got rid of any dictator. China is not responsible for human rights abuses in Africa, ONLY Africans can get rid of their dictators, neither the West nor China can do that for us, so your notion that the Chinese are propping up dictators is very naive and deluding. Europe and America had a bloody history before they got it right and Africa has gotten through it own and is now on the path to development in partnership with China.

Posted by Nduka Tolefe | Report as abusive
 

What a wonderful discussion here.

Our African friends perhaps know very well that the most evil thing the West media has done to Africa is to portrait Africa as a hopeless continent. Its purpose is to destroy the African people’s self-belief so that the West can behave like angles, god and masters.

So does the West media portrait China as a totalitarian country with terrible human rights problems. Friends, do not trust the West media’s rubbish. China treats Africa as friends who have suffered the same in the past, have the same desire to develop, and deserve the same bright future.

Of course China benefits from the trade with Africa. The key issue is that whether such trade is mutual beneficial and good for the long-term interest for future development. The old Chinese wisdom is that a business is a good one only if it serves all parties good.

Posted by Shi | Report as abusive
 

Wilbert Mukori has insight and unfortunately is probably right.

I think, China will do well in Africa because they are very pragmatic and understand long term goals. They are now in a position to achieve these goals because they do not intefere with the politics of countries where they are involved. eg Sudan, Zimbabwe

The west should learn from China and take the same approach. Then they don’t have to worry about being called colonialists etc and should shed all their old values. So western countries, duplicate what appears to be a succesful model or perish.

Posted by buffalojump | Report as abusive
 

http://tia-mysoa.blogspot.com/2010/07/on going-slaughter-of-rhino-and-elephant.ht ml

This is what China is doing to Africa.
They eat it clear from any animal they can get their hands on.

Posted by Fabia | Report as abusive
 

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