Africa: Chinese Dollars Won’t Matter Much if…
November 4th, 2006 | Published in Africa, China | 6 Comments
“Our meeting today will go down in history; China will forever be a good friend, good partner, good brother of Africa.” The Chinese President Hu Jintao says during the opening ceremony of the three-day China-Africa summit (Nov. 4 - 6) - a much publicized event in the blogosphere and media. And there is very justification for this media blitz on this new economic Sino-African alliance; afterall, China just pledged to “double its aid to Africa and provide $5bn in loans and credits over the next three years.”
This is a sweet no-strings attached deal that will involve the exportation of African abundant natural resources to the Chinese hinterland. Already, trade between China and Africa spiked 39% to almost $40 billion last year, and just some weeks earlier, China just signed an $8 billion railway construction deal in Nigeria.
As African heads of state dine and discuss business with the Chinese, I hope they are also doing some self evaluation, particularly on two issues:
First, what provisions are in place, and will be made in the future, to trap much of the technology China has, and will be deploying to execute these business arrangements? No matter how large the influx of Sino-dollars, several African nations are not empowered, at the moment, to make much good out of the relationship. How will African nations develop its technological competence in the process? Will there be a technology transfer?
Two, the most important denominator common to majority of African nations, and which has kept them pretty much stuck in economic backwaters are lack of probity, political oppression, and weakened institutions. How will the cash influx from Beijing help improve these areas?
Afterall, the China African policy is one that focuses strictly on business, and has no room for peddling in internal politics. And If the Chinese nonchalant attitude to events in Sudan (Darfur genocide) - a country that sends 65% of its export to China - is anything to go by, then it is not inaccurate to expect a further deterioration in governance and escalation of humanitarian crises, as the Sino-African relationship gets stronger.
“China is Sudan’s largest supplier of arms, according to a former Sudan government minister. Chinese-made tanks, fighter planes, bombers, helicopters, machine guns and rocket-propelled grenades have intensified Sudan’s two-decade-old north-south civil war…”– Washington Post, Dec. 2004
Since China has made clear its intention to pursue a non-discriminatory agenda in Africa, a “slash and run” business model that it can ably finance with some trillion dollar foreign reserve. And this is not far from the brotherly gesture, the Chinese president stated or alluded to in his statement above. So, it is up to the respective African head of state and local opinion leaders to ensure that whatever accrues from this economic relationship with China is trapped and sunk into building a freer, an economically stronger, and a more prosperous nation.
Can our leaders do this for us? For this is all we need and want as Africans.
Chippla’s Weblog and Jewels in the Jungle present additonal input on the China-Africa summit/trade and speak to several of the issues raised in this post.
November 4th, 2006 at 11:20 pm (#)
For every intent and purpose, the new China Afican Policy, has all the semblance of colonialism. The first wave of colonialism wasn’t entirely evil. Yes, they messed up the geopolitics of the continent, but they also built infrastructure and empowered the locals to the extent possible.
Though the Chinese have maintained they do not what any of the internal politics stuff, their not getting involved in internal politics of their trade partners, is as evil as politics of the first colonisers who truncated the natural sociopolitical growth of African nations.
How can Red Dragon justify trading with a nation whose maniacal head of state kills and maims indiscriminately in the name of war?
How can China continues doing business with a nation when the bulk of the cash that accrues from such trade ends up in the pocket of its kleptomaniac head of state?
To remain silent in the face of evil is evil. It’s even more evil since China benefits immersely by being and remaining silent!
November 5th, 2006 at 11:48 am (#)
Dayo is correct, except for colonization. I think the word is being used emotionally, and not by its definition.
China’s policies are amoral. They believe in “socialism in one state”. They are completely only interested in strengthening their own territory. Still state to state relations are often amoral. State to state is different than people to people.
Regards.
November 6th, 2006 at 11:48 am (#)
Good job Imnakoya, your input on this important issue is much appreciated.
Point 1: Will there be a technology transfer (or professional skills transfer)?
Answer: No. Experts who closely follow the PRC have written that China is not big on sharing its manufacturing know-how with outsiders, especially with other developing nations. When they finish milking the cash cow, they simply leave to find a new one. This might change in the not-too-distant future.
Point 2: lack of probity, political oppression, and weakened institutions. How will the cash influx from Beijing help improve these areas?
Answer: Not my problem. At least, that has been the attitude of the Beijing regime and their ambassadors and international businesspeople up to now. Ain’t in the handbook, Dude. Again, this could change in the not-too-distant future. How long is not-too-distant? Your guess is as good as mine.
My advice?
Take the money and run, get top dollar for your resources, don’t sell too much too fast. Don’t sell at all, just rent or lease it!
Demand local participation in damn near every project, learn what you can when it is of value.
Make sure that your national and regional and local governments spend the money on things that the nations needs and not on themselves.
Keep working closely with specific nations on good governance and fair trade and poverty alleviation and better health and education, ’cause we love you whether you have oil and gas and gold and diamonds or not.
We love you for who you are, not for what you’ve got under your feet (natural resources). After all, many of us in the West and elsewhere are your own blood, those who did not return from the sea a long, long time ago…
November 6th, 2006 at 9:27 pm (#)
Thanks BRE. The China-Africa trade tango is one dance that will generate a lot of heat and reaction for a long time. As you mentioned in your post, the G8 will not remain silent and indifferent to the Chinese agenda, andit will be intersting to see how and what they would offer to checkmate the Chinese.
November 10th, 2006 at 10:19 am (#)
This is why Equatorial Guinea’s President Teodoro Obiang was all smiles at the China-Africa Summit. When he is able to sign a few new deals with China he and his family will not have to worry about this problem anymore reported at the BBC News on Nov 8th:
BBC News
President’s son buys $35 million U.S. home
Teodoro Nguema Obiang bought a $35m house in California’s exclusive Malibu area in February, Global Witness says.
His pay as a minister is $60,000 a year. The country was named recently as one of the world’s most corrupt.
Africa’s third-biggest oil producer earns $3bn a year but most people live on just $1 a day.
Global Witness said it obtained the information on the purchase of the 16-acre property from public records available in Los Angeles.
Read more at
http://news.bbc.co.uk/2/hi/africa/6129992.stm
THIS my friend is a good example of “money laundering”!
Call in The Federales (FBI, U.S. Treasury) quick.
November 14th, 2006 at 7:26 pm (#)
If getting Chinese dollars means that China is simply pumping money into Africa’s vast storehouse of raw materials just to turn around and process them into finished goods somewhere in China, then yes the Chinese money will matter. However, to whom will it matter and in what way?
If history has anything to do with it, “raw material-only” investments would matter mostly for China. They would almost certainly be in the best position to go through the ribbon and cross the finis line, but wait…second to cross the finish line would probably be Africa’s politicians, and in last place struggling to finish this foot-race would be everyone else-Africa’s people.
Mr. Musevini, I believe, took a wise and courageous stance in telling China that their investment would mean only receiving incentives for investing in Uganda’s finished products. On the surface his words may seem proud, arrogant, and misplaced. But wait…if one looks closely accross the wide expanse of African nations..then one might find that for some reason the countries that have experienced the most vicious power struggles, the most shocking poverty to the masses, and etc. these are nations which in their respective categories (oil, diamonds, gold, uranium, bauxite, rubber, & etc) are leaders-when it comes to quantity of resources. Oftentimes, the leadership in these countries found numerous ways of subverting the market system and became the market itself. In the process, so many precious commodities were almost given away to nations who used these materials to make consumer products, industrial products, and strategic products of a national interest. Yes, the politicians become wealthy, but the people starve. Because the people are not blindfolded, the politicians feel the need to further entrench themselves in power. Thereby creating a huge and perplex cycle of suffering. Generally speaking, this is what as happened to the bulk of Africa’s mineral rich nations.
There have been a few exceptions most notably-the three that most quickly come to my mind are Botswana, Ghana, and Uganda. The similiarties that they seem to share are strong leadership and an independent business base. Additionally, they each seem to have a very strong and guiding culture lying just beneath their official socio-politcal structures. My apologies, for the long-wind, what I am hinting at is that although the above scenario of chaos is probable-there is hope that the opposite could happen. Botswana’s diamonds, Ghana’s gold, and Uganda’s coffee have been for the most part favorable for these three nations, they have each invested the proceeds into initiatives aimed at involving/empowering large cross sections of their populations. I hate cliche’s but Africa…your future is in your hands! Only you can decide which upon which path to tread. And which ever direction you choose to take…the world will surely never be the same.