China as 'partner' or neo-colonial operator in Africa ?

Evidence and information is gradually being built up in Africa on the full extent and rapidly growing role and interest of China in Africa. This is being noted not only in the much more evident export penetration from China into African markets (as elsewhere in the world), but also in
- the domestic consumer commercial sector
- - wholesale trade through large-scale Chinese importers and suppliers located within Africa;
- - retail trade through the growing presence of small Chinese traders, street vendors etc
- the extractive mining sector focused mainly on
- - fuel supplies, above all oil and coal (and coal-to-fuel technology from South Africa) and uranium
- - industrial minerals, such as platinum, chrome, manganese, cobalt, nickel, tin, lead, zinc, copper etc
- the construction sector
- - large-scale infrastructural projects, such as roads, railways, dams, hydro-schemes, power lines etc
- - many major social projects, such as public housing, hospitals, clinics, schools, sports stadiums etc
- the capital equipment supply sector
- - large scale heavy construction machinery and transport equipment related to the above
- - information and communication equipment
- the production sector
- - some agricultural projects especially in basic food crops; expected to increase
- - the beginning of some processing - related to minerals - promised to increase
- the financial sector
- - large scale interest free grants to governments and parastatal entities
- - concessional 'soft' loans attached to many of the above projects
And there are some Chinese projects in Africa that combine many of the above in complex integrated projects on a very large scale (such as in Gabon); others operate in special economic zones set up for them by African governments (such as in Zambia).
Further investigation is still required on the precise nature of the Chinese entities operating in Africa. This is complicated by the fact that most governments in Africa are not open and transparent about their international deals. And the Chinese government and Chinese economy is similarly opaque and difficult to assess. The main questions facing analysts in Africa - concerned about the current modalities and aims, and what could be the possible responsiveness and 'accountability' of Chinese enterprises in Africa - relate to whether these companies are
- independent private enterprises operating on the same bases as their counterparts from the 'West', and that can therefore be expected to operate on the same 'profitability' criteria in Africa;
- private companies that are heavily subsidised by national (or provincial) governmental authorities at home, which therefore gives them important competitive advantages over African companies;
- independent enterprises that are directly supported and assisted in their operations abroad by Beijing through political accords and 'tied' financial agreements with African govmts;
- semi state or state enterprises that are not only backed by the Chinese government but could, in significant ways, be potentially accountable to political/economic directions, conditionalities and requirements from the Chinese government..
Given the very active and even directing role of the Chinese authorities in their domestic economy, the significance of the above, and perhaps other forms of Chinese enterprises operating in Africa, relate to the question as to: what degree, or whether, it is strategically worthwhile and feasible for African activists to engage with African governments and African entities such as the AfDB to engage with the Chinese authorities to influence or determine the nature of and criteria for Chinese operations within Africa?
Critical questions are beginning to be posed by civil society organisations in Africa - and even by some governments - as to the effects of such Chinese activities in Africa and on Africa. The main questions and criticisms relate to spheres such as
- commerce - where Chinese imports and Chinese traders on the ground are ousting small local traders; and this, in turn, is resulting in pronounced anti-Chinese xenophobia.
- mining - where little attention is given to health and safety standards and workers rights, or to damaging pollution of neighbouring communities and broader environmental effects;
- forestry - where vast extractive operations of precious woods and timber are being carried out by Chinese companies with no local processing and with highly destructive effects;
- construction - many of which rely on imported Chinese workers, skilled and unskilled, and therefore do not create much local employment and do not transfer production/management skills;
- capital equipment supplies brought in from China - do not draw on possible local suppliers and, being subsidised in China, easily outweigh -and even pre-empt - the emergence of local production of capital goods;
- manufactured goods which are flooding into African countries and wiping out small, and even relatively larger producers which do not enjoy the direct and indirect subsidies that industries receive from Chinese authorities.
- financial flows from China to Africa that are taking various forms:
- - enterprise investment in the above projects raise questions about the capital transfer rights back to China attached to such investments and, with the growing scale of such investments, how this will affect African countries' international reserves and financial security and stability;
- - unconditional governmental grants given to unaccountable and even corrupt governments, which will strengthen such governments, reinforce these characteristics and help to entrench such regimes in power;
- - 'soft' loans, provided to such governments and/or attached to projects, as above, which will over time inevitably accumulate into growing African indebtedness to the Chinese government and Chinese banks; repeating the pattern that were previously created with Western governments and banks.
Fundamental questions are being posed about the so-called partnership and 'brotherly' relationships declared between the Chinese and African governments, as in the Forum on China-Africa Cooperation (FOCAC) in Beijing in November 2006; whether the rapidly growing role of China in Africa is "colonial" or "neo-colonial", or reflecting a "new imperialism". Whatever good intentions the Chinese government may declare, the objective and fundamental problem is that these relations are based upon highly uneven levels of development and very different capacities to benefit from such interactions. This will result in China making very much greater gains from what it obtains from Africa …. even IF this is undertaken 'fairly' and with some generous gestures. Africa may indeed receive (some) quantitative returns, but it is China that will achieve the further vast qualitative transformation of its economy using the material and financial resources it gains from Africa. These grossly uneven gains are not the necessarily result of deliberate 'bad intentions' but are intrinsic to relations between such very uneven 'partners' ….. unless deliberate efforts are made to compensate for such very different situations and capacities, to consciously counter the unbalanced effects, and to conscientiously avoid (or undo) damaging social and environmental impacts.
In the political sphere, major problems reside in the assurance by Beijing that it does not 'interfere in the internal affairs' of other countries. This, of course, means that it does not concern itself with the nature of the governments with which it enters into large-scale economic and 'aid' relations. But this per se constitutes an 'interference' into the internal affairs of African countries through the financial and other support provided to highly questionable regimes, thus helping them to entrench themselves in power. Without the full democratisation of African countries, the kind of domestic role that civil society organisations want their governments to play and the kind of 'developmental' proposals that they want their governments to put to the Chinese authorities will be prevented.
The political and the economic dimensions go together. Side by side with the political and essential human rights and social issues that have to be posed to the Chinese political authorities, the developmental demands that independent African analysts need to present to African governments and African institutions to present to the Chinese government relate to the economic, environmental, and social terms and conditions under which Chinese companies operate in Africa.
During the 'development era' of the 1960s and 1970s the common demand from development analysts was that foreign investors from the West in the countries of the Third World should include some significant undertakings that would increase the 'gains' or improve the effects of such investment in the host countries, and minimise or reduce the losses or negative effects. These investment conditions applied by many Third World governments in various combinations included
- defined periods or duration for such investment projects
- agreed re-investment of (a proportion of) profits, for defined periods
- agreed return of forex earnings from exports from the host country
- payment of company and other taxes, and appropriate royalties
- limitations on the geographical areas/zones and spheres open to foreign investment
- a defined proportion of shares to be held by the host government and/or local shareholders
- joint ventures or partnerships with local enterprises and/or parastatals
- a defined proportion of production inputs, and services, to be acquired from local companies
- payment of import taxes on equipment and other imported production inputs
- transfer of technology with accompanying training and maintenance/services capacities;
- employment of local management and active transfer of management skills
- employment of local technicians and active skills transfers
- employment creation for local labour, and active skills development
- observance of specified wage rates, health and safety regulations,
The much weaker - or non-existent - requirement that foreign investors observe full trade union organisational and collective bargaining rights, at best reflected the frequently paternalistic and substitutionist nature of many of the 'developmental' governments of the time; or their active suppression of such rights. Similarly, the almost total silence on the observance of appropriate environmental regulations also reflected the shortcomings of the development paradigm of that era.
Overall, the terms of the 'development' paradigm sought to 'improve' the benefits of foreign investment in Africa, but those terms could not fundamentally substitute for internally generated capacities and resources. Some governments saw these terms as providing interim bases for 'industrial take off' in their countries, although, in practice, the major gains still accrued to the foreign investors and their home economies. Nonetheless, even those of such regulatory investment conditions that some of the more determined African governments (such as Tanzania) implemented, were largely swept away in the recent decades under IMF and World Bank SAPs. This onslaught has been reinforced by various WTO trade and 'trade-related' agreements, and through the terms within bilateral trade and investment treaties between African governments and the home governments of the major international investors. These, together, are central to the neo-liberal counter-offensive that has displaced the so-called 'development partnerships' of earlier decades….. inadequate and limited though those were.
However, a very important 'test' question to be put to Chinese investors and to the Chinese government is whether they accept that the above terms and conditions would be very justifiable for African governments to require; and whether they would be prepared to agree that Chinese projects and investments in Africa must fulfill all the above terms. In this scenario, much will depend, of course, on the will and capacity of African governments, supported by institutions such as the AfDB, to set and to monitor such terms. Without such basic 'developmental' terms, African governments, and their countries will simply be exchanging one set of long-standing 'Western' neo-colonial 'partners' for another new set of 'South partners'. If, indeed, these new partners from the South are different to the established masters from the North, then the question to be put to and through African governments to the Chinese authorities, is whether they accept and will actively commit to all these very reasonable developmental terms. Failing this, the further question must then be asked - how do China's economic operations in Africa differ from those of the imperialist West?
This is a challenge to emerging Chinese civil society as well. And this is not only about their responsibility to and solidarity with their counterparts in Africa….. but to themselves and their own people, as well. The terms and conditions posed within the 'development paradigm' of earlier years - and in recent years reviving - can be posed, just as importantly, within China, itself; about its own economy, and about the terms and conditions that the Chinese authorities should present to internal and international corporations operating within China.