Monday, Mar 27, 2017, 8:28 PM CST – China

International

China-Africa Forum

HIGH IDEALS, HIGH STAKES

China and Africa adopt new approaches in light of evolving political and economic realities

Chinese President Xi Jinping shakes hands with his South African counterpart, Jacob Zuma, Johannesburg, December 5, 2015 Photo by CFP

During the Forum on China-Africa Cooperation (FOCAC) held in early December in Johannesburg, Chinese President Xi Jinping met with 50 African leaders, announcing a new loan and aid package valued at US$60 billion.

Doubling the figure previously pledged by Chinese Premier Li Keqiang during his 2014 Africa tour, the package, which includes US$35 billion in low-interest loans and export credit, US$5 billion in grants, and a US$5 billion top-up of the existing China-Africa Development Fund, has once again put China’s Africa policy in the spotlight.

It has been almost a decade since the last China-Africa summit convened in 2006. Subsequently, China has emerged to become the continent’s No. 1 collective trading partner, with bilateral trade volume reaching US$222 billion in 2014, as well as the world’s largest single investor in Africa.

But as oil and commodity prices have plunged and China’s economic growth has slowed, China’s relationship with its African partners is facing a new and challenging set of circumstances. According to data released by China’s Ministry of Commerce, Sino-African trade volume fell by 18 percent in the first nine months of 2015. In the meantime, China’s investment in Africa in the first half of the year dropped by more than 40 percent.

As economies on both sides wake up to this new reality, it appears to have drawn China closer to Africa.

Industrialization

A term reflective of China’s updated commitment to Africa conveyed repeatedly during the summit was “industrialization.” Not only was a “China-Africa industrialization program” at the top of a list of 10 initiatives outlined, it was also highlighted in China’s latest Africa policy paper.

Released on December 4, apparently to coincide with the FOCAC summit, the updated policy paper mentioned the term “industrialization” seven times, and listed industrial development as a top priority in the section on “deepening economic and trade cooperation.” By contrast, China’s first Africa policy paper, released in 2006, didn’t mention the term at all, and the word “industry” only appeared once.

A shift in focus towards industrialization may very likely change the bedrock of the China-Africa relationship. In the past, a major criticism leveled at China’s presence in Africa has been its massive extraction of the continent’s rich raw materials and energy resources, traded for the large-scale import of cheap Chinese manufactured goods.

This simplistic characterization of China’s interest in Africa has been shaken by China’s growing investment in a variety of African industrial sectors in recent years, reflecting a certain evolution in Beijing’s thinking on its presence on the continent.

As China’s own demographic dividend sputters, leading to a rise in the cost of labor, it has been endeavoring to restructure its economy to allow it to move up the value chain, leading to a diminished appetite for oil and raw materials – formerly its main imports from Africa.

Thanks to huge stimulus packages that have been injected into its economy since the 2008 financial crisis, China is also facing serious industrial overcapacity, which Beijing is now keen to unload onto other countries.

With a relatively young population and an emerging middle class, many African countries are seen as ideal destinations for domestically redundant, lower-end and labor-intensive Chinese industries. In recent years, China has been building industrial parks across Africa, something that looks set to continue given its prominence in the latest proposed industrialization program.

Contrary to a belief common both in Africa and around the world that Chinese companies operating abroad mainly employ Chinese workers, recent research involving 400 Chinese companies in more than 40 African countries conducted by Hong Kong-based academics Barry Sautman and Yan Hairong found that at least 80 percent of the surveyed companies’ employees were locally hired.

In the development plan proposed by China during the summit, Beijing pledged to set up professional schools in African countries designed to educate 200,000 African specialists and train 40,000 African workers in China. Of the US$60 billion fund pledged, US$10 billion has been allocated to a new “China-Africa Production Capacity Cooperation Fund,” as well as US$5 billion for a loan program aimed at small and medium-sized African businesses.

“China has the technology, equipment, professional and skilled personnel, and capital needed to help Africa realize sustainable self-development,” Xi told his fellow leaders.

‘Win-win’

The fact that China’s own economic miracle began by importing industrial capacity from elsewhere has made Beijing’s proposal particularly attractive to African leaders keen to industrialize their economies.

“Here is a man representing a country once called poor, a country which was never our colonizer. He is doing to us what we expected those who colonized us yesterday to do,” said Zimbabwean President Robert Mugabe, remarks which drew applause from the crowd.

The message that China is an equal partner, instead of a colonizer, found a home in the plan’s official slogan: “Africa-China Progressing Together: Win-Win Cooperation for Common Development.”

Several of the 10 initiatives launched by China appeared specifically designed to deflect persistent criticisms of China’s increasingly prominent presence on the continent, which critics say favors China’s interests at the expense of the long-term interests of Africans.

For example, an agricultural modernization program is listed as the second priority after industrialization, which included Chinese promises to continue to encourage Chinese investors to grow food and raise livestock in Africa and “share China’s agricultural experience and transfer agricultural technology” to “promote local employment and boost the income levels of local communities.” Critics have long warned that China’s agricultural investment in Africa will result in an influx of large numbers of Chinese farmers who will grow food on African land, then ship their crops back to China, threatening the livelihood and long-term food security of the entire continent. However, according to Deborah Brautigam, a professor at Johns Hopkins University’s School of Advanced International Studies who spent three years conducting field research in over a dozen African countries, none of the Chinese-owned farms covered in her research were growing food for the Chinese market, nor did they employ Chinese laborers.

Concerns about China’s impact on Africa’s ecosystem and natural environment, however, are more easily justified. Soaring Chinese demand for bushmeat and other animal products such as ivory has become a major threat to Africa’s endangered wildlife.

Amid mounting condemnation of its slowness to curb this demand, environmental issues have been included in China’s Africa policy agenda in recent months. After agreeing to “phase out” its domestic ivory industry in May, China announced a one-year ban on ivory imports in October, which activists say has lowered the price of ivory by half.

In his visit to Zimbabwe ahead of the FOCAC summit, Xi made wildlife protection a major theme, pledging to cooperate with African authorities in cracking down on transnational organized crime networks of poachers and smugglers who engage in the trafficking of endangered wildlife.

One of the 10 new initiatives announced by Xi was a program of “China-Africa green development cooperation projects,” which constituted a pledge by China to help “enhance [Africa’s] green, low-carbon and sustainable development capability” and implement 100 programs covering “clean energy, wildlife protection, environmentally friendly agriculture and smart city construction.”

Another new area China has ventured into in recent months in Africa is the public health sector. As various African countries, including Sierra Leone, Liberia and Guinea, were devastated by the Ebola outbreak earlier this year, China responded by sending aid and media teams to the affected countries, as well as providing a vaccine developed by PLA military scientists, the first time China has offered such aid in response to an overseas public health crisis.

During the forum, China promised to further implement cooperation programs in 20 Chinese and African hospitals. In an apparent effort to make reference to China’s historical contribution to public health in Africa, leaders also stressed that the country will continue to supply artemisinin, an antimalarial medication developed by Chinese scientists in the 1960s, which recently won Chinese scientist Tu Youyou a Nobel Prize.

‘Belt and Road‘

It is no doubt that many of these Chinese initiatives are designed to promote China’s image in Africa, but many policy adjustments seem to extend beyond image-building. To a large extent, China appears to be extending its One Belt, One Road initiative, which, in the case of Africa, advocates comprehensive regional integration in a wide range of areas.

For example, China pledged to establish a continent-wide currency-swap initiative to promote its financial cooperation with African economies. Another program included measures further promoting trade and investment, with Beijing making it clear that it was open to signing a “comprehensive free trade agreement” with African countries in the future.

With a pledge to build cultural centers in Africa and to provide funding for 200 African academics and 500 African students to visit China each year, as well as 2,000 spots in schools and 30,000 government scholarships, China was also visibly seeking to advance its soft power agenda on the continent.

Through a more comprehensive approach than it has previously adopted, China’s new Africa strategy has also extended into the field of security. In the past couple of years, China has sought to play a larger role in Africa’s security landscape. By deploying its first-ever battalion to reinforce UN peacekeepers in South Sudan, China has actively participated in the mediation of the Sudan-South Sudan conflict. Just a week prior to the FOCAC forum, China announced that it would establish its first overseas military outpost in Djibouti.

Outlining a “China-Africa peace and security program” during the forum, Xi repeated an earlier pledge to provide US$60 million to “assist the African Union to build and maintain its army, both its regular army and crisis response [divisions], as well as to support UN peacekeeping in Africa.” Analysts believe that a major goal behind China’s increased support for the African Union army is to better protect both its personnel and its investments by helping maintain stability.

The ambitiousness of China’s new Africa policy also leaves many questions unanswered. For example, it remains unclear how the US$60 billion aid and loan package and the 10 new programs will be allocated. While somewhat deflecting nagging international accusations of “neo-colonialism,” the new initiative has instead been met with criticism in China, with many warning that Beijing is “overreaching” by further stretching its financial resources and issuing expensive commitments to a distant continent while so many within its own borders continue to live in poverty, especially at a time when China’s own economic growth has faltered.

As political and economic realities continue to evolve both globally and locally, what China’s new Africa initiative will actually accomplish remains an open question. 

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