China's Long March Across Africa
Despite Western suspicions, China is offering concrete solutions to Africa's economic woes.
Despite Western suspicions, China is offering concrete solutions to Africa's economic woes.
By now, we're used to seeing foreign fingers in the African pot. For the latest act of this timeless drama, one need look no further than the Chinatown in Lagos, Nigeria. For years, a small community of Chinese workers ran restaurants or sold textiles in the city; today, however, a walled-off square is brimming with Chinese traders and business ventures. China's Huawei, a telecommunications giant, boasts a downtown Lagos office with 600 foreign workers. There are already more Chinese living in Nigeria than there were Britons during the height of the empire. In similar hubs in cities from Johannesburg and Cape Town to Dakar and Casablanca, the decade-long project known playfully as "ChinAfrica" is exploding the old economic order.
Bilateral friendships have bloomed along with African pagodas, as 48 of the 53 African governments have broadened or initiated ties with China's juggernaut economy. Angola has become China's No. 1 source for imported oil, having surpassed Saudi Arabia in 2006. Sudan is also a leading energy partner. Mozambique and Zambia provide timber and copper. As China seeks to play in the Middle East, Egypt is an essential political ally, while in eastern Africa, Kenya and Ethiopia are important hubs for commerce and foreign relations.
China's expanding footprint across Africa has raised hackles, both on the continent and in the West. China's indifference to human rights, labor and environmental standards—a tense component of many Western business agreements—is proudly ignored on the continent. And China has displayed a brash willingness to cozy up to and deal with despotic and corrupt governments—chief among them, Robert Mugabe's Zimbabwe and the genocidal regime in Khartoum.
But, perhaps most importantly, China has not had to grapple with the colonial hangover that has plagued European countries and, to a lesser extent, the United States. Speaking recently of Western military involvement on the continent, Sen. John McCain, the presumptive Republican presidential nominee, said as much. "You risk the backlash from the people, from the legacy that was left in Africa because of the era of colonialism," he warned. And when it comes to development and commerce, Westerners still appear to believe more in humanitarian aid than in humanitarian trade.
As a result, African nations—whose long-term needs are better met with roads and steel than with 10-point plans—find laissez-faire China a more attractive partner. This dynamic does not apply to every country in Africa, or to every Chinese business deal. But despite uncomfortable echoes of imperialism, in practice China is the only global power laying the tracks for an Africa-wide economic renaissance.
Most of the world wants to know how China does it, says David Shinn, the former U.S. ambassador to Ethiopia and Burkina Faso, who is writing a book on Sino-African relations. The formula, he says, is simple: "One, they take greater business risk, and two, they don't attach the political conditions that the West tends to impose." Indeed, China's remarkable control of its private sector is a clear advantage when it comes to partnerships with less economically sophisticated nations. Eight hundred Chinese companies have set up shop in Africa, and some giants, like Sinopec and Chongqing Telecom in addition to Huawei, have at times operated at a short-term loss (underwritten, naturally, by the Chinese government).
China's aggressive march across Africa has also been fueled by a desperate appetite for resources. State-backed companies have unleashed a blitzkrieg of oil, gas and mining contracts, as well as construction deals. Chinese President Hu Jintao and his prime minister, Wen Jiabao, have visited 10 African countries since 2006, and trade deals with African nations have jumped 34 percent over that period. In May, the Chinese announced a $5 billion "Afro-Chinese development fund," and, along with it, their aspirations to push the continent-wide trade volume past $100 billion in 2010. China hopes such undertakings will smooth the way for continued access to the riches of African ports and soil over the long term.
The rapid escalation of Chinese development in the Democratic Republic of the Congo is a fine case study. In 1997, China established a partnership with Gécamines, the Congolese mining company. And China and the Congolese government recently negotiated a $9 billion deal that would fund construction of the DRC's major development needs—water, roads, electrification, a health and educational infrastructure—to be completed in the next decade. In return for its investment, China will gain near-monopolistic access to the DRC's copper, cobalt and coltan mineral reserves. Keep in mind that cobalt and coltan are key components in any mobile phone—and that the iPhone hasn't even hit mainland China yet. Naturally, the opportunity to corner this valuable commodity market sparks a gleam in the dragon's eye.
But will these deals help Africans?
The answer is unclear. For its part, the Congolese government is firmly backing the "ore for infrastructure" bargain. Announcing the finalized terms of the agreement to Parliament in early May, the DRC's infrastructure minister, Pierre Lumbi, said: "This contract is the foundation on which the growth of our economy is going to be built. It is going to generate tens of thousands of jobs directly or indirectly, with some 10,000 persons being employed directly in the first phase."
About one-third of the transaction, $3.25 billion, will be earmarked for mining development, and the remaining two-thirds will go toward the development of hospitals, electric dams, airports and 6,500 kilometers (4,039 miles) of railway and paved roads. The construction projects will be staffed with both Congolese and Chinese workers—but most experts acknowledge that the financial terms are probably going to favor China in the end. Indeed, some tallies put the value of Congolese industrial metals at a whopping $87 billion, nearly 10 times the value of the current deal. And the Chinese interest will hold 68 percent of Gécamines, while the DRC controls less than a third. (In a similar oil-for-credit deal with Angola in 2004, Chinese companies got 70 percent of lucrative reconstruction bids, compared with just 30 percent subcontracted to local businesses.)
It's easy to see why detractors call this deal the "Chinese Takeout." They fear that resource-rich nations like the DRC will industrialize, expand and develop economically—and only then realize that brokers sold the farm for beans in 2008. Already, all but 13 of the nations in Africa are running trade deficits with China. To move from the pocket of imperialists to the pocket of a rights-averse patron state is hardly a step forward for the young governments of the continent. But, as Shinn notes, "I'm not sure that the DRC had much choice…. For a deal this big, it was either go with China or take an arrangement that would have had so many conditions attached to it, it would have been unacceptable."
China's interventions, however circumspect, are a bright contrast to the absence of the Western private sector in Africa. Christophe Asselineau, an attorney with a global mining group that does business throughout Africa, thinks the Beijing-Kinshasa deal could easily have been struck in the West: "It is really a shame that Europeans … who have powerful construction and energy companies, speak the language of the people and are accustomed to working in Africa hiring locals, did not offer an exchange similar to the Chinese."
With sustained concentration on infrastructure, industry and agriculture, NGOs and Western businesses could make a world of difference in emerging economies. African regional blocs like the African Union (AU), New Partnership for Africa's Development (NEPAD) and the Economic Community of West African States (ECOWAS) are increasingly focused on such projects—but few private, Western interests have shown a willingness to meet them halfway. According to Princeton Lyman, a former ambassador to Nigeria and South Africa now at the Council on Foreign Relations, China "combines aid and investment" in a compelling fashion, versus the West's notion of how to "help" Africa, in which mosquito nets and vaccinations still dominate the dialogue. "They're really not doing much," Shinn says of Western capitalists. "If you subtract out oil investment, there isn't much left."
Of course, some would beg to differ. The IFC, the private investing arm of the World Bank, has made inroads with numerous governments and individuals in the sub-Sahara. Some European Union factions are calling for renewed and robust private sector engagement. President Bush's Millennium Challenge Account focuses on infrastructure (though stringent eligibility requirements have allowed only 19 of 57 countries to participate). The U.S.-run Overseas Private Investment Corporation (OPIC) is providing $2 billion in equity for African businesses and individuals.*
Western governments have been known to tout their substantial foreign aid, or China's maleficent allies, or Africa's terrible governance as a means of discounting their own sluggishness on large-scale private development. Some of the reluctance is purely imagistic—the Dark Continent is no place to send one's enlightened euros. Some of it is systemic—governmental corruption remains a blight on the face of Africa. But despite that reality, continent-wide economic growth now averages 5.7 percent, and the Nigerian and Johannesburg stock exchanges have experienced massive inflows of capital in the past two years.
So whether visionary or malign, "ChinAfrica" has singlehandedly changed the face of development economics on the African continent. This is not just a matter of resource exchange and construction. Fifteen thousand African students have studied in China since their countries became independent. Goods sourced in China, and available at cut-rate prices in Africa, are proving more affordable than American or even Japanese alternatives. Deborah Brautigam, a China-Africa specialist at American University, has said that China's long-term investments could jump-start African economic advances in the same way Japan bankrolled Southeast Asia's transformation in the 1990s. Broader economic engagement could even tamp down Chinese intransigence on foreign policy: China is expected to source 60 percent of its energy needs from abroad by 2020—even from states such as Chad that have recognized Taiwan.
Congolese minister Lumbi called the mining deal a "vast Marshall Plan" for the local economy. And it was only 20 years after the original Marshall Plan that China took the lead in brokering the Tanzam railway between Tanzania and Zambia, and launched Nigeria's first space satellite.
If the West wants to push back China's undemocratic influence across Africa, it will have to match China's economic commitments on the continent. There are 900 million African faces waiting to greet the future as it approaches—from east or west.
Dayo Olopade is a reporter at The New Republic.
*Correction: Due to an editing error, the original version of this story contained inaccurate information regarding the cost of an auctioned lunch with Warren Buffett. The sentence has been removed.