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Friday, December 17, 2010

china in Africa...complex relationship.

The increasing role that China is playing in building Africa’s infrastructure and managing its economy has become the subject of much discussion not only within Africa but also abroad. To capture the true scale of China’s irresistible ascent within Africa – its evolution, methods, actors and relations with EU and United States –, in collaboration with three African newspapers (Addis Fortune, Ethiopia; Sud Quotidien, Senegal and Les Echos, Mali) has interviewed Jonathan Holslag, head of research at the Brussels Institute of Contemporary China Studies (BICCS).

China differs to the West in that it has a more strategic approach in its dealings with the continent. Its leaders advocate a policy of non-interference in what they describe as “sovereign affairs.” But China has been criticized for overlooking human rights violations and the absence of good governance by some of the regimes it has chosen to deal with. Two such examples being Sudan and the Democratic Republic of Congo.

The numbers tell us that as of 2000, trade between China and Africa has grown at an average annual rate of 33.5 per cent. Although still second to the United States (US trade with Africa amounted to US$140 billion in 2008), trade rose from US$55 billion in 2006 to around US$107 billion in 2008, accounting for 4.5 per cent of China’s total trade and surpassing the US$100 billion trade target set for 2010 at the 2006 Forum on China-Africa Cooperation (FOCAC). An extraordinary growth rate which reflects China’s increasing demand for raw materials and food which in turn is caused by an internal consumption boom. Africa is an ‘Eldorado’ that allows Beijing to strengthen its influence on the international geopolitical scene.

Professor Holslag, why is China so interested in Africa? What place does Africa hold in Beijing’s foreign policy?

Clearly, the most pressing need remains to gain access to Africa’s natural richness. However China tries to reduce the resource intensity of its industrial growth, its dependence on foreign supplies of energy and minerals will only continue to grow. But Africa also helps Beijing soft balancing against the West. Although China has made remarkable progress in its domestic development, it has still many interests in common with third world countries. In international organizations it therefore continues to work closely with African countries in promoting alternatives for the economic and political norms that the West has been promoting. We have seen that in the context of the Human Rights Council, negotiations for a new world trade agreement, talks about climate change, etc. It’s thus a matter of both economic and strategic political objectives.

What is the magnitude of Chinese investment in Africa? Which economic sectors and geographic areas are the most valued by China across the African continent?

Statistics remain probably the most slippery part in the China-Africa relations. According to the Chinese Ministry of Commerce, China on average has been investing around one billion USD in the last three years in Africa. This is still fairly small. Even if one would include investments via Hong Kong or the Cayman Islands, this would not make China’s investment much bigger. Beijing often presents huge packages of investment to Africa, but often these are compilations of several existing or forthcoming smaller projects.

Moreover, so-called investments are often loans. The volume of Chinese loans is much lager than the direct investments. Most of these loans are used for contracted projects like the construction of roads, railways, government buildings, schools, etc. Last year China realized for about 15 billion of such projects. It all looks like investment, but in the end China expects to see its money back.

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