China, Africa and the Middle East

SATURDAY: Current Affairs: China and the rest.

Reflections on China, Africa and the Middle East

Just as Edward Said in Orientalism criticized the Eurocentric approach of the West undermining values and beliefs of the rest of the world, there is a lot of misinformation regarding the emerging Sino-African and Sino-Middle Eastern relations. While it is true that the engagement of China in both areas has seen an exponential increase in the recent years, in my opinion the visibility of the Chinese investments and deals in these areas do not necessarily translate into a direct threat or competition with neither other European powers involved nor the US.

Trade between China and Africa has been growing at an exponential rate and reached US$ 106.8 billion in 2008 (1). As of today China has a bilateral trade of more than US$ 1 billion with twenty African countries (2). As China’s economy is expected to quadruple by 2020, as it did from the late 1970s to the mid 1990s, China’s bilateral trade with Africa is expected to continue to increase as China’s economic growth needs more and more resources. However, the volume of Africa’s trade with China is still small if it is compared to the trade between for example China and the EU at US$ 186 billion and between China and the US at US$ 334 billion (3). China is also not the only main East Asian country to be expanding on the African continent as Singapore, India and Malaysia are becoming more and more engaged. India, for instance, has a larger investment in oil in Sudan and Nigeria than China does and Malaysian companies are dominating the mineral extraction in Africa (4).

Similarly, in 1991, total trade between China and Arab countries (of the Gulf Arab States 17-member Greater Arab Free Trade Area) was $2.42 billion. In 2005 it reached $51.3 billion with an annual average increase by 40% in the past years (5). Oil imports from Iran, for instance, increased at fast speed in the most recent years as while Iran accounted for just one percent of China’s total imports in 1994, less than a decade afterwards Beijing purchased US$ 2 billion of oil from Tehran, representing more than 15 percent of its total 2002 oil imports (6). The Middle East today accounts for 39.95% of China’s current imported crude oil and China is expected to import 70% of its oil need from the Middle East by 2020 (7).

Such increase in trade, oil and mineral resources imports should however not be seen as a challenge to other powers involved. I am rather skeptic of the realist approach viewing China’s engagement in the areas as a challenge to the US, undermining its interests in the region. The primary aim of China’s diplomacy in the both Africa and the Middle East seems to be to simply serve the central task of economic modernization and it is in China’s interest to guarantee the stability of both regions and maintain good relations with the Western competitors in the area. China’s core interest in both areas is to gain access to oil and gas to meet its roaring energy needs. Such pattern has been established even before Deng Xiaoping’s “Open Door” policies and began to really strengthen in the 1980s. In order to sustain the present rate of economic growth, China requires vast quantities of inputs and does so by securing its access to African and Middle Eastern oil and natural gas. The Chinese efforts to secure access to raw materials are a consequence of China’s drive to meet its energy requirements at home. In both the Middle East and Africa, Chinese are investing in the infrastructure needed to extract and transport those resources while at the same time signing deals which on one hand guarantee Chinese access to oil and natural resources and on the other hand require China to invest in the area by building infrastructure which can benefit the region, facilitating transportation, benefiting water and energy supplies, building hospitals and school as well as personnel training in various fields. Moreover, Chinese consumer products and other manufactures are becoming increasingly desirable and price competitive in both Africa and the Middle East, benefiting the emerging economies of those areas as the lower – middle class of the population is able to purchase more than before.

Interesting to note is that is that according to the IMF, between 2004 and 2008 Africa has experienced an annual growth rate at more than 6 percent, scoring better than any developed country (8). Angola, China’s largest trading partner in Africa, for instance, had the highest growth rate in the world in 2007, reaching a 21.4 percent (9). Moreover, according to the World Bank, from 1996 to 2005 the percent of people living on $1.25 per day or less decreased from 59 to 51 percent and is expected to continue to decrease (10). What in my opinion is not a coincidence is that the higher levels of growth and better living standards have been seen since the start of the new century, exactly when China’s trade with Africa has started to increase seven-fold. As Africa, as well as the Middle East, offers the world’s highest rate of return on investment, both regions are offering opportunities which China has been able to fully grasp while simultaneously benefit the economies in which it invests.

In May 2006 for example, the China National Electronics Import and Export Corporation (CEIEC) started the implementation of a project providing thousands of people with access to clean water (11). The project involved renovating and widening the water distribution network in Caxito province in Angola, in exchange for oil through the so-called ‘resource for infrastructure’ approach (12). This Chinese modus operandi that perfectly fits the needs of Angola at this time of development, is often criticized by the Western dominated media. China is criticized for undermining good governance and resembling the imperial powers in the Colonial era by being driven by a voracious appetite for natural resources, especially gas oil and minerals rather than a genuine desire to foster strong and long-lasting partnerships with Africa.

Paradoxically, many criticisms generated by the Africans are not against the Chinese, but the West. African leaders have often been criticizing the harsh austerity measures and excessive conditionality imposed upon them by the Western financial institutions and governments, limiting their policy space to effectively develop. As the emphasis put on political conditionalities imposing democracy and on the Structural Adjustment Projects (SAPs) aimed at eliminating market distortions and opening the African economies to foreign direct investment (FDI) have not brought the results the world was expecting, Africans are more and more turning to China which opened new avenues of flexibility and maneuverability previously denied to them by the West. China, the biggest developing country and Africa, the continent with the largest number of developing countries, have come together in a relationship which proposes an alternative to the Washington consensus. Believing that Sino-African relations are based on the principles of mutual benefit, solidarity, equality and non-interference in each other’s internal affairs is not only an official stance, but also what characterizes China’s new diplomacy towards the African continent (13).

China’s success in both Africa and Middle East is due to China’s ability to work within the existing “Western” system and institutions while at the same time bringing forward its own no-strings attached approach to aid and trade in the region. A good example here is in the case of Angola. In 2002, immediately after the end of its twenty-seven year civil war, the IMF and many Western countries tried to get Angola to agree to the introduction of a Staff-Monitored Programme (SMP) and show a good and stable performance for three consecutive months before being eligible to receive financial support. The Angolan government, governing a country where support was needed immediately, felt it could not agree to such conditionalities and turned down the IMF (14). The Chinese government instead was able to guarantee Angola with what it necessitated, providing a new model of cooperation, based on credit lines, economy and commerce, contrasting with the Western efforts of cooperation based on aid attached to conditionality. As Angola was in desperate need for infrastructure development and China needed the resources for its thirsty economy, both countries were able to give each other what they needed through a pragmatic and strategic partnership.

From an Angolan point of view China provided them with the help Western donors did not want to give. The Chinese offered better conditions, lower interest rates and longer repayment time than commercial loans, while the non-Chinese credit lines Angola secured in 2004 demanded higher guarantees of oil, with no grace period and with high interest rates (15). What is however necessary to point out is that the West often plays by double standards, by imposing conditionalities as well as having their oil companies playing a major role in countries like Angola, which have turned down Western institutions. For instance, as Brautigam notes, soon after the 2004 China’s Eximbank $2 billion oil-backed loan used entirely for the rehabilitation of the Angolan infrastructure, allowing repayment over 17 years, with a grace period larger than the European banks, Barclays and the Royal Bank of Scotland offered Angola an even larger oil-backed loan of US$ 2.35 billion, with repayment over 5 year, far shorter than the one China made (16). In 2005 Caylon, the French group Crédit Agricole offered Angola a US$ 2 billion loan and the US Eximbank financed Angola $800 million to buy six Boeing aircraft, but the only loan to make the headlines was the two Chinese “resource-for-infrastructure” loans of US$ 2 billion and US$ 500 million offered between 2005 and 2007 (17). Apart from the Chinese engagement being fast and effective, the Chinese loans are peculiar as the repayment of the loan is made through infrastructure rehabilitation. Such approach has been called the “Angola mode” or the “resource for infrastructure” approach, prioritizing key public investment projects benefiting directly the local citizens. China ensures the fast and effective completion of the work by directly financing the company in charge of the project, without passing through the host government’s bureaucracy, risking that the money China give is misused.

I do see the Chinese engagement in Africa through a liberal institutional perspective and believe the primary interest for China is to maintain stability in the area in which it is involved through a genuine “peaceful rise”. However it should come as no surprise that any engagement that two countries undertake is primarily due to national and geostrategic interests. Just like the US or the EU, China has its security issues at stake in both Africa and the Middle East and wants to safeguard them as much as any other nation would. I do not agree with Bradley A. Thayer’s article Confronting China: An Evaluation of Options for the United States, claiming that the United States has to confront China in order to maintain its peace in international politics (18). Thayer just gives two political options for the US strategy towards China and those are either accommodate or confront. There is no space left for what should be instead viewed as of primary importance: cooperation. Thayer believes that following the Cold War example, marginalizing China and preventing it from being dominant especially in East Asia and it can be added in Africa and the Middle East as well, could prove beneficial to the peaceful development of world politics. However I do not believe China is a threat to the US in any way and it is not in its interests to do so. Statistics of Chinese military capabilities as well as development do not lead to the assumption that China can surpass the US as being the dominant state in international politics. China moreover, with the current leadership, does not seem to want to confront the US, hence not viewing the US as a major impediment to its hegemonic plans. Having such a perception of Chinese politics not only is misleading but could lead to devastating policies from the Western countries triggering angry responses from the Chinese government. The case study of China’s engagement in both Africa and the Middle East explains how cooperation between China and the rest is of fundamental importance in order to maintain good relations. China moreover does not seem to be undermining the US interests in the areas, partly due to the fact that US still has a much larger engagement in both areas and because China is still lagging behind the US technological advance in oil and natural resource extraction.

I do agree instead with the arguments brought forward by both Jedrzej George Frynas and Manuel Paulo article A New Scramble for African Oil? Historical, Political, and Business Perspectives and Muhamad S. Olimat’s article The Political Economy of the Sino-Middle Eastern Relations. Olimat is correct in believing that a clear mutual understanding between China and the US should be first and foremost the priority to guarantee good relations between the two and most importantly to guarantee stability in the region. As it seems that the oil producing countries are as much eager to engage China in the regions’ oil markets as China is, US hostility toward Chinese investment in the area could consequently result in tensions in both Africa and the Middle East where leaders tend to side with the Chinese. Part of the success of the Chinese engagement in those areas is the fact that China has no colonial history in the area and both instead share a colonial history themselves. There seems to be a mutual understanding, a so-called South-South cooperation, with which the US and the Western countries in general should take the opportunity to engage in order to foster fruitful cooperation.

Interesting are Frynas and Paulo’s perspectives showing evidence against recent claims against China accusing it of pursuing neo-colonialist policies and being involved in a “scramble” for Africa’s oil. The current situation is highly different from the earlier XIX century scenario where exploitation was the norm. I agree with their statement that ‘Africans tend to be in the driving seat today’ (19). While it is true that African politics are far from stable and transparent, it is also true that there is nothing today that can stop those governments to pursue the policies that they require necessary or that they prefer. African governments do decide which whom to invest and sign deals and it is just as fair that they can have the liberty to decide their own policies. The Chinese approach leaves a large autonomy for the African governments to adopt policies which can guarantee the maximization of benefits. The seven-fold increase of bilateral trade between China and Africa has led to higher living standards by providing the African low income population to afford goods which were not available to them few years ago as well as more economic autonomy and well-being, leaving further time and space to focus on political policies.

While in the academic literature there are both “supporters” and “detractors” of the Chinese investments in Africa, claims that China is planning to colonize Africa should not be allowed to mislead. China’s People’s Daily criticized the Western countries of ‘sowing discord between China and Africa and blocking the establishment and development of a new Sino-African strategic partnership’ by accusing China of neo-colonialism (20). As most of the literature on imperialism and neo-colonialism presuppose a situation of inequality where through the dominion of the most powerful country, political and economic influence is exerted over the weaker, the Chinese policy of non-interference proves that China is neither exporting its political and economic model nor imposing its will on those it has diplomatic ties with. While the realist understanding explains that China, like any other nation, has its own national interests and priorities to address in Africa, neither imperialism nor neo-colonialism can explain China’s turn to Africa. China is seen instead as pursuing a kind of “business diplomacy” where through the use of diplomacy it has secured business deals which are necessary to its economic development as well as favoring its political standing at the international level. African countries are consequently seen as having benefited from this partnership as they have recently experienced fast economic development as well as having had the space to try different kind of development models. With the neoliberal economic system imposed by the West and with the increasing engagement with China, Africa is now alone in addressing its political issues and it will be up to the African leaders to adopt policies which will guarantee the wise exploitation of natural resources and the respect of their citizens.

Written by Roberta Cucchiaro

The piece has not been published and cannot be quoted. If interested in obtaining further information or quoting rights please contact the author at roberta.cucchiaro [at] gmail.com

Notes:

1 Brown, Kerry and Zhang Chun, 2009. China in Africa – Preparing for the Next Forum for China Africa Cooperation, Chatham House, [online] February. Available at: http://www.chathamhouse.org.uk/files/14269_0609ch_af.pdf [Accessed 02 July 2009].

2 Brown, Kerry and Zhang Chun, 2009.

3 Brown, Kerry and Zhang Chun, 2009.

4 Guerrero, Dorothy-Grace and Firoze Manji, 2008. Introduction: China’s new role in Africa and the South. In: Dorothy-Grace Guerrero and Firoze Manji, eds. 2008. China’s New Role in Africa and the South: A Search for a New perspective. Nairobi, Oxford and Bangkok: Fahamu and Focus on the Global South. P. 2

5 Ji Hye Shin and John J. Tkacik, 2006. China and the Middle East: A New Patron of Regional Intability, Heritage Foundation, 26 Sept. Available at: http://www.heritage.org/Research/Reports/2006/09/China-and-the-Middle-East-A-New-Patron-of-Regional-Instability.

6 Jin, Lingxiang, 2005. Energy First: China and the Middle East. The Middle East Quarterly. 12/2. Available at http://www.meforum.org/694/energy-first

7 Olimat, Muhamad S., 2010. The Political Economy of the Sino-Middle Eastern Relations. Journal of Chinese Political Science. Volume 15. p. 308

8 Perry, Alex, 2009. Africa, Business Destination. Time, [internet] 12 March. Available at: http://www.time.com/time/specials/packages/article/0,28804,1884779_1884782_1884769,00.html [Accessed 25 June 2009].

9 Corkin, Lucy, 2008a. China’s interest in Angola’s construction and infrastructure sectors. In: Dorothy-Grace Guerrero and Firoze Manji, eds. 2008. China’s New Role in Africa and the South: A Search for a New perspective. Nairobi, Oxford and Bangkok: Fahamu and Focus on the Global South. Pp. 157-190.

10 Perry, Alex 2009.

11 Corkin, Lucy, 2008b. China’s strategic infrastructural investments in Africa. In: Dorothy-Grace Guerrero and Firoze Manji, eds. 2008. China’s New Role in Africa and the South: A Search for a New perspective. Nairobi, Oxford and Bangkok: Fahamu and Focus on the Global South. P. 139.

12 Vines, Alex and Indira Campos, 2010. China and India in Angola. In: Fantu Cheru and Cyril Obi, eds. 2010. The Rise of China and India in Africa. London: Zed Books. P.195

13 MOFA, 2006. China’s African Policy 2006. [online] Available at: http://www.mfa.gov.cn/eng/zxxx/t230615.htm [Accessed 11 May 2009].

14 Vines, Alex and Indira Campos, 2010. P. 202

15 Vines, Alex and Indira Campos, 2010. P. 202

16 Brautigam, Deborah, 2009. The Dragon’s Gift. The Real Story of China in Africa. Oxford: Oxford University Press.  P. 276

17 Brautigam, Deborah, 2009. P. 276

18 Thayer, Bradley A. 2005. Confronting China: An Evaluation of Options for the United States. Comparative Strategy, 24/71-98 p. 71

19 Frynas, Jedrzej George and Manuel Paulo, 2007. A New Scramble for African Oil? Historical, Political, and Business Perspectives, African Affairs. 106/423, 229-251

20 People’s Daily Online, 2006. “Neo-colonialism” fallacy aims to sow discord in Sino-Africa cooperation. People’s Daily Online, [internet] Available at: http://english.people.com.cn/200610/30/eng20061030_316577.html [Accessed 23 November 2010].

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