Is China Exploiting or Benefiting Africa?
October 13, 2011
Africa and exploitation are often synonymous. Africa has been the continent exploited and ‘invested in’ for the last two centuries while western countries enjoyed a monopoly over African resources; timber, minerals, oil, gold and diamonds. Companies rushed to Africa to ‘save it’ usually leaving the geopolitics worse than when they started. China now too has this voracious hunger to enter the African “sphere of influence” taking advantage of cheap commodity prices to fuel its rapid growth and establish a solid business base in the emerging African economy. China has suffered great criticism from the west for its involvement in the continent, yet statistics show China’s presence in Africa has anything but hindered its advancement. Africa admires China and its success in moving away from its third-world shackles, and has not only looked to China for trade relations but also as a geopolitical model for its future development.
During the 1990s Chinese-African trade increased 700 percent, and in 2002-3 trade doubled to $US18.5 billion, by 2006 was $US 55.5 billion, but China-African trade reached a record high of US$127 billion in 2010. This number continues to increase exponentially and it is categorically beneficial to both parties involved. Chinese trade has already increased the standard of living and more opportunities have arisen for Africans working in trade relations and the oil industry, and if social problems are altered and wealth starts to trickle down, China could be single-handedly responsible for lowering the poverty rate in Africa. There are now more than 800 Chinese companies in 45 African countries. To put criticism from the west about a re-colonisation of Africa by China into perspective, there are over 2,500 Chinese businesses in Singapore alone and there is even demand for more Chinese companies to establish turf in the small but fierce economic hot spot. Jean-Philippe Stijns, an economist from the OECD’s development centre states, “China has the means to help African countries plan for economic diversification. They have adapted technologies that work well in developing economies that they could share with African countries.”
The below graph is a pictorial representation of the Sino-African bilateral trade relation from the World Trade Atlas as it was in 2008:
As is shown in the above graph from World Trade Asia, over 80 percent of China’s imports from Africa are in mineral products. 10 percent concerns motor vehicle products, and only 3 percent for special stones and metals. Mechanical and electrical products constitute over half of China’s exports to Africa.
Nigeria, Angola, Sudan are all incredibly important to China’s oil fascination and to fuel its surging growth. Like the US, China’s foreign trade with these countries centres on oil imports, with China being the second largest consumer of oil after the US, and the country expected to increase its oil usage by eight million barrels per day by 2030, which will far surpass US consumption. Crude oil has increased 13 percent annually since 1994 and has contributed to a steady rise in wages and infrastructure development in Africa funded by China. China’s commitment to FDI and infrastructure investment in Africa, regardless of it being for the implicit purpose of enabling easier exportation of oil, is aiding African development in the process. Chinese workers and companies alike are involved in building roads and railways and other such infrastructure development projects. The west has criticized this over and over saying that China doesn’t do enough for Africa’s long-term growth and development, which in essence is a confusing sentiment to express given two centuries of exploitation and investment in China. The west seems to be concerned about a closed imperialistic loop, which, as experts on imperialism, could be a sentiment borne of their own experiences with Africa that they see China now closely imitating.
As Peter Navarro, a business professor at the University of California-Irvine told National Public Radio recently when describing this loop, “China goes in, builds the infrastructure, uses that country’s infrastructure to extract their resources, takes those resources back to China, builds finished goods, then ships them back into that country to sell. The bottom line is poverty instead of prosperity in countries that have incredible natural wealth.”
There is truth to Navaro’s claims, Angola accounts for 50 percent of China’s oil imports and China has invested $US 2 billion in infrastructure development, yet still 70 percent of Angolans live under the poverty line. The same can be said for Sudan and in Nigeria 80 percent of the country’s revenues come from China’s oil importations, but the money is not trickling down. China’s reliance on African oil, in particular the case of Sudan, has highlighted political scrutiny from western countries, particularly the US. If China wants to remain long term trade partners with its largest oil exporters it may need to consider the social and humanitarian ramifications of its trade policy and revise how it could contribute more to establishing more stable future bilateral relations.
Serge Mombouli, the current Congolese Ambassador to the United States stated “They [The Chinese] are business people. They are not a charity organization. They are coming for business. And any contract that the Chinese sign with African country, those are contracts that are negotiated.”
Arsen’s “Chinese Coming to Africa” thesis, conducted an on the ground survey of Tanzanian and Chinese relations which contribute to a positive bilateral relationship; 393 Tanzanians stated that Chinese immigrants “live a hard and simple life, just like the rest of us.” “Not luxurious like the white men.” (119/500) Arsen illustrates that due to similar backgrounds and histories Chinese and Africans can find a common goal between themsleves and she hypothesises that Sino-Chinese relationships are not the monolithic, hegemonic, and unidirectional as some Western scholars have previously suggested, stating that close ties are associated with political elites on both sides having clear goals in mind and as they work together to achieve them. China offers trade, development and long term prospects and their people respect the Africans, wanting to work with them not for them (C.Stefan Arsene, 2010). A Chinese businessman in Uganda states that when he first arrived in Uganda, there was nothing. He had to buy direct from China, he knew what Chinese manufacturers were doing and he knew how to be a China sourcing agent so his business boomed. From his China supplier he bought everything from shoes to nails to plastics to machines so that he could build shops and generate business in Uganda.
Chinese people don’t go to Africa to have an easy relaxing life with domestic help and luxurious lifestyle, they go there to buy direct from China and export to Africa, and providing procurement specialist services for anything that Africa needs. These Chinese suppliers get to know the people and the culture and know what Africans need before Africans know.
In 2006 and 2007, President Hu Jintao visited over 17 African countries which is the most countries visited by a foreign Head of State in a two year time frame. These visits are a sign of respect and of an effort to endure long lasting national ties between Chinese suppliers and African buyers, not to mention Chinese oil importers. However African and Western critics still doubt whether this is all about softening up the Africans to enable an easier manipulation of exports and FDI, and a hope to drive local competition out of business and while creating a reliance on Chinese suppliers. In any case, as is shown below, Sino-African trade relations are becoming stronger and stronger and more and more profitable with no sign of slowing down no matter how loudly the west cries wolf.
- Kaitlyn Tregenza- CPG Marketing Intern