China's Expanding Role in Africa

[tequila]

Having just returned from a 2 1/2-week sojourn to Senegal, I can say that some of the Dakar natives I came into contact with told me that they were definitely noticing an influx of Chinese migrants incoming to Senegal. Opinions were split on whether this was a good thing or not.

[Jedburgh]

The current issue (Summer 07) of China Security is focused on China's role in Africa:

Assessming China's Growing Influence in Africa

The Balancing Act of China's Africa Policy

The Fact and Fiction of Sino-African Energy Relations

China and Africa: Policies and Challenges

[Mark O'Neill]

Having read the posts in this thread I thought that an opinion piece that I had published in one of our two national daily newspapers might be of interest.

The link to Australian Business interests was necessary to get it published - it reflects the interests of the paper's readers (it is kind of an Australian equivalent of the Wall Street Journal). The bottom line message about China's changing role still comes through clearly,

regards,

Mark

Time is ripe for investment in Africa
Mark O'Neill
The Australian Financial Review, 16 May 2007 , P. 63

The Ogaden Region in Ethiopia has attracted little attention in the West since a bloody border conflict between Ethiopia and Somalia over 20 years ago. It is a place of nomads, unmarked minefields, bandits and camel thorn. And now, Chinese workers.

A rebel attack last week on an oil field in the Ogaden resulted in the deaths of nine Chinese nationals. The presence of Chinese workers in Eastern Ethiopia underlines a profound change in the nature of Beijing’s engagement with Africa. During transition from the colonial era and the Cold War, China’s involvement was largely ideology and arms. Now, it is resource development and trade. This changed pattern reflects events across the continent.

A scramble for African resources is taking place. Exploration is occurring at a rate not seen since the early European colonial era. Australian companies are part of this rush. Woodside Petroleum and BHP Billiton are seeking developments in places as diverse as Libya and the Democratic Republic of the Congo. But, the scale of investment by Asian powers dwarfs all Australian enterprises.

China and India have emerged as major players in developing African resources. They are seeking to feed their ongoing economic booms. A recent World Bank Report, Africa’s Silk Road: China and India’s New Economic Frontier, illuminates the scale of this effort.

The World Bank has estimated that Chinese direct foreign investment in Africa was over $US 1.18 billion by mid-2006. Angola is now China’s largest source of imported oil. The Council on Foreign Relations estimates Chinese investment in Sudan at over $US10 billion. Chinese corporations control 40% of Sudanese oil production. They have invested over $US150 million in Zambian copper during the last eight years.

India is not that far behind China. The East African littoral has had a significant Indian diaspora for centuries. Recent energy deals with Libya, Sudan and the Ivory Coast, have further widened Indian influence.

The environmental, labour and governance records of many of the new Asian mining and raw materials ventures are generally poor, but Africa’s desire for new investment is great. Emerging Asian economic influence in Africa is challenges stability in three ways.

First, African nations remain extremely sensitive to ideas of colonialism and exploitation. There is growing concern that many developing nations in Africa are engaged in a ‘race to the bottom’ for investment. Beijing’s large role in the Zambian copper industry was a bitterly contested issue in that country’s recent presidential elections. The World Bank has noted that African exports to China and India, less those involving raw resources, face high tariff barriers. Many African states are not resilient. Internal dissatisfaction or agitation over perceptions of economic neo-colonialism could prove destabilising.

Second, China’s public diplomacy position of ‘non-interference’ in sovereign nations plays out in Africa as ‘values free’ engagement. The number of unconditional financial deals it has with nations afflicted by severe human rights and internal security issues highlights this. One example is Zimbabwe, where China is sustaining the Mugabe regime as that nation’s top foreign ‘investor’. Similarly, analysts have identified Chinese support for the Sudanese Government as a factor in the longevity of the conflict in Darfur. Economic support to such states prolongs instability.

Finally, it may be wrong to assume that Africa has seen the last of the proxy conflicts that characterised its experience during the Cold War. These conflicts may be replicated by economic battles between China and India as competition develops, or if Africa‘s old source of investment, Europe, seeks to reassert itself. The recent announcement by the Bush Administration of the creation of a US ‘Africa Command’ points to the possibility of future strategic competition between divergent US and Chinese interests.

The situation in Africa suggests risk and opportunity for Australian business. The key risks are instability for operations, and the development of African competition in our traditional markets. The key to mitigating these risks lies in Australia grasping the opportunities at hand.

The environmental, labour and governance record of Australian firms is a key point of differentiation when contrasted with many Asian firms. It suggests a marketable comparative advantage. Australian ability in the provision of services for the resources sector is another opportunity for promotion. Australia must stop viewing Africa as an object of charity or curiosity. It is time to pursue a strategy of business engagement and development.

Mark O’Neill is a Fellow at the Lowy Institute for International Policy

[Rob Thornton]

Mark,
Superb Post - the figures, who is doing the investing, how they are investing, where they are investing and the result of the investments all provide perspective.

Based on what you wrote, do you think the attention is good or bad for Africa?

Thanks, Rob

[Mark O'Neill]

Mark,
Superb Post - the figures, who is doing the investing, how they are investing, where they are investing and the result of the investments all provide perspective.

Based on what you wrote, do you think the attention is good or bad for Africa?

Thanks, Rob

G'Day Rob,

Frankly, I think that a good or bad outcome is in the balance. In the best case scenario (ie everyone plays 'nice' and acts in accordance with their rhetoric on the issue), things should be relatively 'ok'.

I say relatively because my experience in Africa tells me that that even the 'good' can often work out in a way that we might see as 'not quite right' but at the same time be 'quite acceptable' from a local standpoint.

The worst case scenario is a nightmare that would make us and the Africans look back at the proxy wars of the Cold War as the 'good old days'. Any number of issues - Strategic competition between US/ China / Europe; the growth of Islam (or radicalisation) on the Eastern Littoral (or Nigeria) ; HIV AIDS; heightened trade imbalances post Doha, Environmental issues (deforestation/ drought/ global warming) to name but a few, could act singularly or in some unfortunate concert to really shake things up.

Which way you think it will go can often come down to whether you are feeling like the glass is half full or half empty on any given day.

I believe that a key factor to mitigate against the worst case situation occurring is developing true understanding of the likely issues in the West. In that way informed decisions can be made about what it all means, and what needs to be done. AFRICOM might offer some hope of helping the US with that, only time will tell.

Cheers

Mark

[Jedburgh]

JFQ, 4th Qtr 07: Dragon with a Heart of Darkness? Countering Chinese Influence in Africa

While the United States has been preoccupied with global challenges to its security since 2001, China has used what it calls an independent foreign policy (a term Beijing uses to denote independence from American power) to achieve diplomatic, military, and economic influence in African nations in exchange for unconditional foreign aid, regardless of the benefiting country’s human rights record or political practices. This foreign policy undermines U.S. objectives intended to promote good governance, market reform, and regional security and stability, while concomitantly diminishing U.S. influence. China’s relationships with Angola, Sudan, and Zimbabwe, for instance, have enabled these countries to ignore international pressure and frustrated efforts to isolate, coerce, or reform them. Left unchecked, China’s growing influence will likely facilitate similar behavior from other African countries, stymieing U.S. efforts and leading to friction, if not outright conflict, between Beijing and Washington.

The United States, therefore, needs a coherent and overarching strategy that coordinates its diplomatic, military, and economic instruments of power to counter China’s growing influence in Africa.....