It argued that attention is shifting from alleged East-West ideological competition to the practical challenges and opportunities Africa faces in engaging at multiple levels with a major “new” partner. Although state-to-state ties remain the most important, the activities of Chinese and African provincial and local governments, private firms, and other non-state actors including the Chinese media are gaining in salience.
After reaching a fairly high pitch in the 2000s, the China-in-Africa debate in strategic diplomacy, policy-making, investment and academic circles has now mellowed. African countries are increasingly shaping the contours of such debates. Attention is shifting from supposed East-West ideological battles to the practical challenges and opportunities the continent faces in engaging at multiple levels with a major ‘new’ partner. Although state-level ties remain important, of increasing salience are the activities of Chinese and African provincial and local governments, private firms of all sizes, and other non-state actors, including Chinese media.
Two competing trends will typify maturing relations between China and African countries. Official attempts to institutionalise and formalise linkages will continue, but ties will also become more diffuse, with Chinese entities increasingly operating outside Beijing’s sphere of influence. China will be a long-term player on the continent, increasing the imperative for governments, firms, and civil society in Africa — foreign and domestic — to have a developed China engagement strategy if they are to maximise their own interests in future.
Construction. Africa’s infrastructure deficit makes it the second-largest market of overseas contracted projects for Chinese enterprises. From January to October 2012, Chinese enterprises’ newly-signed Africa contracts amounted to 38 billion dollars — a third of total turnover of Chinese construction projects abroad (see AFRICA: Returns drive Chinese infrastructure lending – February 7, 2012).
Investment. Chinese investment stock in Africa is estimated at approximately 15-18 billion dollars, and grew by about 1.5 billion dollars in the first three quarters of 2012. Mining comprises about one third, followed by manufacturing, and services or logistics.
Financing. Beijing’s mechanisms for consultation, financing and monitoring of official Africa commitments are relatively well developed. Its two policy banks lend support to aid, trade, and investment projects through a combination of concessional and commercial debt financing, and equity funding (see AFRICA: Chinese banks still show relative caution – January 17, 2012).
Engagement was originally characterised by large bilateral trade, aid and investment deals between central governments. However, this relationship has become more differentiated. It is increasingly marked by diverse actors and new types of partnerships. The diplomatic emphasis is shifting from growing the volume of economic relations to enhancing the quality of formal and informal links with African countries.
Throughout the 2000s, the cornerstone of Beijing’s Africa policy has been bilateral economic relationships with states. In these the Ministry of Commerce — rather than the Ministry of Foreign Affairs — played the central role. Beijing consistently expressed reluctance to interfere overtly in African internal political affairs.
Sudans. Unusually, China sent observers to monitor South Sudan’s independence referendum, since which it has been building ties with the new state. It broke with its global precedents to contribute infantry contingents to UN operations. One of the few powers with a developed relationship with Khartoum’s regime, it now finds itself somewhat in the role of mediating between the two Sudans (see CHINA/AFRICA: Peacekeeping tests non-interference idea – September 4, 2012).
Libya. China approved UN sanctions against members of the now-deposed regime, and Beijing’s officials had several high-level meetings with the rebels in Benghazi and later the National Transitional Council — despite China being among the last countries officially to recognise that body.
Beijing’s primary political concerns in Africa are pragmatic, not ideological. They revolve around the security of its investments and citizens and the risks to its international reputation. These concerns are now driving the discernible shift in diplomatic priorities from expanding economic ties to improving the depth and tone of existing relations.
It promoted a sub-regional approach to African infrastructure planning, with special attention to cross-border interconnection of roads, water, electricity, and telecommunications networks.
It increased support for multilateral institutions, principally the African Union.
It gave priority status for joint project financing ventures.
This marked a departure from FOCAC’s traditional role as a site for largely bilateral deal-making. While practical and trade-focused it also reflected a new responsiveness given that barriers to intra-African trade is a principal concern of African leaders themselves.
Nigeria recently sent a high-level delegation seeking 3 billion dollars in financing at a cumulative rate of less than 3% as it seeks to systematise Chinese financing for priority projects (see NIGERIA/AFRICA: Chinese special zones eye longer term – October 9, 2012).
Ethiopia has requested Chinese agricultural experts to facilitate technology transfer to locals — but it pays their salaries and oversees their activities.
Angola’s leveraging of generous credit lines has enabled it to extract additional financing offers from previously disinterested multilateral donors (see ANGOLA/CHINA: Relations remain both nuanced and opaque – March 1, 2012).
In future, African leaders will not be above ‘scapegoating’ China and Chinese nationals should they see a domestic political imperative or gain.
Individuals. Private Chinese firms of all sizes easily lead its state-owned ones in terms of the number of investments, especially in manufacturing, retail and services. They increasingly drive Chinese commercial expansion in Africa. Large numbers of traders and others have migrated. Surveys show that nearly all such individuals have almost no interaction with the Chinese central government.
Local governments. Chinese provinces and municipalities are sending their own companies overseas and implementing independent aid projects. African provincial governors are also courting Chinese investors directly, with African traders commissioning imported goods from south China.
the October 2012 China-Africa Think Tank Forum.
Yet non-state and sub-state linkages will become increasingly diffuse and difficult to monitor. African governments, not Beijing, will bear the primary responsibility for regulating Chinese presence within their borders.
Quality standards. From the compromised structure of the new Luanda hospital to cheaper imported goods, protest can foment around perceived quality shortcomings. A recent example is the late-2012 boycott of taxis constructed under a South African government joint venture with a Chinese state-owned vehicle manufacturer. This scuttled production plans, closing the new factory within weeks of its high-profile opening.
Employment. Long-simmering tensions in Zambia’s Chinese-owned copper mines have resulted in occasional violence. Past politicisation of the Chinese presence had generated a degree of general hostility, although much of this is only latent (see ZAMBIA: China relations will survive recent violence – August 21, 2012).
Competition. While their activities are typically facilitated by locals, Chinese immigrants face actual or potential hostility from African groups, from manufacturers, to street traders, to artisanal gold miners (MEAFDB, August 23, 2012, III).
They fuel a thriving formal and informal retail sector, making inexpensive goods available to populations which might otherwise not afford these.
Yet they also raise directly the issues of quality, local competition, and smuggling through corrupted or porous borders.
Kenya tightened work permit regulations following widespread protests by local retailers.
Malawi banned foreign traders outside of its four largest cities in response to merchants’ protests.
Violent clashes between Chinese and local traders erupted in Uganda over government failure to enforce an existing ban on foreign retailers.
Nigeria arrested 45 Chinese textile traders in a crackdown on illegal trading.
In these cases Chinese embassy officials did not respond beyond supporting the host government’s right to enforce its own policies. Meanwhile, Beijing faces its own problems over its growing African migrant population, whom locals regularly accuse of illegal or criminal behaviour.
Chinese companies lost nearly 10 billion dollars in investments during the Libya conflict and Beijing had to evacuate over 35,000 citizens.
Chinese have begun to be targeted in northern Nigeria, as security there deteriorates. Four Chinese nationals were killed in late 2012 alone.
Beijing recently evacuated 300 long-term Chinese residents from Central African Republic’s civil war.
Broadly speaking, political turmoil and anti-China sentiment trends are both solidifying across Africa, and Beijing has a growing interest in assuring the safety of both investments and citizens.
These various challenges increase the significance of the Africa public relations campaign that Beijing is finding it must wage. In many respects its African relations are very new, despite Beijing’s emphasising long historical connections with Africa. Relations are still marked, on both sides, by a great deal of suspicion and xenophobia.
State-owned news agency Xinhua now has 28 African branches, its correspondents providing African media outlets with world news as well as African stories.
China’s international broadcaster CCTV has launched a high-tech television operation in Kenya.
China Daily, a state newspaper in English, began in late 2012 publishing a weekly Africa edition.
Executives from these agencies cite an explicit preference for reporting the positive aspects of China-Africa partnerships and African development generally. They argue that this is a necessary counterweight to negative Western coverage. It is undoubtedly a concerted effort to control more of the China-Africa debate.
Many African governments see China relations in purely economic terms, without the strategic component characteristic of relations with the West. Whatever the history of Western conduct in Africa, Africans have a range of deep political, security, linguistic and cultural ties to the West. These affinities will not fade quickly nor necessarily be displaced (see AFRICA: US groups are well-placed to compete in region – October 17, 2011). Meanwhile Western and Chinese firms are finding scope for cooperation in Africa (see AFRICA: China’s role will not eclipse French influence – October 11, 2012).
This article is drawn from the Oxford Analytica Daily Brief® which analyses the regional and global implications of key geopolitical, economic, social, business and industrial developments. It provides government, corporate and financial clients with timely, authoritative analysis every business day.
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