The Chinese have mapped out a true sweetheart deal - marrying national economic interests with philanthropic overtones.
China is courting the African continent big-time and how. Sino-African trade of $12 million in 1956 reached $39.7 billion in 2005 and is expected to reach $100 million by 2010. China ‘looking at Africa’ has translated into over 71 agreements covering science, technology, trade; a reduction or annulment of debt of 31 African countries, special treatment to 190 products from 29 African nations; an estimated 800 aid projects and 18,000 scholarships; in addition, 16,000 doctors and 3,000 Chinese peacekeepers are stationed in Africa. In fact, China celebrated the 50th anniversary of diplomatic relations between 46 of 53 nations of Africa in 2006. With 30 per cent of China’s oil supply coming from Africa, the question is whether this is 21st century brand of neo-colonialism — oil diplomacy and a scramble for Africa’s abundant natural resources and extensive markets.
China claims that Sino-African relations are “embedded in the long history of interchange” and that the Sino-African bilateral relations are on a sturdy keel of “sincerity, equality and mutual benefit, solidarity and common development principles” and this is fundamentally guiding the exchange. However, with Chinese eyes on oil-rich and resource-rich countries in Africa such as Nigeria (Africa’s largest oil producer and the world’s sixth largest oil exporter), Angola, Algeria and Congo-Brazzaville, critics in the western world are slamming China’s foray as a competitive global player into Africa.
According to a recent estimate, between 2001 and 2006, Africa’s exports (oil, gas, minerals and metals) to China increased at an annual rate of over 40 per cent, rising from $4.8 billion to reach $28.8 billion in 2006. During the same period, Africa’s imports from China (manufactured products, machinery) quadrupled to $26.7 billion. The composition of trade — 62 per cent of Africa’s exports is oil and 13 per cent crude metals — is quite obviously in energy- and resource-hungry China’s favour.
China’s thrust into Africa began with normalisation of relations with Egypt in 1956. In the 1960s, following Taiwan’s successful ‘Project Vanguard’ in Africa (support for recognition of Taiwan), and against the backdrop of the Sino-Soviet rift, China supported liberation movements such as UNITA in Angola and ZANU in Zimbabwe. The need for better understanding of the continent started in the late 1970s under Deng Xiaoping. In the 1970s, China’s presence came to be identified with the Tazara (Tanzania-Zambia Railway) railroad. By the 1980s, notions of international solidarity and socialist brotherhood were already on the wane. Deng’s successor, Jiang Zemin set the tone for pragmatic cooperation in 1996 — a five-point proposal for the 21st century — encapsulating sincere friendship, treating each other equally, unity and cooperation, common development and looking into the future. Since then, there has been no looking back.
Current president Hu Jintao made three high-profile visits to the continent since he assumed office in 2003 — generously dropping off Chinese largesse in geo-strategic regions and embracing countries with a poor human rights record — selling weapons and securing oil concessions for its state-owned companies along the way. Under the rubric of upholding a non-intervention policy, China has embraced variegated regimes, including rogue countries such as Sudan, Zimbabwe, Nigeria, Libya, Somalia, all of whom have been damned by civil and human rights activists. China’s direct investment to Africa for 2000-2006 stands at $6.6 billion. The first batch of investment projects under the auspices of China-Africa fund, which China instituted after the 2006 Summit, totals over $90 billion.
Getting a share are countries like Angola, Africa’s second largest oil producer (after Nigeria) which got a generous amount to aid post-civil war reconstruction. Oil-rich Congo-Brazzaville got gratuitous aid for social and economic development. China has also pursued a strategic trade relationship with leading trade partner, South Africa.
Besides, Chinese oil companies are making hay — China’s Sinopec acquired Shell in Angola. Tipping the scale was a $2 billion soft aid package. China National Offshore Oil Corporation (CNOOC) purchased for over $2 billion a 45 per cent stake in a Nigerian oilfield. China National Petroleum Corporation (CNPC) is the largest investor in Sudan. Chinese entrepreneurs are also making a beeline for Africa investing in hotels, infrastructure and business.
Ironically, while the Chinese government is driving the wave into Africa, it has yet to socialise its citizens as racial stereotyping is rampant in China. “Black” carries negative connotations — Africa or Feizhou in Chinese can be translated into an evil continent. The Nanjing riots against Africans in 1988-89 saw coloured people at the receiving end. In a twist of sorts, with Chinese entering Africa in a steady stream, an anti-China wave has broken out in places such as Zambia (2006) and Lesotho (2007).
Ruffled by increasing Chinese presence in Africa is the western world, which is waking up belatedly to China’s scramble. While critics slam China’s policy, the western world has not exactly been a gallant no-strings attached aid-giver. While the US does not view Chinese engagement as a threat, but has ‘concerns’, it has been pragmatic enough to send Condoleezza Rice, Secretary of State to Tripoli, Libya, despite all the noise about Libya and Colonel Qaddhafi. The US supports its own ‘Golden Rule’— partnership and cooperation — as the stakes are high, with the proportion of African oil imported by the US rising to 16 per cent and expected to hit 25 per cent by 2015.
Most recently, Russia has sought to expand her influence and has committed to quadrupling bilateral trade to $12 billion by 2012. Russian oil giants such as Lukoil, Rosneft, Stroytransgaz and Russia’s largest gold miner, Norilsk, are striking deals already. France is already re-thinking its Africa policy and plans to mobilise $3.8 billion aid for sub-Saharan Africa. Japan has also jumped on the bandwagon, pledging $4 billion in soft loans and $1.9 billion in grants over the next five years.
India lags behind as it has just recently thrown in the gauntlet for Africa. This April, it hosted the India-Africa Forum, granted duty-free access to Indian markets for products from 34 African countries and doubled the size of credit lines to projects in Africa. It also pledged development aid to the tune of $500 million over the next five years. This, however, pales in comparison to China’s benevolence and strategic thinking, but perhaps it is never too late.
China has succeeded in mapping out a true ‘sweetheart deal’ — marrying strong national economic interests with philanthropic overtones, a pragmatic Chinese model. For now, India must contend to be at least one step behind.
The author is a Sinologist
