Demonising China: pundits get its role in Africa wrong

International media have reported up a storm on the recent surge in China-Africa links. They invoke a theme familiar from the past two centuries of colonialism and Cold War: Africa is beset by poverty and ignorance, caused by ruthless and corrupt rulers. Westerners are trying to bring them to book and instill order on the continent, but other forces, in this case Chinese interlopers, are making that difficult.

The facts on the ground show China’s engagement in Africa has been more positive than this discourse claims. The Chinese are getting bad press in the West because they are from a country that is neither liberal democratic nor white, yet are effectively competing with those who are - to the point that some Africans see Chinese development activities as providing a model.

The Chinese, it is said, are in Africa only for natural resources, to feed China’s industry and huge population. To exploit the continent, they provide loans and aid to rogue regimes. They worsen the plight of Africans by dumping cheap, shoddy products in their markets and ruin local industry. Chinese investors pay Africans a pittance, in contrast to more ethical Western firms. Given all that, China can only be an obstacle to Africa’s development.

It’s an exciting tale but, alas, the media have gotten it all wrong. It’s not mainly China that impairs Africa’s development, but a world system of neo-liberal capitalism, based on privatisation, trade liberalisation, and reduced social spending, into which China is now partly integrated. As part of the same world system, China and the West have many activities in common in Africa, but there are also some distinctly Chinese trade and investment practices and these are often more appealing to Africans.

China-Africa trade was US$3 billion in 1995, but $107 billion in 2008. That’s still only 4 per cent of China’s world trade. Yet, it makes China Africa’s second largest trading partner and trade is balanced in Africa’s favour. On imports from Africa, the China-in-Africa media discourse focuses overwhelmingly on oil. It’s often alleged that Chinese demand for it perpetuates Africa’s reliance on petroleum exports, preventing growth of more labor intensive industries, such as agro-business and manufacturing.

Most of what China buys from Africa is indeed oil (62 per cent) and ores and metals (17 per cent), but in 2008 oil was 88 per cent of US imports from Africa and minerals made up most of the rest. China’s investment in oil production in Africa equals only 8 per cent of that of Western multi-nationals and 3 per cent of all investment in African oil. China received 9 per cent of Africa’s oil exports, but Europe and the US each took 33 per cent.

China also couples oil acquisition with low or no interest loans to build the infrastructure Africa needs, at a much lower cost than the West is willing to do. For 2006-2013, China lent or will lend US$28 billion to Africa for infrastructure and as trade credit. There is also less scope for corruption with China’s loans for infrastructure projects - often built by Chinese firms paid directly by China’s government - than with the all-purpose aid Western sources provide African governments, such as the money for primary education in Uganda in the 1990s, four-fifths of which never reached the designated schools.

The focus of the China-in-Africa discourse on China’s exports is almost wholly on basic consumer items and their alleged negative consequences. Chinese goods are held responsible for the decline in Africa’s textile and clothing (T&C) industry. But when Chinese goods first came in mass around 2000, Africa’s T&C was already decimated by the international financial institutions’ forced trade liberalisation of the 1980s and 1990s, which opened the market to second-hand and new clothing from developed countries.

The fact is that Chinese goods are much cheaper than imports from other countries, as well as locally-made goods that are made costly by poor infrastructure, pricy utilities, and corruption. A British government study found that Chinese exports to Africa mainly displace developed country exports.

China’s stock of investments in Africa rose from US$49 million in 1990 to US$7.8 billion in 2008. The total stock of FDI in Africa in 2007 was US$36 billion, with most of it from the EU, US and South Africa. There are about a thousand significant Chinese enterprises in Africa, but the media discourse focuses only on investment in extractive industries, particularly on one investment, the Non-Ferrous Metals Corporation Africa (NFCA) Chambishi copper mine in Zambia.

Conditions at the Chambishi mine, with its 2,200 employees, have indeed been deplorable. Chambishi, however, is not the only Zambian mine where conditions are highly oppressive, as the many strikes at Western and white South African mines show. Zambians regard all the mines as much worse now than they were before privatisation, at World Bank insistence, in the late 1990s. In any case, Chambishi mine is not the largest Chinese-owned enterprise in Africa. In Nigeria, a Chinese conglomerate employs 20,000, including many local managers, yet the media dwells on Chambishi.

A comparison of Chinese and Western firms in Africa would find that many on both sides have oppressive conditions, but Western firms garner much higher profits. In contrast to Western investments, many Chinese enterprises are equity joint ventures, sharing profits with Africans. Most produce for the local market and focus more on infrastructure and manufacturing than do Western companies.