China: a neo-colonialist country?

By Caroline Molette

China is not any longer only a developing country in need of Western funds but is now competing with Western countries on their own lands of influence. One of the most striking examples is the growing Chinese influence in Africa. In 2006, China defined its first strategy for a particular region in the “China’s African Policy” paper in order to present the interests they were seeking in Africa. Behind the promoted ideas of friendship and equality, of development of the economy or of support during International Summits, we understand that China’s main interest in Africa is to do business without intervening in the countries’ Internal Affairs. This very pragmatic approach is however raising international critics. The purpose of this article is to evaluate the legitimacy of these critics and what is China’s strategy to fight against them.

Over the past half decade, China’s business with Africa has grown exponentially. The trade between these two players has increased from $5 billion in 1995 to $166 billion in 2011 and China has become Africa’s first trading partner. In 2011, Chinese Outward Direct Investments (ODI) in Sub-Saharan countries accounted for 20% of total Chinese ODIs, therefore investing more in Africa than the historically dominant industrial economies.

These figures seem to prove that Chinese growing interest in the region has had a positive effect on the development of Africa. However, China is often criticized for its neo-colonialist approach. Indeed, Chinese companies are particularly interested in natural resources and compete with Western companies by increasing the profitability of their investments. Chinese Ambassador in Niamey pointed out the fact that “[Niger] has already had uranium extradition for nearly 40 years. But when one sees that direct revenues from uranium are more or less equivalent to those derived from export of onions each year, there is a problem”. The main problem is then that African countries have difficulties freeing themselves from the status of exporter of raw materials and are stuck in this vicious circle.

However, Western critics say nothing about all the efforts Chinese banks undertake to foster development in the region. Throughout Africa, local governments and Chinese state owned enterprises (SOEs) negotiate bilateral and trade agreements stipulating that Chinese firms would build infrastructures in the country but that in return the governments would let Chinese firms exploit natural resources in order to reimburse them. These loans, which should actually not be considered as development aid but rather mutually beneficial cooperation, exceed the amounts distributed by the World Bank in most poor countries. The main implication of this is that China considers Africa more as a land of opportunities than Western economies that see in Africa an assisted continent in need of help. Moreover, China has actually also invested in more diverse industries that what is generally thought, as the textile industry, fostering many new jobs but also making basic goods like shoes or radios more affordable

Video : Chinese Medias’ Strategy in Africa

These investments have nevertheless serious side effects, rightly pointed out by the International Community.

First, the quality of the products delivered and the management of firms threaten the security of employees and local populations. Indeed, as Chinese offer very attractive terms for these trading agreements, they suffer few competition from Western firms when local governments have to finance themselves new infrastructures. Therefore, some of their works does not live long as this hospital in Luanda, Angola, that had to be closed after only a few months because of serious cracks appearing on the walls, or this road between Lusaka and Chirundu in Zambia that was swept away by the first rains. As for the working conditions of workers, the security equipments in industrial clusters are usually inexistent and protests, that are more common in Africa than in China, often end with gunshots towards employees.

Second, Chinese companies export in China their ways of doing business. Why would not they use corruption to win deals, while it is a common practice in China as well as in Africa? Western countries would like to improve African governance but they cannot impede them from accepting doing business with companies offering cheaper deals. A better way to promote good governance would be to reinforce the institutions in Africa instead of pointing at a country massively investing in this region that need capital so badly.

However, China should be particularly concerned with the growing fears that its presence in Africa is fostering in local population’s minds. Their presence is seen in some countries as a threat towards small businesses as many Chinese entrepreneurs come to Africa in order to train themselves for business before going to more developed economies. In Dar-Es-Salaam, Chinese have been banned from the marketplace because they were perceived to have an unfair advantage over local merchants. Finally, as institutions are too weak to enforce current existing rules at a time where Chinese firms are building industrial cluster from scratch, some firms feel free, for example, to exploit oil in National Parks such as in Gabon.

Therefore, the Chinese government recently appointed Zhong Jianghua as PRC’s special representative for African affairs. His goal is to promote and defend Chinese investments in Africa before its International and African critics but also to fight stereotypes towards Africa in China. China is also investing in the Medias to increase its soft power in Africa. The Chinese Central Television then decided last January to build its first broadcast hub outside Beijing in Nairobi. These two policies reflect the need for China to change the way they are perceived abroad and especially in these countries essential to them but also the new kind of relationship between developing countries in order to oppose the domination of the West.

Sources

http://knowledge.insead.edu/economics-politics/chinas-africa-policy-2282

http://epress.anu.edu.au/wp-content/uploads/2012/05/EAFQ-4.2-WEB-FINAL.pdf

http://www.economist.com/node/18586448

http://edition.cnn.com/2011/BUSINESS/09/08/america.losing.influence.africa/index.html

http://edition.cnn.com/2012/09/05/business/china-africa-cctv-media/index.html

http://www.bu.edu/today/2012/china-and-africa-a-love-story/

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