China-Africa Economic & Trade Relations
China-Africa Economic & Trade Relations
Introduction
Following the December 2015 Johannesburg conference on China-Africa
Co-operation, there can be no more denying the fact that China has
become big in Africa and massively involved in several developmental
strides and projects many countries across the continent are making and
undertaking. Just like the rest of the world, Africa can no longer ignore
China. It has become, by far, Africa’s biggest trading partner, exchanging
about $160 billion worth of goods yearly. There are many Chinese companies
operating and working on several projects on the continent, especially in the
areas of construction, infrastructural development, telecommunications,
transport, agriculture, petrochemicals including mining. Reports say over one
million Chinese, mostly labourers and traders, have made Africa their home
within the past decade. However, despite the obvious economic gains for
Africa, a lot of criticism trails China-Africa Co-operation, with imperialism the
major claim. A former Governor of the Central Bank of Nigeria, Lamido
Sanusi, puts it this way: Africa is opening itself up to a “new form of
imperialism”.
Reason for the conference
China's second largest source of crude imports is Africa. Its largest African
suppliers are Angola, Equatorial Guinea, Nigeria, the Republic of Congo, and
Sudan. Smaller exporters include Algeria, Chad, Gabon, Kenya, Liberia, and
Libya. China's top five African trading partners are Angola, South Africa,
Sudan, Nigeria, and Egypt. While the majority of Africa's exports to China are
in oil, it also exports iron ore, metals, and other commodities, as well as a
small amount of food and agricultural products. At the same time, China
exports a range of machinery including transportation and communications
equipment, and electronics to Africa.
In its quest to secure an economic foothold in Africa, China engages in a form
of commercial diplomacy that most other countries can't match. It pitches
vast trade, aid, and investment deals on frequent trips to resource-rich
countries, and retains an almost unparalleled ability to provide low-cost
financing and cheap labour for infrastructure projects. It provides low-interest
loans to countries with low credit ratings, and in turn receives favourable
rights to develop oil and mining projects. In addition, gets major deals in
construction and infrastructure development. China, including its stateowned
banks, say it will provide $1 trillion in financing to Africa by 2025,
much of which will go toward infrastructure, including transnational
highways, railways, and airports.
China has a two-pronged approach to its economic relations to Africa: offering
resource-backed development loans to oil and mineral-rich nations like
Angola, and developing special trade and economic cooperation zones in
several states, including Nigeria, Ethiopia, and Zambia.
Contentious issues in the Co-operation
Labour
Local workers fault Chinese companies for maintaining unfair labour practices
thus debunking China’s official stance that says Chinese investments in Africa
is a “win-win” situation for both sides. In Nigeria and Zambia, local workers
have protested against Chinese companies over poor wages and labour
practices. Some other countries have also voiced concern over China's
continued use of Chinese labour on its projects (more than one million
Chinese citizens now reside in Africa) as against local workforce.
Exploitation
China exploits African resources without building up local African economies
and developing skills. It does this by exporting Africa’s primary goods and
importing manufactured ones without transferring skills. In 2011, late
President of Zambia Michael Sata won the presidency largely by tapping into
anti-Chinese resentments.
Safety and environmental issues
China is known not to be safety and environment conscious especially in the
areas of mining and petrochemicals. Grievances range from poor compliance
with safety and environmental standards to unfair business practices and
flouting of local laws.
Corruption
Chinese companies underbid local firms and influence tenders board
decisions in various African countries. International observers say China's
willingness to pay bribes - as documented by Transparency International’s
2010 Bride Payers Index report - and to attach few prerequisites for aid
undermines both local and international efforts to implement good governance
and macroeconomic reforms on the continent.
Security
China spies on its friends especially through cyber-sphere. Almost all
telecommunication contracts on the continent are handled by Chinese firms
like ZTE and Huawei, both supported by Chinese banks, which are known to
be fronts for the Chinese government.
Fake products
Despite China having the free run of most African countries, it is continually
fingered as the major culprit in importing fake and substandard products into
the continent. Its importation of fake, substandard and cheap textile products
killed the Nigerian textile industry. Chinese citizens have been arrested in
various African countries including Ghana and Nigeria as being the brains
behind massive production of counterfeit audio and video DVDs. Substandard
mobile phones produced in China are also prevalent in Africa.
Indifference to local populace/issues
China’s foreign policy is based on state-to-state relations, practicing noninterference
in local issues and politics. It closes its eyes on the gulf between
African rulers and their people and human rights violations in many African
countries where it has secure lucrative deals. It has few political ambitions,
cooperating with democracies as well as authoritarian governments.
THE SUMMIT
No doubt, Chinese investment and economic presence has helped spur high
economic growth on the continent. But in view of these above-mentioned
contentious issues, is it not about time for Africa to re-access and take a
critical look at China’s role in Africa? The Summit will therefore try to:
- Assess the benefits or otherwise of Sino-Africa ties over the years
- Query if it makes good economic sense to allow China easy access of
Africa’s resources?
- Compare Africa doing business with the West and China
- Enlighten ordinary citizens and business people about China and its
African economic policies
