Western Powers Big Mad, the Africa and China Partnership
By: Danielle D. Rogers
The increased trade and investment between China and Africa have helped to boost Africa’s economic growth,[1] much to the dismay of the United States and other Western nations.[2] Despite Africa’s economic growth, controversy shrouds this growing partnership between Africa and China.[3]
During a 2012 speech in Senegal, Hillary Rodham Clinton, then United States Secretary of State, warned Africa about China.[4] Clinton stated that Africa needs “a model of sustainable partnership that adds value, rather than extracts it,” and that unlike other countries, “America will stand up for democracy and universal human rights even when it might be easier to look the other way and keep the resources flowing.”[5] Some have found Clinton’s remarks hypocritical and patronizing.[6] In response to Clinton’s comments during Clinton’s trip to Africa, Professor Emilio Viano of American University stated that one “of the major objectives of the visit is to compete with China and try to limit China's influence, business making and political power in Africa.”[7] Xian Xuejun, then Chinese Ambassador to South Africa, stated that “some western politicians and media tend to make irresponsible remarks on China-Africa relations, attempting to mess up our co-operation.”[8]
Recently, United States Secretary of State Mike Pompeo criticized China during a speech to Ethiopian business leaders at the U.N. Economic Commission for Africa in the Ethiopian capital.[9] Pompeo stated that countries “should be wary of authoritarian regimes and their empty promises” and that the regimes “breed corruption, dependency and instability, not prosperity, sovereignty and progress.”[10] He also announced that United States firms signed several memorandums of understanding for infrastructure projects across Africa.[11]
The Trump administration seeks to rival China’s influence on Africa with the Prosper Africa trade and investment strategy and a new development financier, the United States International Development Finance Corporation.[12] Analysts have stated that this proposal is the United States’ direct attempt to counter Beijing’s Belt and Road initiative, which will link China by sea and land to Africa, Southeast, and Central Asia, and the Middle East.[13] Aside from a long-continued history of exploiting the resources of African countries, the United States has not done a lot in their efforts to serve as a credible alternative to China.[14] Africans want action and can see the progress that China makes throughout the continent.[15] W. Gyude Moore, a Fellow at the Center for Global Development, stated that the United States sees the infrastructure that China implements and attempts to compete with China in infrastructure, which “hasn’t been an American advantage over the past 40 to 50 years.”[16] The inability to focus on a sector, as shown with the Prosper Africa Initiative, and capitalize on American strengths creates a lack of success for the United States in its diplomatic relations with Africa.[17]
The United States also has not treated Africa as its equal. Recently, Trump expanded a travel ban to six African countries: Nigeria, Sudan, Tanzania, Eritrea, Libya, and Somalia.[18] In addition to this ban, Trump even referred to African nations as “shit-hole countries.”[19] Further, the bulk of trade between the United States and Africa consists of the United States paying low costs for the importation of raw materials and Africa’s importation of high cost manufactured goods.[20] In contrast, the trade between Africa and China is relatively more balanced.[21] In 2008, African countries imported around $50 billion of Chinese goods.[22] Western corporations also are not paying taxes in Africa.[23] Regardless, Africa yields an endless amount of opportunities for growth, and competition “among foreign investors holds the prospect of better returns for African states.”[24]
Much controversy centers around the fact that there are over 10,000 Chinese-owned businesses in Africa and 90% of the businesses are privately owned rather than the various Chinese state-owned companies.[25] Panos Mourdoukoutas, Professor at Columbia University and Chair of the Department of Economics at LIU Post, stated that the “reason Chinese corporations are in Africa is simple; to exploit the people and take their resources. It’s the same thing European colonists did during mercantile times, except worse. The Chinese corporations are trying to turn Africa into another Chinese continent. They are squeezing Africa for everything it is worth.” [26]
In addition to the neo-colonial view on China’s engagement in Africa, some also believe that the large inflow of Chinese products, Chinese labor for infrastructure projects, and Chinese traders present a severe danger to African manufacturers and local job markets.[27] As a result, under this view, Chinese engagement will not likely benefit Africa’s development long-term.[28]
Others view the series of economic zones throughout Africa as a unique model in which the cooperation by Chinese companies creates a promising new method to sustain long-term industrialization.[29] Economic trade and cooperation zones, also known as Special Opportunity Zones, are distinguished geographic areas within a country.[30] Zones offer tax and infrastructural incentives appealing to investors[31] such as free import and export, liberal business tax and rules, and special regulatory schemes.[32] Zones have played a vital role in supporting structural transformation and are generally designed to promote export and direct foreign investment.[33] Additionally, zones have helped to stimulate the political economy of reform by allowing countries to have a controlled exposure to global markets and pilot new policies before extending the policies to the broader economy.[34] Despite the extremely high success of zones in China, zones have a mixed record in other countries.[35]
China’s Ministry of Commerce created economic and trade cooperation zones in several African countries.[36] Aside from China’s Ministry of Commerce program, Chinese enterprises have developed several industrial zones throughout Africa and Chinese leaders view the zones as a way to develop local industries and expand local employment.[37] Despite the success of the first processing zones established in Mauritius during 1971 and partial success of the zones in Kenya, Madagascar, and Lesotho, most African zones have not yielded much success nor achieved structural transformation like Mauritius.[38] The zones throughout Africa present issues with local learning for workers, quality of investment, employment, a lack of infrastructure, the absence of government support, and inaccessibility to technology.[39] For example, after recent political turmoil and its suspension from the African Growth and Opportunity Act, Madagascar lost tens of thousands of jobs within the Structural Economic Zones.[40]
Another major criticism centers on the accusation that China is engaging in “debt-trap diplomacy” with Africa.[41] Chinese President Xi Jinping stated that "China's investment in Africa comes with no political strings attached” and “China does not interfere in Africa's internal affairs and does not impose its own will on Africa."[42] In addition to funding for financing projects and planning initiatives for emergency food aid, China offered African countries interest-free loans and concessional loans.[43] In response, critics often mention how Malaysia and that Pakistan are deeply in debt to China and have reconsidered projects.[44] However, these sources fail to factor in the unique circumstances of each emerging economy nor give specific information as to how the situations in both Pakistan and Sri Lanka compare to the Chinese-financed projects throughout Africa.[45] Many, like the IMF and World Bank, also criticize the lack of transparency surrounding the loans China lend and argue that China creates hidden debt.[46] Kaho Yu, Senior Asia Analyst at Verisk Maplecroft, stated that although “Beijing’s lending can help developing countries, an opaque build-up of debt may eventually drag down economic growth.”[47]
Borrowers must receive timely debt data to make informed decisions and citizens have the right to hold their governments accountable through debt transparency.[48] However, this is not an issue for China. Transparency is a strong indicator of democracy and African leaders must be held accountable. If African leaders are undertaking unsustainable amounts of debt that jeopardize the sovereignty of their country, China will most likely seize strategic assets as collateral, which will negatively impact citizens.[49] For example, Zambia is currently restructuring, negotiating, and refinancing its extensive Chinese project debt and Chinese companies want collateral.[50] Chinese firms are seeking to benefit from the liquidation of Konkola Copper mines (Zambia is the second largest copper producer in Africa) and gain control over Zambian mining assets.[51] A divestment of sovereignty in assets could negatively impact the income source of many citizens and serves as a source of both exploitation and colonization. Therefore, African leaders must keep their deals with China opaque.
Every relationship experiences growing pains and growth comes with risks and challenges. Westerners must rebut the presumption that Africans automatically have an inferior ability to bargain in foreign relationships. As a continent with emerging economies in several countries and strong leaders, Africa is more than capable of crafting trade and investment deals beneficial to its infrastructure. Africans have a lot of leverage in their negotiations with China to finance and build infrastructure.[52] African countries must start on equal footing with bargaining, maximize the interests of its country, perform research as to the parameters of what China can and cannot do, have transparency with deals, and make their demands known.[53] For a successful partnership, China must avoid the unsuccessful tactics that lead to the exploitation of African countries and not implement colonial structures that divest the sovereign interests of African countries.
#China #Africa #SEZ #HumanRights #InternationalLaw
[1] Wenjie Chen, et al., Why Is China Investing in Africa? Evidence from the Firm Level, 23 The World Bank Econ. Rev. 3 (October 2018), https://academic.oup.com/wber/article/32/3/610/2669775.
[2] Foreign Staff, China raises fears of 'new colonialism' with $60 billion investment across Africa, Telegraph (Sept. 3, 2018), https://www.telegraph.co.uk/news/2018/09/03/china-invest-60-billion-across-continent-raising-fears-new-colonialism/.
[3] Chen supra note 1, at 1.
[4] Howard W. French, Into Africa: China’s Wild Rush, New York Times (May 16, 2014), https://www.nytimes.com/ 2014/05/17/opinion/into-africa-chinas-wild-rush.html.
[5] Id.
[6] Id.
[7] David Smith, Hillary Clinton launches African tour with veiled attack on China, Guardian (Aug. 1, 2012), https://www.theguardian.com/world/2012/aug/01/hillary-clinton-africa-china.
[8] Id.
[9] Giulia Paravicini, Pompeo takes veiled swipe at China on final leg of Africa trip, Reuters (Feb. 19, 2020), https:// www.reuters.com/article/us-usa-pompeo-ethiopia/pompeo-takes-veiled-swipe-at-china-on-final-leg-of-africa-trip-idUSKBN20D1PB.
[10] Id.
[11] Id.
[12] Id.
[13] Id.
[14] U.S. Tries to Persuade Africa It’s a Credible Alternative to China, The China in Africa Podcast (Mar. 28, 2020), https://chinaafricaproject.com/podcasts/u-s-tries-to-persuade-africa-its-a-credible-alternative-to-china/.
[15] Id.
[16] Id.
[17] Id.
[18] Liam Knox, Civil rights groups condemn Trump's travel-ban expansion to six African countries, NBC News (Feb. 27, 2020), https://www.nbcnews.com/news/nbcblk/civil-rights-groups-condemn-trump-s-travel-ban-expansion-six-n1142231.
[19] Id.
[20] Chen supra note 1, at 1.
[21] Id.
[22] Id.
[23] Ghana’s Risky 2 Billion Roads for Resources Gamble with China, The China in Africa Podcast (Mar. 28, 2020),
https://chinaafricaproject.com/podcasts/ghanas-risky-2-billion-roads-for-resources-gamble-with-china/.
[24] Howard W. French, Into Africa: China’s Wild Rush, New York Times (May 16, 2014), https://www.nytimes.com/ 2014/05/17/opinion/into-africa-chinas-wild-rush.html.
[25] Wendover Productions, How Africa is Becoming China’s China, YouTube (Jul.31, 2018), https://www.youtube.com/watch?v=zQV_DKQkT8o.
[26] Panos Mourdoukoutas, What is China Doing In Africa?, Forbes (Aug. 4, 2018), https://www.forbes.com/sites/panosmourdoukoutas/2018/08/04/china-is-treating-africa-the-same-way-european-colonists-did/#23d2b0c2298b.
[27] Deborah Brautigam & Tang Xiaoyang, African Shenzhen: China’s special economic zones in Africa, 49 J. of Modern African Stud. 49, 27-30 (2011).
[28] Id.
[29] Id
[30] Thomas Farole and Lotta Moberg, Special Economic Zones in Africa Political Challenges and Solutions, in The Practice of Industrial Policy: Government-Business Coordination in Africa and East Asia 235, 235 (John Page & Finn Tarpe eds. 2017), https://www.oxfordscholarship.com/view/10.1093/acprof:oso/9780198796954.001. 0001/acprof-9780198796954-chapter-12?print=pdf.
[31] Xinhua, Africa advised to use economic zones to attract Chinse investment, ChinaDaily (Aug. 7, 2017), https://www.chinadaily.com.cn/business/2017-07/08/content_30041506.htm.
[32] Farole, supra note 17, at 235.
[33] Id.
[34] Id.
[35] Id. at 236.
[36] Brautigam, supra note 27, at 29.
[37] Id.
[38] Id; Farole, supra note 17, at 236.
[39] Id.
[40] Farole supra note 17, at 237.
[41] Foreign Staff, China raises fears of 'new colonialism' with $60 billion investment across Africa, Telegraph (Sep. 3, 2018), https://www.telegraph.co.uk/news/2018/09/03/china-invest-60-billion-across-continent-raising-fears-new-colonialism/.
[42] Id.
[43] Id.
[44] Id.; Panos Mourdoukoutas, What is China Doing In Africa?, Forbes (Aug. 4, 2018), https://www.forbes.com/sites/panosmourdoukoutas/2018/08/04/china-is-treating-africa-the-same-way-european-colonists-did/#23d2b0c2298b.
[45] See id.
[46] Weizhen Tan, China’s loans to other countries are causing ‘hidden’ debt. That may be a problem, CNBC (June 11, 2019), https://www.cnbc.com/2019/06/12/chinas-loans-causing-hidden-debt-risk-to-economies.html.
[47] Id.
[48] Id.
[49] Are African Governments Naïve to Take on so Much Infrastructure Debt?, The China in Africa Podcast (Mar. 28, 2020), https://chinaafricaproject.com/podcasts/are-africans-naive-to-take-on-so-much-chinese-infrastructure-debt/.
[50] Elliot Smith, Zambia’s spiraling debt offers glimpse into the future of Chinese loan financing in Africa, CNBC (Jan. 14, 2020), https://www.cnbc.com/2020/01/14/zambias-spiraling-debt-and-the-future-of-chinese-loan-financing-in-africa.html?__source=twitter%7Cmain.
[51] Id.
[52] Naïve, supra note 56.
[53] Id.