Big leap in China-Africa ties

Beijing offers continent more aid, trade and business
From Africa Renewal: 
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Nigerian President Olusegun Obasanjo with Chinese President Hu Jintao at the opening Nigerian President Olusegun Obasanjo with Chinese President Hu Jintao at the opening of the China-Africa summit in Beijing.
Photograph: AP / Elizabeth Dalziel

Like other African leaders, Ethiopian Prime Minister Meles Zenawi returned home from a three-day summit in Beijing with enthusiastic praise for his hosts and an armful of new economic agreements. More Ethiopian agricultural products would be allowed into China duty-free, he revealed, and China had pledged some $500 mn for various development projects in Ethiopia. “China is an inspiration for all of us,” he added. “What China shows to Africa is that it is indeed possible to turn the corner on economic development.”

Fifty years after China established its first diplomatic ties with an African country, the third summit of the Forum on China-Africa Cooperation was held 3–5 November. It marked the biggest-ever gathering between Chinese and African leaders. All 48 African countries that have diplomatic relations with China took part — with most of their delegations led by presidents or prime ministers. In addition, hundreds of African businesspeople went for a two-day trade exhibit immediately following the summit, eager to explore new market outlets in the most populous country in the world, which has one of the fastest growing economies.

‘New type’ partnership

Building on several years of growing exchanges between China and Africa, the summit approved a three-year action plan to forge a “new type of strategic partnership.” That partnership, the plan says, would be based on pragmatic cooperation, equality and mutual benefit. The plan pledges that China will:

  • Double aid to Africa by 2009 (to about $1 bn)
  • Set up a $5 bn China-Africa development fund to encourage Chinese companies to invest in Africa
  • Provide $3 bn in preferential loans and $2 bn in preferential buyer’s credits to African countries
  • Cancel all debt stemming from Chinese interest-free government loans that matured by the end of 2005, for the 31 highly indebted and least developed countries (LDCs) in Africa that have relations with China (an amount estimated at around $1.4 bn)
  • Further open China’s markets to exports from African LDCs by increasing from 190 to 440 the number of products receiving zero-tariff treatment
  • Train 15,000 African professionals, double the number of Chinese government scholarships given annually to Africans (to 4,000) and send 100 senior agricultural experts and 300 youth volunteers
  • Build 30 hospitals, 30 malaria treatment centres and 100 rural schools.

China also vowed to support the African Union, the continent’s regional organization, including by building a new convention centre at the AU headquarters in Addis Ababa. It likewise reaffirmed its commitment to the New Partnership for Africa’s Development (NEPAD), the AU’s development plan.

The Forum on China-Africa Cooperation, which will hold its next summit in Egypt in 2009, is an important vehicle for dialogue on Africa’s behalf, noted UN Under-Secretary-General and Special Adviser on Africa Legwaila Joseph Legwaila, who represented the UN at the meeting. The forum, he said, lends a “strong voice” to the UN’s work to promote African interests among developed countries, including on aid, debt relief, market access and support for Africa’s anti-poverty efforts.

No strings

During visits to several African countries earlier in the year, Chinese President Hu Jintao reiterated his government’s longstanding “policy of non-interference in other countries’ internal affairs.” On that basis, all African governments that have diplomatic ties with China were invited to the Beijing summit, no matter what their records on democracy or human rights. That stance elicited some criticism, including from human rights groups and donor agencies.

“As long as China is so willing to invest in Africa, we must not miss out on the bounty. But we must engage with our eyes wide open.”

— Macharia Gaitho, managing editor, The Nation (Kenya)

Some African commentators have pointed to shortcomings in China’s economic involvement in Africa. They have cited the limited regard for environmental and safety standards of some Chinese companies, their tendency to bring in Chinese workers rather than hire Africans and the stiff competition that African manufacturers face from large quantities of low-priced Chinese imports.

While acknowledging such drawbacks, other Africans have welcomed the opportunity to diversify the continent’s external partnerships. They also appreciate the absence of explicit political or economic policy conditions on China’s part, in contrast to the sometimes heavy-handed approach of certain Western powers.

During the summit, the Chinese authorities signaled their willingness to pay greater attention to countering corruption and protecting the environment in their African activities. Premier Wen Jiabao said that projects implemented by Chinese firms would be conducted in an “open, fair, just and transparent” manner. The action plan pledged Chinese assistance in building African countries’ capacities to safeguard the environment and preserve biodiversity.

‘Eyes wide open’

Chinese foreign investment in Africa has grown spectacularly since the early 1990s. According to a recent study by the industrialized countries’ Organization for Economic Cooperation and Development (OECD), flows of Chinese direct investment into Africa in 2003 reached $107 mn, more than 100 times the annual level in 1991. Today, some 700 Chinese firms are estimated to hold a total investment stock of $6.3 bn in Africa. The Beijing summit brought a dozen major new investment agreements totaling $1.9 bn. They included deals to build expressways in Nigeria, a telephone network in rural Ghana and an aluminum smelter in Egypt.

“As long as China is so willing to invest in Africa, we must not miss out on the bounty,” Mr. Macharia Gaitho, managing editor of the Kenyan daily Nation, commented. “But we must engage with our eyes wide open.”

‘More balanced’ trade

Trade between China and Africa is also expanding rapidly. Valued at only around $3 bn in 1995, total trade grew to an estimated $40 bn in 2005. Premier Wen stated during the summit that China hopes to increase that amount to $100 bn by 2010.

So far, the nature of these flows has been quite similar to those between Africa and its traditional trading partners, noted the OECD study, The Rise of China and India: What’s in it for Africa? For the most part, it found, Africa exported oil and other raw materials to China, while importing Chinese manufactured goods. Inexpensive Chinese textile and clothing products have become prevalent in many African markets, seriously jeopardizing the survival of Africa’s own manufacturers.

A columnist in the Nigerian Daily Trust newspaper, Mr. Charles Onunaiju, observed that unless steps are taken to alter this pattern of trade, “the relationship in future will come to resemble the Europe/America and Africa relations, that is, lopsided, dependent and even detrimental to Africa.”

China’s leaders are responding to such criticisms. The action plan calls for the growth of China-Africa trade “in a more balanced manner.” The decision to more than double the number of African products allowed into China duty-free was one concrete step in that direction. Another was a Chinese pledge earlier in the year to voluntarily cap clothing exports to South Africa.

Whatever questions Africans may still have about China’s economic relations with the continent, noted Mr. Legwaila, the high African turnout in Beijing “was a clear demonstration that China has succeeded in winning the confidence of its African partners.”