China: A New Partner for Africa’s Development?
China: A New Partner for Africa’s Development?
“The need for a constantly expanding market for its products chases the bourgeoisie over the surface of the globe. It must nestle everywhere, settle everywhere, and establish connections everywhere.” With these words, Marx and Engels in the Communist Manifesto capture the basis for the expansionist instinct of capitalism. Perhaps, so far in this millennium, no state, the organ of the ruling class of a nation, has more aptly characterized this exposition than China, an ex-Stalinist-Maoist state on the irreversible transition to capitalism.
As for its predecessor, the western imperialism, Africa provides the choicest place for China’s products: oil to fuel its growing economy, natural resources to feed its industries and of course market for its manufactured goods. China dated its relations with Africa to 1956 when it supported liberation movements in the continent – Angola, Mozambique, etc. But that relationship was driven, in that ‘cold war’ era, by rivalry with both imperialism and Moscow’s rival Stalinist regime. Often the Beijing and Moscow elites would back rival liberation movements not for ideological reasons, but to gain points of support. This time around the motivation is primarily business – a classical pursuit of naked economic interest.
With the visit to the Seychelles on February 10, Chinese President Hu Jintao completed a 12-day tour of Africa. This visit, which had earlier taken him to other seven countries – Cameroon, Liberia, Sudan, Zambia, Namibia, South Africa and Mozambique – was his second to the continent in just nine months and the third since assumed office in 2003. This underscores the strategic importance of Africa to the phenomenal growth of China.
QUEST FOR AFRICA’S NATIONAL RESOURCES
China, the second biggest consumer of oil after the US, having overtaken Japan, is responsible for 40% of growth in global oil demand. It gets one-third of its imported oil from Africa. This is in addition to raw materials – minerals, farm products and timber – it gets in abundance from the continent. More than 50% of China’s investment abroad is in extractive resources and Africa has a fair share of it. It invested hugely in the exploration, production infrastructure and transportation of oil in Sudan. In return it gets almost 80% of the Sudan’s oil export. In a similar vein, it imports 25% of Angola’s oil. In Nigeria, last year it secured $2.3bn 45% stake in an oilfield which will produce 225, 000 barrels per day when coming on stream in 2008.
To guarantee supply of copper from Zambia, on the top of already over $500 million investment in Zambia, China is setting up a new economic partnership zone in Zambia’s Copperbelt province expected to draw in $800 million in the next three years. The zone is expected to create 50, 000 jobs in addition to 10, 000 jobs already created by Chinese investment.
China earns concessions from Africa governments in oil and mining rights through aid, preferential loans and construction projects. At the end of the last November Sino-African Summit, Beijing announced the provision of $5bn in loans and credits for a three year period, the establishment of $5bn China-Africa development fund to encourage Chinese companies to invest in Africa and the cancellation of debt in the form of all the interest-free government loans that matured at the end of 2005 owed by the heavily indebted poor countries and the least developed countries in Africa that have diplomatic relations with China. Five African countries: Gambia, Burkina Faso, Sao Tome, Swaziland and Malawi do not have diplomatic relations with China for recognizing Taiwan, an independent state considered a renegade part by China. While preparing to set for the journey to Africa, Hu announced that 33 African countries would benefit from the debt write-off.
NO FREE LUNCH
China does not however give free lunch. Its aid also has strings, though of much lesser degree than that of the West, and mostly commercial. For instance, in 2004 the China granted Angola a $2bn credit for rebuilding infrastructure destroyed during the civil war, but in return Beijing would receive 10, 000 barrels of oil per day. On top of this was a condition that only 30% of the construction project that would be subcontracted to Angolan firms.
Similarly, last year after the visit of Hu, China gave Nigeria $2.5bn loan for infrastructure development, but secured an $8.3bn contract for modernization of the Nigeria’s primitive railway. The Chinese firm handling what is called a “design, construct and maintain” project said 50, 000 Nigerians would be employed in the work. Ordinarily, this job promise would have been welcome with hurrah, but for the horrid experience of Nigerians working in Chinese companies, which are the worst forms of sweatshops in the country. Also attached to the loan is the control stake of the 110, 000 barrel per day refinery in Kaduna, northwest Nigeria, that has been won by China.
It is not only China that sees the Sino-Africa cooperation as a strategic partnership for development, the African leaders also do. They jointly formed Forum on China-Africa Cooperation (FOCAC), which had its maiden summit in 2000. The trade between China and Africa rose from $10bn in 2000 to $55.5bn last year and projected to hit $100bn by 2010. Of course, oil, minerals, other raw materials and Chinese made goods make up most of the trade. Largely connected to this trade, Africa, for instance in 2005, witnessed 5.5% growth in its economy, though concentrated among the mineral-rich countries. Besides, on the surface, the trade is more favourable to Africa which records surplus in relation to China. However, in reality Africa is the net loser. While it imports raw materials particularly oil to enhance its growth, China floods the continent with cheap goods that contribute to killing of local industries, particularly the textile and clothing. This is a major element in the growing hostility against China’s presence in Africa, which will be addressed in a greater detail later on.
THE WEST FRIGHTENED
The West has appeared green with envy on the China’s success in Africa. Though it still trails the West in term of investment and trade in the continent, China has overtaken Britain to become Africa’s third biggest trading partner after the US and France. This new situation has allowed some African regimes some limited room to play off different foreign powers against one another. The western imperialism is worried about increased diplomatic and economic competition from China as regards access to resources.
The US, which at present gets 15% of its imported oil from Africa, in the face of the growing geo-political threat to oil supply in the Middle East, has projected to secure 25% of oil import from Africa, particularly the Gulf of Guinea, within a decade. Achieving this target may be threatened by China. But to protect its interest the US has constituted the oil-rich countries in the Gulf of Guinea into what is called Gulf of Guinea Energy Security.
France is also feeling the heat on its tracks. The effect of China on the France’s influence in Africa has become an issue in the on-going campaign for the forthcoming presidential elections. The two leading candidates, Segolene Royal and Nicolas Sarkozy have promised to improve on the relation with Africa where France’s traditional influence has come under threat from China red-hot quest for resources. Apparently trying to incite African leaders against China, French President Jacques Chirac, at this year biennial France-Africa summit in February whose one of the themes was “how to tap and protect Africa’s natural resources”, admonished, “Africa is rich, but Africans are not. The continent holds one-third of the planet’s mineral reserves. It is a treasure trove. But it must be neither pillaged nor sold off cheaply”. Good talk! But it is a kettle calling pot black. The West including France is the worst culprit, however not the only one, in rendering Africa underdeveloped and poverty stricken in the midst of its colossal wealth. Right from the trans-Atlantic slave trade through the colonial epoch to the current era of neo-liberal capitalism and multinational domination, the West has continued to pillage the resources of the continent.
While it can only make murmur on the China’s “encroachment” on its sphere of influence, the West ostensibly hinges its grumble on the Beijing’s lack of qualm about dealing with dictatorial regimes rendered pariah by the West like Sudan and Zimbabwe. Of course this does not prevent the West fully backing the oil rich feudal Saudi dictatorship.
China, a veto-wielding member of the UN Security Council, has severally prevented sanction against Khartoum for its role in Darfur conflict where government sponsored militia has killed some 200, 000 people and left 2.5 million homeless since 2003. Paul Wolfowitz, a former US Deputy Secretary of Defence in the Bush Jnr administration and currently President of World Bank, has reportedly accused China of ignoring human rights in Africa. But China is treading the path already charted by the West. Thus, the west does not have moral authority to condemn China’s support for repressive regimes. History is replete with several instances of the West supporting repressive regimes all over the world out of economic and strategic interest. The US and Britain have severally vetoed criticisms against the belligerent Israeli government over its repression of Pakistani and Lebanese people. The New York Times in its editorial of February 19, 2007 aptly captured the point, “China is not the first outside power to behave badly in Africa. But it should not be proud of following the West’s sorry historical example”
WHO RUINED AFRICA’S LOCAL INDUSTRIES?
Inside Africa it is not all a pat on the back for China on its economic expedition in the continent. Workers and poor masses have protested the flooding of Africa with Chinese cheap goods that kills local industry particularly textile and clothing, and makes hundreds of thousands to lose jobs in Zambia, Namibia, Nigeria, South Africa and elsewhere in the continent. The opposition has already taken to the street thousands of South African textile workers where about 100 manufacturing units have been closed and close to 100, 000 jobs lost. In Nigeria though there has not been political action, textile trade unions have been grumbling over closure of about 100 factories and loss of about 200, 000 jobs in the last 8 years.
But can one reasonably blame the collapse of local industry in Africa solely on cheap Chinese goods? Let’s take Nigeria as an example. Despite being blessed with the world 10th largest reserve of gas in addition to vast availability of coal and hydroelectric potentials, Nigeria generates only 3,000 MW of electricity. Even recently this dismal output has plummeted to ridiculous 1,500 MW for a population of over 140 million. Yet, the government claimed to have spent over $2bn on the power sector in the last 6 years. The attendant inadequate and epileptic power supply has meant that companies are run on generating set powered by expensive fuels that are sometimes a scarce commodity in spite of the country being the 7th largest producer of crude oil in the world.
As a result the cost of doing business is dearly and products are expensive. Yet, the anti-poor neo-liberal economic policies have meant that the purchasing power of workers and poor masses are low. Factories are closed and workers thrown into labour market. In January, Michelin, a tyre manufacturing company that had over 2,000 Nigerian workers in its workforce, announced the closure of its operations in Nigeria citing high cost of energy that makes business unprofitable. Chinese cheap apparel has only worsened the situation in textile industry.
RISING HOSTILITY AGAINST CHINA
But the Chinese anti-labour practices and contemptuous disregards for rights, safety and improved living and working conditions of workers have attracted to the Chinese the deep-seated odium of workers and poor masses in the continent. Chinese companies are characterized by unsafe working conditions and poor environmental practices. In 2005, 51 workers died in explosion at the Chinese run mine in Copperbelt while 5 workers were shot dead during a protest over working condition at the same mine last year. Similarly, in Lagos Nigeria, 29 workers were roasted alive in inferno at a Chinese firm in 2002. The workers in the firm were always locked inside without emergency exit. The affected workers died because they could not escape.
Chinese firms do not respect minimum wage and labour laws of the host country. The workers are usually engaged as casuals on low pay and with no benefits and rights to form or belong to a trade union. Some of the firms also bring to Africa their own low-paid Chinese workers who however earn much more than the average African worker. But it is important for African workers to see that workers in China could be one of their strongest allies, their common enemy is capitalism. Today the Chinese working class is the largest in the world and when it starts to struggle for democratic rights and better living conditions this will be in the interests of workers and poor around the world.
While in Zambia President Hu himself had a taste of bitterness against Chinese by ordinary workers and the poor. To avoid being embarrassed by a planned protest over poor working conditions by workers at the Chinese mine, he had to cancel at the last minute his scheduled visit to Copperbelt province, the economic heartland of Zambia, where china has heavily invested and planned to build a stadium. For the same reason, the University of Zambia was heavily cordoned off with the armed police for the two days the visit lasted.
In the same Zambia, the Chinese investment became an issue in the last year general election with the main opposition leader, Michael Sata capitalizing on the growing hostility against the Chinese. He promised to chase away the Chinese and recognize Taiwan if he won. Though, the incumbent, Levy Mwanawasa won the presidential election, the Sata’s party, Patriotic Front, swept the parliamentary seats in Lusaka, the capital, and Copperbelt province.
In apparent attempt to launder its image in Africa, the China on the eve of the last Sino-Africa summit issued “Nine principles” to “Encourage and Standardize Enterprises’ Overseas Investment”. The principles require Chinese companies operating overseas to abide by local laws, bid contracts on the basis of transparency and equality, protect the labour rights of local employees, protect the environment, etc. But can the Chinese give what they do not have? The Beijing government is undemocratic and does not accord any rights to workers in China. Implementing the “nine principles” will be a tall order, though they could be forced by circumstance to shift ground to an extent.
Some African leaders like Thambo Mbeki of South Africa have also warned against Africa relations with China assuming colonial relations. Mbeki told a youth conference in Capetown in December 2006 that, “China cannot only just come here and dig for raw materials and then go away and sell us manufactured goods”. He opined such arrangement could condemn Africa to underdevelopment. However Mbeki himself is not concerned about the plight of African workers, he is worried about the future of the South African ruling class.
WHO UNDERDEVELOPED AFRICA?
Agreed, on the basis of logic of capitalism, any economy rested on primary commodities, which are usually non-renewable, is doomed. But, it is shameless for any leader of mineral-rich Africa to impute continent’s underdevelopment solely to China and other industrialised nation, which need raw materials for their economies. Nigeria, for instance, has realised about $400bn from the sales of crude oil alone since 1958, yet there is nothing to show for it, besides being looted by its thieving capitalist ruling elite. This huge revenue, a study reveals, is six times what the US spent through the Marshal Plan to successfully rebuild the Western Europe devastated by the Second World War. The primitive accumulation was so alarming that the World Bank was forced to reveal in 2004 that only 1% Nigerian thieving elite consumes 80% of the country’s oil and gas revenue. If the resources rich countries had used the enormous wealth to provide infrastructure and industrialize, they themselves could as well become net importer of raw materials. China is oil-rich and only import 40% of its oil consumption.
However, it is apposite to state that besides the parasitic nature of African leaders, the western imperialism created the pre-condition for the underdevelopment of Africa. The World Bank that was originally established to assist in reconstruction and development of the war-devastated Western Europe through state interventionist economic model today prescribe to Africa and the third world the market oriented neo-liberal economic policies for their development.
African leaders are encouraged by the western imperialism to cut social spending on basic needs like education, health care, housing etc, and thus left with huge but loose resources for looting. But they are advised to provide infrastructures not for the sake of their populace but in order to make their economies more easily exploitable. In its Newsletter of November 9 2006, the World Bank Group stated, “Africa is enjoying economic resurgence but a focus on social spending means poverty-stricken lack sufficient roads and communication to attract foreign firms.” The dictate of World/IMF explains why workers and poor masses in Africa have not seen improvement in their living condition despite the increased wealth and economic growth brought about by rise in commodity prices occasioned by China’s growth and other factors.
GENUINE PATH TO DEVELOPMENT
To set stage for development the African countries have to commit their huge resources to build viable industrial base that could produce manufactured goods of international standards and engender diversification of economy. But to mobilize adequate resources to finance its industrialization along with the provision of basic needs for its populace, the commanding heights of the economy have to be nationalized and put under democratic management and control of the working masses. This however entails attack on the rapacious interest of multinationals and greed of the local capitalist elite. Therefore, achieving this will require a mass struggle of workers and poor masses of Africa, with the international working class solidarity including with Chinese workers, aimed at defeating capitalism and enthroning genuine socialism on the continent.