Africa Diary
Africa Diary

China, Africa and FOCAC: The Trade and Investment Dilemma

China's view on development is seen as singular, an “all-weather” friend, if one accepts the views of such analysts as Hoze Riruako of the University of Namibia. Preconditions are not present; caveats and qualifiers are distinctly absent.

The third summit of the Forum on China-Africa Cooperation (FOCAC) continued to gather momentum as leaders gathered at the Great Hall of the People in Beijing on September 3, 2018. The approached taken at this gathering was not necessarily new from previous FOCAC summits, though it was clear that the PRC had been listening. This was all pattern and plan, a process long thought over in the halls of the Beijing politburo.

The focus had, previously, been on the selfless angle of Chinese foreign policy, the marked contributions of an investment and trade policy without strings while still pursuing a muscular presence on the African continent. Freed of such conditions, the idea was seduction and conviction that would enable China to have access to a continent while also emphasising the theme of development.

The September FOCAC gathering was a suitable reminder about how the PRC involvement in African has developed. In 1980, Sino-African trade was a mere $1 billion. Two decades later, it reached $10 billion. By 2011, it had reached $166.3 billion, a year which saw an giddy increase of 33 percent from the previous year. The African complement for China lay in petroleum, agricultural products, and mineral ores; the Chinese return was a staggering $93 billion worth, mostly consisting of manufactured goods.1

But China’s engagement with Africa can, to a large extent, be laid at the door of the Three Worlds Theory that emerged as a crucial development in PRC foreign policy: China would provide leadership for the Third World in opposition to the First, supplying the stewardship for formerly exploited colonial states against the First World capitalist states made up of former colonial powers. In time, this opposition would also be against a rival hegemon, the Soviet Union. China’s historical sufferings supplied the ideal credentials for understanding the predicament. They had their own aspirations, but also understood the depredations of their enemy.

Since then, China has emerged as a power of concern and promise. “What our ancestors could never have predicted,” explains the rather pessimistic note from the Pan African Alliance, “was the rise of China as a new colonial threat.” September saw a version of this response in finessed form, urgent given the emergence of various threats to the PRC. The Chinese economy, for one, is slowing. The quarterly growth GDP growth of 6.5 percent, while still impressive, is the weakest since the shocks of the global financial crisis between 2008-9. The United States has been pressing what has been regarded as a trade war, though the public response to this is reserved. Chinese officials have attempted to disabuse notions that the recent impositions of tariffs by the Trump administration are significant. “The psychological impact,” explained Vice-premier Liu He this month to China Central Television, the People’s Daily and Xinhua news, “is greater than the actual impact.”2

Whatever softening statements might be stemming from Beijing, September presented Premier Xi Jinping with a chance to adumbrate a sharper PRC policy towards African states. China, explained Xi, had adopted a “five-nos” approach to Africa: that there would be no interference in the pursuit of development paths by African states that fit their specific national conditions; that no interference would be had in the internal affairs of those states; no imposition of China’s will upon them would be forthcoming; nor would there be an attachment of political conditions to the granting of assistance, and no pursuit of selfish political gains in financing and investment cooperation.

The FOCAC Beijing Action Plan (2019-2021) was duly adopted at the summit centred on furthering eight initiatives: industrial promotion, infrastructure connectivity, trade facilitation, green development, capacity building, health care, people-to-people exchange, and peace and security.3 But on closer inspection of the numbers, the $60 billion in future financing promised by Xi is actually $50 billion, the difference being made up by private Chinese investments.

China’s view on development is seen as singular, an “all-weather” friend, if one accepts the views of such analysts as Hoze Riruako of the University of Namibia. Preconditions are not present; caveats and qualifiers are distinctly absent. But this masks a more complex, and for various analysts, troubling picture for the continent. Congolese economist Fweley Diangitukua’s position on the “win-win” stance of China’s development approach to Africa has been clear for some years: Beijing’s wooing policy had to be considered a hoax, meaning that the PRC wins twice. Trade is taking place in abundance but is imbalanced in favour of China, a recipe for underdevelopment reminiscent of European exploitation. Between the lines and buried in the fine print of such arrangements is the importation by China of its own workforce on aid projects, a case that is distinctly beneficial to Beijing. The need for local labour and machinery is alleviated; projects are not stymied. China’s local domestic employment market is thereby eased in terms of its stresses, a point that will become more significant as the Chinese labour market sheds jobs.

Neo-colonial critics

Even as the PRC was pressing for such leadership, the 9 Point Resolution of the Sixth Pan-African Congress held in Tanzania in June 1974 acknowledged the threats and problems posed by the lingering vestiges of colonialism. Leaders resolved to: “Put an end to foreign domination in Africa by destroying the bases of the last colonial and racist regimes; because for as long as part of the African continent continues to suffer under the yoke of foreign domination, irresponsibility and indignity, the personality, and moral integrity of every man, whether or not of African descent, will be jeopardized.”4

Old theorems can survive the transfer to new bottles, and suggesting that China is a neo-colonial power in the mould of Western states vis-à-vis the African continent remains common, though not necessary accurate. FOCAC, so goes this argument, simply serves to perpetuate this approach, another forum designed as much to convince as to deceive about the true economic goals of an emerging superpower. Some scholars have argued that the exploitation of Africa’s natural resources, the export of oil and raw materials to China and, in turn, supplying the Chinese market with cheap mass manufactured goods, enables an exchange to be made in the absence of criticism and oversight. The British columnist and writer Peter Hitchens is even more brazen, suggesting that China is acquiring, and to a large extent has been successful, in establishing a “slave empire” on the continent.5 “China offers both rulers and the ruled in Africa the simple, squalid advantages of shameless exploitation.” Former South African President Thabo Mbeki had himself warned in 2007 that, “China cannot only just come here and dig for raw materials and then go away and sell us manufactured goods.” The aid paradigm also risks coming full circle, with loans potentially leading to the spectre of debilitating debt.

From the European side of things, Karin Kortmann, German development ministry parliamentary secretary, has been a prominent figure warning that China’s trade deals with Africa countries totalling $1.9 billion meant that “our African partners really had to watch out that they are not facing a new process of colonisation.”6 But here, the problems are far more subtle, and Beijing, attuned to such criticism, has attempted to adopt a more refined posture, a point emphasised at the latest FOCAC meeting.

Xi has certainly shown some awareness of these criticisms. The FOCAC gathering gave some room to combat and, in some cases, deflect criticisms. The threats posed by “debt trap diplomacy” and its neo-colonial suggestions were countered by various actions, including the forgiveness of debt to some poorer African states. (These acts are not entirely benevolent: they tend to come with encouragement for greater access for Chinese multinational corporations.) “China’s investment in Africa comes with no strings attached,” stressed Xi to a high-level dialogue with African business representatives and leader immediately prior to the FOCOC summit. “Our cooperation with Africa is clearly targeted at the major bottlenecks to development. Resources for our cooperation are not to be spent on any vanity projects, but in places where they count the most.”7 South African President Cyril Ramaphosa was convinced. The platform for cooperation focused “on the tangible improvement of the quality of lives of all the people of Africa.” FOCAC, in his mind, “refutes the view that a new colonialism is taking hold in Africa, as our detractors would have us believe.”8

Consequences

The modern sentiment advanced by countries keen on good relations with Beijing can be gushily approving. Serbian President Aleksandar Vučić, in a recent meeting with China’s ambassador to Serbia Li Manchang, suggested that, “As the world economy faces the challenges of trade protectionism, China, as a country of great economic power, has once again demonstrated its willingness to help developing countries unselfishly, to the benefit of, as President Xi Jinping said, a common prosperity.”

What is needed here is an understanding about various new symmetries of power: the emergence of, for instance, an “Aid 2.0” idea that challenges Western oriented models. Development aid and assistance tend to be, in the Chinese approach, coupled with trade deals, thereby adding another layer of complexity. Exploitation it might well be, but in a qualified sense. As Stephanie Rupp deems it in an edited collection titled China into Africa: Trade, Aid and Influence (2008), “Relations between African states and China can be best characterised as postcolonial interdependency.”

What is unmistakable here is that aid and development do come with political restraints. Connectivity and Chinese-backed infrastructure projects can simply smack of an accelerated process of exchange that disproportionately favours the PRC. Then comes the issue of criticism of Chinese policy, something that aid and investment tends to stifle. “It’s official,” wrote a concerned Azad Essa in Foreign Policy (Sep 14). “After more than a decade of planning, setting up, and bankrolling African media, the Chinese are ready to cash in on their investment.”9 Interference and managing the affairs of another country remain in the eye of the beholding power. Where there is aid, there is influence; where there are investments, there must be promises of return. The Chinese program and influence is here to stay; what African states might well be advised to do beyond the individual and singular interests pertaining to each, is forge a unified front. The PRC can be, in time, one of several options but it is incumbent on states to improve their means of bargaining and leverage with Beijing. Even Xi duly acknowledges this, suggesting that, “The vigorous development of China-Africa cooperation has… inspired international partners to pay closer attention in Africa and increase their input and cooperation with the continent.”

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.

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