Future Prospects And Impacts Of Chinese Expansion In Africa – Analysis
Since the Chinese first began heavily investing in Africa, the continent’s citizens have witnessed many changes in the economic, social and cultural spheres of their countries. It is difficult today to say unambiguously whether these changes have been positive or negative overall. One thing is certain, however: Chinese expansion into Africa has raised many questions, especially in areas as environmental protection, respect for human rights, workers’ rights and the protection of local labor markets.
The Chinese authorities have clearly demonstrated their desire to make economic growth and profit their top priority, as these go hand in hand. It is little wonder that the policy of the People’s Republic in African countries is largely aimed at maximizing profits and expanding its share of the continent’s natural resources to perpetuate domestic growth, and by doing so, maintaining control over their own society.
Matters are further complicated by the fact that Chinese investments are mainly concentrated in the most environmentally sensitive industries, such as crude oil exploration, natural gas, and mining of coal and precious and semi precious minerals. Western companies operating in Africa are widely believed to be following guidelines and international standards, which reduce negative environmental externalities. Chinese companies have not yet adopted international environmental standards, and they rather follow their own. These often do not respect even the most fundamental of environmental guidelines, as largely adopted by Western corporations. The logic is simple for the Chinese: the lower the environmental standards are, the greater the competitiveness for Chinese companies on the African market. The cost factor is the other main advantage of Chinese business models, and top Western companies usually lose out on winning highly lucrative contracts. Of seemingly little concern to the Chinese, many such investment activities present a real threat to African wildlife. For example, China Petroleum & Chemical Corporation (SINOPEC), one of the largest integrated petroleum and petrochemical companies in China, set up a drilling company in the Loango National Park in Gabon a few years back.
Thabo Mbeki, president of South Africa, and Olusegun Obasanjo, president of Nigeria, have sharply criticized Chinese companies for their across the board violations of safety and working standards. They have warned locals in Africa of the “new Chinese colonialism,” such as the case of in the Loango National Park. Oil exploration in the area lasted until September 2006, when the Park authorities banned the company from carrying out additional work in the Protected Area. It was only too evident after the start of operations that the exploration of fields operated by SINOPEC had contributed to the destruction of several rare species of plants and animals. In Nigeria, the Chinese company Western Metal products Company Limited (WEMPCO) is accused of releasing raw sewage into the river in the southeastern part of the country, thereby destroying the integrity of water resources which had been habitually used by local fishermen for many years.
Another Chinese company called WAHUM, operating in Lagos, has been targeted by NGOs, which criticize the amount of pollution it is pumping into the atmosphere.[i] Moreover, the building of dams and waterworks by Chinese companies, such as Project Merowe in Northern Sudan,[ii] is adversely affecting the environment. In Ghana, Sinohydro Company, China’s leading dam builder, having built 65% of China’s hydropower capacity, is involved in constructing many controversial projects, one being the construction of a dam which will flood a whole national park and is funded by the Import-Export Bank of the United States (EXIM Bank).
ChinAfrica” replaces “ChinAmerica”
Chinese mining and large infrastructure projects do not only threaten the environment. Since 1998, China has introduced restrictions on the cutting of older trees. Chinese companies who once were involved in this business have now moved abroad, especially to countries on the Gulf of Guinea. China is now the world’s largest importer of wood. Unfortunately, almost 90% of the wood imported from Cameroon, Gabon, Congo and Equatorial Guinea is a result of illegal deforestation.[iii] Aside from the environmental issues, this practice results in multimillion-dollar economic losses for the countries exporting this wood. There are many unemployed people in Africa and they will do what they can to survive, including working in the industry of illegally felling timber. Such desperation, however, is an indirect result of the actions of the PRC.
Africa has also been flooded with inexpensive Chinese goods, much cheaper than those African countries can produce on their own. Consequently many local businesses have not been able to stand up to such stiff competition. They are left with the options of cutting employees or reducing wages. The standard practice for new Chinese companies setting up shop is to first reduce the number of local employees and increase productivity at the same time. It is no wonder that locals do not receive the Chinese presence in Africa with open arms, as they have to work more for less money and often under unsafe conditions.
Zambia provides one of the best case studies of Chinese labor rights violation in Africa. The Chinese companies in that Third World country are primarily involved in the mining industry. There are often accidents in the Chinese-owned copper mines due to lax safety standards. Shortcuts are common in order to increase production at the expense of safety. In Lusaka, the country’s capital, miners have held protests and the people of Zambia have gone so far as to call for the deportation of Chinese citizens and sought to liaise with imported workers from Malawi and Taiwan. [iv] The staff of Chinese enterprises must work twelve hour shifts without breaks. Chinese construction firms in Ghana, Namibia and Angola pay their employees less than local companies do, and in some cases even less than the minimum legal prevailing wage. These are not isolated instances, but there are some noteworthy exceptions to this trend, as in Nigeria, where some Chinese corporations have managed to create relatively good working conditions and pay living wages. Most likely this is due to the fact that there is competition for the local workforce from Indian, Lebanese and Israeli companies. [v]
China’s and India’s standoff on the African continent
The growing discontent of African workers in Chinese-owned factories creates a negative image of China in the eyes of many Africans. For many, the Chinese are just the successors of the Western colonialists, once again exploiting the locals. No wonder there are so many reports of violence and aggression being aimed at Chinese companies and citizens, initiated mostly by rebel groups, who see China as an ally of the repressive regimes and local networks of patronage. The authorities in Beijing are now starting to realize that supporting African regimes and dictators may not produce the intended results in the long term and may lead rather in incurring high economic and political costs.
Political instability and armed conflict do not serve the long-term interests of the PRC in Africa. For this reason Beijing has decided to actively support efforts to establish peace on the continent. At the end of 2008 the PRC had the fourth largest country contingent participating in UN peacekeeping operations, providing more troops, police and observers than the other three countries which are permanent members of the UN Security Council: Russia, Britain and the United States. Nearly three-quarters of Chinese peacekeeping personnel are stationed in Africa. [vi]
In September 2004, China provided $120,000 in material assistance to the Economic Community of West African States (ECOWAS) peacekeeping efforts. China also supported the conflict resolution process in Somalia, providing $100,000 USD to the Provisional Government in Mogadishu, which was formed in 2000. In July 2006, Prime Minister Wen Jiabao offered the African Union $1 million for peacekeeping operations in Darfur and an additional $5 million in humanitarian aid for the region.[vii]
Such financial contributions to strengthening the peace process are not the only example of the benefits deriving from Beijing’s interest in Africa. Ever since China began making large-scale investments in Africa there has been a jump in real economic indicators for many countries on this continent. This is most evident in countries with deposits of oil and natural gas, which, for example, in 2004 witnessed a 10 percent increase in GDP per capita. Nigeria had some problems with its extraction industry, but nevertheless achieved 6% growth in the same year.[viii] The role of China in Africa will grow further as its economy will demand even more natural resources in the future.
The people of Africa need a partner who will invest directly in the improvement of their lives regardless of political and social conditions. The best way to meet the needs of Africans is through developing closer connections to China, and this is best achieved through Sino-African relations increasingly dominated by trade and investment. In 2006 the volume of trade between China and African countries amounted to $55.5 billion, while the value of debt redeemed and transferred amounted to 2.3 billion.[ix] Foreign assistance is also important, but it is expected that this will be substantially reduced over time. Nonetheless, it is still an essential part of the overall Chinese policy in Africa.[x] It is applied in many ways other than those generally used by Western countries. Unlike the assistance provided by the United States and the European Union, there are fewer conditions attached, which makes this aid more attractive to national governments.
It is clear that thus far China has been the most effective country in meeting the needs of Africans, as well described by the Sierra Leone ambassador to Beijing: “The Chinese are doing more than any member of the G8 to make poverty history in Africa.[xi] If any of the G8 members wants to build a stadium, much time is spent in organizing numerous meetings on the project. The Chinese just come and do it; they do not hold meetings, do not debate the impact of the investment on the environment, do not discuss human rights or waste time talking about how “good” or “bad” the government is.”[xii]
This article appeared at Diplomatic Courier and is reprinted with permission.
[i] Obiorah, N., Rise and Rights in China-Africa, SAIS Working Paper, 2008, p. 9.
[ii] The Merowe project is the construction of huge dams on the Fourth Cataract of the Nile in northern Sudan, carried out mainly by Chinese companies. This project required the resettlement in 2006 and 2007 of over 50 thousand people living near the river, mainly from ethnic groups and Manasri Amri. See. El-Mahdi Bushra, M., Endangered Cultures: A Case Study, Merowe Dam, UNESCO, 2006, p. 2-3.
[iii] Bosshard. P., China’s Environmental Footprint in Africa, South African Institute of International Affairs (SAIIA), 2008, p. 3.
[iv] Dale, M. Huse, Muyakawa, L., China in Africa: lending, policy space and governance, Norwegian Council for Africa 2008, p. 47.
[v] H. Jauch, Chinese Investments in Africa: Opportunity or Threat for African Workers? African Labor Research, 2009, p. 34-35.
[vi] G. Bates, Chin-Hao H., China’s Expanding Peacekeeping Role: Its Significance and the Policy Implications, SIPRI Policy Brief, 2009, p. 1.
[vii] He, Y., China’s Changing Policy on UN Peacekeeping Operations, Institute for Security and Development Policy, 2007, p. 38-39.
[viii] Ajakaiye, O., China and Africa – Opportunities and Challenges, AERC, 2006, p. 2.
[[ix] Wang, IY, What Drives China’s Growing Role in Africa?, IMF Working Paper, 2007, p. 22.
[x] Beijing provides loans and grants to African countries in exchange for exclusive mineral extraction rights. It also participates in tenders for public investment. In 2004 China gave Angola a loan of $2 billion, which used these funds to allocate70% of all contracts in the country to Chinese companies. See. Kurlantzick, J., Beijing’s Safari: China’s Move into Africa and Its Implications for Aid, Development, and Governance, Carnegie Endowment for International Peace, November, 2006, p. 3.
[xi] The G8 is a grouping of the most influential industrialized countries in the world, its members being the United States, Canada, Russia, Britain, France, Germany, Italy and Japan.
[xii] Bosshard, P., China’s Role in Financing African Infrastructure, IRN, 2007, p. 11.