Chinese investment in Africa has been the subject of heavy criticism: Chinese aid increases corruption; China’s firms violate human rights; China’s energy strategy damages the environment; China’s close relations with dictators are inappropriate for a responsible power. Li Anshan, director of Peking University’s Center for African Studies, responds to these complaints.
Ning Er: How do you view the behaviour of Chinese firms in Africa? They represent China’s image and interests on the continent.
Li Anshan: I recently visited five African nations. In April I went to Mali for the China-Africa Agricultural Seminar, in May to Cameroon, Tanzania and Kenya to evaluate the follow-up to the China-Africa summit with a group of experts from the Ministry of Foreign Affairs and in July to a meeting in Sudan.
My overall sense is that there are many more positive impressions of Chinese firms in Africa than negative. The larger and more influential of the Chinese firms in Africa are state-owned enterprises [SOEs] and their investments often have positive effects beyond just increasing tax revenues, and so many African nations are keen to work with China. An example of the positive impact is employment. In Sudan, China is involved in the Khartoum oil refinery and Merowe dam projects. When campaigning for re-election this year, president [Omar al-] Bashir used slogans referencing both of those projects. The Merowe dam alone, built by China International Water & Electricity Corporation, employs 16,000 locals. That’s no small number.
These projects have also upgraded the technical skills of local workers. For example, the refinery that China National Petroleum Corporation [CNPC] is helping to build in Khartoum now employs 1,100 locals, up from just 200 originally, all of whom are receiving training. And the entry standards are quite high. Sudan was originally an oil importer, but now has a complete oil industry – from exploration to extraction to refining – and is a net exporter of oil. Many African presidents who have seen the refinery in Khartoum have said they want one just the same.
Another advantage of the investment for Africa is that the presence of Chinese firms increases the choices and opportunities available. Niger has rich uranium deposits, but previously a monopoly held by a French firm kept prices low. Niger isn’t large, but it has long been one of the least developed of nations. Uranium sales should have allowed it to develop, but this didn’t happen – why not? That monopoly was the main reason. Once Chinese firms arrived, things changed and the price of uranium and raw materials increased, to the dismay of the French.
Many Chinese projects also involve infrastructure such as railroads and highways – often there’s a whole package of contracts and that improves Africa overall.
NE: But there has been criticism from the international community about China’s linking of “aid” and “investment” in Africa. The claim is that bundling aid and commercial activity together is a new form of colonialism.
LA: In February 2006, the United Kingdom’s foreign secretary [Jack Straw] said during a trip Nigeria that what China is now doing in Africa is the same as what the British did 150 years ago, and this sparked a discussion about China’s “new colonialism”.
But it’s a ridiculous comparison. Colonialism is an application of force, and China is in Africa on a foundation of equality and mutual benefit. In December 2007, I met with Nigeria’s consul-general to Hong Kong during a lunch meeting at Hong Kong University of Science & Technology. He said that they wanted to do business with China – why? Because we can sit down as equals, to discuss and negotiate, and they don’t have that status when dealing with the west.
Or again, due to the unrest in Sudan, other nations pulled out and Sudan came to invite the Chinese in. In 2003, Canadian firm Talisman Energy withdrew from Sudan and CNPC wanted to take over Talisman’s interests [in an oil pipeline and production project] – but for the sake of diversity the Sudanese government opted to sell to an Indian firm, which was offering a higher price. But this didn’t affect CNPC’s partnership with Sudan. If China was colonialist, Sudan wouldn’t have been able to do this.
During my trip to Mali in April, we visited a sugar company in Ségou, the country’s second largest city. The plant was built with Chinese aid, but after completion and handover it failed to make a profit and became a joint venture. The president is a Chinese woman, but the vice-president is Malinese, as are many of the senior officials. Once the company was profitable, it was able to make significant improvements to its local area, which is now a small town with a residential area and a school – it was really moving to see that. One European academic on the trip was dubious, saying aid is aid, business is business, why mix them up? But in fact, whatever you do, as long as the area benefits it’s a good thing.
The west’s traditional aid model in Africa is in trouble, it’s moribund. Meanwhile China has been combining aid and investment since the 1990s, and that has provided huge stimulus to the projects involved. Zambian academic Dambissa Moyo wrote a book last year called Dead Aid, which was controversial in the west. She laid into western aid-giving, saying that the trillion dollars of aid poured into Africa over the last half-century had failed to have any positive outcome – and had, in fact, been damaging. I think the western model is unsustainable, and China should look to its own experience.
NE: There are currently at least 2,000 Chinese firms operating in Africa. Leaving the SOEs aside, how do you view the influence of private firms, such as trading companies, in Africa?
LA: China’s private firms have always acted as pioneers. Of course there are always problems that we need to recognise, for example a lack of understanding of local circumstances, a lack of respect for local laws or a tendency for these firms to keep themselves isolated from the locals. There are all kinds of issues. But nor should we underestimate the role of private firms in trade between China and Africa. In comparison with the SOEs, they are small and scattered, but that means they can fill the niches where others won’t work or invest.
The Chinese government, and especially Chinese embassies and consulates in Africa, need both to protect the legitimate interests of those firms and to provide guidance and information on the local investment and legal environment. There are ongoing improvements in these areas, such as the publication of interviews with our commercial attaches. Giving private firms the right guidance will reduce problems, and then the Ministry of Foreign Affairs won’t have to do so much fire-fighting.
Ning Er is a reporter at Southern Metropolis Daily.
Li Anshan is a professor at Peking University’s School of International Studies and head of its Center for African Studies. He is participating in a project to evaluate the Ministry of Foreign Affairs’ projects in Africa.
An earlier version of this article was published in Southern Metropolis Daily.
Homepage image from Chinese embassy in London shows a construction training session in Tanzania.