{"id":341,"date":"2012-10-22T09:55:22","date_gmt":"2012-10-22T09:55:22","guid":{"rendered":"https:\/\/africaresearchinstitute.org\/wordpress\/?p=341"},"modified":"2016-03-01T16:05:55","modified_gmt":"2016-03-01T16:05:55","slug":"between-extremes-china-and-africa","status":"publish","type":"post","link":"https:\/\/africaresearchinstitute.org\/wordpress\/between-extremes-china-and-africa\/","title":{"rendered":"Between extremes: China and Africa"},"content":{"rendered":"<p><a title=\"Betweeen Extremes: China and Africa\" href=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2013\/03\/Briefing-Note-1202-pdf.pdf\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft  wp-image-345\" title=\"Aid, BRICS, China in Africa, China-Africa relations, Economics, Non-interference, Politics, trade\" src=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2013\/03\/China-Africa-border-212x300.jpg\" alt=\"Aid, BRICS, China in Africa, China-Africa relations, Economics, Non-interference, Politics, trade\" width=\"211\" height=\"300\" srcset=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2013\/03\/China-Africa-border-212x300.jpg 212w, https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2013\/03\/China-Africa-border-723x1024.jpg 723w\" sizes=\"auto, (max-width: 211px) 100vw, 211px\" \/><\/a><\/p>\n<p><em><strong>October 2012<\/strong><\/em><\/p>\n<p><span style=\"text-decoration: underline;\"><strong><a title=\"Between Extremes: China and Africa\" href=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2013\/03\/Briefing-Note-1202-pdf.pdf\" target=\"_blank\">Download PDF<\/a><\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><strong>China has re-cast Africa\u2019s position in the global economy. Africa\u2019s natural resources and China\u2019s \u201cGo Out\u201d strategy have underpinned a rapid surge in Chinese investment and two-way trade. The array of\u00a0Chinese enterprises active in Africa, and their financing, defies simple categorisation. China\u2019s adherence to principles of \u201cnon-interference\u201d and \u201cmutual benefit\u201d is increasingly tested as ties\u00a0multiply and expectations rise. These notes argue that African governments should collaborate more keenly in exploiting relationships with China \u2013 and other trading partners \u2013 to improve economic\u00a0diversification and competitiveness.<\/strong><\/p>\n<div class=\"message-box-wrapper none\">\n<div class=\"message-box-title\">SUMMARY<\/div>\n<div class=\"message-box-content\">\n<div class=\"shortcode-list bullet\"><\/p>\n<ul>\n<li>&#8220;China in Africa&#8221; is a product of globalisation, not colonisation<\/li>\n<li>Chinese finance to Africa is multifaceted, and aid is only a modest proportion<\/li>\n<li>Discourse of &#8220;win-win&#8221; relationship between China and Africa is misleading<\/li>\n<li>China&#8217;s policy of political non-interference is ambiguous, and evolving<\/li>\n<\/ul>\n<p><\/div>\n<\/div>\n<\/div>\n<h2>Going global<\/h2>\n<p style=\"text-align: justify;\">Sino-African ties proliferated during the 2000s. Popular depictions of the relationship are polarised. China\u2019s presence\u00a0in Africa is typically cast as an unalloyed blessing or neocolonialist curse. During a seven nation tour of Africa in\u00a0August 2012, the American Secretary of State Hillary Clinton implied that <a title=\"Why Cheap-Shot Diplomacy in Africa Won't Work\" href=\"http:\/\/www.businessweek.com\/articles\/2012-08-12\/why-cheap-shot-diplomacy-in-africa-wont-work\" target=\"_blank\">China\u2019s interest in Africa is motivated solely by\u00a0a desire to profit from its natural resources<\/a>. Burgeoning links with countries not rich in oil and metals \u2013 from Malawi to\u00a0<a title=\"US Secretary of State Clinton hails Senegal democracy\" href=\"http:\/\/www.bbc.co.uk\/news\/world-africa-19073601\" target=\"_blank\">Senegal<\/a> \u2013 undermine allegations of an exclusively extractive agenda. Politically charged pronouncements, like popular\u00a0depictions, disregard the diversity of interaction between multifarious Chinese enterprises and African countries.<\/p>\n<div id=\"attachment_4594\" style=\"width: 320px\" class=\"wp-caption alignright\"><a href=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2012\/10\/Africa-China-Trade-Chart_without_sources.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-4594\" class=\" wp-image-4594 \" src=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2012\/10\/Africa-China-Trade-Chart_without_sources.jpg\" alt=\"Source: China Statistical Yearbook\/ Centre for Chinese Studies\" width=\"310\" height=\"258\" srcset=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2012\/10\/Africa-China-Trade-Chart_without_sources.jpg 388w, https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2012\/10\/Africa-China-Trade-Chart_without_sources-300x249.jpg 300w\" sizes=\"auto, (max-width: 310px) 100vw, 310px\" \/><\/a><p id=\"caption-attachment-4594\" class=\"wp-caption-text\">Source: China Statistical Yearbook\/ Centre for Chinese Studies<\/p><\/div>\n<p style=\"text-align: justify;\">The acceleration of Chinese economic engagement with Africa is striking. Foreign direct investment increased\u00a0thirty-fold between 2003 and 2011, from US$491m to US$14.7 billion. In 2012, China pledged US$20 billion of\u00a0loans to Africa over three years for infrastructure, agriculture and manufacturing. If the funds are committed,<br \/>\nChina will become Africa\u2019s principal financial backer. China is already Africa\u2019s leading bilateral trade partner. Two-way\u00a0trade grew from US$10.6 billion in 2000 to US$166 billion in 2011.<\/p>\n<p style=\"text-align: justify;\">The association of the Communist Party of China (CPC) with Africa has a long history. During the Cold War, strategic\u00a0alliances were forged with liberation movements and newly independent African states in an effort to counter American\u00a0and Soviet influence \u2013 and diplomatically isolate Taiwan. The 1,860km TAZARA railway was the most conspicuous\u00a0manifestation of Chinese assistance in this era \u2013 and, at US$500m, the most costly. In the 1980s and 1990s, China\u2019s\u00a0foreign policy objectives were gradually realigned to underpin ambitions for domestic economic growth. \u00a0China\u2019s \u201cGo Out\u201d strategy, initiated in 1999, was framed to secure access to natural resources and encourage domestic\u00a0companies to become globally competitive. Overseas investment and aid are utilised to promote industrial growth\u00a0and diversification. The Beijing government has been reluctant to promote a \u201cChina model\u201d for Africa \u2013 or elsewhere.<\/p>\n<p style=\"text-align: justify;\"><strong>Also read: <a title=\"the Conversations Series - Ambassador Zhong Jianhua, China's Special Representative on African Affairs\" href=\"https:\/\/africaresearchinstitute.org\/wordpress\/publications\/ambassador-zhong-jianhua-on-trade-aid-and-jobs\/\" target=\"_blank\"><em>the Conversations Series<\/em> &#8211; Ambassador Zhong Jianhua, China&#8217;s Special Representative on African Affairs<\/a><\/strong><\/p>\n<p style=\"text-align: justify;\">Although Africa policy is still decided at the highest level of the CPC, it is implemented \u2013 and shaped \u2013 by organisations\u00a0pursuing varied, sometimes competing, objectives. Globalisation has entailed a diminution of central control over\u00a0Chinese concerns operating overseas. State-owned and private enterprises compete with each other for mining and\u00a0construction contracts. Sudanese oil extracted by the state-owned China National Petroleum Company is sold on\u00a0international markets to the highest bidder. Provincial administrations and private companies attracted by the\u00a0margins attainable in Africa have forged their own presence in resource extraction, infrastructure construction and consumer\u00a0markets \u2013 accounting for a quarter of Chinese investment in the continent by 2007 (1). Chinese traders independently seek\u00a0new markets for exports and low-cost production.<\/p>\n<p style=\"text-align: justify;\">Enthusiasts for China\u2019s growing involvement in Africa are united in their antipathy to the <em>modus operandi<\/em> of western\u00a0donors and multilateral financial institutions. African government ministers praise China for a \u201ccan do\u201d,\u00a0non-prescriptive approach. Chinese officials and investors have criticised western governments and donors for being<br \/>\nout of touch with the needs of contemporary Africa. As Sino-African ties become increasingly complex and\u00a0entrenched, the Chinese government will face dilemmas created by economic relationships it does not fully control.\u00a0\u201cThough China is an officialdom-led society. . .a national level synergy is not feasible in Africa, or we could return to the old\u00a0track of colonialism\u201d, remarked <a title=\"Zhong Jianhua, China's Special Representative on African Affairs\" href=\"https:\/\/africaresearchinstitute.org\/wordpress\/publications\/ambassador-zhong-jianhua-on-trade-aid-and-jobs\/\" target=\"_blank\">Zhong Jianhua, China\u2019s special envoy to Africa<\/a>, in April 2012 (2).<\/p>\n<p style=\"text-align: justify;\">\n<blockquote class=\"center\"><p>Africa belongs to the Africans \u2013 it is not\u00a0anyone\u2019s \u2018cheese\u2019 &#8211; Zhai Jun, deputy foreign minister of China (3) <\/p><\/blockquote>\n<h2 style=\"text-align: justify;\">Aid and financial flows<\/h2>\n<p style=\"text-align: justify;\">Multi-billion dollar commodity-backed infrastructure loans from Chinese banks to African governments have gained\u00a0notoriety for a lack of transparency. China is frequently accused by western governments and corporate competitors\u00a0of using aid to promote commercial interests and \u201cresource colonialism\u201d \u2013 and of encouraging corruption. Many charges\u00a0of impropriety are simplistic or politically motivated. The heterogeneity of China\u2019s financial transactions with African<br \/>\ncounterparts is often overlooked.<\/p>\n<p style=\"text-align: justify;\">The negotiation of loans secured against revenue from natural resources is modelled on the practice of Japanese\u00a0firms investing in China in the 1970s. Interest rates are almost always non-concessional. For the Chinese government, and\u00a0its African partners, these are straightforward commercial transactions. Sovereign entities, both sides often argue, are\u00a0as entitled to confidentiality regarding terms as any corporate investor. But massive loans to African\u00a0governments raise genuine concerns about repayments \u2013 and beneficiaries.<\/p>\n<p style=\"text-align: justify;\">State-backed \u201cpolicy banks\u201d \u2013 including the Export-Import (Exim) Bank of China and China Development Bank \u2013\u00a0promote government interests. In addition to providing non-concessional finance for infrastructure loans, Exim Bank\u00a0offers concessional loans with discounted rates, interest payment \u201cholidays\u201d and long repayment periods. But most\u00a0of China\u2019s financial institutions take advantage of China\u2019s colossal foreign exchange reserves and low global interest\u00a0rates to offer competitive, as opposed to state subsidised, credit to Chinese companies and African governments.<\/p>\n<p style=\"text-align: justify;\"><strong>Also Read: <a title=\"China in Africa: five lessons from ODI\" href=\"https:\/\/africaresearchinstitute.org\/wordpress\/blog\/chinas-in-africa-five-lessons\/\" target=\"_blank\">China in Africa: five lessons from ODI<\/a><\/strong><\/p>\n<p style=\"text-align: justify;\">The conduct of most leading financial institutions from communist China which are active in Africa differs little from\u00a0that of their capitalist western peers. The US$3 billion government-backed China-Africa Development Fund (CADF),\u00a0launched in 2007, invests in Chinese companies keen to pursue long term ventures \u2013 and higher returns \u2013 in Africa. In\u00a02008, the Industrial and Commercial Bank of China purchased 20% of South Africa\u2019s Standard Bank for US$5.5 billion.\u00a0Increasing equity investment in Africa by Chinese companies and financial institutions is indicative of a progression from\u00a0the export of goods to the export of goods and capital.<\/p>\n<p style=\"text-align: justify;\">Aid, like trade and investment, is one of an assortment of tools deployed in the pursuit of China\u2019s economic and\u00a0political objectives. But only a modest proportion of total Chinese funding in Africa conforms to common definitions\u00a0of \u201caid\u201d. In 2009, an estimated US$1.6 billion of grants, interest-free and concessional loans, and preferential lines<br \/>\nof credit were disbursed for largely diplomatic purposes (4). Most Chinese finance in Africa is investment \u2013 for profit. Export buyers\u2019 credits, commodity-secured export credits\u00a0and commercial loans support the rapid expansion of Sino-African trade.<\/p>\n<h2 style=\"text-align: justify;\">Trading places<\/h2>\n<p style=\"text-align: justify;\">Intense competition for jobs in China has forced many to seek economic opportunities abroad. More than 2,000 investors\u00a0and businesses have operations in Africa. Estimates for the number of Chinese living on the continent range from 500,000\u00a0\u2013 1 million, although records are unreliable and migrants regularly overstay temporary visas. Contract workers\u00a0employed by state-owned and large private corporations seldom encounter Africans outside the workplace. For the vast\u00a0majority of Africans who do come into contact with Chinese, interaction is with small-scale traders and business owners\u00a0with no sponsorship or support from Beijing.<\/p>\n<p style=\"text-align: justify;\">Chinese traders have caused discontent in local markets. In Uganda, retailers closed their shops in protest at being\u00a0undercut by competitors and cheap goods from China. African authorities have responded to popular demands for\u00a0greater regulation. In Malawi, foreign traders are restricted to establishing businesses in the four main cities. Botswana\u00a0introduced a list of professions reserved for nationals. Africa is not a first-choice destination for Chinese migrants. Profit\u00a0margins in local markets are usually small, and existence precarious. Poor quality goods and strict no return policies have\u00a0provoked widespread demands for better regulation of Chinese imports. Concerns about reputational damage have\u00a0prompted officials in Beijing to address quality control. In 2012, at the Fifth Forum on China-Africa Cooperation\u00a0(FOCAC V), the director-general of China\u2019s Department for Africa declared that goods \u201cmust go through a special\u00a0inspection to ensure only those with high quality\u201d are exported.5 Specific measures to guarantee standards and\u00a0protect local industries in Africa were not articulated. A proposed code of conduct designated trading standards \u201ca\u00a0matter of ethics rather than law\u201d (6).<\/p>\n<p style=\"text-align: justify;\">The refrain that Africa is a dumping ground for unwanted Chinese products largely disregards the active role of African\u00a0consumers. More often than not, supply is generated by demand. Chinese market traders peddle affordable\u00a0consumer goods. In many wholesale markets, Chinese businessmen rely on African agents to identify what will sell<br \/>\nlocally. As supply chains multiply, and more African entrepreneurs travel to China to source goods directly from\u00a0manufacturers, the influence of African consumers on the type of goods imported from China will continue to increase.<\/p>\n<h2 style=\"text-align: justify;\">\u201cWin-win\u201d reconsidered<\/h2>\n<p style=\"text-align: justify;\">Chinese government officials emphasise the role of China in \u201csupporting African countries to choose their own\u00a0development path\u201d (7). \u00a0Triennial FOCAC conferences aspire to align the interests of China and Africa. The discourse of the\u00a0\u201cmutual benefit\u201d of economic relations is increasingly accompanied by insistence that the Beijing government\u00a0must do more to reconcile official rhetoric with actions. For Africans, the continued plausibility of claims on both sides of\u00a0the uniquely reciprocal and developmental character of China-Africa relations will depend on the prompt delivery of\u00a0more discernible \u2013 and widespread \u2013 benefits.<\/p>\n<p style=\"text-align: justify;\">The World Bank estimates that the Chinese economy will shed 85m jobs by 2022 as it \u201cmoves up the value chain\u201d and\u00a0workers demand higher wages and better living standards. A growing number of Chinese manufacturing companies are\u00a0assessing Africa as a potential site for low-cost production. Seven to ten million people enter the labour market each\u00a0year in Africa. Duty-free and tariff-free access to American and European markets through the African Growth and\u00a0Opportunity Act (AGOA) and Cotonou Agreement remain underexploited incentives to manufacturers. But as yet the\u00a0transfer of jobs from China to Africa remains illusory.<\/p>\n<p style=\"text-align: justify;\">\n<blockquote class=\"center\"><p>Africa\u2019s past economic experience with Europe\u00a0dictates a need to be cautious when entering\u00a0into partnerships with other economies\u201d\u00a0Jacob Zuma, president of South Africa (8)<\/p><\/blockquote>\n<p style=\"text-align: justify;\">A more prevalent reality in Africa than new jobs is the collapse of small and medium enterprises under pressure\u00a0from cheap imports. According to one study, competition from Chinese imports may have cost South Africa 78,000\u00a0industrial jobs in 2001-10 (9). A Chinese currency undervalued by anything up to 40%, according to common estimates,\u00a0keeps domestic production costs low \u2013 and has prompted accusations that China is \u201cexporting unemployment\u201d, not\u00a0jobs, to Africa (10). Significant demand for light manufacturing jobs still exists within China. Furthermore, African countries\u00a0face stiff competition in the global labour market from the likes of India, Bangladesh, Mexico, Turkey and Vietnam.<\/p>\n<div id=\"attachment_4595\" style=\"width: 320px\" class=\"wp-caption alignright\"><a href=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2012\/10\/China-Africa-Trade-Sector-Chart_without_sources.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-4595\" class=\" wp-image-4595 \" src=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2012\/10\/China-Africa-Trade-Sector-Chart_without_sources.jpg\" alt=\"China Customs, World Trade Atlas Compiled by Frontier Advisory\" width=\"310\" height=\"305\" srcset=\"https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2012\/10\/China-Africa-Trade-Sector-Chart_without_sources.jpg 388w, https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2012\/10\/China-Africa-Trade-Sector-Chart_without_sources-300x294.jpg 300w, https:\/\/africaresearchinstitute.org\/wordpress\/wp-content\/uploads\/2012\/10\/China-Africa-Trade-Sector-Chart_without_sources-50x50.jpg 50w\" sizes=\"auto, (max-width: 310px) 100vw, 310px\" \/><\/a><p id=\"caption-attachment-4595\" class=\"wp-caption-text\">China Customs, World Trade Atlas<br \/>Compiled by Frontier Advisory<\/p><\/div>\n<p style=\"text-align: justify;\">While Africa showed a US$20 billion trade surplus with China in 2011, more than three-quarters of the continent\u2019s exports\u00a0are oil, gas, metals and minerals from five countries \u2013 Sudan, Angola, Egypt, Nigeria and South Africa. Chinese exports to\u00a0Africa are far more diverse \u2013 by destination and product. Excluding oil exports, Africa had a trade deficit with China amounting to US$28 billion in 2011 (11). In the 2000s, Sino-African trade was not accompanied by significant skills development, technology transfer or\u00a0productivity improvements in Africa. Of eight economic and trade co-operation zones approved by the Chinese Ministry\u00a0of Commerce in 2006, only one \u2013 in Egypt \u2013 was fully operational by 2012. At FOCAC V, China announced plans to\u00a0remove tariffs on 97% of items from 30 least developed African countries, and pledged to train 30,000 workers and\u00a0provide 18,000 scholarships. Repeated affirmations from the Chinese government of the intention to bolster regional\u00a0trade, link African products to global supply chains, and improve the variety of imports and the quality of exports\u00a0remain largely rhetorical.<\/p>\n<h2 style=\"text-align: justify;\">(Non-)interference<\/h2>\n<p style=\"text-align: justify;\">China\u2019s unwavering commitment to non-interference in the internal affairs of sovereign nations is alluring to African\u00a0governments. American officials \u2013 and human rights groups \u2013 have decried the non-interference policy as a direct\u00a0challenge to the development of open, democratic governments in Africa. Chinese officials castigate western<br \/>\nhypocrisy and point to flourishing relationships with South Africa, Ghana, Zambia and Kenya as proof that they prioritise\u00a0political equality with all nations, not authoritarianism. CPC delegations visiting Africa routinely meet representatives of\u00a0opposition parties, demonstrating the emergence of a distinction between neutrality and non-interference.<\/p>\n<p style=\"text-align: justify;\">The difficulty for China of practising non-interference in \u201cfragile\u201d African states is exemplified in Sudan. In January 2012,\u00a029 Chinese road construction workers were kidnapped by Sudan People\u2019s Liberation Movement-North rebels in an\u00a0attempt to force China to persuade the Sudanese government to end its military offensive in South Kordofan. As economic\u00a0interests have multiplied, official policy has undergone subtle reinterpretation. The appointment of an official advisor on\u00a0Darfur, and flexible mediation in protracted disputes between Sudan and South Sudan, is tacit acknowledgement\u00a0that China cannot promote its economic ambitions without adopting a more prominent diplomatic role.<\/p>\n<p style=\"text-align: justify;\">The Chinese government\u2019s conduct in Chad is a clear example of melding political and economic interests.\u00a0Chinese investment in ventures like the US$1 billion R\u00f4nier project, a 311km pipeline connecting oil fields in southern\u00a0Chad to a refinery north of the capital N\u2019Djamena, has buttressed the regime of President Idriss D\u00e9by \u2013 purportedly\u00a0in the interests of domestic stability and \u201cgood neighbourliness\u201d between Sudan and Chad.12 \u201cWe should\u00a0promote peace and stability in Africa and create a secure environment for Africa\u2019s development\u201d, declared Hu Jintao,\u00a0China\u2019s president, at FOCAC V.<\/p>\n<p style=\"text-align: justify;\">Chinese officials insist that the policy of non-interference is motivated by a principled objection to unilateral and\u00a0externally imposed solutions, not ambivalence towards human suffering. In 2012, Chinese personnel were included\u00a0in six out of seven United Nations peacekeeping missions in Africa. Since December 2008, Chinese warships have\u00a0participated extensively in joint \u201canti-piracy\u201d escort duties off the Horn of Africa. The foundations of new policy may be\u00a0taking shape. Participation in multilateral initiatives provides room for manoeuvre. The need to protect Chinese\u00a0investment will render the definition of non-interference increasingly ambiguous.<\/p>\n<h2 style=\"text-align: justify;\">Negotiation and integration<\/h2>\n<p style=\"text-align: justify;\">A marked imbalance of power inevitably characterises Sino-African relations, as it does US-Africa and Europe-Africa\u00a0relations. Despite China\u2019s emphasis on mutual respect and equality of interest in all negotiations, smaller African\u00a0economies in particular have scant bargaining power. African states are typically reactive \u2013 and often uncritical \u2013<br \/>\nin their dealings with China, in all its guises. FOCAC conferences are staged around Chinese pledges. Only South\u00a0Africa and Ethiopia methodically monitor commitments made by China at FOCAC and other similar meetings (13).<\/p>\n<p style=\"text-align: justify;\">Increased regional collaboration \u2013 collective bargaining \u2013 would strengthen the hand of African governments.\u00a0The merits of regional approaches have been acknowledged \u2013 in China, and Africa. In 2011, the East African Community\u00a0signed an agreement with the Chinese government to foster economic, trade, investment and technical co-operation. At\u00a0FOCAC V, Chen Deming, China\u2019s commerce minister, outlined new measures to negotiate infrastructure projects directly<br \/>\nwith Africa\u2019s regional institutions. Regional public goods \u2013 the provision of cross-border infrastructure, power, water\u00a0and health care \u2013 are essential for a continent with so many small and landlocked countries. But efforts to promote\u00a0intra-African trade and integration are frustrated by the continued preference of China \u2013 and other trade partners \u2013\u00a0for bilateral relations.<\/p>\n<p style=\"text-align: justify;\">Expectations for economic returns from natural resource extraction are rising in Africa. In negotiations with Tullow Oil,\u00a0Total and China National Offshore Oil Corporation, the Ugandan government insisted that the consortium should\u00a0develop a c.US$1.5 billion national oil refinery to satisfy domestic demand and facilitate regional exports. But the\u00a0opportunities created by competition between Chinese companies and western multinationals \u2013 and high\u00a0commodity prices \u2013 are often squandered. Inadequate investment and regulatory codes, and poor negotiation,\u00a0frequently stymie pursuit of national goals.<\/p>\n<p style=\"text-align: justify;\">Assertions that Africa needs a \u201cChina plan\u201d overlook a more pressing imperative. National and regional strategies that\u00a0better utilise and deploy the benefits from rising foreign investment \u2013 whether from China or elsewhere \u2013 are urgently\u00a0needed. Economic diversification, job creation and poverty reduction are central to all African national development\u00a0plans. In the 2000s, African governments failed to capitalise on growth fuelled by demand for oil and hard commodities.\u00a0In most countries efforts to diversify economies were half-hearted. The onus is on African governments to ensure\u00a0the long-term effectiveness of foreign investment by channelling resources into priority sectors, and to secure\u00a0terms which enhance skills and technology transfer.<\/p>\n<p style=\"text-align: justify;\">Many African economies have experienced the dire effects on exports of plummeting soft commodity prices. All remain\u00a0extremely vulnerable to external shocks. The impact on Africa of China\u2019s domestic policy and accession to the World\u00a0Trade Organization has been immense. While oil and hard commodity prices are unlikely to collapse in the foreseeable\u00a0future, slower growth in China will certainly be felt in Africa.<\/p>\n<p style=\"text-align: justify;\">An increased focus on stimulating domestic consumption in China will generate uncertainty in many African economies.\u00a0African governments should be mindful that \u201cSouth-South solidarity\u201d is rhetorical. In reality, national self-interest is\u00a0paramount in economic relations. The responsibility for converting trade and investment from China \u2013 and other\u00a0rapidly developing nations \u2013 into more diversified economies and sustainable growth rests squarely with\u00a0African policymakers.<\/p>\n<div class=\"message-box-wrapper none\">\n<div class=\"message-box-title\">SOURCES<\/div>\n<div class=\"message-box-content\">\n1 Chen Zhimin and Jian Junbo, \u201cChinese provinces as foreign policy actors in Africa\u201d,\u00a0Occasional Paper No 22, SAIIA, January 2009.<br \/>\n2 <a href=\"http:\/\/www.focac.org\/eng\/zxxx\/t923570.htm\" target=\"_blank\">Zhong Jianhua, \u201cChinese enterprises in Africa\u201d, Wall Street Journal (Chinese edition), April\u00a017th 2012<\/a>.<br \/>\n3 Li Xiaokun, Zhang Yunbi, \u201cChina says Africa is no one\u2019s cheese\u201d, China Daily (USA), July 13th\u00a02012.<br \/>\n4 Alex Berger, Deborah Br\u00e4utigam, Philipp Baumgartner, \u201cWhy are we so critical about China\u2019s engagement in Africa?\u201d, German\u00a0Development Institute, August 15th 2011.<br \/>\n5 Mgaya Kingoba, \u201cChina to curb exports of fake goods\u201d, Tanzania Daily News, July 19th\u00a02012.<br \/>\n6 Peter Fabricius, \u201cBeijing firms agree to code of conduct\u201d, South African Foreign Policy\u00a0Initiative, July 22nd 2012.<br \/>\n7 Hu Jintao, FOCAC V, July 19-20th 2012.<br \/>\n8 Speech at FOCAC V, July 19-20th 2012.<br \/>\n9 \u201cChinese competition and the restructuring of South African manufacturing\u201d, DEV Research Briefing 4, University of East Anglia,\u00a0August 2012.<br \/>\n<em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\">10 Xan Rice, Katrina Manson, Andrew England, \u201cBeijing exports weigh on Africa\u2019s producers\u201d,\u00a0<\/em><\/em><\/em><\/em><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\">Financial Times, July 20th 2012.<br \/>\n<\/em><\/em><\/em><\/em><\/em><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\">11 Goolam Ballim, \u201cMade with China\u201d, This is Africa, August\/September 2012.<br \/>\n<\/em><\/em><\/em><\/em><\/em><\/em><\/em><\/em><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\">12 John Schellhase, \u201cChina\u2019s Chad courtship\u201d, The Diplomat, June 26th 2012.<br \/>\n<\/em><\/em><\/em><\/em><\/em><\/em><\/em><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\"><em id=\"__mceDel\">13 Sven Grimm, \u201cThe FOCAC: Political rationale and functioning\u201d, Policy Briefing, May 2012.<\/em><\/em><\/em><\/em><\/em><\/em><\/em><\/em><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>China has re-cast Africa\u2019s position in the global economy. African governments should collaborate more keenly in exploiting relationships with China to improve economic diversification and competitiveness.<\/p>\n","protected":false},"author":7,"featured_media":4602,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[13,8],"tags":[83,127,270,46,26,128,27,126],"class_list":["post-341","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefing-notes","category-publications","tag-aid","tag-brics","tag-china-africa","tag-china-africa-relations","tag-economics-in-publications","tag-non-interference","tag-politics-in-publications","tag-trade"],"aioseo_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - 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