China's involvement in Africa: A view from the US

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China's involvement in Africa: A view from the USPrinceton Lyman aa Ralph Bunche Senior Fellow and Director of Africa Policy Studies , Council on ForeignRelations , USPublished online: 26 Jan 2010.

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129

China's Involvement in Africa:A View from the US

Princeton Lyman*

A burst of attention

In 2005, an article in the International Institute for Strategic Studiespublication Survival described China's growing engagement with

Africa and suggested it had gone 'little noticed in the West'. But morerecently there has been a spate of articles, studies and commentary inthe West on China's rising role in Africa. It reflects both fascination andapprehension.

Does China's rising activity pose a challenge to American andother western countries' interests in Africa? Or does it simply reflect agrowing and quite legitimate competition for resources in which Chinais not the only actor— the West has been so engaged for decades, andIndia, Malaysia, South Korea, Brazil and other countries are now joiningthe action? For Africa, is it a new form of exploitation? Or does Chinarepresent new opportunities for Africa, both economic and political?

Recent literature covers all these possibilities.1 The Council onForeign Relations presented one of the more comprehensiveassessments in its report in January 2006 on United States policytowards Africa, More Than Humanitarianism: A Strategic US ApproachToward Africa. The report described the growing Chinese investmentin Africa in oil, minerals, timber, telecommunications, infrastructure,manufacturing and agriculture. It raised two challenges for the US:China's protection of African regimes guilty of human rights violationsand its general disregard of issues of governance, transparency andhuman rights; and the forms of competition used by China (and othernew actors on the scene) that could disadvantage Americancompanies as aid doubles to Africa in the coming five years and moreinfrastructure and other projects are opened for bids.

* PRINCETON N LYMAN is Ralph Bunche Senior Fellow and Director of Africa PolicyStudies at the Council on Foreign Relations in the US.

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130 South African Journal of International Affairs

The report cautions against the US making this into another ColdWar, but does recommend that issues of concern be put on the US-China agenda. In addition, the report warns that the US needs torecognise new challenges to Western influence in Africa that call fornew types of diplomatic initiatives and programmatic responses.'

Since that report appeared, China issued its own statement on itspolicy in Africa. In it, the country emphasised its partnership withAfrica, not only for development, but in terms of global advocacy inareas such as trade and representation in international bodies.

The debate has subsequently widened, with commentary fromAfrica, Europe, the US and Asia. New opportunities for dialogue on awhole range of issues have opened up. A conference on the subjectwas held in Washington in May 2006, another in London in June.Under the auspices of the Council on Foreign Relations, the BrenthurstFoundation, and the Chinese Academy of Social Sciences, a trilateralforum — Africans, Chinese and Americans — will begin in South Africain August and meet twice more over the next year. Yet another forumis being developed between the American Center for Strategic andInternational Studies and the Chinese government.

In the official realm, the US government has opened formal talksbetween the Assistant Secretary of State for Africa and her Chinesecounterparts. Renewed focus on the crisis in the Darfur region ofSudan, with a debate over sanctions in the UN Security Council, whereChina has resisted such action against an important African tradepartner, has further focused public as well as official attention onChina's policies in Africa. A student-led movement is calling foruniversities, state and local governments in the US to disinvest inChinese companies and in any company doing business in Sudan.

In sum, China's role in Africa is now on the foreign policy agendaand the issues it raises are beginning to get a full hearing.

China's engagement in Africa

China has had a long relationship with Africa, one that predates the eraof independence in the late 1950s and 1960s. During the latter period,China pursued an active policy of building support among Africannations at the UN in its campaign to take diplomatic recognition awayfrom Taiwan. Chinese-built stadiums and public buildings dot thelandscape across the continent. China built the famous Tanzamrailway, as the US sought to compete with a near-parallel highway.China also was competing for influence with the Soviet Union among

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Lyman: A US View 131

the more radical African regimes. China backed Robert Mugabe, theultimate victor and current president, in the fight for Zimbabwe'sindependence, while the USSR backed Joshua Nkomo. Chinese ties toMugabe have remained strong ever since.

The more recent level of engagement is, however, more focusedon economic objectives important to China's growing economy.China is now the second largest importer of oil, having surpassedJapan. China accounts for 3 1 % of the global growth in demand for oil.It is also the second largest importer of copper, and a major importerof nickel, zinc, iron ore and platinum. In the opinion of some analysts,'an unprecedented need for resources is now driving China's foreignpolicy'.3 In the past few years, China has embarked on an aggressivecampaign to win access to oil, minerals, timber and other naturalresources. It is distinctive in this regard, for example in contrast.toJapan, having focused heavily on an integrated approach, withinvestments directly in exploration, production and in some processingof these resources, and not relying solely on importing via worldmarketplaces.

This approach is reflected in China's growing role in energyproduction in Africa, from which China receives 28% of its oil imports.China is engaged in oil production or oil-related investments in Sudan,Angola, Nigeria, Algeria and Gabon, and is establishing a presence inother producing states such as Equatorial Guinea, and in states whereexploration for oil and gas is taking place, such as Ethiopia. Beyond oil,Chinese investment and direct management has enabled Zambia toreopen one of its largest copper mines. It has invested in a number ofmineral activities in Congo and is now a principal buyer of timber fromcentral Africa.

China's economic interests, however, are broader than naturalresources. It has promoted and subsidised the activities of Chinese-owned companies in order to broaden participation in infrastructure,telecommunications, textile and other manufacturing, health, tourism,and agriculture.

Accurate figures on the extent of Chinese investment in Africa arehard to come by. Estimates range from $625 million to more than $7billion, with contradictory figures in the same articles.4

Sudan clearly represents one of the largest targets. In addition totaking 40% equity in several major oil fields, China is investing inpipelines, an export terminal, water systems and arms factories. Theline between equity investment and loans is not absolutely clear, butsome put China's investment in Sudan at $4 billion. Meanwhile, China


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recently paid more than $2 billion for rights to explore an oil block inNigeria and agreed to take shares in one of Nigeria's notoriously badlyrun refineries. It has also talked of making more than $7 billion ininvestments in Nigeria in the future.

Chinese companies operating in Africa are now estimated tonumber more than 700, some of which are state-owned, and they areengaged in all aspects of economic activity, which receive generousloans and subsidies from China. The totality of their investments is nottallied anywhere.

Trade is also growing rapidly. Chinese trade with Africa has risenfrom a little over $19 billion in 2003 to $29 billion in 2005. It isexpected to grow another 50% in 2006 and one prediction is that itwill rise fairly quickly to $100 billion. Suffice it to say China is investingsubstantially, across a wide number of African countries and sectors.But, to keep things in perspective, the US, the UK and France togetherstill account for 70% of foreign private investment in Africa. Americanoil companies alone will put as much as $13 billion more into Africaenergy production between 2005 and 2010, with total oil investmentsreaching $33 billion in this period, mostly from Western companies.

Figures on the presence of Chinese people in Africa are equallydifficult to determine. But they do have an almost ubiquitous presenceon the continent. As one writer put it, 'Chinese lumberjacks in theCentral African Republic, Chinese textile merchants in Lesotho, Chi-nese tourists in Zimbabwe, Chinese road builders in Ethiopia, Chinesenewspapers in South Africa, Chinese geologists in Sudan, Chinesechannels on African satellite television."

One estimate had 40,000 Chinese working in Africa, but abusinessman just back from Angola told this author there were 80,000in Angola alone. The number of Chinese in Zambia is believed to haverisen from 3,000 to more than 30,000 in the past decade. There havebeen reports, if unsubstantiated, of several thousand Chinese troopsprotecting oil interests in Sudan during the civil war there. AnotherAmerican businessman in Angola reported he could not get expatriatework visas for his half dozen employees returning from vacationtimeously processed because the Angolan government was swampedby 2,500 such visas applications from China.

Risks and benefits for Africa and for China

There is no question China is providing badly needed aid andinvestment in Africa. It has followed up on pledges made in the China-


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Africa Co-operation Forum, created in 2000, to train thousands ofAfricans, cancel African debt of more than $1 billion, and encouragegreater trade, investment and tourism between China and Africa.

China's willingness to undertake infrastructure projects, andconstruction of various public and tourism-related buildings contrastsin particular to the very limited attention to these needs in the US aidprogramme over the past 30 years. Even countries heavily dependentupon Western aid appreciate China's readiness in these areas. Ghana,one of the largest recipients of World Bank and other Western aid overthe past decade, is delighted that, in preparing to host the Africa Cupin 2008, it has secured China's commitment to build the necessarystadiums and hotels.

Africa is also basking in China's strongly professed willingness toavoid the conditions of good governance, transparency, human rightsand other issues that come with most Western assistance. Referring toChinese rebuilding of a stadium in Sierra Leone, the ambassador of thatcountry to Beijing commented, There are no benchmarks, andpreconditions, no environmental impact assessment. If a G8 country hadoffered to rebuild the stadium, we'd still be having meetings around it.'6

Africa has also benefited from the dramatic rise in prices for itsnatural resource exports; not only oil, but copper, zinc, platinum andother minerals are at record or near record highs, in large part becauseof demand from China, India and other fast-growing Asian economies.These prices might well rise further. China recently announced plansto build up significant strategic reserves in various metals. One analystsaid this could drive prices 'through the roof'.7 Of course, for Africa'soil-importing countries, the rise in oil prices is a major burden.

Africa has some other problems concerning Chinese engagement.The practice of importing Chinese labourers for infrastructure projectslimits employment opportunities for locals, and the growth of aChinese merchant presence can produce a backlash — as hashappened in South Africa and Nigeria. Perhaps most famously, therehas been a negative effect on Africa's textile industries. These enjoyeda spurt of growth under the US African Growth and Opportunity Act(AGOA), especially in Lesotho, Swaziland, South Africa, Ghana, Kenyaand Uganda. But, with the end of US quotas on Chinese textileimports, China took away much of that market. Together with a largegrowth of Chinese exports to Africa of textile and other consumergoods, the effect was the loss of tens of thousands of African jobs.

In South Africa, Chinese imports have become a hot politicalissue, with both labour and business demanding quotas and other


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forms of relief. But, even in this sector, China may also be starting toadd value to Africa's export capacity. China has begun investing inthese and other AGOA-related industries in Africa. A Nigerian businessexpert recently reported that China has opened 30 factories in Nigeria,exporting shoes, clothes and other consumer goods to Europe. He feltChina was showing Nigerians how to break into these markets.

One of the most devastating impacts on Africa, however, is in thetimber industry. China is a major importer of timber and a majorparticipant in logging throughout central Africa. In this instance Chinais, in the words of Jarrod Diamond in his book Collapse, exporting itsenvironmental problems. The experience of extraordinaryenvironmental damage from logging practices within China, producingsevere flooding and destruction of precious wetlands, has resulted inthe imposition of strict controls on domestic logging. But, to meet itstimber needs, China now finances and participates in logging in centralAfrica that violates almost every environmental rule, and often floutslocal laws.

One estimate is that up to 90% of Equatorial Guinea's timberharvest is exported to China through illegal channels. China has beenfined more than $1 million for what was described as 'anarchiclogging' in central Africa. It also previously helped to prop up Liberia'sautocratic ruler, Charles Taylor, through illegal timber exports — untilthe UN Security Council banned such exports from Liberia.

There are other risks to both China and Africa in the rapid andliberal way the former has bid on exploration rights and has subsidisedboth bidding and investments. One oil executive told this author hiscompany would not bid on some of the recent blocks acquired byChina because China had bid the price higher than the blocks wereworth. He doubted China would reap much return. Another specialistpoints out that the Chinese banking system is facing large liabilitiesfrom bad loans and could experience a serious shake out. That mightwell pull the rug from some investments and project commitmentsmade by Chinese state-owned companies in Africa.

Finally, while China seems willing to ignore the problems ofinstability, lack of transparency, and human rights in Africa, it is findingit is not free of the consequences. Insurgent militias in Nigeria'stroubled delta region have warned China it will not be spared theattacks and kidnappings carried out against Western companies ifChina goes forward with its exploration plans there.8 In Sudan, Chinahas to look to how it positions itself with regard to the new federalgovernment structure. The southern administration, which fought the


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Khartoum government that China has long supported, may nowcontrol access to some of Sudan's most promising oil deposits.

Issues of stability may be one area in which China finds itselfincreasingly on common ground with the West. Not surprisingly,perhaps, China has contributed several hundred soldiers to UNpeacekeeping operations in Africa, most notably in Sudan.

Implications for the US

The US government has been cautious in its statements about China'srole in Africa. Jendayi Frazer, Assistant Secretary of State for Africa,told journalists when questioned about China, 'Why should we be incompetition with any other country in Africa? There is enough good tobe done.'"' But the US government has, in fact, taken a harder line withChina over Sudan and the Darfur crisis. Former Deputy Secretary ofState Robert Zoellick, the administration's point man on Darfur,several times raised with China its obstruction of stronger UN actionin Sudan, both in Beijing and in Washington. Another high-levelWashington policy maker took a more cynical view, saying Africanswould soon learn the downside of so much Chinese activity. Therewas no need for the US to press the case.

But without exaggerating the situation, nor denying China'slegitimate right to search for resources, the US should have concernsover China's role. First and foremost is China's support of autocraticand ruinous regimes. Sudan stands out, where China has in effectblocked strong pressure on the Khartoum government regardingDarfur for nearly three years, resulting in repeated feckless andtoothless resolutions by the UN Security Council — somethingKhartoum has readily recognised. But the same is true of Zimbabwe.As in Sudan, China provides not only economic assistance andinvestment but sells arms as well. Though not the major influence onSouth Africa's modest, almost quiescent, policy toward Mugabe'sregime, China's active acquisition of Zimbabwean mineral and otherresources cannot fail to have had an effect on South Africa's ownambitions in that arena and its desire to have its companies stayengaged there.

China's impact on American influence with other African regimesis more subtle but real. When China made a $2 billion (oil secured)loan to Angola, the Angolan government signalled that it would nolonger be interested in a long-negotiated International Monetary Fundprogramme that would be conditional on greater transparency in its oil


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sector; nor would the government care very much about a promiseddonors' conference to help rebuild Angola's war-shattered economythat was predicated on similar conditions. China is reportedlyincreasing the loan to $3 billion, and India may follow suit.10 Nigeriacountered US pressure to make serious inroads in the oil bunkeringproblem in the delta region by buying Chinese patrol boats andcriticising the US for not providing the assistance it really needed.Ethiopian Prime Minister Meles Zenawi flaunted the important roleChina was playing in his country in response to European criticisms ofelections there and the aftermath in which major opposition figureshave been arrested.

In this more competitive environment, the US has to develop newmethods and models for meaningful and productive relations withcountries that come up short in terms of governance or human rightsperformance but which are important players on the continent or inglobal energy calculations.

The subtleties and realities also have to be explained to theAmerican public. The difficulty in walking a fine line betweendiplomatic outreach and adherence to principle in this environmentwas amply illustrated during the recent visit to the US of EquatorialGuinea President Teodoro Obiang, whose country is the third largestoil producer in Africa and host to as much as $5 billion in Americaninvestment. For reasons unrelated to the visit itself, Secretary of StateCondoleezza Rice invited the press corps to the close of her meetingwith Obiang, where she called Obiang a 'good friend'. The followingweek, Rice was excoriated in an editorial in The Washington Post forthrowing 'bouquets to odious dictators' such as Obiang.11 Contrastthat to Obiang's reception in China, where he was met at the airportby the foreign minister, hosted at dinner by the president, with amplepositive press coverage, and held meetings with several Chineseministers — including, of course, the minister of petroleum.

For the US, only as Africa resolves its conflicts, improves itsgovernance, reduces corruption, and opens it economies, willAmerican objectives in Africa be achieved. That is true of America'smost humanitarian objectives — the overcoming of poverty anddisease — but also America's interest in a stable and growing energysector; in African resistance to the siren songs of terrorists who wouldnot only destabilise the continent but recruit for terrorist actionselsewhere; in Africa's capacity to be a strong partner in fightingworldwide pandemics like the threatened avian flu; and in Africagraduating from heavy aid dependency.


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US aid to Africa has risen to $3 billion in 2006, a level that maynot be sustainable if progress on these fronts is not evident to theCongress and the public. The US cannot assume it can dictate toAfrican governments on these issues — but it cannot back away fromthem either. That is the challenge which China's growing role in Africadid not create but clearly amplifies.

The question arises then whether China can be a partner ratherthan a competitor with regard to these objectives. On this there aretwo sharply divergent opinions. One is that there is no reason forChina to back away from support for dictatorial regimes if theseregimes are partners in meeting China's own basic economicrequirements. Nor is it in its interest, according to this view, to push forsuch reforms when that goes against its own resistance to suchreforms in China, and carries little reward.12 China does better, it isargued, by playing on its 'solidarity' with the developing world, itsdistinction in not making demands for its aid or investments, andpursuing a purely neo-mercantilist foreign policy.

An alternative view is that China has another self image that isimportant to it: China as a world player and major power. In thiscontext, China cannot be immune to the effect on its image when it isaccused, as in Darfur, of supporting genocide. Nor can it be immuneto charges of being party to wholesale violence and internal war, as inits relations with Charles Taylor. In the latter case, China cut off itstimber purchases from Liberia as soon as UN sanctions were imposed.China has yet to actually veto a UN resolution on Darfur, and faces aserious challenge in that regard as the US presses for a vote on modestbut symbolic sanctions on a few middle-level persons from both sidesin the Darfur conflict. It was to this self image that Zoellick appealedwhen he urged China to take a more co-operative stance on endingthe Darfur conflict.

Finally, as the threats made against China in the Niger Delta bringhome, China has a stake in the stability and security of the major oil-producing regions of Africa. That may well open the door to greaterattention to underlying causes of instability in those places. China isaware arms sold to insurgents — and China is a major arms exporter toAfrica — can be turned on its own facilities and workers.

Exploration of these possibilities, of co-operation or at least moremutually reinforcing policies, is what needs to be on the agenda of allconferences and talks being planned on China in Africa. There aremany potential areas of win-win situations, of complementaryinvestments in Africa' growth, in health, and in further integrating


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Africa into the global economy. In the end, however, it must beAfricans that take the lead in sorting out the competing agendas. Ifthere is to be greater democracy, transparency, better economicpolicy, and openness for investment, it must come from Africans'desire for them. That desire is what the West can most effectivelysupport. In some cases, that will be a slow but steady process, inothers it can be more dramatic, such as in confronting gross levels ofcorruption or gross violations of human rights. The underlying trendwill nevertheless be in African hands, to take full advantage of a morecompetitive environment for the betterment of its people.

Endnotes

1 See for example, Alden C, 'China in Africa', Survival, 47(3), Autumn 205, pp.147-164;Brooks P & JH Shin, 'China's Influence in Africa: Implications for the United States',Backgrounder, The Heritage Foundation, No. 1916, 22 February 2006; Hale D,'China's Economic Takeoff: Implications for Africa', Brenthurst Discussion Papers,1/2006. The Heritage paper provides references to more than 20 recent articles onthe subject.

2 More Than Humanitarianism: A Strategic United States Approach to Africa. New York:Council on Foreign Relations, http://www.cfr.org., pp.24-25, 44-54.

3 Sweig D & B Jianhai, 'China's Clobal Hunt for Energy', Foreign Affairs, 84(5),September/October 2005, p.25.

4 Alden, op. cit., uses the figure of $625 million but elsewhere in the article cites Chinaacquiring a major stake in Sudan's oil industry which others put at more than $2billion, pp. 148-150. Brookes and Shin, op. cit., put the figure at $ 13 5 million in 2004,but elsewhere cite more than $5 billion invested in Sudan and billions elsewhere,pp.3, 7.

5 Carroll C, 'China's Goldmine', Guardian, 28 March 2006.6 Hilsum L, 'China in Africa', New Statesman, 4 July 2005.7 The Washington Post, 10 May 2006, D 12.8 Owen S, 'Nigeria bomb destroys 5 oil trucks', The Washington Post, 30 April 2006.9 Carroll R, op. cit.

10 There is a positive aspect to these loans. They replace loans, also oil-secured, at muchhigher interest rates, that European banks have been making to Angola, also withoutgovernance or other such conditions.

11 Rice invited the press at the last minute in order to make a statement on Iran for theevening news. See 'With Friends Like These ... Condoleezza Rice's IngloriousMoment', The Washington Post, 28 April 2006, A-18, and Grunwald M, 'AConversation with Amos Hockstein', The Washington Post, online, 23 April 2006.Hochstein is a lobbyist for the Equatorial Guinean government.

12 For a solid presentation of this view, see Kagan R, 'League of Dictators? Why Chinaand Russia Will Continue to Support Dictators', The Washington Post, 30 April 2006.


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China's involvement in Africa: A view from the US