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CHINA’S AID TO AFRICA: THE CASE OF CAMEROON
MSc. Thesis for Chinese Area Studies, Development and International Relations
Department of Culture and Global Studies
Aalborg University
Denmark
STUDENT
EYONG ETA MBUAGBAW
SUPERVISOR
PEER MOLLER CHRISTENSEN
MAY 2015
1
Table of Content
Preliminary Pages
Title page
Table of content
Abbreviations
Abstract
Chapter 1 Pages
1.0 Introduction-------------------------------------------------------------------------------------------------- 7
1.1 Sino-Africa Relations -------------------------------------------------------------------------------------- 7
1.2 Sino-Cameroon Relations --------------------------------------------------------------------------------- 10
1.3 Effectiveness of Aid ---------------------------------------------------------------------------------------- 11
1.4 Problem Statement ------------------------------------------------------------------------------------------ 15
1.5 Research Question --------------------------------------------------------------------------------------------16
1.6 Objective of the study ----------------------------------------------------------------------------------------16
1.7 Aims of Study -------------------------------------------------------------------------------------------------16
1.8 Research Focus ------------------------------------------------------------------------------------------------17
1.9 Structure of the study -----------------------------------------------------------------------------------------17
2
Chapter 2 Pages
2.0 Methodology ------------------------------------------------------------------------------------------------- 18
2.1 Research Design -------------------------------------------------------------------------------------------- 19
2.2 Research Strategies ----------------------------------------------------------------------------------------- 19
2.3 Case Study ---------------------------------------------------------------------------------------------------- 19
2.4 Data Sources -------------------------------------------------------------------------------------------------- 20
2.5Document Review -------------------------------------------------------------------------------------------- 20
2.6 Method of analysis ------------------------------------------------------------------------------------------- 21
2.7 Use of Theory ------------------------------------------------------------------------------------------------ 21
2.8 Limitation of Study ------------------------------------------------------------------------------------------ 23
2.9 Sub-Conclusion ---------------------------------------------------------------------------------------------- 23
Chapter 3
3.0 Literature Review -------------------------------------------------------------------------------------------- 24
3.1 OECD and Chinese Definition of Aid -------------------------------------------------------------------- 24
3.2 China’s Aid to Africa ---------------------------------------------------------------------------------------- 25
3.3 Measuring Chinese Aid --------------------------------------------------------------------------------------- 26
Chapter 4
4.0 Theory --------------------------------------------------------------------------------------------------------- 29
4.1 Economic Liberalism and Trade --------------------------------------------------------------------------- 29
4.2 Economic Development ------------------------------------------------------------------------------------- 31
3
4.3 Social Development ----------------------------------------------------------------------------------------- 33
4.4 Critique of the theory ---------------------------------------------------------------------------------------- 34
4.5 Dependency Theory ------------------------------------------------------------------------------------------- 35
4.6 Economic Development -------------------------------------------------------------------------------------- 36
4.7 Social Development ------------------------------------------------------------------------------------------- 37
4.8 Critique of the Theory ---------------------------------------------------------------------------------------- 40
4.9 Interdependency Theory -------------------------------------------------------------------------------------- 40
Chapter 5
5.0 Findings and Analytical Discussion ------------------------------------------------------------------------ 44
5.1 Sino-Cameroon Trade ---------------------------------------------------------------------------------------- 44
5.2 Chinese investments and infrastructural Development --------------------------------------------------- 55
5.3 Analysis of Chinese investments in Communication sector --------------------------------------------- 58
5.4 Chinese Aid in the Health Sector ---------------------------------------------------------------------------- 60
5.5 Hydro-Electrical Dam project and Economic Development -------------------------------------------- 62
5.6 Agricultural sector --------------------------------------------------------------------------------------------- 63
5.7 Infrastructural Development and Economic Development -----------------------------------------------63
Chapter 6
6.0 Conclusion ----------------------------------------------------------------------------------------------------- 66
References ---------------------------------------------------------------------------------------------------------- 68
4
Abbreviations
AFRODAD: African Forum and Network on Debt and Development
DRC: Democratic Republic of Congo
DAC: Development Assistance Committee
FOCAC: Forum on China-African Co-operation
GDP: Gross Domestic Product
ODA: Official Development Assistance
OECD: Organization for Economic Co-operation and Development
ODF: Official Development Assistance
IMF: International Monetary Fund
LDC: Less Develop country
USAID: United States Agency for international Development
UN: United Nations
W.TO: World Trade Organization
5
ABSTRACT
China surge in the global political economy and entrance as a major aid donor is one of the most
challenging debates in the donor community. This has altered the balance of power in favor of African
countries with different alternatives to the western model of aid. Chinese aid to Africa has received a
mixed appraisal from friends and foes of this relationship and has thumped up world attention. Foes of
this relationship argued Sino-African relation is exploitative in nature. Pointing to the fact that cheap
Chinese manufactured goods has been detrimental to the growth of African home industries. Similarly,
Chinese Firm’s preference for Chinese labor has raised serious doubts on Chinese genuine intentions.
However, friends of this relationship argued that China aid has offer a different alternative of western
aid which has helped to spur economic growth and has enhanced African self-reliance.
Nonetheless, a lot of aid assistance has been provided to Africa by the aid donor community geared
towards economic development to enable African countries to meet developmental goals. However,
African is still facing lots of developmental challenges despite huge aid assistance which has led to the
perception that aid assistance to Africa specifically Cameroon has not had the desired outcome. In the
light of the above assumption this research seeks to investigate the consequence of Chinese aid in
Cameroon.
The analysis of this study was done in conjunction with appropriate theories relevant in investigating
Chinese aid in Cameroon. Economic liberalism theory was selected to provide an insight of the
beneficial nature of the Sino-Cameroon trade, whereas, dependency theory was selected because it
provides a critical aspect of the Sino-Cameroon trade relations. While, interdependence theory was
selected since it portrays the dependent nature of Sino-Cameroon relationship.
In conclusion, according to relevant data collected and investigations carry out on Chinese aid in
Cameroon, this study concludes that Sino-Cameroon relations is “Win-Win” for both parties in this
relationship.
China’s Aid to Africa: The Case of Cameroon
6
1.0 Introduction:
This section examines the Sino- African relationship and evolving nature of this relationship.
1.1 Sino- Africa Relations
The government of China has always maintained a cordial relationship with Africa; this union is built
on mutual trust and interest. China needs Africa natural resources and a market to sell manufactured
products to sustain its fast growing economy. According to Li Xing et al, (2013) during the cold war,
this relationship was centered on ideological motives in which Chinese government supported African
independent struggles and in return Africa governments supported Chinese agenda in the international
arena, like the vote to claim the seat of Taiwan in 1971 in the United Nations. African States supported
Chinese application for entry into World Trade Organization and Chinese desire to host 2008 Olympic
in order to attract Chinese aid and investments in Africa, (Rotberg, 2008: 2) both shared a historical
familiarity of being colonized by the West. The government of China uses both cards in the
international arena, when dealing with Africa States Chinese government portrays itself as a
developing nation and when dealing with the West and NATO as a developed nation, (Zafar, 2007) as
cited by Li Xing et al, 2013:28).
Presently, the Sino-African relationship has moved from an ideological standpoint against imperialism
to a more pragmatic and co-operative relationship. The government of China desires African friendship
to support its agenda in the international arena and respects African Countries as equal partners.
Chinese government has built mutual trust with African countries in comparison to European countries
which do not respect African countries as equal partners, (Rotberg, 2008:2). The government of China
wants African support for its global dominance and African governments are in need of Chinese aid to
meet developmental targets and Chinese model of aid is longed-for by African governments (Li Xing,
2013). Chinese huge demand for natural resources has escalated commodity prices; Nigeria was able to
pay its outstanding debt by trading with China. Sudan over a few years went from an oil importing
country to an oil exporting country due to huge Chinese financial investments in the oil sector, in
Sudan (Anshanl. L, 2008: 39). Marks, (2007) states this relationship can be analyzed from the
7
perspective of South to South cooperation as one developing nation helping another developing nation.
China as a nation has undergone and is still undergoing most developmental challenges and is better
place to direct the African states. Chinese aid model which focuses on infrastructural development is
appreciated by African governments as a more effective model of aid as compared to the western
model of aid which place a lot of conditions before aid is granted. Such assessment of Chinese aid was
further echoed in the Tokyo International Conference on African development in 1993.In that
conference, African governments expressed their support for aid which focuses on development and
production and argued it was more effective than traditional western aid which places conditions before
aid is approved1. Chinese aid model, unlike the Western aid model, is helping African countries to
obtain self-reliant skills vital to sustain economic growth (Liu, 2010: 62) as cited by (Li Xing et al,
2013: 28). The Chinese model of aid is established on the following principles: low interest loans,
mutual benefits and respect of both partners, aid without attachments or conditions, equality in aid
relationship, faster projects with results, respecting State sovereignty, technology transfer by training
locals, empowering recipient countries to be self- reliant, providing material and equipment’s to do
these projects (State Council, 2011).
Right now, Sino- African relationship is more pragmatic in terms of economic and political goals in an
era of globalization where countries are more interconnected, (Thompson, 2005) as cited by (Li Xing et
al 2013:24). The combination of good policy reforms, hard work and good economic directives China
has witnessed a growth rate of more than 8 percent for the past decade which is the envy of the world,
(Zafar, 2007). When the world’s most populated nation with a growth rate of 10- 11 percent needs raw
materials to sustain its fast growing economy, it has to suck up resources all over the globe including
Africa to sustain its fast growing economy and no nation, not even the colonial powers has such an
appetite for natural resources (Rothberg, 2008: 1).
Recently, the highlight of this union was reaffirmed in a strategic meeting between China and African
in 2006 and 2012, (FOCAC). African countries were invited for a strategic meeting on the cooperation
between China and Africa. Zhang (2011) as cited by (Li Xing et al, 2013) coined the union of having
reached the “partnership phase” Li Xing, et al, (2013:25).The Chinese government by 2005 had offer
1 Zhang Zhixin, “Carrying out New Principles Of Foreign Aid to open Up a New Phase,” in Ministry of Foreign Trade and Economic Cooperation, Almanac of China’s Foreign Economic Relations and Trade 1994/95 (Beijing, 1995) 62.
8
scholarship to more than 18,000 Africans to study in China, financed more than 720 projects in Africa,
posted Chinese medical personnel’s who treated 170 million patients in Africa, (Yao, 2006) as cited by,
(Li Xing, 2013). By 2009, African states had greater access to Chinese markets and Beijing had
cancelled debt worth (US$2.7 Billion) for 35 African nations, most in the form of zero- interest loans
and abolished tariffs on more than 440 lines of African import to China, (State Council, 2011) as cited
by (Li Xing, et al,2013: 25). African leaders were assured by Chinese President Hu Jintoa in 2006
when he reaffirmed China commitment to Africa by forging a new strategic partnership. He
commitment to doubling Chinese aid to Africa, cancelled more African debts, (Li Xing, et al, 2013:
25). Some researchers have called such a strategic relationship between Africa and China as the “The
Year of Africa” (Alden et al, 2008: 2). Nowadays, when delegations from China and Africa visits one
another, the delegation is consist of Cultural consultants, entrepreneurs, investors, financiers
(Thompson, 2005) as cited by( Li Xing, et al,2013:25) providing opportunities for both partners in this
relationship.
Though, these figures of Chinese aid to Africa are impressive and this union is in a strategic phase,
many valid questions need to be raised about Chinese increase presence in Africa. Western rhetoric is
loud; the media and critics point to the fact Africa is bless with abundant natural resources and Chinese
huge appetite for raw materials and Africa’s wiliness to supply China with raw materials to sustain its
economy making the relationship exploitative in nature, (Marks, 2007). According to Marks, (2007)
Chinese government support of repressive regimes and its principle of non-interference have derailed
international efforts of good governance and not a good sign for the consolidation of democracy in
Africa. He argues that the notion that Chinese companies are not bound by western standard of good
governance has led to human right infringements and exploitation of African workers and is counter-
productive to the growth of workers’ rights in Africa (Ibid). A good example is the case of Zambia
where workers in Chinese- owned mines, were protesting against inhumane working conditions and
demanded answers about the death of their colleagues who died in a mining accident killing 46 miners.
In response, Chinese security forces opened fire on the protesters, killing six of the protesters which led
to massive criticism of Chinese presence and way of conducting business in Zambia (Arnold, 2009:70).
According to (Brautigam, 2011) cheap Chinese imported products are affecting the sustainability of
African home industries. African industries do not have technology skills and competitive edge to
9
compete with Chinese firms. This criticism of Chinese businesses was better expressed by Moelestsi
Mbeki, when he explains in a conference organized by Chinese parliament the effects of cheap Chinese
imported products to African home industries he said, Sino-Africa trade relations does not favor
African countries since China exports finished products to Africa and import natural resources from
Africa. Such a scenario is risky for African nations since it locks their economies in the primary
industry which is not sustainable since Africa’s need to keep its natural resources for its own
industrialization, (Mbeki, 2006)2as cited by Marks, ( 2007: 5).
1.2 Sino- Cameroon Relations
After achieving independence in 1961, Cameroon established diplomatic relations with Taiwan.
Nonetheless, Cameroon diplomatic relations with Taiwan lasted for ten years since in 1971 Federal
Republic of Cameroon disconnected relations with Taiwan, and recognized China. This relationship
has transformed into a strategic partnership in social and economic collaboration (Khan and Baye,
2008). According to Jansson (2009) the 1st high- level high official meetings between the two countries
occurred in August 1972 when Cameroon Minister of Foreign Affairs, Vincent Efon visited China to
open diplomatic ties. Likewise, the first Chinese high-ranking officials to visits Cameroon was in 1978.
Chen Muhua, the then Vice- Premier of the State Council visited Cameroon Jasson, (2009: 4).
Cameroon attended the inaugural meeting of (FOCAC) in 2000. In 2007, Hu Jintao, President of China
visited Cameroon and numerous economic co-operation agreements were signed (Jasson, 2009: 4).
Cameroon partnership with the government of China greatly captures Chinese approach of mutual
respect. Illustrated in, (FOCAC) in 2000, 2006 and 2012 respectively where Chinese officials
reiterated the strategic importance of Sino-African relationship based on equality and mutual respect
(Ibid).
Sino- Cameroon relationship covers an array of sectors which comprises of trade, investments in
infrastructural sector: roads, bridges, dams and natural resources. Similarly, the Chinese government is
constructing hospitals and schools in all regions of Cameroon, cancelling of debts worth millions of
dollars and the provision of interest- free loans. This model of aid which focuses on production and
2 M. Mbeki (2006) South African Journal of International Affairs, 13(1): 7.
10
infrastructural development is welcome and applauded by Cameroonian government, (Khan and Baye,
2008).Chinese aid to Cameroon follows the pattern of concessional loans, debt cancellation,
scholarships and technical assistance with the first of such notable gifts being the construction of the
Congress Hall and the Presidential Place, in 1977. The government of China has constructed many
schools and hospital in almost all regions in Cameroon, provided scholarships to Cameroonians to
study in Chinese universities and opened the Chinese language center in 1997 to facilitate the learning
of Chinese language and culture (Khan and Baye, 2008).
It is worth noting that Chinese aid to Cameroon follows the same patterned of Chinese aid principles,
which consist of, mutual respect, equality and non-interference in domestic politics of recipient’s
countries. This principle of mutual respect and non-intervening in domestic policy was reiterated when
Hu Jintao the President of China visited Cameroon in 2007. He reiterated Chinese government’s
commitment to Cameroon by explaining that China will never impose her beliefs, social patterns and
approach of economic development upon others (Ibid). The government of China has provided
substantial aid relief to Cameroon which takes the form of debt cancellation; the first of such
cancellation happened in 2000 in the, (FOCAC) conference where China cancelled US$ 34 million
worth of Cameroonian debts owed to China. The second cancellation occurred when Hu Jintao the
President of China visited Cameroon in 2007; US$ 32 million worth of debts was cancelled
(Cameroon’s Ministry of Economics and Financial Report, 2007).
Nonetheless, critics of this union argued this relationship is exploitative in nature since China is
interested in Cameroon’s raw materials to fuel its growing economy and a market to sell manufactured
products, (Khan and Baye, 2008). The government of China needs African support in the international
arena and Cameroon is willing to offer such support in return for Chinese aid and investments.
1.3 Effectiveness of Aid
Discussion about the usefulness of aid is a highly contested one. According to Boone (1996) there
exist a correlation between the positive effect of aid and the relative size of the government.
Nonetheless, there are studies which indicate a negative connection between development and aid.
11
Empirical studies by Burnside and Dollar (2000) established that if the beneficiary country has sound
monetary and fiscal policies with a vibrant civil society, foreign aid will have a positive impact.
Similarly, this position was supported by Paul Collier (2008) in his book The Bottom Billion, he argues
that from empirical studies he conducted in Africa demonstrates aid contributed to the minimal growth
of African countries and without aid African countries would not have experienced any economic
growth. He further explains foreign aid has helped to maintain the minimal growth in Sub-Saharan
African which has helped Sub-Saharan African governments to meet developmental targets, (Ibid).
Nonetheless, empirical studies by Easterly and Roodman (2003) found no correlation of foreign aid and
economic development even in recipient countries which have sound financial and monetary policy.
But a recent study by Akramov (2012) indicated aid ensures a helpful influence in financial output of a
beneficiary nation when certain sectors are targeted such as agriculture, and infrastructures.
Nevertheless, in that study they also came to the conclusion that if such aid is given to sectors such as
health and education, such aid would not contribute to the beneficiary country meetings its
developmental targets country (Ibid). Nevertheless, another firsthand study conducted by Morrisey and
White (1996) indicates that foreign aid is less effective when compared to the role exports can
contribute to economic growth. Exports contributed more in terms of economic growth to the recipient
countries and are more helpful to the population than foreign aid.
The various discussions regarding usefulness of aid have given rise to persistent paradoxes of the
impact of foreign aid. These paradoxes were first acknowledged by Mosley, (1987). He could not
establish the correlation between aid and development since foreign aid allocated to developing nations
went to fruitless public sector disbursements. His perspective was supported by Peter Boone (1996) in
an empirical study he conducted with 95 countries in less developed countries in which he concluded
that there was a link between aid and development. He argues further that most aid allocated to
developing countries goes to consumption which does not contribute to the development of these
nations.
Aid donor countries have adopted different approaches to determine the effectiveness of aid, one of
such approach is the recipient country must meet certain conditions before such aid can be disbursed.
Traditional aid donors such as OECD members States and international aid agencies such as World
Bank, IMF and USAID have all put certain conditions before aid is approved.
12
According to Radelet and Bhavani, (2004) different approaches or modalities of foreign aid have
different outcomes with respect to the influence of aid. They argued that aid granted to beneficiary
countries which focuses on productive investment like the constructions of roads; bridges, have a short
term effect on economic growth hence limiting its effectiveness. They further argued that aid given as
technical assistance to promote good governance; democracy and aid that focus on sectors such as
education and health will contribute to a nation meeting its developmental targets.
Zambian Economist, Dambisa Moyo argues that developmental aid has not been beneficial to Sub-
Saharan African; she remains a fierce opponent of developmental aid and depicts foreign aid as
encouraging corruption in Africa preventing African countries meeting developmental targets, (Moyo,
2009). Dambisa Moyo argues bilateral aid between aid donor’s countries and Sub-Saharan African
countries which takes the form of budget support has only helped to promote corruption,
mismanagement and aid dependency which has profited corrupt government officials and is detrimental
to the overall growth of African economies (Moyo, 2009). Furthermore, she argues foreign aid has led
to massive corruption and a motive for politicians in African to cling to power because of the
incentives from aid money entering the continent from donor agencies and countries (Ibid).
Nevertheless, the view of Moyo, (2009) has been vigorously contested by other researchers. Paul
Collier, (2008) in his book, The Bottom Billion, elucidates the link between aid and development. He
explains that without foreign aid Sub-Saharan African economies would not have experienced
economic growth. Similarly, two prominent economists of the World Bank Rajan and Subramanian,
(2005) demonstrated a link between aid and development in countries which have sound public
institutions and vice versa. They also argued that aid which comes with conditionality and has a
political motive limits its effectiveness. However, they emphasize the need for a better management of
aid. The diagram below highlights the various types of Chinese aid flows.
Diagram 1: Categories of Chinese aid flows
13
Source: Global Development Finance by Deborah Brautigam (2011)
The diagram overhead illustrates the various flows of Chinese aid which comprises of three channel of
distribution. Firstly, the government of China provides aid via interest- free loans to developing nations
to meet developmental challenges.
Secondly, the government of China provides aid in the form of grants which targets the infrastructural
sector.
Thirdly, the government of China provides aid through concessional fixed low- interest loans and debt
relief. It is worth noting the Chinese model of aid is different from the western model of aid since the
government of China does not place conditions before aid is approved to developing nations. Likewise,
Chinese companies operating in developing countries benefit from debt relief, to give a helping hand to
Chinese companies investing in Africa.
The effectiveness of aid is definitely an empirical question and one that this study seeks to address.
This study will employ the most relevant and recent data on Chinese aid to analyzed the impact of
Chinese aid to the lives of Cameroonians.
14
1.4 Problem Statement
The ultimate aim of aid is the eradication of poverty which is geared towards self-sufficiency.
Likewise, aid is meant to assist in the stabilization of the economic output of recipient countries.
Proponents of foreign aid such as Paul Collier, (2008), argue that foreign aid is vital for the economic
development of Africa and that aid has contributed to the minimal growth rate of African countries.
Paul Collier, (2008) states that foreign aid is vital for developing countries to meet developmental
goals. Nevertheless, other researcher such as Brautigam, (2011) argues that Sino-African relationship
has been detrimental to the growth of African home industries since they do not have the necessary
skills and knowledge to compete with Chinese manufacturing firms. She expounds Chinese aid to
Africa through trade promotes the dumping of cheap Chinese manufactured products in African
markets which have been detrimental to the growth of African home since they cannot compete with
cheaper imports from China. Equally, Marks (2007) is of the opinion China existence in African is
detrimental in the advancement of democracy in the continent and has derailed international hard work
to encourage democracy. The government of China is supporting or conducting business with
undemocratic nations. Furthermore, Arnold, (2009) is also supportive of the view that Chinese
companies doing business in Sub-Saharan African is counterproductive to the promotion of human
right and good governance and has stalled the progress of human right in Africa. He argues the fact that
Chinese companies do not follow international working standards and conditions of work has led to
many African workers’ rights being exploited by Chinese companies.
According to Lundsgaarde Erik, (2005) there is persistent calling by advocates of foreign aid for aid to
be increased. He is of the opinion that without foreign aid, developing nations will not have sufficient
funds to tackle developmental challenges of the 21st century. Cameroon, like most African countries, is
highly dependent on foreign aid to meet developmental targets. Cameroon has been a huge benefactor
of foreign aid since she gained her independence in 1960. Traditionally, Cameroon receives aid from
Europe and USA, international organizations such as UN, IMF, World Bank (Mbaku, 1994). However,
over the last decades China is becoming an important player in the international aid system and with its
15
new status is forging a new relationship with African states. With this in mind, this study seeks a
detailed investigation of Chinese aid in Cameroon.
1.5 Research Question
Intrigued by, Chinese huge appetite for raw material to sustain its robust economy, Chinese dependence
in Africa as a vital partner for supplying natural resources. Chinese government over the last decades
has significantly increased its aid to Africa to forge a new strategic partnership. Considering the above
circumstances, the research question of this study is:
1 What are the impact of Chinese aid, trade, and investment in Cameroon?
To comprehend the research question other sub-questions will be relevant to support the main research
question:
What are the opportunities and challenges of this relationship?
Is this relationship a win-win or a zero sum game?
The impact of Chinese aid to the economic development of Cameroon?
1.6 Objective of the Study
To add to the body of knowledge on the ongoing debate of Chinese aid in Cameroon.
To investigate how Chinese aid has impacted the lives of Cameroonians.
1.7 Aims of the Study
To examine the impact of Chinese aid in Cameroon.
To examine the impact of Chinese aid to the economic development of Cameroon.
To examine the challenges and opportunities of this relationship.
16
1.8 Research Focus
To examine the impact of Chinese aid in Cameroon.
To examine the Sino-Cameroon relationship.
To examine the challenges and opportunities of this relationship.
1.9 Structure of the Study
To improve the readability of this study, I have incorporated a brief summary of the structure of this
study. Chapter one, compromises of a brief introduction of the topic area, the problem statement,
research question, and the objective of the study. Chapter two, compromises of methodological
consideration. Chapter three encompasses literature review. Chapter four presents theories. Chapter
five consists of findings and analysis of this study. Chapters six, consist of the conclusion of this study.
Sub-Conclusion
This chapter has provided a detailed background of the Sino-African relationship. Presently, the Sino-
African relationship is centered on mutual respect and equality which has moved into a strategic
partnership. Furthermore, this chapter has also provided a synopsis of the opportunities and challenges
of this relationship. The next chapter will dwell on the methodological considerations relevant in
collecting data for this study.
2.0 Methodology
17
This chapter outlines the methodological platform appropriate in answering the research question. It
comprises of philosophical considerations, use of theory, data sources, case study, research strategy,
research analysis and limitations of the study.
Diagram 2: An outline of the structure of the Study
Error! Objects cannot be created from editing field codes.
2.2 Ontological Consideration,
2.1 Research Design
18
Research field: China´s Aid to Africa : The case of Cameroon
Research question; Impact of Chinese aid, trade, and investments in Cameroon
Methodology
Secondary Data: qualitative and quantitative
Data Analysis; Interpretation
Dependency theory
Economic Liberalism
t
Interdependence theory
Cameroon as a case study;
Findings and Analysis
Conclusions
According to Bryman, (2008) research design is imperative in formulating the research questions in
social research science. This study will adopt the research design approach of interpretive to
comprehend Chinese aid in Cameroon. Interpretive is best suited for this study as social reality is based
on how individual members of the society construe realities in which they participate. Social reality has
significance for individual members of the society and these social realities and connotation are access
through human interaction, observation and through interpretation of the text, (Bryman, 2008:17). To
acquire data relevant in answering the research question, this study will employ secondary sources,
which includes Newspapers, government documents, journals, data from government departments in
Cameroon like National Institute of Statistics, Autonomous Public Debt Repayment Fund.
2.2 Research Strategies
According to Alan Bryman, (2008) there is a clear difference between qualitative and quantitative data
collection methods in social research because of the diverse ways of collecting data. A qualitative
research method of collecting empirical knowledge deals with any data that is non-numerical and
describes the collecting process which includes in-depth interview, written documents review, and
direct observations. Whereas, quantitative data collecting research methods deals with data which is
numerical in nature and is verifiable (Ibid). Quantitative data collecting method includes collecting
techniques such as participant observations; interview with closed- ended questions, questionnaires.
This study employs both the qualitative and quantitative methods of data collection to help in analyzing
the impact of Chinese aid, trade and investments in Cameroon.
2.3 Case Study
According to Bryman,( 2012) there are five applicable research strategies when conducting a social
research study which include case study, survey, experiment, archival analysis and history. To offer
an accurate picture of the impact of Chinese aid, trade and investments in Cameroon, this study will
adopt the case study strategy. Bryman, (2012) defines case study as an investigation approach to
study difficult entities. This study adopts a case study designed because case study offers the
19
researcher a means of studying complex units comprising of several variables in a real life scenario.
Furthermore, the case study’s designed strategy provides the researcher with a holistic view of the
realities on the ground of the impact of Chinese aid, trade and investment in Cameroon. Similarly,
case study design is well suited for this research to provide the relevant knowledge in analyzing the
impact of Chinese aid, trade and investment in Cameroon. Furthermore, another reason for
choosing case study design is that China is providing aid to many African countries to get a clear
perspective of the impact of Chinese aid, trade and investment in terms of developmental aspect. It
is imperative to narrow it to a single country, to verify the impact of Chinese aid in Africa.
2.4 Data Sources
To provide all-inclusive picture of the first-hand knowledge on the impact of Chinese aid in
Cameroon. This study employs several data collection techniques which include:
Document review
Data interpretation
Content analysis
Use of theories
Limitation of the study.
2.5 Documents Review
In any research, document review is very vital in providing a clear picture of the research area.
Consequently, an exhaustive overview of the works of earlier researchers will provide valuable data
on the research topic. Secondary data was collected from government institutions in Cameroon:
National Institute of Statistics Cameroon, Autonomous Public Debt Fund Cameroon, local and
international newspaper like Cameroon Tribune, China Daily, Financial Times and World trade
atlas. Equally, books, journal and articles of other researchers who have written extensively on the
topic area have been of much assistance in analyzing the impact of Chinese aid, trade and
investments in Cameroon.
20
2.6 Method of Analysis
The most appropriate methods of analysis to provide a holistic investigation of Chinese aid in
Cameron is both qualitative and quantitative data analysis methods. According to Bryman, (2012) a
qualitative analysis is how the researcher constructs reality by interpreting a text through coding of
the text. Furthermore, this study will also adopt a quantitative data analysis. According to Bryman,
(2012) quantitative data analysis involves interpreting the numerical aspect of social research. A
quantitative data analysis is best suited for this study since it offers an objective analysis because of
the numerical aspect of such an analysis. In this study data is collected from both qualitative and
quantitative methods in order to create themes to demonstrate the impact of Chinese aid, trade and
investments in Cameroon.
2.7 Use of Theory
In this study, the researcher wants to find out which theory is best suited for analyzing the impact of
Chinese aid in Cameroon. Therefore, the researcher will use different theories in the field of
international relations to determine which theory is best suited for analyzing the impact of Chinese
aid in Cameroon. Economic liberalism, dependency, and interdependence are the three theories
best suited in analyzing the research question. The diagram below displays theories applicable for
the analysis of this study.
Use of Theory Diagram
21
The diagram overhead displays three different philosophical approaches in analyzing the nature of
the Sino-Cameroon relationship. Supporters of economic liberalism argue free trade is the greatest
engines of prosperity and is the best mechanism to lift people out of poverty. Similarly, David
Ricardo explains that the capitalist mode of production base on free market principle is good for the
efficient management of a nation economic productivity, when he formulated the idea of
Comparative advantage. He explains that a country that produces a particular product at a higher
cost at home is better off importing that product from a country that produce that product at a lower
cost3. Whereas, proponents of dependency argue that development center on free trade is not good
for developing nations, due to the exploitative nature of free trade. On the other, proponents of
interdependence theory illustrates that both actors in this relationship are dependent on each other,
China needs African resources to sustain its fast growing economy and African countries are in
need of Chinese aid to meet developmental goals.
2.8 Limitation of the Study
3Library Economics liberty. Available online at: http://www.econlib.org/library/Enc/bios/Ricardo.html. Accessed on 5/25/2015.
22
Economic liberalism
Dependency
Interdependence
The Impact of Chinese Aid, Trade, and Investments in Cameroon.
It is worth mentioning that due to time constraint, this study relies solely on secondary data.
According to Bryman, (2012) secondary data has many shortcomings. It is data collected for a
different purpose and might lead to troubles in interpreting the data. Nonetheless, with the
availability of books, articles on the topic, data from the government of Cameroon, Word trade atlas
and other related sources, offer valuable data to investigate the impact of Chinese aid, trade and
investments in Cameroon.
Another limitation of this study is it focuses solely on Cameroon, it would have been appropriate to
include several African countries to offer a better representation of the Sino-African relationship.
However, by limiting the Study to Cameroon, it has provided a genuine insight into the impact of
Chinese aid in Cameroon.
2.9 Sub-Conclusion
Secondary data is the main data collection technique of this study with emphasis on content
interpretation in order to get a holistic analysis of Chinese aid, trade and investment in Cameroon. It
is important to mention that there are different methods in collecting and interpreting knowledge in
social science research. This study will adopt the interpretation of texts to get a wide-ranging
analysis of the impact of Chinese aid, trade and investments in Cameroon. Similarly, the next
chapter will dwell on relevant literature available on the impact of Chinese aid in Africa.
3.0 Literature Review
23
There exists a wide range of data on foreign aid. Beneath is the two main demarcations of aid as
purported by China and OECD?
3.1 OECD and Chinese Definition of Aid
OECD defines aid as any monetary contributions gear towards the improvement of living conditions of
recipient country and must have a grant component of 25 percent, (OECD, 2009).
The overhead definition, it is clear aid engulfs debt cancelation, relief operation, transfer of cash, the
deliverance of goods, financing developmental projects to recipient countries. The definition of aid via
OCED was agreed upon by, (DAC) comprising of 23 members which includes USA, UK, Japan,
Belgium, Italy, France, Australia, Austria, Norway, Greece, Canada, New Zealand, Ireland, Finland,
Denmark, Luxembourg, Portugal, Netherlands, Spain, Switzerland, Sweden, Germany and the
Commission of European Communities. Similarly, it is worth mentioning OECD approaches aid in two
dimensions, firstly as, (ODA) which comprises of credits aim at encouraging economic development
and well-being of the recipient nations (Wolf, et al, 2013). Secondly as, (ODF) which includes, non –
concessional developmental lending by international institutions like IMF, World Bank and USAID
(Ibid). OECD procedures of providing aid are in conformity with the principles of Bretton Wood
institutions of placing conditions before aid is approved. Nonetheless, with the entering of China as an
important actor in the giver community the approach of OCED member with regards to placing
conditionality before aid is approve is witnessing great alterations since China is providing aid to
African countries without conditions.
According to Davies, (2011) the government of China does not have a clear agreed definition of aid
since Chinese government definition of foreign aid comprises of both (ODA) flows and (ODF) creating
difficulties in differentiating aid from trade. Chinese aid to developing nations focuses on economic
and technical collaboration. It is worth mentioning the Chinese model of aid is different from western
aid since China does not place conditions before aid is approved. Chinese aid is based on mutual
respect and equality which is appreciated by African governments, (Li Xing et al, 2013).
3.3 China’s Aid to Africa
24
According to Brautigam, (2011) Chinese aid is delivered through various schemes and channels.
Chinese aid takes the form of low- interest- free loans, equity support to Chinese companies and firms
investing in Africa. Similarly, Chinese government also provides aid through grants and concessional
loans to fund infrastructural developments such as roads, bridges, dams, sport complex, hospitals, and
schools, which are the most standard methods of Chinese aid, (Brautigam, 2011: 205). Likewise, most
Chinese aid to Africa is provided through interest- free loans, debt cancelation, and concessional loans
fiancé by Exim Bank of China.
Chinese aid to Africa has been received with a lot of mixed feelings. Mark, (2007) is critical of Chinese
policy of non-intervening in the domestic policies of recipient Countries and argues it has been
detrimental to the international efforts to promote good governance, which has derailed international
efforts to promote the Rule of Law and democracy in Africa. He explains that governments like Sudan
and Zimbabwe whose human right stance is questionable, still benefit from Chinese political and
economic backing, which has led to mass human right violations which is not good for human
improvement in Africa.
Another criticism of Chinese aid is the aspect of dumping of cheap Chinese manufactured products into
African markets, which is detrimental to African home industries. A good example is the textile
industry which has lost majority of its sales to cheap imported Chinese textile products, (Brautigam,
2011). The effects of cheaply imported Chinese products has led to local companies and business
shutting down which has contributed to declining employment opportunities.
Nonetheless, there are some positives aspects of the Sino-African relationship. According to Li Xing et
al, (2013) Chinese aid in the infrastructural sector is appreciated by African governments since it places
emphasis on infrastructural development. Furthermore, Li Xing states for aid to be sustainable and
effective it must include financial support training. According to Nour, (2010) Sudan has moved from
an oil importing country to an oil exporting country because of huge Chinese investments in the oil
sector. The Sudanese government has profited from Chinese aid in the oil sector through Chinese
finance, equipment and knowledge transfer.
The impact of Chinese aid in Cameroon has a received mixed appraisal from researchers. Researcher
such as Khan and Baye, (2008) portrays that the relationship is a complex but gutted with
25
opportunities. The government of China is searching for a market to sell its manufactured products and
Cameroon offers such a market. Whereas, Cameroon is in need of Chinese investment in the
infrastructural sector and aid money to meet developmental goals. Nevertheless, Khan and Baye,
(2008) states Chinese aid in Cameroon cut across the broad spectrum such as investing in
infrastructural projects such as roads, dams, bridges, sports complex. Another, element of Chinese aid
in Cameroon is allocating scholarship to Cameroonian students to study in Chinese universities
(Jansson, 2009). The government of China has provided aid assistance in educational and health sectors
in Cameroon by donating health equipment’s, renovating hospitals across the country and constructing
schools. Nonetheless, he argues that Chinese businessmen and companies are affecting the output of
local companies and business in Cameroon, (Khan and Baye, 2008).
3.4 Measuring Chinese Aid
There are numerous agencies accountable for Chinese foreign aid disbursements; foreign affairs
ministry, Commerce ministry. Likewise, another vital component of Chinese foreign aid is Exim Bank
which finances most infrastructural projects. Similarly, another important actor with regards to private
financing is China Development Bank (CDB), founded in 1994.It finances commercial undertakings by
Chinese companies and firms in Africa, (Dreher and Fuchs, 2011). Furthermore, according to
Brautigam (2011) numerous agencies and Ministerial Departments are also involved in the decision-
making procedure of Chinese aid.
There are no concrete figures concerning Chinese aid to Africa because of the secrecy in which Beijing
disburses aid funding. Approximately, the amount of aid China has disbursed to Africa varies
significantly. According to (Dreher and Fuchs) in 2006 Chinese Premier Wen Jiabo estimated China’s
foreign aid to about US$ 5.6 billion from 1949-2006. Nonetheless, this figure is considered by most
Chinese scholars as inaccurate. For example, Exim Bank provided concessional loans in 2007 to the
amount of 8-9 billion, (Manning, 2007: 7). Furthermore, Kurlantzick, (2006) valued that about 2.7
billion dollars of aid was provided to Africa in 2004. Similarly, according to the Financial Times
26
(2011), China is the biggest supplier of loans to developing countries; such loans are financed through
the Exim Bank to the sum of 110 US$ billion in 20104.
Due to international criticism of the way China provides its aid figures and the secrecy nature of its aid
figures lead the Chinese government in 2011 to publish a White Paper to provide information on
Chinese foreign aid, (State Council, 2011). According to the State Council (2011) 161 countries have
profited from Chinese aid. Until 2009, most of these beneficiaries of Chinese aid are from developing
countries consisting of 123 out of 161 (Ibid). China has provided aid to the sum of US$ 38.54 billion,
mostly in the form of grants 41.4 %, 28.7 % concessional loans, 29.9 % in the form of interest- free
loans (Ibid). Table 1, displays the announcement of Chinese aid to Africa by Chinese leaders to
demonstrate Chinese commitment in Africa.
Table 1: Announcements of Aid by Chinese leaders.
Source: Deborah Brautigam (2011: 208)
4 “China’s lending hits new heights” Financial Times January, 17, 2011
27
Table 1 overhead demonstrates Chinese aid to African is constantly increasing from 2008 which was
313 million dollars to 10.8 billion dollars in 2011.This demonstrates China’s commitment in forming a
strategic partnership with African nations. Similarly, table 1displays Chinese aid is provided through
different mechanisms such as concessional loans and investments in infrastructures.
Sub-Conclusion
The impact of Chinese aid to Africa has received a mixed appraisal from researchers. Researchers such
as Marks, (2007) is very critical of Chinese aid model of not intervening in internal politics of recipient
countries has derailed international efforts to promote good governance in Africa. Similarly,
Brautigam, (2011) argues that Chinese trade in Africa is disastrous to the growth of home based
industries. Nonetheless, other researchers such as Li Xing, (2013) argued that African governments
appreciate Chinese model of aid which focuses more on infrastructural development. The next chapter
of this study will dwell on the theoretical consideration relevant for the analysis of this study.
28
4.0 THEORY
A glut of theories in international relations have flourished in enlightening the effectiveness of aid
stretching from world system theory, constructivism, idealism, classical realism, dependency theory,
and constructivism, all in a bid to explain the effectiveness of aid. Nevertheless, this study will adopt
Economic Liberalism and Dependency theory which are two opposing theoretical standpoints employ
by researchers to investigate Sino-African dealings. Similarly, this study will also adopt
interdependence theory to portray dependency nature of Sino-African relationship.
4.1 Economic Liberalism and Trade
According to Adams, (2001) economic liberalism is a free market system with limited government
interference and regulations. In such an economic system, commerce operates with limited government
interference and regulation. The idea of an economic system based on limited government interference
and less regulation was better coined by Adam Smith as the “invisible hand”. He explains limited
government intervention in commercial activities will spur prosperity (Library of economics and
liberty, 2013). Nonetheless, he explains the State is allowed to interfere in the economic activities in
order to provide basic services to citizens such as water, schools, electricity, hospitals, and roads.
According to Brown, (2005:39) economic liberalism does not support socialism or mixed economies
and it is against all forms of tariffs and protectionism.
David Ricardo was a huge advocate of free trade. He formulated the idea of comparative advantage, an
appropriate notion which is the key argument in support of capitalist system. He explains that a country
is better off importing cheaper goods produce abroad and exporting locally cheaper goods abroad.5 This
idea is based on the notion of opportunity cost; which means when a country is producing certain goods
it automatically loses on producing other goods.
According to Gomes, (2003: 36) the cost of producing good A is not measured in term of financial
costing but in terms of number of good B that would have been produced exploiting the same
production abilities.
5 Library of economics and liberty, 2013): Available online at: //www.econlib.org/library/Enc/bios/Ricardo.html.Accessed on5/25/2015.
29
Using the example of two countries, he further enlightens this notion, two countries producing the same
goods wine and cloth which are demanded in the same country.
Cost of Production:
Cloth Wine
Portugal 80 70
England 90 110
From the above, Portugal produces both cloth and wine cheaper than England and one might presumed
that Portugal will be better off not importing for England. Nevertheless, the wine production cost is
very high in England as compared to Portugal and the English prefer to import wine than producing it
locally and such an opportunity can be exploited by the Portuguese by concentrating in producing wine
and exporting wine to England and England will concentrate on the production of clothes and exporting
to Portugal. Thus, Portugal will pay a higher price for clothes produced in England than if these clothes
were produced domestically but the overall profit from selling wine to England will cover for that and
the volume of trade between the two nations will increase Gomes,( 2003 :55)
The nature of the Sino-African relationship is complex since Africa is a huge continent made up of
diverse countries with varied socio-political history. Consequently, Chinese trade with African nations
should be evaluated from individual cases. African Countries exports natural resources, agricultural
products and imports finished goods from China that is the nature of the Sino-African relationship,
(Alden, 2007).
According to Hanson, Kararach and Shaw, (2012) Africa’s future in the 21st century is promising due to
increase trading and collaboration with China in a host of important issues that is going to shape the
21st century. African trade with China improved from US$ 10.5 billion in 2000 to US$ 29.5 billion in
2004. Subsequently, a dramatic increase from 40 billion US dollars in 2005 to 55 billion US dollar, by
2007 there was an increase of 25 percent of Sino-African trade to the amount of US$ 32 Billion Alden,
(2007: 11). During this period African trade with its traditional trading partners OECD countries
witnessed a drop in trade, at the same time Sino- African trade increase from 1.3 percent in 1995 to 9.3
30
percent in 2004 (Ibid) This illustrates Chinese trade with Africa is rising at an alarming rate whereas
African trade with the Europe is dwindling.
4.2 Economic Development
The increase Chinese demand for raw materials to sustain its fast -growing economy has increased
commodity prices predominantly oil and metals which has given a lift to African economies,
(Kaplinsky and Morris, 2009). China huge appetite for raw materials to fuel its economy has retained
minimal economic growth in Sub-Saharan Africa despite global financial crisis. Increased commodity
prices due to huge Chinese demand have contributed in a lift in GDP of Sub-Saharan African. A boost
in GDP in Sub-Saharan African because of increased trade with China has enabled African
governments to provide basic services such as clean pipe borne water, electricity, roads, hospitals and
schools which have improved standard of living in the continent, (Arnold, 2009: 54-56).
State Council, (2011) depicts that by 2009, the government of China had eliminated tariffs on more
than 440 lines of African exports. The elimination of most tariffs on African products to Chinese
market has boost African exports to Chinese markets and opened up unprecedented access of African
companies’ (Yao, 2006). Furthermore, another positive aspect of the Sino-African trade agreement is
zero tariffs to African agricultural products. Huge Chinese population has created opportunities for
African countries to supply agricultural product to China and has increased the volume of trade
between African and China, (Fan, 2007).
Agricultural growth is imperative in the wellbeing of farmers since it is a mechanism of alleviating
poverty in Africa since agriculture is the backbone of African economies (Sammis, 2011).Increased
African agricultural export to China has improved living standard in African since farmers have the
financial ability to spend more on basic goods and services which subsequently have improved the
quality of life in the continent (Ibid). A worthy example is the government of China financing a
training programmed, to train farmers in Guinea Bissau to produce hybrid rice, (Fan, 2010). Therefore,
the production of hybrid rice has helped reduced hunger in Guinea- Bissau.
31
Guy Arnold, (2009) states that infrastructural development is fundamental in improving the living
conditions in Sub-Saharan African. African states are profiting from huge Chinese investments in the
infrastructural sectors: the agreement between Chinese Export-Import Bank (Exim Bank) with the
Democratic Republic of Congo to finance infrastructural projects worth 6.5 billion dollar, in a bid to
improve infrastructures in the Democratic Republic of Congo (Arnold, 2009: 60-70) is fundamental in
the economic development of the DRC. Likewise, Angola is benefiting from huge Chinese investments
in the infrastructural sector to the amount of 300-500 million US$ to improve Angolan railway network
(Ibid). One of the most significant Chinese infrastructural investments in Africa is the TAZARA
railway. It was constructed during the peak of the Cold War to demonstrate its loyalty to fellow
socialist states. The railway linked Dar es Salaam to the copper belt completed in 1975 Brautigam,
(2009: 40) and facilitated movement between Zambia and Tanzania. The improvement in transport
network due to huge Chinese investment in Tanzanian helped the Chinese government to transport raw
materials out of East Africa. TAZARA railway was used as an opening to transport raw materials from
landlord countries like Uganda, Zimbabwe and Zambia (Ibid). Improvement in transport network
facilitated the shipping of agricultural and raw materials out of the country which increased the volume
of trade and boost GPD of African countries. With a positive balance of payment, African government
have more flexibility in terms of budget choice and can spend more on social services such as schools,
hospitals, electricity and pipe borne water and has improved living conditions.
Nevertheless, the impact of Sino-African trade in improving the standard of living based on individual
countries. Countries which exports agricultural products and raw materials to China will benefit from
high commodities prices due to China huge demand for natural resources. Nonetheless, manufacturing
countries with vibrant home industries like South Africa have much to lose trading with China since it
is detrimental to the growth of home industries, (Eichengreen and HUI, 2006: 227). According to the
IMF forecast as cited by, (Arnold, 2009: 63) Sino-African trade will surpass the US$ 50 in 2007 and
will eventually reach US$ 100 in 2010. Such a forecast indicates Sino-Africa trade is increasing at an
alarming rate and has lifted many people out of poverty. China is importing different commodities from
all over African; such commodities include timber from Cameroon, Liberia, Gabon and Equatorial
Guinea. The Chinese government also imports diamonds from Zimbabwe, Congo, copper from
Zambia, oil from Sudan and Nigeria. Even countries which do not have natural resources have
32
witnessed a dramatic increase of trade with China like Ethiopia which has double its trade with China
from US$ 150 in 2003 to US$ 300 in 2005, (Arnold, and 2009:56).
4.3 Social Development
According to Ademola et al, (2009) cheap consumer products from China have improved living
standards in Africa since individuals are able to afford made in China goods as compared to goods
from Europe. Cheap motorcycles, vehicles, mobile phones, textiles products, household appliances
such as fridges, gas cooker have improved the quality of life of most Africans, (Ademola et al, and
2009:469). Furthermore, the availability of cheaper transport equipment’s to African business has
lowered the cost of doing business in Africa, (White Africa, 2009). The availability of cheap
motorcycles from China is significantly supplementing the production of taxi services in all
municipalities in Africa, generating employment opportunities for the youths. Motorcycles are very
useful in conducting petite business activities in cities and villages since most roads are inaccessible.
Improved communication due to the availability of cheap mobile phones from China has made it much
easier for farmers to get in contact with prospective buyers. Similarly, the availability of cheap mobile
phones from China has improved the efficiency of African business since businessmen can contact
prospective trading partners much faster than before which has improved trading in Africa, (Parr,
2013). Equally the availability of cheap mobile phone from China has transformed millions of lives in
Africa through mobile money transfer, the effects of mobile money transfer in the lives of ordinary
Africans is amazing because people can received and send money without the complication of bank
transaction and has improved the circulation of money, hence improving living standards of most
Africans.
Haughton and Haughton, (2011) states that African has benefited from cheap consumer goods from
China such as fridge’s, gas cooker, household furniture’s, and kitchen utensils have improved the
quality of life of most Africans. These cheaper goods from China has improved living standard among
African since they are more affordable as compared to Africans buying such goods from other trading
partners like Europe, Japan and the USA,( Haughton and Haughton, 2011 :113-114).
33
The government of China is financing various training schemes to assist African countries meet the
challenges of the 21st century, (Besada et al, 2008). This various technology centers which primary
focus is innovative research have helped African countries to produce improved quality products. A
good example of Sino-African collaboration in knowledge such as the training schemes in Guinea
Bissau to train farmers how to grow and produce hybrid rice has improved the quality of rice in
Guinea- Bissau, (Fan, 2010). The effect of the Chinese training program is a knowledge transfer which
has helped African countries to gain necessary skills needed for the 21st century. Furthermore, the rice
training scheme in Guinea- Bissau has increased rice productivity which has help reduced hunger in
Guinea-Bissau.
4.4 Critique of the Theory
Helleiner, (2003) states advocates of economic liberalism fails to understand for an efficient capitalist
system in which the poor in the society are protected the state must play an important role in regulating
certain activities such as currency exchange rate, bank regulations, labor regulation. He explains
without the government regulating commercial and financial transactions there are bound to be
disastrous economic consequences and in such a scenario it is the underprivileged members of the
society that are bound to suffer. Therefore, the state must intervene and regulate financial activities to
protect the underprivileged in society.
Ghosh, (2001) states that a society based on economic liberalism exploits the working class. He
explains such a society which the capitalist elite exploits the working class is unjust since economic
gains of the system are in the hands of a few capitalist landowners.
Ghosh, (2001) argues economic liberalism market principles based on Bretton Wood institutions
desires structural adjustment for developing nations to reap the benefits of free trade and without such
structural adjustments from these Bretton Wood institutions developing nations will not profit from
free trade.
According to Helleiner, (2003:691) members of the green party revolution argue advocates of
economic liberalism do not pay much attention to environmental issues and are much more interested
34
in how much profit is to be made. Similarly, they argued that Bretton Wood institutions do not place
much emphasis on environmental issues.
Similarly, feminist argues the theory fails to take into account men and women participate differently in
economic production. Women are engaged in low- paying jobs like housekeeping and export
processing jobs while men are involved in high paying service jobs Helleiner, (2003:692). They argued
capitalist system of production does little to protect rights of women in the job market.
Summary
Sino-African trade is beneficial to African countries because of cheaper products from China which has
improved living conditions of most Africans. Increased Sino-African trade through investments has
contributed to African countries meeting developmental goals. The affordability of made in China
goods has improved living conditions in the continent since Africans are able to purchase goods they
could not buy from Europe, (Hanson, Kararach, Shaw, 2012). Increase size of trade concerning Africa
and China has boost GDP of African nations which has contributed to economic growth which has led
to a positive balance of payment. A positive balance of payment enables African governments to
provide basic services to the population due to the availability of cash to spend on such services like the
provision of pipe borne water, electricity, hospitals, and schools. Nonetheless, there are some negative
effects of Sino-African trade, African economies are becoming too dependent on trade with China
which focuses more on natural resources and it is not good for the future industrialization of Africa.
4.5 Dependency Theory
Dependency theory seeks to enlighten the circumstances contributing to the underdevelopment of less
developed countries (LD C). It is deep-rooted in the Marxism doctrine of exploitation of less developed
countries by developed countries. Nonetheless, to have a better analysis of dependency theory the
works of authors who have written extensively on the topic will be useful.
35
B.N. Ghosh, (2001) in his book Dependency Theory Revisited defines dependency as an unequal
trading relations between the developed economies the core nations dominate the less developed
economies periphery nations, all trading activities are determined by the developed economies at the
expense of the less developed economies,(Ghosh, 2001: 1). Similarly, Dos Santos, (1970) in his book
Structure of Dependency defines dependency as when the expansion of the periphery less developed
economies is determined by developed economies Dos Santos, (1970:231).
4.6 Economic Development
According to Ademola, (2009) cheaply imported made in China goods is detrimental to the growth of
African home industries since the goods are more affordable than locally made goods. This has
contributed in workers losing their jobs since African home industries do not have the necessary skills
and knowledge to compete with Chinese manufacturing firms. A good example is the South African
textile industry which has been affected by cheap imported Chinese textile products. The South African
textile industry has lost from 23.000 to 85.000 jobs due to competition from cheaper textile products
from China and has resulted in workers being laid off which has aggravated the unemployment
situation.
Giovannetti and Sanfilippo, (2009: 522) illustrates there is a correlation between increasing Chinese
exports and decreasing African export when both countries produce the same products. They argued in
areas where Africa and China are competing for the same targeted customer. African companies are in
a disadvantageous position. The textile industry in South Africa, the influx of cheaper textile products
from China has reduced the demand for local textile products. Such a scenario is not good for the
employment situation in South Africa. South African home industries are bound to lay off workers due
to low sales. This situation has led to severe criticism by high ranking government officials in South
Africa, President Mbeki, as cited by Arnold, (2009) states that the nature of Sino-African trade
whereby China exports manufactured products to Africa and imports raw materials is not good for the
industrialization of Africa, Arnold,( 2009: 71-72). This is a true picture of effects of Sino-African trade.
36
According to Munemo, (2013:303-304) Sino-African trade relationship, has been disastrous to the
African continent. He explains Sino-Africa trade relationship is not good for industrialization prospects
of Africa, since Africa is exports raw material and imports finished products from China makes it
challenging for African economies to diversify.
According to Kofi and Desta, (2008: 36-37) African countries have failed to adapt their economies to
the challenges of the 21st century and have structured their economies to depend on exporting raw
materials and agricultural products. Bretton Wood institutions like W.T.O is putting African economies
on an unfair advantage when they advocate for free trade ,whereas, develop countries are protecting
their home industries from outside competition by providing subsidies Moyo, (2009:115). For example
US agricultural sector which benefits from government subsidies making it difficult for the African
agricultural sector to compete.
According to Ghosh ,(2001) industrialized nations like China are exploiting economic situations in less
developed countries by providing aid to have influence and complete dominance of African economies
which has contributed to African countries continuous reliant on aid.
4.7 Social development
Chinese increase presence in Africa has had disastrous consequences as far as the promotion of human
right is concerned. Marks, (2007) argues that Chinese support of dictatorial regimes with a poor human
right record has derailed international efforts to promote good governance and not a good sign for
African democracy. A striking case is in Zambia where protestors of Chinese -owned mines protested
against poor working conditions, low wages and demanded accountability from Chinese top
management when a mining explosion killed 46 Zambians miners. Miners demanded an answer from
top Chinese management instead 6 protesters were shot by Chinese security forces leading to the
massive discontent of Chinese presence in Zambia, (Arnold, and 2009: 70).
Similarly, Chinese trade with Zambia has resulted to dumping of cheap Chinese goods at the detriment
of infant industries which has led to discontent of local businessmen and women in Zambia who
question Chinese involvement in petite business activities. This situation prompted the former Zambia
37
minister of trade to question Chinese true intentions in Zambia by stating ingenious businessmen
cannot compete with Chinese businessmen in petite trading activities such as selling of eggs, clothes
and chicken in the market and it presents a great challenge to local businessmen, (Arnold, 2009:70).
This model of Chinese trade in Africa has contributed in African economies being too dependent on
trade with China.
Another contentious aspect of Chinese involvement in Africa is Chinese support of dictatorial regimes
and conducting business with such regimes like selling arms to Zimbabwe and Sudan which both
presidents are known human right offenders, (Brautigam, 2009: 287). The sale of arms to dictatorial
regimes that cling to power by all means has led to massive human right abuses in the continent and
such arms are used in conflict regions like Sudan. Likewise, president Mugabe of Zimbabwe is using
arms from China to torture and silence any opposition voice in the country (Arnold, 2009:57-74). The
supply of arms to dictatorial regimes has derailed international efforts to promote good governance and
it is not good for consolidation of democracy in Africa (Marks, 2007). Nonetheless, Chinese officials
insist Chinese government principle of non-intervening in the internal policymaking of foreign regimes
must be respected by the international community, (Arnold, 2009:57). Such statements do not help
anti-China sentiments in the continent since it demonstrates that China does not care about good
governance and democracy.
Nevertheless, African civil societies are exacting pressures on their governments to protect their
citizens when dealing with Chinese companies and business. For example, the humiliating encounter
China had in 2008 where a Chinese bound cargo ship with ammunition comprises of assault rifle,
rocket –propelled grenades intended for Zimbabwe was refuse to be uploaded by South Africa
dockworkers because of the intended purpose of the arms and cargo ship was recall back to China and
China suffered international the humiliation (Arnold, 2009:71).
Another aspect of Chinese trade with Africa countries which contributes to dependency is the fact that
Chinese trade in Africa focuses solely on raw material which is not good for the industrialization of
infant industries due to limited transfer of knowledge by Chinese Firms since they prefer Chinese
workers (Marks, 2007). Such a trajectory of Sino-African trade makes Africa economies too reliant on
trade with China. Furthermore, Chinese trading with Africa countries focuses more on raw materials
38
locks African economies in the primary industry and susceptible to prices fluctuation (Ibid). Similarly,
Chinese investment in oil and gas sectors in Africa which has not encourage African oil exporting
nations to diversify their economies and have made oil exporting nations too reliant on Chinese
investment in the oil sector which has a negative effect on the employment situation, (Adenikingjin and
Bamou, 2006:18-19). The figure below describes the organizational framework of dependency theory.
Diagram 3: Organizational Framework of Dependency Theory
The overhead diagram displays the dynamic of Sino-African trade relations. China imports raw
materials and agricultural products from Africa and exports manufactured products to Africa, valued
added to the Chinese economy. Whereas, Africa export raw materials and agricultural to China and
imports manufactured products which leads to a zero- sum gain, which led to the dependency of
African economies on trading with China.
39
CORE STATES;
CAPITALIST IN ORIENTATION
PRODUCER AND EXPORTER OF FINISHED MANUFACTURED PRODUTCS, IMPORTER OF RAW MATERIAL
VALUE ADDED
CAMEROON/AFRICA
SUPPLY NATURAL RESOURCES AND AGRICULTURAL PRODUCTS
BUYS FINISHED MANUFACTURED PRODUCTS. ZERO SUM GAIN
CONTACT CENTRE
THE CASE OF CHINA
IMPORTS NATURAL RESOURCES AND AGRICULTURAL PRODUCTS
EXPORTS MANUFACTURED FINISHED PRODUCTS
4.8 Critique of the Theory
According to Ghosh, (2001) dependency theory fails to provide any practical alternative to overcome
the economic dependency of less developed economies from developed economies. The theory is too
subjective and does not provide better alternatives or solution to overcome the challenges of
underdevelopment in less developed countries, (Ghost, 2001:12).Dependency theory lacks concrete
details on how developing countries can become less dependent on developed economies.
Furthermore, the theory has failed to illustrate how poverty and wealth are the outcomes of capitalism
(Ghosh, 2001: 11). Dependency theory has failed to give a proper explanation of how capitalism
generates enormous wealth and while also creating the conditions of economic hardship and poverty at
the same time
Finally, the theory fails to take into account class and cultural aspect which plays a factor in the
underdevelopment and generating poverty of the less developed countries, (Ghosh, 2001:13).
Dependency theory fails to acknowledge some of the issue of poverty and underdevelopment of less
developed countries have a cultural aspect which has hindered any real economic progress. He further
argues that dependency theory is constrained by a naïve interpretation which makes the theory fail to
provide better alternatives on how less developed countries can break away from poverty.
4.9 Interdependence Theory
According to Brenner, (2000) interdependence theory gained popularity in the 1970s once advocates of
political realist philosophy could not offer a better description of the recent happenings in international
relations and failed to recognize several new features of interstate relations. Though, this theory has
witnessed some changes over the years the core principles of interdependence theory have remained the
same over the years. Researchers such as Robert Keohane and Joseph Nye, (1977) are of the opinion
that interdependence theory encompasses nations avoiding conflict because of the benefit of
commercial activities. They explained it is hard for trading nations to go to war because of the cost of
war and the benefit of trading outweighs wars. Although, scholars such as Robert Keohane and Joseph
Nye, (1977) portrays interdependence theory as a situations in which actors of international relations,
40
that is states are engaged in a reciprocal relationship with other states because of the benefits of trade
and opportunities to be derived from trading activities as opposed to conflict which leads to financial
cost.
In reality, Sino-African relationship both partners are reliant on one another. China offers financial
incentives in the form of aid, whereas, African countries provide raw materials, natural resources and a
market for manufactured Chinese goods.
Such a scenario of the relationship as describes above is better illustrated by Enuka, (2011, 44-53)
when he explain that Africa is a poor continent which is in need of aid and financial money to meet
developmental targets and it is willing to partner with any nation that can offer much needed financial
assistance.
It is worthy of mentioning that state relations are not always equally balance as illustrated by Robert
Keohane and Joseph Nye (1977) they presented a logical example where country A is dependent on
trade with Country B with respect to oil and country B is dependent on trade with country A with
respect to food. Both nations are dependent on each other, but it would be wrong and incorrect to
assume that the trading relationship between country A and B is a balance trading relationship. The
picture of this relationship explain overhead is not balance since country B that sells oil has more
money than country A that sell food.
That is the nature of Sino-Africa relationship is not a balanced relationship. China buys raw material
and sells finished products to Africa value is added to the Chinese economy .Whereas, Africa countries
sells raw material to China leading to zero sum-gain. Nevertheless, both partners are dependent on each
other for trade. The Chinese government is in need of African natural resources to sustain its fast-
growing economy. While, Africa nations are in need of Chinese aid to meet millennium development
targets. The figure beneath will illustrate the application of the interdependence theory.
41
Diagram 4: Application of interdependence theory
The diagram overhead displays the dependent nature of the Sino-African relationship. The Chinese
government is dependent on African raw materials to sustain its fast growing economy. Africa nations
are dependent on Chinese aid and investment to meet developmental targets. It is worthy of pointing
out that Sino-African trade relationship is unbalanced since Africa’s exports raw materials and imports
finished products from China.
4.9 Criticism of the Theory
Firstly, less developed economies are in a disadvantageous position when bargain with developed
countries since they are too reliant on financial and economic grants from developed economies putting
African countries in a weak bargaining position6. Nations with robust economy such as China are in
6Omojarabi Femi (2015): The relevance of interdependency theory in a Globalization Age. Available online at: http://www.academia.edu/4327944/. Accessed on 5/26/2015.
42
Dependent Relationship
AfricaSells raw materilas and
agricultural productsBuys Manfactured
Products
Chinalow instrest loans
Concessional loansInvestmnets in infrastrutres
strong bargaining position when negotiating and are able to direct and determined the outcomes of
trading negotiations because of financial incentives they offer.
Secondly, another critique is that international organizations like W.T.O. World Bank, UN are not
democratic enough and do not protect the interest of smaller nations but promote the agendas of
powerful nations. For instance, UN Security Council with veto powers allocated to permanent members
supersedes the decision of the National Assembly which is undemocratic. Likewise, W.T.O and I.M.F
decisions are conducted behind closed doors and in secrecy which is not good for democratic processes
of such organizations (Ibid). There is a need for structural reformation of Bretton Wood institutions in
order for African nations to profit from free trade.
Finally another critique of the theory is that the theory fails to explain states will always put the interest
of their nations before any other nations and will resist any common profits if it is not profitable, (Ibid).
Sub-Conclusion
It is clear from the overhead description Sino-African relationship is complex but gutted with
opportunities. From an African perspective, the relationship offers opportunities in terms of investment
and financial incentives. Equally, from the Chinese perspective, it offers China a ready market to sell
Chinese manufactured products and a constant supply of raw materials.
The theories explained overhead illustrate how Sino-African relationship works and offers different
perspectives of this relationship. Economic liberalism portrays the benefit of free trade. Whereas,
dependency theory demonstrates that Sino-African trade relations has contributed in African economies
becoming too dependent on trade with China which has disastrous consequences. Lastly,
interdependence theory describes Sino-African relations as both nations dependent on each other;
Chinese government needs African raw materials and a market to sell its manufactured products
whereas Africa needs Chinese aid to meet developmental targets.
5.0 Findings and Analytical Discussion
43
This chapter data will be analyzed in conjunction with relevant theories to generate meaning of Sino-
Cameroon relations, whether this relationship has created opportunities or challenges for Cameroon to
meets its developmental goals. This chapter will be grouped into themes for easy readability.
5.1 Sino-Cameroon Trade: Opportunities and Challenges.
Trade is an essential element in the economic development of a nation. Chinese increased status as a
key actor in international political economy has increased its trading with the outside world. Sino-
Cameroon trade over the past two decades has witnessed dramatic increase as represented below.
Figure 1: Sino-Cameroon Exports and Imports from 1995 to 2008
Source: World Trade Atlas Complied by CCS (2008)7
It is clear from figure 1 overhead that the size of trade concerning Cameroon and China is on an
upward trend. Cameroon exports to China was US$ 30 million in 1995 which improved to US$ 475
7 Centre for Chinese Studies
44
million in 2008, while at the same time Cameroon importations from China improved from 10 million
US$ in 1995 to 380 US$ million in 2008.It is clear from figure 1 Cameroon imports from China is in a
continuous upward trend which means Cameroon is importing more products from China from 10
million US$ in 1995 to 380 million US$ which indicates China is an important import destination for
Cameroon business. Likewise, figure 1 also shows Cameroon’s exports to China constantly fluctuate
which are not good for the overall trading relations with China.
Nonetheless, it is important to determine the degree to which Cameroon is benefiting from trading
relations with China. The increased importation of cheaply manufactured products from China is
advantageous to the lower stratum of the Cameroonian society because of the affordability of made in
China products. The importation of cheap consumer products from China has created employment
opportunities for youths in the service sector in Cameroon. For instance, the importation of cheap
motorcycles from China has supplemented the availability of taxi services which has generated
employment opportunities for youth who are employed in taxi services transporting passengers.
Similarly, the low-cost importation of motorcycles from China has generated revenues for city councils
through the issuing of licenses and the collection of taxes from owners of these motorcycles operating
taxi services. Furthermore, the importation of cheap mobile phones from China has also created
employment opportunities for youths who work in phone booth services. Khan and Baye, (2008)
explain the availability of cheap mobile phones from China has eased money transfer in Cameroon
through mobile transfer which has contributed to stress-free financial transactions as people can
received and send money via mobile phones .Another, findings of this study is phone booth services
generates revenue for city council through the collection of taxes for operating a phone booth service.
Due to the increase job opportunities created from cheap motorcycles and mobile phones from China
has contributed to the reduction of crime rate in the major cities in Cameroon. Figure 2 beneath shows
employment situation in Cameroon by sectors.
Figure 2: Employment by sectors
45
2005 20100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ServicesIndustryAgriculture
Source: World Bank
From the overhead figure, it is clear that Agriculture remains the main employer in Cameroons. In 2005
55.7 percentage of the Cameroonian labor force was employed in the agriculture sector, whereas, in the
same period in 2005 the industry sector employed 14.1 percent of the workforce. Similarly, in 2005
service sector employed 30.2 percent of the labor force. Nevertheless, in 2010 the percentage of the
labor force employment in the agricultural sector dropped from 55.7 percent to 53.3 percent, whereas,
industry sector also witnessed a drop from 14.1 percent to 12.6 percent. However, the service sector
witnessed a slight increase in employment from 30.2 percent in 2005 to 34.1 percent. What this
indicates is more Cameroonians were employed in the service sector which was made possible because
of cheap consumer imports from china. This has provided job opportunities for the youths in the
service sector made possible by cheap motorcycles and cheap mobile phones from China. The
availability of cheap consumer products from China like mobile phones and motorcycles has created
job opportunities for youths who are involved in taxi services and phone booth services. To have a
clear picture of the effect of cheap consumer products from China on job creation in Cameroon figure
3, beneath will displays Cameroon increasing imports from China from 2009 to 2012.
Figure 3: Cameroon imports from China 2009-2012
46
2009 2010 2011 20120.00
100,000.00
200,000.00
300,000.00
400,000.00
500,000.00
600,000.00
700,000.00
800,000.00
US$
US$
Source: World Bank
From figure 3 overhead, it is clear Cameroon imports from China are continually increasing thus there
was a slight decrease in 2012. Cameroon Imports from China increased from 442,046.22 US$ in 2009
to 678,286.39 US$ in 2012 which indicates an increase in imports of consumer goods from China.
Figure 3 illustrates Cameroon imports a lot of products from China which have improved living
standards in the country. Cameroonians are able to purchase goods they could not afford when
purchasing from traditional trading partners such as USA and Europe.
Another finding of this study is the importations of cheap products from China has improved living
standard in Cameroon. These cheaper consumer goods have improved living conditions because of the
affordability of made in China good to all segments of the Cameroonian society from business which
can buy cheap and efficient machinery , to ordinary Cameroonians who have profited from cheaper
consumer products from China. To further explain this point, figure 4 below shows the composition of
Cameroon top 20 imports from China from 1995 to 2008.
Figure 4: Structure of Cameroon 20 imports from China
47
Source: World trade Atlas Complied by CCS8
Figure 4, shows Cameroon imports numerous products from China which includes electrical
machinery, textile products, Vehicles parts, ceramic products, insecticides, machinery, leather art,
cement, iron and steel, clothing and footwear. Figure 4 overhead helps to establish the fact that
Cameroon’s importation from China is not limited to few items but covers a wide range of
manufactured goods which have contributed in improving living conditions. Khan and Baye, (2008)
states that the availability of cheap affordable products from China has improved living conditions of
most Cameroonian since Cameroon being a developing nation most of the populations cannot afford
products from Europe and USA. The availability of cheaper products from China has enabled most
Cameroonian households to purchase consumer goods such as television sets, fridges, gas cooker,
textile products and shoes which have improved living standards. To understanding the significance of
Chinese imports in improving living conditions of ordinary Cameroonians diagram 1display top 4
imports origins of Cameroon.
8 Centre for Chinese studies (2008)
48
Diagram 1.Top 4 imports origins of Cameroon in %
%
NigeriaFranceChinaIndia
Source: Observatory of Economics Complexity9
The above diagram demonstrates China is Cameroon 3rd biggest import origins. However, it is worth
mentioning that though Cameroon imports more products from Nigeria and France, Chinese imports
are concentrated in Consumer goods which have profited Cameroonians of lower incomes because of
the affordability of made in China goods, (Khan and Baye, 2008). Cameroon is a less developed
country with most of the population under poverty line, the importation of cheaply manufactured
products from China such as fridges, gas cookers, cement, iron and steel, foodstuffs and electrical
appliances such mobile phones, television sets have improved living standards in Cameroon.
Nonetheless to get a better understanding of Sino –Cameroon trade trends it is necessary to show top
20 Cameroon exports to China from 1995 to 2008.
9Observatory Economics Complexity: Available online at: https://atlas.media.mit.edu/en/profile/country/cmr/ accessed on 5/15/2015.
49
Figure 5: Structure of Cameroon 20 exports to China from 1995-2008
Source: World Trade Atlas Complied by CCS10
From figure 5 overhead, it is clear that Cameroon’s exports to China comprises of wood, cotton, and
oil. It is worth mentioning that Cameroon exports to China is unbalanced as Cameroon started
exporting oil to China in 1999 but stopped in 2004 and started exporting oil once more in 2008 to
China. The cause for this unbalance nature of oil exports to China is Cameroons oil agreement with
China is based on periodic basis which is constantly renegotiated with the government of Cameroon,
(Khan and Baye, 2008).During the period from 2005-2007 a new agreement was being negotiated.
To remain focus on the analysis of Sino-Cameroon trade in job creation, this study will examine
Chinese increased involvement in the logging industry in Cameroon and job creation.
10Centre for Chinese studies (2008)
50
The logging industry is a key employer of Cameroonians who are engaged directly or indirectly from
logging- related activities. As illustrated in figure 5 overhead, timber consist one of Cameroon’s main
exports to China which has created jobs for Cameroonians. According to Global Forest Watch, (2000)
55,000 Cameroonians were employed in the logging industry in 1998.Logging undertakings entails a
lot of manpower and youths are profiting from numerous low- skilled jobs in the logging industry.
Another finding of this study is logging industry provides employment to unskilled Cameroonian in the
economic sideline parts of the country, (WWF Global, 2015)11. Apart from providing jobs to
communities of economic sideline parts of the country, local communities were logging is carry out
also benefits from services provided by various logging companies such as maintenance of roads,
construction of schools, hospitals, community halls, electricity which have improved living conditions
in these economically sideline parts of the country. Furthermore, the local communities were logging is
carried out benefits from royalties from Chinese logging companies. Royalties provided by Chinese
logging companies to these communities where logging is carried out use the royalties’ money to
provide basic services to the population such as pipe borne water, construction of schools, health
centers which have improved quality of life in these communities. Furthermore, the government of
Cameroon profits from logging activities through the collection of taxes from Chinese logging
companies. The increase in revenues via taxes from logging companies dominated by Chinese
companies has enable the government to provide basic services to remote parts of the country which
have improved living conditions.
Another, findings of this study is medium Size companies are benefiting from cheap imported
machinery from China as can be seen from figure 4 overhead that Cameroon imports machinery from
China. According to a scoping study carry out by Khan and Baye, (2008) on Sino-Cameroon trade
relations they illustrate manufacturing industries in Cameroon are profiting from Cheap machinery
from China. Similarly, Khan and Baye, (2008) explains cheap imported Chinese transports and
machinery equipment’s are the fastest growing imports groups from China. This demonstrates that
medium size industries are profiting from cheap machinery from China which is less expensive in
11WWF is one of the world’s largest Conservation organizations. ( Online) Available at http://wwf.panda.org/what_we_do/where_we_work/congo_basin_forests/problems/deforestation/logging/#4(Accessed on 5/11/2015)
51
comparison from machinery imports from Europe, USA, and Japan, which is a welcome relief to the
manufacturing industry since it has contributed in the reduction in the overall cost of production.
David Ricardo in the theoretical chapter of this study explains the benefits of comparative advantage in
a free market economy, relating comparative advantage to Sino-Cameroon trade relations both nations
have utilized their respective advantage on trading with each other. Cameroon sells raw materials to
China and is benefiting from higher prices because of huge Chinese demands. Similarly, China is
selling manufactured products to Cameroon both parties are exploiting their comparative advantage.
Similarly, as explained by Adams, (2001) in the theoretical section when he explained nations engage
in free market principles will profit from opportunities offered by free trade. When one looks at Sino-
Cameroon trade one can assume that trade between Cameroon and China has created jobs for
Cameroonians. Putting on the lapses of interdependence theory one would conclude parties are
dependent on each other, China needs raw materials and Cameroon is in need of Chinese aid to meet
developmental targets.
Nevertheless, to provide a better analysis of Sino-Cameroon trade one needs to look at the challenges
of Sino-Cameroon trade. According to Bruatigam, (2011) Chinese manufacturing industries are
counter-productive to the growth of African home industries especially in the textile industries where
competition is stiff. Looking at figure 4 overhead, it is clear that Cameroon is importing diverse
manufactured products from China from food products, electrical appliances, leather arts, machinery,
cement, iron and steel, insecticides, clothes and textile products. Putting on the dependency theory
lenses, one would argue such a scenario is not good for the growth of home industries in Cameroon.
Sunday A. Khan, (2010) in a scoping study on the relationship between China and Cameroon
demonstrates that cheap Chinese manufactured products are a huge challenge for Cameroon
manufacturing industries since they cannot compete with cheaper influx of made in China products. A
good example is the local manufacturing batteries company in Cameroon (PILCAM) which is losing
out from stiff competition from Chinese manufactured batteries, PILCAM management complained
about the cheap nature of Chinese batteries as compared to the locally manufactured batteries by
PILCAM and the effects it is having on sales of PILCAM batteries nationwide. As an illustration, a
pact of size 4 AA (Hellenes) PILCAM batteries cost 67 cents whereas, Imported Chinese Royal
batteries cost 22 cents Sunday A. Khan, (2010). Another findings by Sunday A. Khan, (2010) in an
52
empirical study conducted was that some consumers are sensitive to made in China goods because of
the presumed low quality especially those at the upper strata of society since they believed it is inferior
to western goods. On the other hand, those at the lower strata prefer imported goods from China since
they are affordable. The importation of various manufactured products from China has paved the way
for Cameroonian economy to be too reliant on trade with China. Another, critical aspect of the Sino-
Cameroon trade, it has led to the shutting down of home industries since they cannot compete with
cheaper imports from China which has led to jobs loss especially in the manufacturing sector in
Cameroon.
Figure 4 and 5 overhead, shows China exports manufactured products to Cameroon while Cameroon
exports raw materials to China relating it to dependency theory it makes it tough for Cameroon to
diversify its economy since Cameroon is too reliant on imported products from China. Observing
figure 5 it is clear the structure of Cameroon’s exports to China remains unchanged exporting three
main commodities that is wood, oil, and cotton , whereas, China exports finished products. The
consequence of such trading is record trade deficits between Cameroon and China. The table beneath
shows trade balance between Cameroon and China.
Table 1: Sino-Cameroon trade balance, (cost in US dollars)
Source INS (2004) and INS (2006) 12
12 Institute National de la Statistique ( National Institute of statistics Cameroon 2004 and 2006)
53
Table 1 overhead shows Sino- Cameroon trading; it is definite that Cameroon’s does not enjoy
favorable trade relations with China starting from 2004. From 1999 until 2003 Cameroon was enjoying
favorable trade with China since Cameroon was exporting more than it was importing from China.
However, beginning from 2000 Cameroon exports to China began falling while at the same time
imports from China was growing. What this shows is from 2004 Cameroon began recording trade
deficits with China since Cameroon was importing more than it was exporting to China. Relating this
to dependency theory one might argue that it is not good for the overall economic output since it makes
Cameroonian economy too reliant on trade with China. It should be noted that Cameroon’s trade
shortfall with China is contributing considerably to the overall Cameroon trade shortfall which affects
government abilities to provide basic services. The situation of Cameroon trade deficit with China is
even made worst by the importation of made in China goods from third party countries such as United
Arab Emirates (Dubai), Nigerian and Benin Republic. The downside of this increasing importation of
cheaply made in China goods from China and another third party country is that it hinders the
diversification of the economy and locks the economy in the primary sector.
The growing Cameroon trade deficit with China hinders the growth of manufacturing industry since
Cameroon exports purely raw material such as oil, cotton and wood to China and imports manufactured
products from China, which impedes the growth of manufacture industry in Cameroon. The economy
of Cameroon is too dependent on exportation of raw materials which has destroyed the manufacturing
industry. The lack of diversification of Cameroon’s economy is not good for the overall economic
output of Cameroon because of the constant fluctuation of commodities prices.
This issue was raised by the President of Cameroon, Paul Biya when Hu Jintao the President of China
visited Cameroon in 2007. President Biya raised the issue of deteriorating trade deficit with China and
appealed for consideration in the form of quotas intended for selected Cameroon raw materials export
to China such as cotton, wood, coffee (Cameroon Tribune, 2 February, 2007 p:3)13. President Paul Biya
explains Cameroon being a primary exporting country needs some form of relief from China in order to
reduce the trade deficit between the two nations.
5.2 Chinese Investments and Infrastructural Development
13 National Bilingual newspaper
54
Infrastructural improvement is vital for a nation economic development. Investments in infrastructures
such as road, bridges, hydro-electrical dams, are vital to a nation’s developmental advancement as the
saying goes “where there is a road development follows”. Chinese investments in roads, railways, pipe
borne water and electricity has spurred development through job creation and economic growth which
has been essential in the reduction of poverty in Cameroon. China’s aid assistance to Cameroon is
center on infrastructural development which follows a similar pattern of Chinese investments in Africa.
The government of China has funded numerous infrastructural investments as indicated in table 2, 3, 4
and 5 beneath:
Table 2: Completed projects financed with Chinese Aid
Source Khan and Baye, (2008:25)
Table 3: Ongoing Projects Financed by Chinese Aid
55
Source Khan and Baye, (2008:26)
Table 4: Forthcoming projects to be financed by Chinese Aid
Source Khan and Baye, (2008:26)
Table 5 Chinese Assistance to Cameroon from 1996-2009
56
Source: “Caisse Autonomed”Amortisement” (Autonomous Public Debt Repayment Fund)
57
Observing table 2, 3, 4 and 5 overhead, the overall information gathered is, Chinese investments in
Cameroon is not focused in a specific sector but covers several sectors. Chinese investments in
Cameroon cover a wide range of sectors like health, culture, sports, telecom, education, social work,
water, electricity, agriculture, military, technical assistance, roads and so forth. Furthermore, table 2 to
5 demonstrates Chinese aid assistance to Cameroon is diverse and not uniform to a particular sector
which is fundamental in Cameroon meeting its developmental goals.
To stay focus in the analysis of this study, the following sub-section will analyze the impact of Chinese
aid in the economic development of Cameroon and how it has improved living conditions of ordinary
Cameroonians.
5.3 Analysis of Chinese investments in Communication Sector and Economic development
The financing of the modernization of the telecom sector in Cameroon to the amount of 45.2 million
US$ (see table, 3) by the Chinese government is vital for the development of Cameroon because in an
era of globalization modern communication systems are essential in conducting business. Chinese
Telecom Company HUAWEI is supplying equipment’s to Cameroon Telecom Company
CAMTEL .Chinese telecom company HUAWEI in collaboration with the government of Cameroon is
providing wireless network system in Cameroon which has greatly improved communication systems
in Cameroon. In the researcher opinion, modern communication systems is an instrumental tool to
integrate with the global political economy since in the 21th- century modern communications systems
are vital for the advancement of a nation development. Therefore, the modernization of the telecom
system in Cameroon to the amount of 45.2 million dollars by China is contributing to the development
of Cameroon. Similarly, China is funding the connection of communication system between remote
parts of the country with the rest of the country which has contributed in the economic development of
Cameroon. The Chinese ambassador in Cameroon Wei Wenhua in a diplomatic meeting he held with
Emmanuel Nganou a senior government official in the Ministry of Economic Planning and Regional
Development on 29th of April 2015, said “I have never seen any African country that has such
agreements with China to this level” (Wei Wenhua, 2015) explaining that China is committed in the
continuous financing of developmental projects in Cameroon. He explains the modernization of
58
Cameroon telecommunication system by Chinese telecom company HUAWEI will facilitate the
integration of Cameroon in the global political economy (Cameroon Tribune 4th May 2015)14. Such
investment in the telecommunication sector by Chinese government has helped in the development of
Cameroon. The provision of the wireless network by the Chinese telecom company HUAWEI has
benefited Cameroonian companies and businesses since they are able to communicate quicker to the
outside world. Similarly, the modernization of telecom sector by the Chinese government to the amount
of 45.20 million US$ has widened the scope of internet coverage. Remote parts of the country are
connected with the rest of the country. The improved internet access has profited Cameroonians who
are able to gain access to the outside world. I was able to look for admission to come to Aalborg
University thanks to a local internet café which benefited from Chinese aid in the telecommunication
sector in my local community.
Another finding of this study is that through cheap Chinese mobile phones, most Cameroonians are
able to purchase a mobile phone which has eased daily transaction and is of much assistance in the
mobile money transfer scheme. Graph1 display the use of mobile phones by percentage.
Graph 1: The use of Mobile Phones in %
2001 2004 2007 2010 20130
10
20
30
40
50
60
70
80
n/100
n/100
14 National Bilingual newspaper
59
Source: UNESCO Institute of Statistics
From graph 1 overhead, it is definite that the percent of Cameroonians having access to mobile phones
is constantly increasing from 5 percent in 2001 to 72 percent in 2013.This illustrates that more and
more Cameroonians are able to purchase cheap mobile phones from China which has increased the
percent of Cameroonians who possess a mobile phone (see figure 4 above), which shows the
importation of electrical machinery increased significantly in 2007 and 2008. This means Cameroon is
importing more electrical appliances such as mobile phones from China which has increased the access
of mobile phones in Cameroon. Importation of cheap mobile phones from China has benefited the
common man in the street since Chinese phones are affordable which has contributed to the economic
development of Cameroon. Farmers and business people are able to conduct business activities more
quickly. Similarly, the availability of cheap mobile phones has helped in the development of the
country via money transfer schemes which has helped the lower income Cameroonians since they can
send and receive money instantly to conduct their daily activities.
5.4 Chinese Aid in the Health Sector
The government of China has provided a lot of health assistance in Cameroon via the renovations of
hospitals, providing drugs; equipment’s and the medics from China who work in hospitals all over the
country (see table, 2, 3 and 4, overhead). The Chinese government has delivered a 200 bed
Gynecological- Obstetrical hospital in Yaoundé worth 10 million dollars to the government of
Cameroon (see table2, overhead). Similarly, the Chinese government has also renovated and expanded
the Regional Hospital in Buea to the amount of 5.2 million dollars, (see table 3). The government of
China has also, provided equipment worth 0.13 million dollars to the Gynecological-Obstetrical
hospital in Yaoundé and has also constructed a Gynecological-Obstetrical hospital in Douala the
economic capital of Cameroon to the amount of 0.90 million dollars (see table 4, above). Furthermore,
the building of hospitals by the Chinese government has helped in the improvement of hospitals quality
in Cameroon. Likewise, the supplying of equipment by the Chinese government to hospital in
Cameroon has improved diagnosis of diseases and has improved the quality of treatment provided to
Cameroonians. A good example is the renovation of the general hospital in Buea to the amount of 5.2
60
million dollars has helped the local population. In the researcher opinion, the municipality of Buea has
profited from the renovated and expanded hospital since the research originate from Buea. The
residents of Buea are contented with the renovated hospital and appreciate such aid gesture from the
Chinese government. Another, discovery of this research is the affordability of Chinese medicines
which are becoming popular and prefer by most Cameroonians, (Khan and Baye, 2008). The
affordability of cheap Chinese drugs has provided alternatives to western medicines which are
expensive in comparison to Chinese drugs which has helped low- income Cameroonians. Likewise,
Chinese traditional medicines are popular nationwide among Cameroonians especially in the treatment
of malaria and other tropical diseases, (Pokam, 2011: 54). The government of China also partakes in
the distribution of Chinese traditional medicines in Cameroon through dispensaries to patients of
Chinese doctors and to the general public who are interested (Ibid). Furthermore, Chinese
pharmaceutical Cameroon Company has an agreement with the Ministry of Public Health to sell
Chinese manufactured malaria medicines in the country. It has special privileges to sell medicine to
treat malaria manufactured by Guilin Southern Pharmaceutical laboratory established in Guilin in
China which produce a single treatment of malaria drug which is package in two forms Artesunat in the
injection form or Arsuamon in tablet form which has been recommended by W.H.O in 2004 Pokam,
(2011: 54)15. This medicine is popular among Cameroonians since it is effective and cheap.
Another aspect of Chinese assistance in the health sector in Cameroon is the 1975 agreement between
the governments of Cameroon and the Chinese government to provide professional training to medical
personnel in Cameroon. The 1975 agreement led to the arrival of many Chinese medics on a temporary
basis which Cameroonian medics have benefited enormously by acquiring knowledge. Similarly, as
part of the 1975 agreements Cameroon doctors were given scholarships to study acupuncture which
presently is fashionable in Cameroon, (Pokam ,2011: 54). The graph 2 beneath displays malaria
mobility in Cameroon from 2008 to 2012.
Graph 2: Malaria Morbidity in Cameroon from 2008-2012 in %15 Pokam H.D (2011). Chinese Medicine in Cameroon. Retrieved 5/17/2015 from China Perspective at : http://chinaperspectives.revues.org/5642?file=1
61
2008 2009 2010 2011 20120
5
10
15
20
25
30
35
40
45
n/100
n/100
Source: World Trade Organization
As depicted in graph 2 overhead, malaria morbidity is continuously reducing; it was 41 percent in
2008, while in 2012 it drop to 27 percent which illustrates Chinese assistance in the health sector is
having an effect. The effectiveness and affordable of Chinese drugs has contributed to low malaria
mobility in the country since most Cameroonians can afford cheaper medicines from China in
comparison to drugs from Europe and USA. Likewise, the provision of treated mosquito’s nets to
pregnant women by the Chinese government has also helped in reducing malaria morbidity, (Pokam,
2011: 54).
5.5 Hydro-Electric Dam Project and Economic Development
Electrical power is vital for a nation’s economic development since sufficient electrical power will
attract foreign investments which are vital for a nation’s economic development. Likewise, sufficient
electrical power will help manufacturing companies to operate in maximum capacity. Therefore, the
financing of the hydro-electrical dam in Ladgo in the northern part of Cameroon to the amount of 56
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million dollars (see table 2, overhead) contributes to the economic development of Cameroon. Upon
completion, the Ladgo hydro-electrical will increase electricity capacity which will attract foreign
investments. Another, finding of this study is increased electrical power has provided incredible
benefits to Cameroonian households since they are able to use electrical appliances like fridges,
television sets and so forth which has improved the living conditions.
5.6 Agricultural sector
Another finding of this study is Chinese aid has improved agricultural productivity. The financing of
rice cultivation to the amount of 56 million dollars in Ladgo has helped in improving rice productivity
in Cameroon, (see table 2, above). Similarly, the supplying of tractors to the Ministry of agriculture to
the sum of 10 million dollars has helped in agricultural productivity. As indicated in figure 2 overhead
agriculture is the back bone of the Cameroonian economy employing more than half of the population?
The provision of tractors to the Ministry of Agriculture by the Chinese government is important
because it has helped farmers to transport agricultural produce out from the farms which have
improved productivity. Better productivity in agriculture due to Chinese aid has helped in reducing
hunger which has contributed in improving living conditions of Cameroonian Farmer.
5.7 Infrastructural Development and Economic Development
Progress in infrastructures development is vital to the economic development of a nation. One of the
findings of this study is Chinese investments in infrastructures in Cameroon have contributed to the
economic development of Cameroon. A good example is the Kribi port project which is a combined
undertaking between the government of Cameroon and the government of China. China Harbor
Engineering Company Ltd is the company in charge of building the port. The agreement cost of the 1st
phase of the port execution is 568 million dollars of which 85 percent of that amount for the project is
provided by the Import-Export bank in China, while, Cameroon government is to provide 15 percent of
the amount for the implementation of the 1st phase of the project. The China Harbor Engineering
63
Company Ltd completed the 1st phrase in June 2011(The Diplomat February 27, 2015)16.Nonetheless, it
is estimated that the final Kribi seaport project will cost 1 billion dollars and a size of more than 100
million tons yearly. The Kribi port has boosted the Cameroonian economy as describe by the deputy
coordinator of the project Mr. Hand Bahiol Magloire to Xinhua newspaper that port will boost the
economy of the Southern Region and the country as a whole. He explains that Cameroon is rich in
aluminum, iron, oil and natural gas, the new port will make it easy for Cameroon to exports minerals
out of the country (Ibid). Chinese investment in the Kribi port has accelerate economic development in
the Southern Region and the country as a whole and has acted as a gate for land lock neighboring
countries such as Chad to export natural resource. Similarly, employment opportunities in the Southern
region have been generated as many Cameroonians are employed to work in the Kribi seaport project.
However, putting on the dependency theory lenses one will argue limited Cameroonians have profited
from job opportunities since Chinese construction companies prefer Chinese workers. Take for
example the Kribi port project there are numerous complaints by local of being look over for menial
jobs like truck driving since the jobs are given to Chinese workers. In August 2013 out of 1,125persons
working at the port project only 609 were Cameroonians (Ibid) such a scenario is not good for the
overall employment situation in Cameroon.
Another finding of this study is the government of China is financing various road construction projects
in Cameroon. In 2011 China Exim Bank provided the loan of 482 million dollars for the construction of
the Douala – Yaoundé highway to connect the economic and the administrative capitals in Cameroon.
The road will cover 215 km and is expected to be completed in 2017 to be constructed by a Chinese
constructing firm; China Highway Industrial Corporation (Aid data)17. The construction of Doula-
Yaoundé highway has spurred economic development because it has connected the two biggest cities in
Cameroon which has increased commercial activities. Furthermore, the construction of the Doula-
Yaoundé highway by China Highway Industrial Cooperation has provided employment opportunities
for Cameroonians who are employed in skill and unskilled jobs. Nonetheless, it is worthy of pointing
out the government of China is investing in infrastructures in Cameroon in order to exports raw
materials out of Cameroon to China.
16 The Diplomat is the premier international current affairs magazine for the Asia pacific. Available online athttp://thediplomat.com/2015/02/whats-it-like-to-have-china-build-you-a-port-ask-cameroon/: accessed on 5/14/2015.17 Aid Data. Available online at:http://china.aiddata.org/projects/30189. Accessed on the 5/14/2015.
64
Another finding of this study is that Chinese constructing firms in Africa do not follow internal
working values since they continuously insist of long working hours, (Khan and Baye, 2008) and do
not provide good working conditions. Similarly, African employed in Chinese companies are exploited
and suffered human right mistreatments from Chinese management, (Marks, 2007).Mark further argues
Chinese increased presence in Africa has derailed international efforts to good governance.
65
6.0 Conclusion
The Sino-Cameroon relationship has progressed over the years once Cameroon disengaged relations
with Taiwan in 1971, this relationship is complex though gutted with opportunities. Chinese
investments in the infrastructural sector like the construction of the Kribi seaport, the financing of
215km of Douala –Yaoundé road linking the economic and administrative capital has contributed to
economic development of Cameroon. Similarly, Chinese investments in the energy sector like the
building of the Lagdo hydro-electrical dam has increased energy capacity which has attracted foreign
investors and has contributed to the economic growth. Furthermore, Cheap imported goods from China
has been advantageous to Cameroonians particularly those at the lower strata of society since they are
able to purchase goods they could not buy from Europe. Likewise, China’s aid in the health sector has
helped ordinary Cameroonians through cheap and effective Chinese medicines. The construction of the
Gynecological- obstetrical hospital in Yaoundé the administrative capital of Cameroon has helped to
improve the quality of health in Yaoundé. The renovation of Buea reference hospital by the Chinese
has profited the population of Buea due to improved diagnosis of diseases which has improved the
quality of care of patients. Cheaper Chinese medicines are preferred by most Cameroonians since it is
affordable and effective which has helped low income Cameroonians. Also, Chinese investments in the
logging industry, agricultural sector, construction, energy and trade have created both skilled and
unskilled jobs for Cameroonians who are employed in Chinese construction companies which has
contributed in reducing unemployment. Similarly, the importation of cheap consumer products has
profited Cameroonians who can purchase manufactured products such gas cooker, fridges, household
furniture’s, electrical appliances which were too expensive to buy from Europe which has improved
living conditions.
Nonetheless, this relationship also has lots of challenges like the unbalance nature of trade since
Cameroon imports more products than it is exporting to China which has contribute significantly to the
overall trade deficit of Cameroon. Similarly, the importation of cheap manufactured products from
China has been detrimental to the growth of home industries since local manufacturer cannot compete
with cheaper imports from China leading to closure of some manufactured firms’ in Cameroon. A
good example is the local batteries manufacturing company (PILCAM) which is losing sales because of
cheap imported Chinese batteries. Such a scenario is not good for the industrialization prospect of
66
Cameroon manufacturing industries since it has locked the country into the primary sector which
makes diversification of Cameroon economy difficult.
In order for Chinese aid to have any real impact, Cameroon government must promote good
governance and limit corruption, since corruption is the single biggest obstacles of the efficient
implementation of aid projects. The government must build strong public institution to limit the
influence of corrupt government officials and must invest in human capital such as proving
scholarships to Cameroonians to pursue technical education in fields such as engineering, medical
doctors, planners, nurses, and so forth. Human capital investment by the government of Cameroon is
vital for the economic development of Cameroon since without skilled Cameroonians it is will be
difficult to make any real progress in terms of development targets. Therefore, Chinese scholarship to
Cameroonians to go study technical education fields in China is vital in the economic development of
Cameroon. Likewise, the government of Cameroon must put in place effective mechanisms of
evaluating and checking the impact of Chinese aid. Civil society organizations must protect the interest
of the public by making their voices heard on the challenging aspect of Chinese aid to Cameroon; they
should act as watchdogs and formulate policies for evaluating the impact of Chinese aid and assistance
to Cameroon.
In the nut shell Sino-Cameroon relationship presents both opportunities and challenges though the
relationship is a “Win-Win” situation for both Cameroon and China. China has a market to sell its
manufactured products and imports raw materials from Cameroon to sustain its fast growing economy.
While, Cameroon is also profiting from huge Chinese investment in infrastructures, agriculture, energy
and health sectors which have improved living conditions and created jobs for Cameroonians.
However, Cameroon should regularly evaluate its relationship with China so as to ease the challenges
and increased the benefits.
67
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