Africa in general and Sub-Saharan, black, Africa, in particular, have made significant economic and political progress in the last 10 to 20 years. To a large extent this is attributed to the economic and political presence of China.
The rapid economic growth of China generated a huge demand for raw materials which benefited Africa. Progress in trade was spectacular. The volume of Chinese-African trade was just $1 billion in 1980, reached $10 billion in 2000 and more than $200 billion today. Investments followed a similar path.
Chinese investments were focused on raw materials and energy. “Greenfield” investments, in industry, have appeared recently. That is investment, by Chinese companies, in brand-new factories, not in existing ones. Ethiopia, according to Bloomberg, is becoming China's China - a base for low cost industrial production. A World Bank report from last March, outlines an evolving scenario, where a richer, more consuming, more expensive China, transfers low skill, labour-intensive industries, to Africa.
At the same time China, as president Xi Jinping, announced in Johannesburg, is ready to upgrade it's long-standing involvement in public works and infrastructure. In the 1970s China constructed the famous Tan-Zam or TAZARA Railway for political reasons. It was an anti apartheid investment. Racist South Africa and Rhodesia controlled Zambia’s export route and the Chinese built an alternative route. Today, Chinese built railways, in Africa, (nearly 6 000 klm and 10 000 vehicles), such as the ones linking Addis Ababa to Djibouti or Lagos to Kano, have an obvious economic rationale. They can serve Chinese companies as corridors for trade and investment to exploit the huge unemployed labour force of Africa. If today they facilitate the export of raw materials, tomorrow they will also facilitate the export of low cost industrial products.
As a percentage of international trade and investment or even as a percentage of Chinese international trade and investment, African flows are small. They are nevertheless significant for Africa and for the future of the world. Nowhere else on the planet are there such huge margins for growth. Nowhere else, in the world, is there such a need for basic things like food, water and electricity, houses, roads, schools etc.
The Chinese, who recently abandoned the policy of one child per family, know that by the end of the century 1 in 3 inhabitants of the planet will be African and that Nigeria may have a bigger population than China. They know that the continent is expected to add one hundred million persons to its labour force, in 2035. (= number of people aged 15-64). This is twice as much as the rest of the world, will be adding, put together. They also know the natural resources of Africa and its size. China, India, the US, Mexico and the EU can fit into Africa.
The number of Chinese in Africa and of Africans in China are also growing. It is estimated that there are 2 million Chinese living in Africa and half a million Africans living in China.
The political and geostrategic presence of China in Africa, is cautious and discrete. It has a long-term perspective.
For a long time, the military presence of China, was symbolic. They participated only in UN peace keeping missions and only with support staff (non-combat). This changed for the first time in the war against sea piracy and more recently with the inclusion of combat troops in UN missions, such as the one in South Sudan. Last year we learned about the establishment of a military outpost, in Djibouti, next to the much bigger American one and smaller French and Japanese ones.
International trade in arms is an oligopoly. The US and Russia control nearly 60% of this trade. China has only 5%. Nevertheless, Chinese military exports to Africa, have increased significantly. According to some estimates they used to represent only 3% of African military imports but now take up 25%. As with so many other Chinese products they are good enough and much cheaper.
The West continues to intervene provocatively in Africa, to blackmail legitimate governments, as in Zimbabwe, to commit crimes against whole nations as in Libya, to support criminals like Kagame of Rwanda, and “businessmen” like Nguesso of Congo (Brazaville), to prop undemocratic regimes as in Egypt or Ethiopia. China does not intervene. They trade with everybody and invest in many countries. The Chinese see this as respect for the sovereignty of other nations. The West criticises it as unprincipled (sic).
In three important countries there is significant political progress : 1) the end of apartheid in South Africa, 2) the relative stabilisation of Congo (Kinshasa), 3) a peaceful democratic change of government in Nigeria.
From an international perspective these appear to be major achievements of western protection and guidance. They are indeed western achievements but exist in a political space created by Chinese and Russian discreetness and often cooperation at the UN security council.
Under western protection and guidance economic apartheid remains intact in South Africa, multinationals reign and the country has become a world champion of inequality.
In the People's Republic of Congo (Kinshasa) an agreement that would give privileged access to the country’ s minerals to the Chinese, in exchange for massive investments in infrastructure, was overturned. The World Bank worked hard on this. Maybe the Chinese themselves questioned the capacity of the country to manage such an ambitious exclusive cooperation. Maybe they foresaw the fall in the prices of raw materials. Maybe they didn't want to antagonize the Americans.
Nigeria of Shell and its local private and state partners, under western protection and guidance, is deeply neo-liberal, unequal and corrupt. It is suffering from the collapse of the price of oil and is focused… on the war against Boko Haram. It remains to be seen if its democratically elected government can democratize the economy.
In Sudan and in South Sudan, where the Chinese made significant investments for the extraction of oil, terrible civil wars followed. French military intervention in the Central African Republic, had as one of its goals the displacement of Chinese mining companies. A similar antagonism was seen in Tchad.
Such situations resemble sometimes a boxing match where the Chinese wear gloves and Westerners wear iron fists. The Chinese seem to accept this unequal match and to be winning nevertheless. Why ? Because despite all the interventions and protectionist aberations, the west respects and protects free trade and the free movement of capital enough, to make rupture very unprofitable for the Chinese. It is the participation of China in global markets, its investments in the US itself and in Europe and of course massive western investment in China that make China such a discreet and cautious international player.
What will happen if, one day, the Chinese have, by far, the largest internal market and the largest accumulated capital in the world ?
Two signs from the future :
- Two treaties: TTIP (Transatlantic Trade and Investment Partnership for the US and EU) and TPP (Trans Pacific Partnership for the US, Canada, Mexico, Peru, Chile, Japan, Australia, New Zealand, Malaysia, possibly Indonesia etc)
- The international organization BRICS (Brazil, Russia, India, China, South Africa)
Thus the relationship between China and Africa has a long way to go. It is based on solid current mutual benefits, and makes global, long term, geopolitical sense. The rapid development of Africa could become a significant component of long term global growth. China seems destined to play a leading role.
Little Greece is entitled to claim its little share in this cosmogony.
A shorter version of this article was published in ΑΥΓΗ (the newspaper of SYRIZA) on January 3, 2016