China has been on several occasions been blamed for its expansionary policies and its large scale Belt Road Initiative has been criticized for being a veiled form of neo-colonization. Chinese economic growth is slowing down, pushing the country to look elsewhere for newer markets and growth space. Waiting with its enormous resources and need for development is the continent of Africa. Over the last few years, Chinese presence has considerably increased in the region. In 2016, President Xi announced that China will be extending $60 billion in financial support to Africa, making it the 3rd largest recipient for Chinese investment behind Asia and Europe. The agreements that China is inking with African nations include industrial projects, infrastructure projects (popularly being railway lines) and other energy and development projects.
The resources found in Africa makes the continent a hot spot. Africa accounts for 30% of the world’s reserves of hydrocarbons and minerals. Coupled with other characteristics such as large population and growing economies, it makes this place the most feasible for Chinese projects. Under the Belt Road Initiative, China has entered into several development and trade projects with many starved African countries that eat up the deals. It is estimated that nearly 10,000 Chinese owned firms are operating in Africa.
Another reason for China’s interest in Africa is China’s overpopulation and unemployment. In a drive to decongest China and to find further space for its growing population, large numbers of Chinese immigrated to African countries to work on the projects. China funded projects require the hiring of Chinese-owned contractors rather than employing local workers. Howard French, in his book, China’s Second Continent, explains about million migrants building a new empire in Africa traveling around the Sub-Saharan region and also spoke of his conversations with several Chinese who had come to live in Africa.
Africa seems to love the attention. In 2018, China held a forum on China-Africa Cooperation where 53 out of 54 African countries sent representatives. Quartz Africa noted that 51 African leaders were in Beijing for the forum as compared with 27 in New York for a UN General Assembly Meeting. At the forum, African Union chairperson praised Chinese investments and aid in Africa. It termed it a source of deep transformation. This is unsurprising as Chinese investment and money have put Africa on the track of globalization. Senegal, one of the developing countries in Africa is the recipient of large Chinese loans in exchange for minerals and construction projects. China has invested nearly $1.6bn in investment in Senegal and this sits well with Senegal’s Emerging Senegal Plan a development model “to speed up its march towards emergence”. They see the situation as ‘win-win’ which it might most possibly be in the short run.
Another endearing factor is that Chinese friendship comes with no conditionality attached. Egypt, one of the continent’s biggest economies has been criticized for its human rights violations. While foreign aid such as the IMF loan to Egypt came with strings attached and hence viewed paternalistic, Chinese aid is seen to be more flexible.China is also attempting to internationalize its currency. In 2018, Nigeria and China signed a 3-year currency swap agreement where Naira will be made available to the Chinese businessmen and the Chinese currency to Nigeria in order to boost speed, convenience and volume of transactions between the two countries.
Without due regulation, China’s presence would become a liability. French, in an interview, stated that China’s interests are extractive in nature and the Chinese companies in Africa have a history of lack of respect for the environment or regulatory compliance. Political motives have blinded some of the African leaders, French observed that a lack of transparency has permitted Chinese businessmen to export valuable resources like timber illegally. This could lead to long term damage.
Another major concern is the debt that African countries now owe China. In 2017, Sri Lanka had to hand over its strategically placed Hambantota Port to Chinese firms on a 99-year lease as it was unable to pay off Chinese debts. The country has borrowed large sums to facilitate a port project. Many believe that poor economies in Africa will be unable to bear the burden of Chinese debts and will have to sell off land or resources as payment. Africa’s engagement with China might well be good for its economy and promote true common prosperity, but it mustn’t also heedlessly disregard the suspicion surrounding the Belt Road initiative. When debt traps and resource exploitation become a reality they can blame no one but themselves. A smart Africa will help the continent realize its goals of development.
Picture Credits: aljazeera.com