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Posted on October 5, 2009 by Editor

China and African Development

By Bilal Randeree

Bilal is  our guest columnist and is from Newcastle and is a chartered accountant. He not only rants and raves on the Oppidan Press website but also thinks he is a social activist and takes a keen interest in finance, economics and just about anything political and/or controversial. After living and working in London, travelling Europe and studying in the Middle East, he is back in sunny SA and is studying towards a post grad in economic journalism at Rhodes.
“China has supported development in Africa since independence”, said Sanusha Naidu, from the social networks movement Fahamu. She was speaking last week at the colloquium on China-Africa Economic Relations hosted by the Confucius Institute at Rhodes University. “So what makes it different now? This old ally of Africa is not just continuing their historical efforts, but also sourcing and extracting energy and natural resources.”

The Chinese economy continues to grow and reports show that within months it will overtake Japan and become the world’s second-biggest economy. While at least half of the world’s major economies hold current account deficits and need more foreign currency than they hold, China has one of the largest current account surpluses and holds the world’s largest holding of US dollars.

China, which is essentially the planets factory for cheap goods, has a growing consumer base that is also demanding goods. For all of this China needs energy, raw materials and oil. But a country that has around 22% the world’s population and only 7% of the world’s arable land needs to find alternative sources. China has found that the African continent is the answer to their problems.

In order to access Africa’s plentiful natural resources, the Chinese are forced to introduce the necessary infrastructure. “China now has over $4 billion of direct investment in Africa, up from just over $50 million about 20 years ago,” said Professor Tang Yuhua from Jinan University in China, speaking at the Rhodes colloquium. “It is also the largest consumer of oil after the US and imports a fifth of its oil from Africa.”

But the building of major transport networks and infrastructure is not enough to solve Africa’s problems. “While Beijing sees itself as partners in African development, unless Africa picks itself up, this won’t do no good,”
said Professor Ron Sandrey of Stellenbosch University. “Africa is under performing and lacks the policies and leadership required to turn things around on the continent.”

 He argued that Africa is in a terrible economic situation and while interactions with the Chinese may bring some
improvements, “Africa has missed the bus and China’s growth are making it very difficult for Africa and South Africa to get back onto the bus.”

Most speakers at the colloquium criticised the claims “that China is taking over Africa and colonising it”, that sometimes come from the US and Europe. The relationship between the Chinese enterprises and different African
companies and governments is varying; and while all most deals and experiences are good for the continent, those that are not need to be exposed and changed.

It was suggested that perhaps the “West is disturbed by the fact that Africa only recently gained independence after centuries of exploitative colonialism, and now China seems to have replaced them at a time when these Western countries are in a shaky economic state”.

Yuhua was challenged when he spoke about “China’s non-interventionist policy”, as this has dangerous implications, especially for African countries that are run by ruthless dictators. But others questioned whether encouraging Beijing to adopt interventionist policies will be much better. “Does Africa, or the world, need another global super-power that feels it can decide what is best for citizens of other countries?” questioned one delegate, without needing to mention the US and the Bush administration.
However, Naidu cited examples of how China is becoming increasingly concerned about negative publicity and is making active efforts to address its global image.

“China is doing business in socially and politically less stable countries because Western countries have already scooped up all the other markets,” claimed economist Hannah Edinger of Stellenbosch University. She admitted that while bad examples do exist, such as the arms shipment to Zimbabwe that was turned away at South African ports, the Chinese have actually rejected much more deals with Zimbabwe than have been accepted. However, this does nothing to alleviate concerns and a vigilant eye needs to be kept on Chinese-African relations.

The Chinese presence in Africa seems to be bitter sweet. “China is inhibiting the African manufacturing base and is also squeezing Africa’s international growth,” said Sandrey. Africa needs visionary and dedicated leader’s more than foreign investment and infrastructure development. Africa needs to set its house in order before the benefits of Chinese involvement mean anything. “Where is all the oil and mineral wealth gone? In the past 3 years alone, millions of dollars have poured into the African continent and most African people haven’t benefited.”

While one may be naïve to believe that China’s interest in Africa is one of philanthropy, Naidu argues that Chinese development aid to Africa important. “While there is confusion around what actually constitutes aid from China,
they have promised to double aid to continent by 2009,” she added. What this means is still unclear, however it is clear that the relationship between China and Africa is a complex one.

South Africa has a bigger responsibility to the African continent and is best suited to positively direct influence the Chinese-African relationship. China recently overtook the United States as South Africa’s biggest export destination. What implications does this have for Africa’s biggest economy?

For more on Bilal’s opinion visit www.bilalsblog.blogspot.com