China's march into Africa.

 
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Over the past year alone, African Business has been invited to participate in eight international conferences on China's role in Africa; to our knowledge, there have been at least 32 such conferences over the past year. The meetings have been held at various sites in Africa, Asia, Europe and the US.

This is a clear indication that China's relationship with Africa is of growing importance not only the main actors involved (China and Africa) but globally. The consequences of closer economic, strategic and diplomatic ties between China and Africa have wide and far-reaching implications.

Will China's ascendancy in Africa mean a decline in the West's traditional power and influence on the continent? Will China's relentless growth lead to a clash over Africa's resources? Will China's development model supplant the Western blueprint? Is China, as many are suggesting, the missing factor in Africa's accelerated growth?

As the debate continues to rage, African Business analyses what China's new role in Africa really means. African Business editor Anver Versi and Chief Correspondent Neil Ford report.

A meeting of minds--and needs

China's increasing presence and influence in Africa has now become a hot item of discussion and debate on a global level. In less than 10 years, China's investments and trade with Africa have registered what can only be described as stunning growth.

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The pace of Chinese involvement with Africa is also accelerating. In 1999, the value of China's trade with Africa was $2bn; by 2004, this had grown to $29.6bn. This included a growth of 48.4% in just one year, 2003 when trade volume amounted to $16.64bn. By the end of this year, volume of trade will reach $45bn.

China is the third largest investor in Africa with FDI commitments of around $29bn. Analysts expect China to overtake the US as the second largest investor by 2010 and to push Europe, currently Africa's number one investor, into second place by 2030. By the end of 2003, some 638 Chinese companies had set up shop in Africa. These included wholly-owned, joint-venture and co-managed enterprises. The current figure is around 1,000 Chinese enterprises active in Africa.

China is also strengthening and deepening diplomatic ties with African countries and winning friends and influence among the masses. At the first China-Africa Forum held in Beijing, China acceded to South Africa's request to cancel some African debts and wrote off $1bn. It also placed 190 products from 28 least developed African countries on a tariff-free roster.

State owned companies have been investing heavily in agriculture, fisheries and related secondary production facilities. For example, it has set up joint-ventures in fisheries in Gabon and Namibia and leased agricultural land in Zimbabwe, Zambia and Tanzania. It has just made a deal to operate coal mines and built a thermal station in Zimbabwe to ease that country's energy shortfalls.

Chinese manufacturing companies are already producing consumer items like air-conditioners and bicycles and capital equipment such as farm and other agricultural processing machinery. China has found a ready market for its manufactured items, which are cheap but durable. Many of these are produced by loss-making state owned enterprises, imported by Chinese commercial companies and distributed through extensive, often informal networks, not only in African towns and cities but also deep in the rural areas. Most of these products are ideal for African conditions which in many ways are similar to those in China.

Chinese construction firms, supported by the state apparatus and employing low-cost but highly efficient Chinese labour (estimated to be around 80,000 at present) have been able to outbid contractors from other parts of the world and are winning an increasing slice of Africa's construction sector. They have been building roads in Ethiopia, railway lines in Angola, stadiums in Mali, Djibouti and the Central African Republic and government offices in Mozambique and Uganda.

China has broken long-standing protocols and has provided peace keeping troops to Liberia and the Democratic Republic of the Congo. Its donations to UN operations in Africa have increased substantially and it has provided humanitarian assistance to combat drought in the Horn of Africa and recently to Darfur.

War of words

China is now the third largest economy in the world, after the US and Japan, but well-researched projections predict that by 2040, China's GDP will rise to $29.4 trillion, just shading the US's projected GDP of $29.1 trillion.

With oil and commodity prices breaking all previous records (see pages 20 and 24) thanks in large part to China's inexorable double digit growth, alarm bells have been ringing in London, Paris and Washington. Pundits are already prophesying a new scramble for Africa's resources, pitting the West against a resurgent China.

The war of words has already started. Heavyweight columnists in the West's leading newspapers have been loudly wondering about 'China's hidden agenda in Africa'. China has been accused of turning a blind eye to human rights abuses in some African countries and of refusing to lay down governance conditionalities on its African trading partners. The US has openly criticised China for selling arms to 'irresponsible regimes' by which it probably means Sudan.

The Chinese, on the other hand, counter that their main interest in Africa is economic, that China and Africa have a great deal in common in terms of shared historical experiences and that a strategic and economic alliance with Africa is 'natural'.

Beijing's Africa Policy White Paper, which was released while Chinese Foreign Minister Li Zhaoxing was sweeping through Africa on a charm offensive, emphasises the Five Principals of Peaceful Coexistence. These include mutual territorial respect, non-aggression and non-interference in each other's internal affairs.

This aspect has gone down very well with most African governments. Over the last decade, Western aid to Africa has progressively declined while what is considered by many Africans as 'interference in internal affairs'--such as governance conditionalities--has increased.

African leaders have long argued that Western models of democracy including the length of presidential tenure and forms of public institutions are often not suitable for some African conditions. Some African states are still trying to recover from internal conflicts, others are facing critical poverty related problems, yet others have to finely balance class and ethnic divisions.

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Each case, African political scientists argue, is unique often requiring unique governance solutions taken in line with national cultural and historical sensibilities. The blanket one-size fits...

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