
China in Africa
“Nǐ hǎo!”
I glance back as two Congolese children giggle and repeat the Mandarin greeting. This marks my third time hearing the phrase while wandering Brazzaville’s streets.
The people around me are all clearly Congolese.
The children seem perplexed at my lack of response. I am equally perplexed by their linguistic choice.
When I lived in Tanzania, children often greeted me with “mzungu!” (Swahili for “white ghost” — I took it as a compliment for my zealous use of sunscreen).
But throughout West Africa I instead hear “Nǐ hǎo!”
Were African parents also enrolling their children in Mandarin classes to prepare for China’s inevitable world domination? Perhaps West Africa and Palo Alto had more in common than generally believed.
This premise, not surprisingly, proved false. A more interesting force was at play.
Planes, Trains, and Automobiles
My first clue is the flights. Most passengers are African, a sign of the continent’s growing middle-class. The expats tend toward specific professions. The Americans work for non-profits, the Europeans for governments, and the Chinese for corporations (which are often indistinguishable from the government).
Perhaps most notably, Chinese businessmen outnumber American NGO workers by 10 to 1.
While driving from the Kinshasa airport, I am awed by the freshly-paved six lane highway, particularly given the DRC’s miniscule national budget. The road makes the 101 from the San Francisco airport to town look like a national disgrace. We pass an impressive football stadium. I ask my Congolese driver about the roads and stadium.
He responds with one word: “China.”
I prod. “The Chinese fund the roads and buildings and then sends building crews. It previously took 4 hours from the airport to town. It now takes 45 minutes. The stadium holds 100,000 people. We have much new infrastructure — and many Chinese people.”
The light bulb goes off. African children are now more accustomed to seeing Asians than Caucasians.
Capitalism Versus Aid
In 2009, China surpassed America in African trade. Three years later, China’s African trade was double America’s, a remarkable growth trajectory. On a country level, China is also taking the lead. For instance, Angola replaced Saudi Arabia as China’s largest supplier of crude oil in 2010.
America historically viewed Africa as a poor continent needing handouts. Since 9/11, the US also deemed it a terrorist breeding ground. Consequently, most of America’s activity on the continent focuses on development aid or military relationships.
“What the Chinese did uniquely was viewing Africa as a market… when the rest of world viewed Africa as an economic basket case and a place for aid,’ says Richard Poplak, a Johannesburg-based journalist.
In Djibouti, home to a large US military base, an official tells me, “Americans bring drones while the Chinese build roads.”
China’s lead stems from both a greater focus by the national government and less restrictive regulations on businesses. One American diplomat confides, “American companies put in competitive bids, but since they cannot pay bribes, they often lose.”
In Kinshasa, a Congolese gentleman notes, “We are very happy with the Chinese. They are rebuilding our country. But don’t worry, we still love America – we watch your movies and listen to your music.”
So China brings infrastructure and America brings bombs… and Miley Cyrus.
It feels like a losing proposition for America — and Africa.
Beyond Resources
Conventional wisdom holds that China’s role in Africa is solely to extract resources.
Yet, a 2013 study by Johns Hopkins found that China committed $75B in development aid to Africa in the last decade, just shy of the $90B committed by the US.
Throughout Africa, I saw new roads, buildings, and organizations funded by the Chinese.
It is not only roads and buildings. The diverse list of projects includes school computers in Mali, new telecom networks in Eritrea, and anti-malarial drugs in Somalia.
As one gentleman who works in the Congolese finance sector tells me, “The Chinese were always active in infrastructure and business, but they are now also involved in soft power areas.” He continues, “The US is still important politically, today, but that too might change.”
Resource Curse
It’s not all just new computers and cultural centers, however. While excited by the prospect of new infrastructure, many Africans are leery of the true price of China’s so-called goodwill.
As one Burundian tells me, “China has no rules. This can be great for businesses, but terrible for the people.”
The classical challenge faced by resource-rich countries is Dutch disease, when extraction replaces other industries. But the issue plaguing many African countries is more akin to the Resource curse, when resource-rich countries paradoxically experience lower long-term growth than resource-poor countries.
In Africa, this curse has two main components: unsustainable development and diminished democracy.
Essentially, China deals with anyone on any terms. Despotic dictator? No problem. A few million dollars in “gifts” for the right people to make a deal happen? The price of doing business. A few human rights abuses along the way? Stuff happens.
Some African leaders pin their hopes on Chinese-backed development placating restive populations and serving as a substitute for civil liberties. A Belgian advising a Western Africa government tells me, “Often mining deals struck between African governments and Chinese companies promise the African government only 20-30% of market royalty rates. The rest goes straight to the pockets of the president and his cronies.”
The result? A national budget derived from resource wealth instead of taxes – and a strongman not reliant on citizens for income and therefore power, making democracy expendable.
Made in Africa?
The Chinese development model also relies heavily on imported Chinese workers instead of training and paying locals. I ask a taxi driver in Senegal who builds the new roads. “They are all Chinese laborers living in Chinese camps. We never see them, except when they work. But some stay behind and open shops.”
A Congolese man later explains, “The Chinese have stores and sell Chinese goods at very reasonable prices. They are putting the local shops out of business.”
It’s like Wal-Mart in America, except instead of Made in China, it’s also Owned by China.
Colonialism Redux? Or the African Century?
“The conquest of the earth, which mostly means the taking it away from those who have a different complexion or slightly flatter noses than ourselves, is not a pretty thing when you look into it too much.” —Charles Marlow, Heart of Darkness
Africa is home to seven of the ten fastest growing economies in the world. Africa now outpaces Asia in economic growth. By 2050, Africa will have two billion people spread over 50 countries. They will matter — for economics, security, and geopolitics.
China is making a strong play for Africa’s both resources and influence.
Yet, in every country I visit, I hear stories of Chinese-built roads washing away or Chinese-engineered buildings falling apart.
In exchange for extracting the finite and non-renewable wealth of Africa, what do the Chinese give in return: roads that last for a few years? Buildings that need repair immediately after opening? Locals sometimes derisively call the roads “disposable” and buildings “styrofoam”.
As Lamido Sanusi, governor of the Central Bank of Nigeria, wrote in the Financial Times, “China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism.”
I leave with more questions than answers. How should the US approach Africa: As an aid project or as an emerging powerhouse? Should we play by our own rules – or those of our biggest competitor?
Perhaps more importantly, on what terms should the US, China, and others view Africa’s resources: wealth to be extracted abroad at the lowest possible price – or a foundation for sustainable local economies in democratic countries?
What does seem clear is that America cannot ignore Africa or consider it solely as destination for sympathy. It also cannot simply discard its own core values in a race to the bottom with China.
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I think this is my favorite posting yet. Informative and thought provoking. Well done. i think I’ll go do a bit more research now.
Thanks — please report back!
Hi Paul,
thanks for having gone on this adventure and sharing what you see. A lot of what you have said matches what I have seen, including everything you have written above. But I also don’t feel this is the whole story, “China is evil and we are good” sounds too black and white. Here’s a few thoughts. I’m numbering them, so that if anyone would like to disagree with me, it’ll be easy for them to refer to what I say. Just one thing: I see flame wars exploding online and detracting from the purpose of the discussion the whole time. Obviously, people will disagree with me, and that’s fine. But please, let’s stick to the topic. If you want to attack my character, let’s just agree here and now that I’m the lowest life form that ever typed on a keyboard and move on from here.
1 – The low price and quality of Chinese finished products is a classic even in the “west”: we don’t want Chinese quality, but we want Chinese prices. And we go with the prices. The Africans do exactly the same, but they don’t buy objects – they buy infrastructure. Short term planning, on a grand scale.
2 – The difference is that in Africa, regulations are even more lax because of the widespread corruption and centralized power. But whilst China has recently taken advantage of this undemocratic situation, the “west” is the one that has actively supported it in the first place, until now. The difference is, they mainly exploited it for raw materials (metals, diamonds, etc.) and for selling weapons, and keeping countries unstable in order to pit people against each other and exploit that instability; whereas China is creating work for its own people, and buying land on a massive scale on which to grow food which it then ships back home to feed its own people – effectively taking away from Africa the Africans’ own food.
3 – We are also pretty adept at corruption, we’re just less transparent about it. The quote about how American companies do not pay bribes comes from a US official. I am sure if you talked to the Chinese embassy they would also deny paying bribes.
4 – Chinese labour is, however, cheaper, done the way this is done. Therefore, margins are higher. Therefore, bribes can be larger that ours and still return a profit.
5 – Let me be clear: my argument is NOT that since we do it, it’s ok for China too. it’s that neither is ok.
6 – But I’m also not ok with saying “China is evil, and we’re the goodies”. We’re not, and haven’t been, we’re just sore losers when someone else is even better at exploiting developing countries than we are.
7 – Africa is the latest turf on which the global political was is taking place.
8 – We don’t invade countries where people need us the most. We invade countries that have resources we need the most. This speaks about our true intentions.
9 – Having said that, I don’t want to make this into a manifesto for “everybody is evil and the world is a terrible place”. The facts are as you exposed them, I just don’t buy the explanation and have given mine above. Starting from here, the discussion becomes: what CAN we do to improve things, even if things are as bad as I have just said?
10 – I am grateful to you for exploring the world and reporting back to those who are not there to see things with their own eyes. And for providing the opportunity to start these discussions in front of all. The world needs people like you.
Hi Michael-
Thank you for sharing. I for one am very appreciative of your thoughts. Moreover, I have been very pleasantly surprised at both how civil and informative the discussion has been on previous posts. Let’s hope it continues!
One quick overall response: my intent was not to make the West sound like the “good guys” and China the “bad guys”. I certainly do not think America and the West are close to blameless or solely altruistic in their intentions.
I actually mostly agree with all your points, with the exception of number 3. While I am sure there is plenty of corruption among American and Western companies in Africa, I would argue that it is in fact less than that of Chinese companies. America has the FCPA (Foreign Corrupt Practices Act) and other Western countries have similar laws that provide for harsh penalties for companies found to be paying bribes abroad. Unlike some laws, FCPA is one that is both enforced (people have gone to jail, companies have been given large fines). Having consulted for companies that work abroad, I can attest that executives are extremely nervous about FCPA and spend a lot of time worrying about how to avoid their local employees and agents getting tangled up in it. As far as I am aware, China does not have an equivalent law — or certainly not one that is commonly enforced.
I like your points, Michael. Paul, for smaller companies who undergo less oversight, do you think what ends up happening is contractors and subcontractors might get hired to do the dirty work?
I think the same happens for larger companies as well — just with more layers in between. It makes it more challenging when as a Western firm you need to hire five layers of contractors and create full deniability versus being able to do it relatively openly as a Chinese firm.
The Brazzaville airport is like a clone of HKIA 6.6
It was probably built by the same firm!
From a non-American perspective, I feel that China is winning hearts at about the same speed with which the US is losing them.
I am scared to ask what speed that might be…
Very nice article Paul! Having lived in China, this topic is not new to me but I think you made a very rich discussion about it.
Also, being Portuguese, I grew up hearing many stories of African colonization.
However, the most astonishing fact (for me at least) I heard about this was in a conference of a United Nation Aid Development program where the speaker explained that the genesis of aid programs started in the west and were mostly based on a guilt feeling about the past. Thus, no market mindset was (is) ever really involved.
If this is so, then I would disagree with your last sentence. It’s not a race to the bottom, but actually the opposite.
Of course being european, I do feel some “historical guilt”, but I don’t agree with millions of $$ being badly spent just because of that. Aid from the west ends up being a sort of corruption anyway.
Even if Chinese infrastructure is poor (and usually it is), the largest benefit was that it put a marketplace mindset on the table.
Because of this, the US and Europe have now to rethink how they deal with the region. I think the net effect of this is still positive. Not only because of the chinese money going in, but because the quality of US/Europe money might increase substantially going forward.
About Corruption
Yes, there is a lot of corruption in China.
But do believe me that the discourse that I heard from the government/companies in China was exactly the same as in the US. They all want to protect their own interests. And if China does it with corruption, the US has more sophisticated business/company contracts but that end up bringing a lot of business to the US in return from that aid.
China will probably develop this sophistication at some point.
How to make it better?
Transparency on those business agreements/projects/aid.
But do government and companies really want it? Probably not. Because probably nobody has the real incentive to disclose.
So maybe it must be the African side to fight for that transparency. However, are ready? Do they have the institutions and culture to enforce it?
Anyway, this my thoughts and contribution 😉
Continue to enjoy the trip!
Very interesting food for thought. I had never thought of the historical guilt angle. I certainly agree that aid can be either positive, ineffective, or sometimes even quite pernicious — so is certainly in no way better than a more capitalistic view. I also agree that ultimately transparency is best, but like you, suspect it will be quite a while before it is achieved. That said, I am hopeful given how strongly and adamantly most Africans I met expressed their contempt for corruption in their countries — so let’s hope they are able to demand and obtain better leaders and political systems.
I also really appreciated how you delved deeper into politics on this post…not because I enjoy politics but because so much of what is happening in the countries you are visiting is inherently political. And Michael I think you are spot on, although I read Paul’s post to both point out China’s malintentions and also pointing out that basically we in the West did it first. In my opinion this is just a building on what colonialism left behind.
Precisely, hence my finding the Heart of Darkness quote so fitting.
Your observations reflect the now six-year-old special report Fast Company did, China Storms Africa. From both, I would say it is clear that African countries continue to lack self-governance, and it is causing them long-term harm. I am curious: do Africans think their own governments are fostering economic colonization? Did you see exceptions to this corruption?
here is a link to the Fast Company report.
http://www.fastcompany.com/849662/special-report-china-storms-africa
The more educated are certainly quite keenly aware of what is transpiring, both in terms of corruption and “new” colonialism — and are mostly quite displeased.
The challenge is that in most countries the educated comprise such a small portion of the electorate that they cannot truly influence the outcome of elections, assuming that said elections are free and fair to begin with, which sadly is not a given.
But there are a number of countries that are considered to be relatively free of large-scale corruption. Botswana, Namibia, Ghana, Senegal, and Rwanda all come to mind.
Just read the article below and it made me think of your post. I spent a summer teaching in Sub Saharan Africa in 2002 – it’s amazing and inspiring to think of what’s happened in just over 10 years! http://www.mckinsey.com/insights/globalization/lions_go_global_deepening_africas_ties_to_the_united_states?cid=other-eml-nsl-mip-mck-oth-1408
what an interesting and thought provoking post plus discussion. loved this.