Aid for Profit?

In last week’s blog I looked at particular examples of bad press about the Chinese relationship, in accusations of poor workmanship, and in worker mistreatment. Both examples were drawn from the African press. While China is usually very popular among African governments, for whom Beijing is a strong and generous ally, the man on the street is under different pressures.

The African press shares the sensationalist western habit of giving great weight and significance to stories of Chinese mistreatment. The route cause is twofold. Firstly China has been enormously successful in its manufacturing industries and the goods it has exported to Africa are well used and well liked. Therefore they outcompete domestic manufacturing, especially in textiles.

In addition persistent rumours of China importing labour to Africa mean that ordinary Africans worry that China’s engagement will result in a loss of jobs. Reliable data is hard to come by, but some attempt is made here. An influx of Chinese migrants looking to start small scale businesses has also meant competition in markets from Chinese traders and farmers. Therefore the Chinese presence manifests itself in a very familiar fear of immigrants and foreigners stealing jobs. This has often been branded colonisation, but there is a very important difference.

Chinese workers work under exactly the same conditions, and with similar opportunities as African workers. They are not imported because of a sense of racial superiority but because they are price competitive. Petty entrepreneurs don’t succeed because of state favour or class connections, but due to hard work and experience. In many cases they bring valuable goods and services which improve the economy, and the lives of ordinary Africans.

The second root cause is the political benefit of rival politicians in making China a scapegoat for deeper issues. In a continent so affected by the violent history of colonialism, colonisation is a powerful rhetoric, and one unfairly associated with China’s engagement.

It was interesting to read an interview this week with Chinese Vice Minister of Commerce, Fu Ziying. Firstly it represented a policy of active engagement with criticism of China’s role, by Beijing. Second Fu defended China’s aid policy evoking the admirable Tazara railway project of the 1970s. In response to criticism that China only gives aid to access resources he said,

 “Africa’s oil export to China totally follows the international trade rules and the amount is no more than 30% of its total oil exports. Where do the rest of the 70% oil go? Why don’t you care for that? Take Guinea’s iron ore export for example, I just came back from a visit there. Who is the biggest owner of mineral rights there? It is not China, but the western countries that once colonized Africa. Little resources are found in Mali now, right? I just visited it, too. The Chinese are helping it build bridges and roads. Do we do that for the purpose of obtaining resources? I understand that some countries are spreading words on the media and internet accusing China of providing aid purely for resources but that is sheer rubbish! ”

This is largely fair. Western actors are generally far more resource concentrated in Africa than China, as Africa produces little else that the west wants. Increasingly China has offered value added investment in Africa, and the World Bank has looked to the Chinese government for help in stimulating manufacturing on the continent. Western companies simply don’t have the right industries to invest in Africa in the same way.

China’s stage of development offers positives and negatives for Africa, but its motives are no different. European and American aid are far from apolitical and often have a clear commercial goal. The UK Department for International Development is under increasing pressure to deliver commercial benefit, having protected its budget while other departments lost out. China’s aid may not be purely about friendship, but neither is anyone else’s.

It is up to African governments to drive a hard bargain with foreign businesses. One way to do this would be through creating larger Free Trade Areas (FTAs) through which to practice collective bargaining. The proposed southern African FTA would encompass 26 countries and 521 million consumers. A growing African middle class in such a large population is certainly attractive to Chinese businesses which are increasingly willing to locate assembly plants in Africa, such as Foton trucks in Kenya.

South African President Jacob Zuma spoke at the World Economic forum last week saying, "With the coming of China comes a different kind of relationship ... let’s do business ... We are very much aware of the size of China. We need to take a position that is clearly understood by us — how do we trade with China in a way that benefits us as well as them?"

It’s interesting to note the different headlines in South African and Chinese reporting. Business Day give, “Zuma seeks ‘fair deal’ in Africa’s ties with China”, while Xinhua write “Africa's interaction with China a different one, says South African president Zuma”. Increasingly China has sought to present its own version of events in Africa. Also in Xinhua this week was a republishing of comments by Charles Robertson of Renaissance Capital which appeared two weeks ago. Xinhua republished the more complimentary comments that were made. Through forums such as FOCAC Beijing has built up its media profile offering a rival view on its relations.

Perhaps the greatest myth spread through media around the China Africa relationship is that the motives of China and the West are any different. Western companies have greater accountability to shareholders who are wealthy, and often interested in issues like biodiversity and worker treatment. Therefore their practices are generally far more sophisticated and often look after native workers and communities far better.

However China’s involvement also has its benefits. Chinese experts operate at a fraction of the cost of their rivals, and their experiences are often better suited to the African reality. Both approaches have advantages, but both seek profit and development as an end goal. Chinese companies are no more or less moral than their Western rivals, they merely have different accountability and different talents. The media often presents the question as either China or the west in Africa, when in reality it’s a question of horses for courses.

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of FRANCE 24. The content on this blog is provided on an "as-is" basis. FRANCE 24 is not liable for any damages whatsoever arising out of the content or use of this blog.

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