China and Africa Development Relations (Routledge Contemporary China Series)

China and Africa Development Relations

China is among a number of large developing countries or new powers on the ascendance in the international system, all of which are deepening their economic relations with Africa. However, China is the largest and most powerful of this group. It has sought closer economic relationships with other developing country regions and continents such as Latin America and Central Asia, but it is with Africa – the continent that hosts more developing countries than any other – that China has fostered the closest links. This book provides an overview of how the China–Africa relationship has evolved over the last few decades and examines whether it presents a new paradigm of ‘development relations’ in the international system. The contributors investigate what is particularly special about the emerging development partnership between Africa and China, and how it may evolve in the future. The contributors focus on various development capacity issues – infrastructural, industrial, technocratic, institutional, human capital, sustainable economic practices – and consider various debates on ‘development’ and development ideologies, including whether China’s practices in Africa pose a challenge to Western conventions on development assistance. China and Africa Development Relations will be of interest to students and scholars of African studies, Chinese studies, international development and development studies. Christopher M. Dent is a Professor in East Asia’s International Political Economy at the University of Leeds, UK.

Routledge Contemporary China Series

1 Nationalism, Democracy and National Integration in China Leong Liew and Wang Shaoguang 2 Hong Kong’s Tortuous Democratization A comparative analysis Ming Sing 3 China’s Business Reforms Institutional challenges in a globalised economy Edited by Russell Smyth and Cherrie Zhu 4 Challenges for China’s Development An enterprise perspective Edited by David H. Brown and Alasdair MacBean 5 New Crime in China Public Order and Human Rights Ron Keith and Zhiqiu Lin 6 Non-Governmental Organizations in Contemporary China Paving the way to civil society? Qiusha Ma 7 Globalization and the Chinese City Fulong Wu 8 The Politics of China’s Accession to the World Trade Organization The dragon goes global Hui Feng 9 Narrating China Jia Pingwa and his fictional world Yiyan Wang

10 Sex, Science and Morality in China Joanne McMillan 11 Politics in China Since 1949 Legitimizing authoritarian rule Robert Weatherley 12 International Human Resource Management in Chinese Multinationals Jie Shen and Vincent Edwards 13 Unemployment in China Economy, human resources and labour markets Edited by Grace Lee and Malcolm Warner 14 China and Africa Engagement and compromise Ian Taylor 15 Gender and Education in China Gender discourses and women’s schooling in the early twentieth century Paul J. Bailey 16 SARS Reception and interpretation in three Chinese cities Edited by Deborah Davis and Helen Siu 17 Human Security and the Chinese State Historical transformations and the modern quest for sovereignty Robert E. Bedeski

18 Gender and Work in Urban China Women workers of the unlucky generation Liu Jieyu 19 China’s State Enterprise Reform From Marx to the market John Hassard, Jackie Sheehan, Meixiang Zhou, Jane Terpstra-Tong and Jonathan Morris 20 Cultural Heritage Management in China Preserving the cities of the Pearl River delta Edited by Hilary du Cros and Yok-shiu F. Lee 21 Paying for Progress Public finance, human welfare and inequality in China Edited by Vivienne Shue and Christine Wong 22 China’s Foreign Trade Policy The new constituencies Edited by Ka Zeng 23 Hong Kong, China Learning to belong to a nation Gordon Mathews, Tai-lok Lui, and Eric Kit-wai Ma 24 China Turns to Multilateralism Foreign policy and regional security Edited by Guoguang Wu and Helen Lansdowne 25 Tourism and Tibetan Culture in Transition A place called Shangrila Åshild Kolås 26 China’s Emerging Cities The making of new urbanism Edited by Fulong Wu 27 China–US Relations Transformed Perceptions and strategic interactions Edited by Suisheng Zhao

28 The Chinese Party-State in the 21st Century Adaptation and the reinvention of legitimacy Edited by André Laliberté and Marc Lanteigne 29 Political Change in Macao Sonny Shiu-Hing Lo 30 China’s Energy Geopolitics The Shanghai cooperation organization and Central Asia Thrassy N. Marketos 31 Regime Legitimacy in Contemporary China Institutional change and stability Edited by Thomas Heberer and Gunter Schubert 32 US–China Relations China policy on Capitol Hill Tao Xie 33 Chinese Kinship Contemporary anthropological perspectives Edited by Susanne Brandtstädter and Gonçalo D. Santos 34 Politics and Government in Hong Kong Crisis under Chinese sovereignty Edited by Ming Sing 35 Rethinking Chinese Popular Culture Cannibalizations of the canon Edited by Carlos Rojas and Eileen Cheng-yin Chow 36 Institutional Balancing in the Asia Pacific Economic interdependence and China’s rise Kai He 37 Rent Seeking in China Edited by Tak-Wing Ngo and Yongping Wu

38 China, Xinjiang and Central Asia History, transition and crossborder interaction into the 21st century Edited by Colin Mackerras and Michael Clarke 39 Intellectual Property Rights in China Politics of piracy, trade and protection Gordon Cheung 40 Developing China Land, politics and social conditions George C.S. Lin 41 State and Society Responses to Social Welfare Needs in China Serving the people Edited by Jonathan Schwartz and Shawn Shieh 42 Gay and Lesbian Subculture in Urban China Loretta Wing Wah Ho 43 The Politics of Heritage Tourism in China A view from Lijiang Xiaobo Su and Peggy Teo 44 Suicide and Justice A Chinese perspective Wu Fei 45 Management Training and Development in China Educating managers in a globalized economy Edited by Malcolm Warner and Keith Goodall

46 Patron–Client Politics and Elections in Hong Kong Bruce Kam-kwan Kwong 47 Chinese Family Business and the Equal Inheritance System Unravelling the myth Victor Zheng 48 Reconciling State, Market and Civil Society in China The long march towards prosperity Paolo Urio 49 Innovation in China The Chinese software industry Shang-Ling Jui 50 Mobility, Migration and the Chinese Scientific Research System Koen Jonkers 51 Chinese Film Stars Edited by Mary Farquhar and Yingjin Zhang 52 Chinese Male Homosexualities Memba, Tongzhi and golden boy Travis S.K. Kong 53 Industrialisation and Rural Livelihoods in China Agricultural processing in Sichuan Susanne Lingohr-Wolf 54 Law, Policy and Practice on China’s Periphery Selective adaptation and institutional capacity Pitman B. Potter 55 China and Africa Development Relations Edited by Christopher M. Dent

China and Africa Development Relations

Edited by Christopher M. Dent

First published 2011 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Avenue, New York, NY 10016 Routledge is an imprint of the Taylor & Francis group, an informa business This edition published in the Taylor & Francis e-Library, 2010. To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk. © 2011 Editorial Selection and matter, Christopher M. Dent. Individual chapters, the contributors. The right of Christopher M. Dent to be identified as editor of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data China and Africa development relations / Edited by Christopher M. Dent p. cm. 1. China–Foreign economic relations–Africa. 2. Africa–Foreign economic relations–China. 3. China–Economic policy. 4. Africa–Economic policy. I. Dent, Christopher M., 1965HF1064.Z44A573 2010 337.5106–dc22 2010007306 ISBN 0-203-84502-1 Master e-book ISBN

ISBN: 978-0-415-56933-0 (hbk) ISBN: 978-0-203-84502-8 (ebk)

To John Pugh, who has touched and graced the lives of many, including mine

Contents

List of tables and figures List of contributors Acknowledgement Preface

xi xii xvi xvii

PART I

China, Africa and international development

1

1

3

Africa and China: a new kind of development partnership CHRISTOPHER M. DENT (UNIVERSITY OF LEEDS)

2

China–Africa relations and the European Union: ideology, conditionality, realpolitik and what is new in South–South co-operation

21

UWE WISSENBACH (EUROPEAN COMMISSION)

3

China and the geo-political imagination of African ‘development’

42

MARCUS POWER (UNIVERSITY OF DURHAM) AND GILES MOHAN (OPEN UNIVERSITY)

4

Chinese soft power, insecurity studies, myopia and fantasy

68

SHOGO SUZUKI (UNIVERSITY OF MANCHESTER)

PART II

Country case study perspectives 5

The end of abstraction: China’s development relations with Sudan DANIEL LARGE (SCHOOL OF ORIENTAL AND AFRICAN STUDIES)

85

87

x

Contents

6

Chinese development co-operation and Africa: the case of Tembisa’s Friendship Town

103

CHRIS ALDEN (LONDON SCHOOL OF ECONOMICS) AND ANNA YING CHEN (SOUTH AFRICAN INSTITUTE OF INTERNATIONAL AFFAIRS)

PART III

Resource sector perspectives 7

China’s structural demand and commodity prices: implications for Africa

119

121

MASUMA FAROOKI (OPEN UNIVERSITY)

8

China’s energy diplomacy in Africa: the convergence of national and corporate interests

143

CHI ZHANG (UNIVERSITY OF NOTTINGHAM)

PART IV

Conclusion: China, Africa and development relations

163

9

165

China, Africa and conceptualising development relations CHRISTOPHER M. DENT (UNIVERSITY OF LEEDS)

Index

181

Tables and Figures

Tables 2.1

Rankings for China’s bilateral trade with African countries 2.2 Ranking of African exporters to China 2.3 EU and China in Africa at a glance 7.1 China’s importance for commodity-exporting developing countries, 1990–2006 7.2 Africa’s share of global production and reserves (per cent share)

25 26 27 131 132

Figures 7.1 7.2 7.3 7.4 7.5

7.6 8.1 8.2 8.3

Quarterly index of commodity prices in nominal US$, 1949–52 Monthly averages of UNCTAD commodity index, 1970–75 Monthly averages of UNCTAD commodity indexes, January 2000–June 2009 Per cent increase in global demand for metals accounted for by China Per cent share of costs of minerals/extractive sector in industrial production and per capita income (purchasing power parities (PPP)), 2004 China’s exports and imports from Africa in US$ million, 1990–2008 Sudan’s net oil exports/imports, 1990–2007 (thousand barrels per day) Distribution of China’s oil imports from various regions, 2008 Distribution of China’s oil import from Africa, 2008

123 124 126 126

129 133 151 152 153

Contributors

Chris Alden is a reader in International Relations at the London School of Economics and Director of the China in Africa Project, South African Institute of International Affairs. Since 1992, he has researched and published extensively on Asia–Africa relations, with a special focus on China– Africa issues. His publications include China in Africa (Zed/Palgrave 2007), China Returns to Africa: A Rising Power and a Continent Embrace (Hurst 2008). Dr Alden taught at the University of the Witwatersrand, South Africa, from 1990 to 2000. Anna Ying Chen is a research associate for the South African Institute of International Affairs (SAIIA) and research fellow for Centre for Sociological Research (CSR) at the University of Johannesburg, South Africa. Anna did her MBA study at the University of Witswatersrand. She has extensive research interests in China–Africa relations, the economic impacts of Chinese aid and investment in Africa, and Chinese living in Africa. Anna is also conducting research on Chinese mining investments in South Africa and Southern Africa. She helped set up the South Africa– China Economic & Cultural Exchange Centre in 2001 and also the representative office of the China Mining Association in 2003. Anna Chen sits on the board of several Chinese associations and Chamber of Commerce, and advises Chinese investors as well as South African businessmen on investment related issues. Chi Zhang graduated with a PhD from the School of Politics and International Relations, University of Nottingham, in 2009. His research interests are international political economy, Chinese foreign policy and Chinese politics. He received a BA in International Politics from the University of International Relations in China, and an MA in International Political Economy from the University of Warwick in the UK. Christopher M. Dent is a Professor in East Asia’s International Political Economy, Department of East Asian Studies, University of Leeds, UK. His research interests centre on the international political economy of East Asia and the Asia-Pacific. His published books include East Asian Regionalism

Contributors

xiii

(Routledge, 2008); China, Japan and Regional Leadership in East Asia (editor, Cheltenham: Edward Elgar, July 2008); New Free Trade Agreements in the Asia-Pacific (Basingstoke: Palgrave Macmillan, 2006), Asia-Pacific Economic and Security Co-operation (editor, Basingstoke: Palgrave Macmillan, 2003); The Foreign Economic Policies of Singapore, South Korea and Taiwan (Cheltenham: Edward Elgar, 2002); Northeast Asian Regionalism: Learning from the European Experience (co-editor, RoutledgeCurzon, 2002); The European Union and East Asia: An Economic Relationship (Routledge, 1999); The European Economy: The Global Context (Routledge, 1997); Core Economics (co-editor, Heinemann, 1995). His book on East Asian Regionalism (Routledge, 2008) was awarded the Masayoshi Ohira Foundation ‘Special Prize’ in 2009. Christopher Dent is also author of around 60 academic articles and other papers. He has acted as an advisor to the British, Australian, Chilean, German and United States Governments, and the European Commission on trade issues. He has been an invited speaker at conferences and other events in Asia, Europe, North America, Latin America, Africa, the Middle East and Oceania. Christopher Dent is also an Expert (Brains Trust) member of the Evian Group. Masuma Farooki is a PhD student at the Development Policy and Practice Unit at the Open University. She is closely associated with the Asian Drivers Programme and the Making the Most of Commodities Programme at the Open University. Her research focus is on the direct and indirect impact of China on other developing countries through International Trade, particularly in Africa. Her current work focuses on issues relating to China and the International Mineral and Metals Commodities sector. She has previously worked on similar areas related to Chinese growth and African Manufacturing, particularly in Textile and Apparel. She received an MPhil in Economics from Government College University Lahore (Pakistan) and an MPhil in Development Studies from the IDS, Sussex. Daniel Large is Research Director of the Africa Asia Centre, a collaboration between the Royal African Society and the School of Oriental and African Studies that started in December 2007. He worked and studied in China before completing an MSc in International Politics in 2000 at SOAS and subsequently conducting doctoral research in East Africa, with particular interest in the international politics of intervention in Sudan. He is the Founding Director of the Sudan Open Archive (www.sudanarchive.net), a digital archive providing access to historical and contemporary knowledge about Sudan, and has been Deputy Director of the annual Sudan Course organised by the Rift Valley Institute (www.riftvalley.net) since 2004. His recent publications include China Returns to Africa: A Rising Power and a Continent Embrace (Hurst, 2008), co-edited with Chris Alden and Ricardo Soares de Oliveira.

xiv

Contributors

Giles Mohan is a reader in the Politics of International Development at the Open University. He has researched questions of local governance and participation in Africa and the dynamics of diasporic communities. His recent work focuses on the political economy of aid, focusing particularly on China’s growing involvement in Africa. He has published extensively in human geography and development studies journals and is on the editorial boards of The Review of African Political Economy, Political Geography, Geography Compass, and the International Development Planning Review. Giles has also acted as a consultant to recent Open University/BBC productions African School, Indian School, Comic Relief and the Reith Lectures. Marcus Power is a reader in Human Geography at the University of Durham. He is author of Rethinking Development Geographies (Routledge, 2003) and currently serves on the editorial boards of Geopolitics and the Review of African Political Economy. His research attempts to radicalise and rethink the ways in which ‘development’ has been understood in Geography and to critically explore the potential of post-structural perspectives concerned with the power and dissemination of ‘development’. In particular, much of his research has been concerned with the former Portuguese empire in Africa and has explored the theorisation and practices of ‘development’ in Lusophone African post-colonial states, primarily Angola and Mozambique. His recent research has focused on the dissemination of neo-liberalism through Investment Promotion Authorities (IPAs) and global development institutions such as UNCTAD and the Commonwealth. He is co-investigator on an ESRC-funded research project entitled The Politics of Chinese Engagement with African Development, which seeks to understand the increasingly influential role of Chinese discourses of development in Africa and their geopolitical imagination. Shogo Suzuki is a lecturer in Chinese politics at the University of Manchester. His research interests include international relations theory with reference to East Asia, Chinese and Japanese foreign policy and SinoJapanese relations. He is the author of Civilization and Empire: China and Japan’s Encounter with European International Society, and has published articles in the European Journal of International Relations, International Relations, The Pacific Review and the Third World Quarterly. Uwe Wissenbach is the European Commission’s Co-ordinator for Africa– China Relations and an Adjunct Professor at Ewha Women’s University, Seoul. He studied at the Mainz and Lille Universities, the London School of Economics, and Beijing Foreign Studies University. He spent five years in the European Commission delegation to Beijing (1999–2004) and then managed a project in Panam, Tibet, which attempted to show Beijing the value of local participation in development as an alternative to typical large-scale works led from the distant capital. Returning to Brussels, Uwe

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Wissenbach joined its Social Development Unit before moving to his present role in the Directorate-General for Development. In ‘The EU, Africa and China: Towards Trilateral Dialogue and Co-operation’, published by the European Commission in October 2008, he argued for a multilateralist approach to Africa, emphasising the common interest in a peaceful and stable Africa.

Acknowledgement

The support of the Economic and Social Research Council (ESRC), Arts and Humanities Research Council (AHRC), and the Higher Education Funding Council for England (HEFCE) is gratefully acknowledged. The editor is a member of the White Rose East Asia Centre (WREAC).

Preface

This book is based on a White Rose East Asia Centre (WREAC) research project. Established in 2006, WREAC is an international Centre of Excellence on China and Japan funded by the Britain’s Higher Education Funding Council, the Economic and Social Research Council and the Arts and Humanities Research Council, following a successful £4 million bid under the 2006 Language-Based Area Studies initiative. The White Rose East Asia Centre is a joint endeavour between the University of Leeds and the University of Sheffield. The National Institute of Chinese Studies and the National Institute of Japanese Studies together constitute the White Rose East Asia Centre. A WREAC research workshop entitled ‘China and Africa Development Relations’ was held at University House, Leeds, in February 2009. Organised by the book’s editor, Professor Christopher M. Dent, the event brought together a number of distinguished scholars to discuss current developments in China–Africa relations, and how they might evolve in the foreseeable future. Subsequently revised papers presented at the research workshop form the basis of this book. There has been growing public interest in the China– Africa development relationship, and this book looks to establish new empirical and conceptual understandings of the complexities of this relationship. I would like to express my special thanks to a number of people. Firstly, to my chapter authors who not only have written top-class chapters but too helped minimise my editorial burdens by their prompt and efficient responses to my queries. A big thank you also to Jenni Rauch who provided excellent administration support and encouragement throughout this project. I would too like to express my heartfelt gratitude to Stephanie Rogers and Leanne Hinves at Routledge for their fabulous help and encouragement through the book’s development. Finally, an extra special thanks as always to all my family for their love, patience and support. This book is especially dedicated to John Pugh, a great man who has touched and graced the lives of many, including my own, and who celebrates his 90th birthday on the eve of this book’s publication. Christopher M. Dent Leeds, February 2010

Part I

China, Africa and international development

1

Africa and China A new kind of development partnership Christopher M. Dent

1 Introduction The emerging economic relationship between Africa and China has become a subject of much scholarly debate, the main reasons being: (i) the rapid growth and now significant scale of the relationship in terms of economic exchange and assistance, and seeking to understand the key drivers behind this growth, as well as its environmental and economic implications; (ii) China’s ‘developing country’ status, thus a departure from the usual and long-standing developed country ‘partners’ that African nations have hitherto primarily worked with; (iii) China’s different approaches to the Western powers in forming development partnerships in Africa; (iv) the broader geopolitical implications of China forging closer economic relationships with developing country regions such as Africa, including the challenge posed to Western hegemony. China is among a number of large developing countries or new powers (India, Brazil, South Africa, Russia) on the ascendance in the international system, all of which are deepening their economic relations with Africa (Kragelund 2008). However, China is the largest and most powerful of this group, and has at times positioned itself as a champion of developing country interests in certain fora, or mediator between developed and developing countries, for instance in World Trade Organisation (WTO) negotiations and in G20 talks on the 2008/09 global financial crisis. It has sought closer economic relationships with other developing country regions and continents such as Latin America and Central Asia, but it is with Africa – the continent that hosts more developing countries than any other – that China has fostered the closest links. This book examines whether the Africa–China relationship presents a new paradigm of ‘development relations’ in the international system, and this introductory chapter is the first of four that especially examine this relationship in various international development contexts. In the analysis that follows in this chapter, we introduce the reader to a number of important contextual issues and debates. The rise and emerging role of China in the world system is initially examined, looking at how the country’s deepening engagement with the African continent can be understood as part of a broader

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trend of China’s growing global impact generally, as well as taking into account its position as an ascendant large developing country power. Thereafter, the historic development of Africa–China relations is examined, the 1955 Bandung Conference between developing Asian and African nations being critical in orientating these relations in the decades that followed. This is followed by a brief overview of the China’s new and more proactive Africa policy and strategy that became apparent from the late 1990s and early 2000s onwards. We then discuss how the burgeoning Africa–China relationship may be understood from the perspective of key economic security drivers, the most important being those associated with various supply security, finance–credit security and techno-industrial capability security objectives. In the context of contesting development ideologies, the analysis moves on to consider whether China is challenging Western conventions on development assistance policy and practice through its interactions with Africa. It then examines the debate on whether an emerging ‘Beijing Consensus’ on international development and the conduct of international affairs more generally is discernible, which may be considered a counter-paradigm to the (post-)Washington Consensus. The chapter’s final section provides a summary of the book’s structure and main themes and contentions of subsequent chapters.

2 China, Africa and international development 2.1 Rise and emerging role of China in the world system For much of recorded human history, China has been among the world’s most economically and technologically advanced nations. Its re-emergence as a great power has been principally founded on a rapid and sustained economic development process that has transformed a once moribund economy into one of the major engines of the international economic system. As a rising great power, China has been expected to play an increasingly responsible role in the international community, helping address the various interrelated and persisting challenges that confront humanity in the early twenty-first century. In many ways China is uniquely positioned to tackle poverty alleviation and the global ‘development divide’. Over the last few decades the country has lifted hundreds of millions of its own people out of poverty, the largest ever number achieved in history. It also has enormous financial resources at its disposal, being for example the world’s largest retainer of foreign exchange reserves as a consequence of huge inflows of foreign investment, substantive and consistent trade surpluses, high levels of domestic savings and the sovereign wealth fund policies of the Chinese state. Thus, China is able to offer substantial funds for development assistance. Furthermore, China may for the most part be considered a developing country, and hence compared to developed countries is perhaps more likely to empathise with, and appreciate, the development needs of African states,

Africa and China: a new kind of development partnership

5

having recently itself had to overcome a number of constraints on the path to economic transformation. The inherent problems of China’s dualistic development (e.g. divergent incomes, employment, welfare and skills levels between core urban-industrial zones and peripheral rural-interior areas) also confront many African countries. In short, China has many recently learned pertinent lessons to share with its African partners. Of course, many developed nations – and the United States especially – do not want African nations to adopt the Chinese ‘socialist market’ model of political economic governance, but rather align to Western market-liberal democratic norms and practices. But, what does China want to contribute to international development, where does it see its position in the world system, and how does it view the accommodation of its interests in that system? Chinese Government foreign policy statements and documents have been careful to articulate the nation’s ‘peaceful rise’ within a multilateral world order. As China’s President Hu Jintao stated during his tour of West Africa in 2006, ‘China’s development will not bring a threat to anyone but, instead, will only bring more opportunities and space for development to the world’ (cited in French 2006: 128). Moreover, China does not wish to particularly disturb the international economic system that has helped deliver rising levels of prosperity and geo-political influence to the Chinese nation. However, as a rising developing country superpower, China is already having a significant impact on international economic structures (e.g. trade, production and finance), on geopolitical relations, as well as on the debates and practices of development diplomacy. 2.2 The historic context of China–Africa relations China–Africa relations have ancient roots. Records of bilateral trade date back to the tenth century bc, when the Egyptian city of Alexandria started trading with the Chinese nation (Aning and Lecoutre 2008). China’s explorers had established links with many Sub-Saharan African peoples some centuries before their European counterparts. Relations between both sides lapsed, though, during the period of Western imperial domination, not being re-established until the latter half of the twentieth century. The Bandung Conference of 1955 that brought together for the first time 29 Asian and African nations is often cited as the starting point for China–Africa relations in the modern era. China had been instrumental in setting up the summit meeting, its adopted Five Principles of Peaceful Co-Existence being based on a prior understanding established between China and India a year earlier. The Bandung Conference’s main themes and declarations emphasised the respect for sovereignty, non-interference in the internal affairs of other nations, economic and technical co-operation, mutual benefit, the needs and rights of developing nations (including investment and the stabilisation of primary product prices), as well as a peaceful co-existence. As Mawdsley (2007: 408) observed, this reflected the delegate countries’ preferred vision for

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a multipolar world order, and for moving beyond ‘European colonialism and US–USSR neo-imperialistic superpower rivalry’. Sino–African economic relations dwindled, however, during the stagnant economic development of China under Maoism from the late 1950s to the 1970s. Beijing simply lacked the resources to have a significant economic impact on the continent. Furthermore, China’s main interests in Africa at the time were driven more by ideological and geopolitical motives, these being to compete with Western and Soviet influence, politically isolate Taiwan, and maintain the rhetoric of a shared Third World struggle against capitalism and the Cold War superpowers (Konings 2007, Mbaye 2007). In the 1980s with the initial onset of socialist market reforms, China was preoccupied with its own economic modernisation process and endogenous development. However, Sino-African relations were revitalised during the 1990s as China sought to globalise its economy and economic relations more substantively. 2.3 China’s new Africa policy and strategy Trade and investment flows between Africa and China steadily built during the 1990s, a process largely driven by China’s rapid industrialisation. The inaugural meeting of the Forum on China–Africa Co-operation (FOCAC) was convened in 2000 at Beijing. Mawdsley (2007) notes the following four principal elements to the speech made by then-President Jiang Zemin at the event that revealed Chinese Government thinking at that time:

• • • •

The present world order is unjust and inequitable, and that developing countries remain largely disadvantaged. The right to national self-determination and the rejection of foreign meddling in the internal affairs of nation-states. Promotion of greater economic co-operation between developing countries, eschewing where possible structural dependencies on the advanced industrial states of the West. Commitment to peaceful multilateral solutions to economic, political, environmental and security-related problems.

A second FOCAC was convened in 2003 in Ethiopia, and a third in 2006 hosted again by Beijing, where President Hu Jintao outlined the basis of China’s 2006 Africa Policy document to 43 African heads of state gathered at the summit.1 This coincided with China’s designation of 2006 being the ‘Year of Africa’, and Beijing’s comprehensive white paper on China–Africa relations, adopted in January 2006, lays out the following fundamental principles that underpin China’s current policy towards Africa:

•

Sincerity, friendship and equality: China adhering to the principles of peaceful co-existence and respect of the African nation’s self-determination regarding economic and socio-political development.

Africa and China: a new kind of development partnership

• • •

7

Mutual benefit, reciprocity and common prosperity: China’s promotion of development co-operation with Africa in its various forms, to the mutual benefit of both parties. Mutual support and close co-ordination: China’s commitment to strengthened co-operation with Africa at multilateral levels, drawing upon the international community to play a more active part in Africa’s peace and development. Mutual learning and common paths of development: Strengthened exchange and co-operation in various social fields, as well as China’s support for enhancing capacity building and sustainable development in Africa.

These principles can trace some lineage back to the 1955 Bandung Conference declaration, e.g. peaceful co-existence and respect of African national selfdetermination (Aning and Lecoutre 2008) and they at least represent the guiding theory and principles of China’s Africa policy and strategy. Davies (2007) makes some connections here with China’s approach to its own domestic economic development. The guiding concept underlying China’s 11th FiveYear Plan (2006–10) is the so-called Xiaokang society that aspires to establish a more equitable sharing of prosperity in order to achieve ‘five balances’ between: urban and rural development; development among regions; economic and social development; development between man and nature; and domestic development with opening wider to the outside world. Similarities exist between the Xiaokang concept and the UN Millennium Development Goals, both being ‘people-centred’ and converge around human-centred goals and objectives. The 2006 Africa Policy document also outlined plans for substantial increases in aid, investment and trade with Africa, the key objectives here being:

• • • • • • •

China to double its 2006 level of assistance by 2009. Increase Sino-African trade to US$100 billion per year by 2010. Provide US$5 billion in preferential loans and credits over 2006 to 2009, and a further US$5 billion to support Chinese company investment in Africa. China to cancel debts owed by the most heavily indebted nations. Increase tariff eliminations on African exports to China from 190 to 440 product lines from the least developed countries from the continent. Establish a series of Sino-African trade and economic zones. Construction of 30 hospitals, 30 malaria treatment centres and 100 new schools across rural Africa.

In 2007, China hosted the African Development Bank’s annual meeting in Shanghai, promising US$20 billion for Africa’s infrastructural development over the following three years. Sino–African trade was just US$820 million per year in 1979, but by 2000 it had reached US$10 billion and by 2007 a total of US$73 billion. China is now Africa’s third largest trade partner behind the US and France, recently overtaking Britain, although Africa only accounts

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for 3 per cent of China’s total trade. China also has around an estimated 900 investment projects on the continent, primarily in mining, energy, commodities, agriculture and infrastructure-related sectors.

3 Economic security drivers of the China–Africa relationship 3.1 Introduction: the economic security context As I have theorised elsewhere (Dent 2002, 2007), the pursuit of various forms of economic security primarily determines foreign economic policy objectives. We define the pursuit of economic security as safeguarding not only the structural integrity and prosperity-generating capabilities, but also the interests of a politico-economic entity in the context of various externalised risks and threats that confront it in the international economic system. In my earlier works on foreign economic policy formation, I proposed eight different conceptual typologies of economic security, namely: supply, market access, techno-industrial capability, finance-credit, socio-economic paradigm, transborder community, alliance and systemic. In this section, we apply the most relevant of these economic security concepts in explaining the determining and motivational factors behind a closer China–Africa economic relationship. 3.2 Supply security Put simply, ‘supply security’ concerns the securing of key supply chains involving foreign sources. It therefore relates particularly to the various structures of supply through which countries acquire foreign materials, components and technologies, and exercises of economic diplomacy may be necessary to maintain the integrity of these structures. These structures, in turn, ultimately serve the supply-base of the economy, which itself may be thought of in infrastructural terms from the perspective of economic agents (i.e. individuals, firms) who stand to gain external economies of scale and scope from an enhanced supply base. China’s dynamic industrialisation process has generated a large-scale demand for natural and fuel resources both inside and outside the country (Jiang 2009). Africa still has relatively abundant levels of resources to help feed this process, with for example certain African nations possessing large quantities of metal ores (e.g. copper, cobalt) required for the manufacture of consumer electronic goods. Although China is a major oil producer (the world’s sixth largest) it had become a net oil importer by 1993. Beijing has established oil and other energy supply contracts with a number of African states, including Angola, Algeria, Chad, Equatorial Guinea, Gabon, Nigeria and Sudan. Africa now accounts for around 25–30 per cent of China’s oil imports (Prah 2007).2 Other high-volume levels of natural resources that the continent supplies to China are cobalt, copper, aluminium, platinum, iron, uranium, tin, manganese and timber (Konings 2007).

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The resource demands of Chinese enterprises have competed increasingly with those of developed countries, who have much longer-standing commercial interests vested in Africa (Gu 2009). There has been much reported concern and even anxiety expressed in the Western media and policy communities over China’s ‘rapacious thirst’ for Africa’s resources, but this must be put in context. For decades, Western firms have dominated the continent’s resource industries and more or less continue to do so. For example, in 2006 China procured 9 per cent of Africa’s petroleum exports but the United States purchased 33 per cent and Europe 36 per cent (Aning and Lecoutre 2008). In 2006, the United States still consumed around three times more oil than China in total and imported almost four times as much.3 It is also helpful to examine the nature of the resource demand drivers within the Chinese economy. China’s levels of resource-processing and productive efficiencies are still relatively low, having to consume over three times the world average for the amount of energy required for each new US dollar of gross domestic industrial development (French 2006). However, we might expect such levels from a developing country economy, and the Chinese Government is taking substantial measures to address productive inefficiency issues. More importantly, what exactly do we mean by the ‘Chinese economy’? Many analyses of China–Africa economic relations tend not to acknowledge the hugely significant role played by foreign invested enterprises (FIEs) in the Chinese economy and the nation’s economic development. Around 60 per cent of China’s exports and 40 per cent of total investment in the country can be attributed to FIE activities (Breslin 2007). Thus, much of China’s burgeoning demand for energy and other natural resources is being driven by the now very large number of American, European, Japanese and other foreign multinational enterprises operating within the country. In this sense, China’s demands for Africa’s resources are part of the latest phase in global capitalist development. Moreover, as Davies (2007: 8) comments, ‘China is often viewed as a threat and competitor to industrialised countries for access to Africa’s natural resources. This disregards the fact that much of the resources imported into China are re-exported in the form of value added inputs or products to uphold consumption in industrialised countries’. While it is true that the Chinese state and its various related agencies have been responsible for policy strategising and signing resource contract agreements with their African counterparts, the fundamental determinants behind these processes are closely linked to economic globalisation. As we later discuss, Africa’s demands on what China can supply relate primarily to finance and techno-industrial capability transfers. 3.3 Finance-credit security This entails ensuring insofar as possible the financial solvency of countries in the international system, as well as its maintenance of access to, or influence or control over sources of international credit. In recent times, this has

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become an acute economic security concern of developing countries in the context of Third World debt. Many African countries are both poor and heavily committed to repay foreign loans. China has more surplus financial resources at its disposal than any other nation, and these resources has provided Beijing with considerable latitude for helping African nations mitigate their finance-credit security predicaments. Since 2000, China has taken notable steps to cancel the debt of 31 African states, and in 2006 alone, China lent a total to US$8.1 billion to Angola, Mozambique and Nigeria alone, compared to the World Bank sum in the same year of US$2.3 billion for the whole of Africa (Eisenman and Kurlantzick 2006). Finance remains a key imperative of African countries in their relations with China whose ‘policy banks’ and state-controlled commercial banks (e.g. China Development Bank, China Export-Import Bank) have been actively arranging and signing various investment-for-resource swap agreements. A much cited example is the China–Angola agreement whereby the former offered US$2 billion to help repair the latter’s national railway system in return for offshore oil concession rights (Chan-Fishel and Lawson 2007).4 Other high-profile examples of China’s financing of infrastructure projects in Africa include road network construction in Nigeria, Rwanda, Angola and Ethiopia, the Tekeze Dam in Ethiopia, Nigeria’s railway system and Sudan’s oil pipeline network (Aning and Lecoutre 2008).5 In addition, the China Road and Bridge Corporation has to date been involved in over 500 construction projects. Chinese enterprises have been winning government procurement contracts in Africa more generally, outcompeting foreign rivals owing to a formidable combination of cost advantages, these being lower operating margins, cheaper imported Chinese labour, capital and materials, use of standard designs and Chinese government subsidies (Kaplinsky et al. 2007). By the end of 2007, Chinese firms had won construction contracts in Africa worth around US$30 billion (Foerstel 2008).6 There are strong overlaps between finance-credit and techno-industrial capability security considerations in the China–Africa economic relationship, as discussed below. 3.4 Techno-industrial capability security This economic security typology is concerned with the preservation and development of the ability of the economy to generate prosperity, productivity and other welfare-creating factors through techno-industrial means. This may derive from indigenous or foreign sources, and relate to issues of access and acquisition of foreign technologies. These capabilities may be deployed to meet specific foreign economic policy objectives, e.g. export competitiveness, attracting higher value-added foreign investment, etc. Conversely, certain foreign economic policy actions (e.g. trade-industry policy, economic diplomacy) may be used to assist the development of techno-industrial capabilities. China’s financing for improvements in Africa’s techno-industrial capability has been largely directed towards infrastructural developments, with

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comparatively much less investment to date channelled to improving and broadening industry sector development. This may be partly explained by the fact that few African states have asked for such assistance from China. While investment in infrastructure is an essential and integral element for capacitybuilding development, a key reason why most African states remain stuck in the cycle of low value-adding activity is because of the industry base of their economies have been weak, narrow and in some cases virtually non-existent. A structural shift from the current agrarian and agro-processing activities towards sustainable manufacturing sectors would seem essential for African nations improving the long-term prosperity-generating capacity of their economies. There are some inherent problems in this aspect of the China–Africa economic relationship. Firstly, China’s economic rise and expanding technoindustrial competitiveness has itself posed a significant economic challenge to Africa’s economic and industrial development. Many industries in China’s interior province economy compete directly with their African counterparts, e.g. textiles, plastics, furniture-making, basic electronics and other low-tech consumer durable products (French 2006). There is therefore a potential conflict of interest for the Chinese Government when seeking to promote infant industry development in Africa. Certain events and developments at the global level have brought further complications to this issue. Under the Multi-fibre Agreement (MFA), African textile exporters once enjoyed quota protection rights to sell their products to key Western markets. However, after the termination of the MFA in December 2004, they had to compete with their Chinese counterparts in a newly liberalised global market. This also had an immediate effect with large numbers of textile factories in South Africa, Lesotho, Ghana, Swaziland, Uganda and Kenya closing down, unable to compete against Chinese and other Asian producers (Konings 2007). Ghanaian furniture and clothing exporters have also been hard hit, as have Ethiopian footwear producers, and South Africa – with perhaps the continent’s most developed industrial capacity – has been adversely affected on many fronts by Chinese competition. Yet the empirical data on such displacement effects remains patchy and anecdotal (Prah 2007). Even if one makes the assumption that the initial prioritisation of most African states for infrastructure investment from China will gradually give way to manufacturing industry sector investment, what is China’s interest in corresponding with such a shift? This key question is considered in later discussions on conceptualising development relations. There are signs that the Chinese Government is addressing this matter, perhaps the clearest indication being the stated policy objective in its 2006 Africa Policy document to establish a series of Sino-African trade and economic zones. Much of China’s economic development strategy, especially during the early phase of its reform period, was based on fostering industrial district or cluster formations on a zonal basis, anchored in city-based hubs of skilled labour and infrastructure networks. The linking of such industrial districts and clusters to international

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production networks and other types of supply chains has been instrumental to China’s own economic success, and the envisaged Sino-African trade and economic zones could offer African nations similar opportunities, if indeed, the intention of Chinese funding agencies is to follow this aspect of its own economic development model.

4 Contesting development ideologies 4.1 Is China challenging Western conventions on development assistance? It has been only natural for African nations to look to alternative emerging development partners such as China, India and Brazil given the generally failed partnerships endured with Western powers over the last few decades. As Manji and Marks (2007: 17) comment, ‘[Africans] feel that traditional relations and partnerships with the West have not helped Africa overcome the structural obstacles to eradicating poverty and reversing its economic marginalisation. Rather than develop, Africa is haemorrhaging while the rest of the world accumulates wealth at its expense through the unbalanced exploitation of its natural resources and the enforcement of a distorted international economic system’. Yet to what extent do China’s approaches to development assistance pose a challenge to Western conventional practice? More fundamentally, is there an underlying ideology behind China’s Africa policy or is this policy ultimately determined by the pursuit of pragmatic objectives? There remains much debate over the answer to these questions, and this is a key area of this book’s analysis. Certainly, there is general agreement that China is conducting its economic relations with Africa in distinctly different ways to Western countries. Aning and Lecoutre (2008: 47) offer a succinct overview of the basic positions taken by many analysts on this issue: ‘The main point here is the ideological battle between the West and China over which economic model is best for Africa. Good governance and human rights issues that fit in perfectly with the neo-liberal discourse on economic development are opposed to “no economic and political conditions” in the case of development by China.’ The relative lack of conditionality attached to Chinese loans for African nations (especially to pariah states such as Sudan and Zimbabwe) has drawn much criticism from Western governments. For example, Gill et al. (2007) report that in September 2006 the US Department of the Treasury labelled China as a ‘rogue creditor’ practicing ‘opportunistic lending’.7 Mawdsley (2007) also notes that China has been criticised in the United States and Europe for undermining Western efforts to support transparency and accountability in Africa through a lack of an ‘ethical’ dimension to its business dealings on the continent. The usual retort to this criticism, from Beijing or other sources, is to remind all concerned of the long historical view, and of the hypocrisy of Western powers preaching to others on ‘good practice’ concerning development assistance given their dismal record on this matter.

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Both China and Western developed nations share common economic security interests regarding their relations with Africa, and China is in many respects simply following in the same well-trodden footsteps as the advanced industrial economies on the continent. This has led many, especially those in Africa, to contend that we simply have the re-emergence of the ‘great game’ of imperial geo-politics on the continent, a new ‘scramble for Africa’, and that Western anxiety is ultimately based on how China poses a hegemonic challenge to Western power and influence in Africa (Bates and Huang 2006, Campbell 2008). Furthermore, African states have largely rejected the ‘Washington Consensus’ on economic policy and governance, in particular regarding past neo-liberal strategies (privatisation, deregulation, devaluation, cutting subsidies, opening markets and export-led growth) ardently prescribed by Westerndominated multilateral economic institutions (Mawdsley 2007). Indeed, the United States and EU agricultural trade policies continue to impose much harm on Africa’s economic prospects through the maintenance of heavily subsidised domestic production and relatively high levels of protectionism against imported African agri-products. Sautman and Yan (2007) summarises the main framework of the EU’s relations with the developing world – the Cotonou Agreement of 2000, established with 77 African, Caribbean and Pacific (ACP) states – as being based on: (i) the principles of free trade, private enterprise, export production, FDI and austerity measures; (ii) poverty reduction as a by-product of trade and capital liberalisation, and FDI; (iii) a developing network of bilateral and regional free-trade Economic Partnership Agreements. The US’s own framework – the African Growth and Opportunity Act (AGOA) of 2000 – may be similarly summarised as follows:

• • • •

African states receive trade preferences if they marketise, liberalise, privatise, de-subsidise, deregulate, and do not undermine the US foreign policy interests. AGOA trade concessions only marginally exceed the US General System of Preferences rates, partly owing to oil and minerals making up more than 80 per cent of the value of African exports to the United States. Only a few countries have gained under AGOA, mainly by exporting agricultural products, but most African agri-exports remain face an uneven playing field in the US market due to the effects of subsidised US rival products and various non-tariff barriers (e.g. SPS regulations). AGOA provides a platform for FTAs between the United States and African regional entities.

Although the US and EU policies on Africa have changed and adapted over time as a result of the changing global economic environment and learning from past mistakes made, there still remains a general lack of trust in these policies among African nations, who are increasingly looking to alternative development partners. So what can China offer?

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4.2 An emerging Beijing consensus The Chinese Government has a strong capability for strategic policy-making given its impressive technocratic resources and the continuity of its one-party state system. It is therefore more able to operationalise long-term plans than most liberal democratic countries, which offers further appeal to African governments. We have also seen that underlying China’s Africa policy is a set of guiding principles, as articulated in the 2006 Africa Policy document. To what extent, then, do these factors constitute a formative basis for a so-called ‘Beijing Consensus’ on international development and the conduct of international affairs more generally, which may be considered a counter-paradigm to the (post-)Washington Consensus? This is another much debated issue, and the only real agreement among Sinologists is that the emerging Beijing Consensus is based on upholding the rights and values of national sovereignty, the advocacy of multilateral dialogue and solutions to solving regional and global-level problems, and ensuring the ‘peaceful rise’ of China in the international system. China’s (re-)ascendance is a relatively recent phenomenon, and it may take some time before any definitive ideological features to China’s approach to foreign economic policy and international development issues are formulated, and from deeper theorisation on such matters. There is a potentially large constituency of developing countries that could prescribe to any emerging Beijing Consensus, especially if China seeks to champion their common interests in the international community. Just as we asked earlier, ‘What exactly do we mean by the Chinese economy?’, it is also helpful to ask ‘What exactly do we mean by China?’ There has been a tendency to equate ‘China’ exclusively with the actions and policies of its central government, however, there are a diverse range of relevant Chinese foreign economic policy actors with in cases competing or contradictory interests in the nation’s relations with Africa. Li (2007) notes, for instance, the tensions between the interests of Chinese corporations that are primary oriented by maximising short-term economic gains, and the more long-term public good-oriented objectives of the Chinese central government laid out in the 2006 Africa Policy document. Inter-ministerial and inter-agency frictions have also arisen within the Chinese state apparatus itself as a consequence of competing economic and strategic interests. Nevertheless, compared to Africa’s other development partners, the Chinese state’s approach on development assistance to the continent demonstrate a relative coherence of purpose and inter-agency co-ordination. In many ways China’s fast developing relations with Africa will be viewed by many as an important litmus test for Chinese foreign policy in the early twenty-first century. As Gill et al. (2007: 8) contend, ‘Africa is seen as integral to Beijing’s strategic ambition to advance a “new security concept” that can ensure China’s peaceful rise as a global power and strengthen relations with key neighbours and regions’. China will for sure wish to avoid its actions in Africa being labelled ‘neo-imperialist’, and avoid repeating past mistakes

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made by Western powers (Campbell 2008). The aforementioned criticism of China for providing economic and other forms of support for pariah states such as Sudan and Zimbabwe, thus helping to perpetuate corruption and further undermining human rights in certain African states, usually is afforded Beijing’s retort of ‘business is business, and politics is politics’. Prah (2007: 71) comments on the problems the US and EU have in making such criticisms when at the same time Western oil companies are working in apparent harmony with Equatorial Guinea’s dictatorship, and these companies’ environmental record on the continent is hardly without blemish. Moreover, the West’s, and particularly the US’s, support for the ‘undemocratic monarchical regimes in the Middle East, the fiasco of Iraq, American unevenhandedness in the Israeli-Palestinian issue are just as questionable as Chinese insensitivities in the Sudan’. In defence of criticism of Beijing’s support for oppressive regimes in Africa, He (2007: 33) supports the Chinese Government primacy afforded to the ‘basic respect for national sovereignty and territorial integrity, as well as deference to the ruling power of the legitimate governments’. A similar argument is made by Li (2007: 76), commenting that, ‘China does not consider itself qualified to make judgments on the domestic affairs of African countries and considers the African Union more qualified to do so’. Yet, such arguments are predicated on the primacy of national, and more often than not national government interests specifically rather than those of international society. The above defence of Beijing’s approach implies that there is no national government regime – no matter how evil, corrupt or oppressive – that Beijing is unwilling to ‘do business’ with, and can thus potentially legitimise national government regimes that harm both their own people and potentially those of the wider international community. One could argue that China is meddling or interfering in the interests of the international community by shirking many of its social and political responsibilities on the African continent. ‘Business’ cannot be so easily disaggregated from the social, environmental, political and cultural domains in which it exists and also affects, and there is a need for a more holistic diplomatic approach in this regard. There are indications that China has come to better appreciate this, providing generous investment funds to help build Africa’s social infrastructure, such as schools and hospitals, but thorny issues of political governance remain seemingly unresolved. A key problem here is that the Western record of ‘interference’ in the domestic affairs of African states has been so poor and destructive generally that laudable alternative approaches of engagement with African states are hard to come by, and there is therefore a lack of good models or practices with proven track records to help guide Africa’s new development partners like China. Although as noted earlier, Western governments and multilateral development agencies have learned many lessons from their engagements with Africa, and have adapted their policies accordingly, it is too early to evaluate or appreciate their demonstrative good effects. Furthermore, in one

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sense, all Africa’s development partners are ‘damned if they do interfere, and damned if they don’t’. Semantics can play a part in this debate as there are differences of perception between the operative terms of ‘interference’, ‘intervention’, ‘influence’ and ‘support’. What is ultimately required among foreign partners is smart support on improving Africa’s development capacities and associated aspects of development-related governance, and China has much potentially to give in this respect as this book discusses from various perspectives.

5 Structure and summary of the book This book is structured along the following lines. Part I examines the China–Africa partnership from various international development perspectives, some of which have been presented in this introductory chapter. In Chapter 2, Uwe Wissenbach discusses how China’s new Africa Policy since 2000 has sparked many debates and notably one on competing development models, opposing Western governance conditionality and the Chinese non-interference principle. He considers how China poses as a potential leader of the developing countries’ quest for a new global order (i.e. a less US/Western-dominated one) and that China and Africa co-operation is presented as an important part of this quest. Wissenbach explores how China’s Africa policy is both an expression of traditional South–South co-operation and an emerging alternative model of development and governance to the established Northern one. Moreover, a new and more complex relationship between developing countries is arising that cannot simply be captured by the traditional (dependency theory inspired) South–South template nor indeed by alleged neo-colonialist practices. Instead, the ChinaAfrica relationship has proven to be as challenging for African countries as relations with the North, and requires a new strategy for African countries. Behind the rhetoric of South–South co-operation, changes in interactions between developing countries have taken place, which requires a wider prism than a China–Africa focus to analyse the new dynamics. Just as North–South co-operation templates are fading into geopolitical irrelevance (like the EU– ACP relationship), new templates are required for co-operation (and competition) between developing countries. Wissenbach further contends that in the absence of efficient global institutions with ‘fair’ representation of all actors, groups of countries (e.g. the African Union, the EU and China) could co-operate functionally in selected problem areas to deal with global development-related issues. In Chapter 3, Marcus Power and Giles Mohan examine the changing historical position of Africa within Beijing’s foreign policy strategy and its vision of the evolving international political system and look in particular at China’s bilateral and state-centric approach to working with African partners. They note that Chinese practice is uncomfortable and unfamiliar with the notion of ‘development’ as an independent policy field of the kind that

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emerged among Western nations from the 1950s onwards. Rather than highlighting one strand of Chinese relations with African states, such as aid or governance, Power and Mohan propose that it is necessary to critically reflect on the wider geopolitics of China–Africa relations, past and present, in order to understand how China is opening up new ‘choices’ and altering the playing field for African development for the first time since the neo-liberal turn of the 1980s. In Chapter 4, Shogo Suzuki makes a critical appraisal of academic works on Chinese soft power. These works typically portray Chinese soft power, characterised by its disregard for Western models of development that propagate ‘democratic governance’, as a latent threat to global order. Suzuki contends that such claims are premature, and to date there is little evidence of a systematic attempt by the Chinese to propagate a ‘Beijing model’ of autocratic development. These claims are substantiated by analysing China’s participation in United Nations peacekeeping operations in Africa, which are characterised by mandates aimed at transforming war-torn states into liberal democracies. Suzuki suggests that China’s participation in these operations is a crucial component of its ‘charm offensive’ aimed at the West, and designed to allay fears of a ‘China Threat’. His chapter explores how Chinese understandings of soft power are diverse and directed at multiple audiences. The tendency to ‘look for potential threats’ in many Western policy-informed works, however, ignores the multi-faceted nature and diverse views on Chinese soft power, and consequently clouds our ability to understand this new phenomenon in Chinese foreign policy. Part II comprises two chapters offering country case study perspectives on the Africa–China development relationship. In Chapter 5, Daniel Large considers China’s engagement with Sudan with particular interest in the political interplay between the ideational foundations and nature of the Chinese role as played out in the political economy of development in Sudan. Western coverage of China’s links with Sudan has neglected ‘development relations’ but these nonetheless have been and remain integral to modern relations in a period when developmentally premised initiatives continue to expand. The question of whether China presents a new model of development in Sudan is approached in terms of the nature of its engagement but also in comparison to other ‘international’ development and humanitarian interventions in Sudan. Daniel Large observes that despite a longer history of aid projects in Sudan, China is a comparatively new ‘development’ actor contributing to a new chapter in a historically developed political economy of central state dominance, wealth extraction and protracted conflict. In Chapter 6, Chris Alden and Anna Ying Chen present a case study on China’s involvement in developing a housing project in the South African township of Tembisa. As part of the context of their study, they contend that many analyses of Chinese development co-operation in Africa are based on limited empirical or anecdotal evidence, contributing to conflicting perceptions as to its purpose, means and outcomes. Thus, unpacking the policies,

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institutions and instruments of Chinese development co-operation is a necessary prerequisite to understanding the impact that this form of assistance has on African economies and livelihoods. Moreover, they argue that examining particular case studies of development co-operation provides an opportunity to assess the relative success and failure of what the Chinese government likes to characterise as a unique form of foreign assistance. Alden and Chen’s case study on the Tembisa housing project in South Africa hence contributes to illuminating the differing dimensions of this key aspect of Chinese engagement in Africa. Thereafter, Part III of the text presents two chapters on resource sector related issues. In Chapter 7, Masuma Farooki examines how the 2003 to 2008 commodity price boom, which may also be referred to as a ‘super cycle’, was driven mainly by China’s demand for commodities to fuel its domestic infrastructure and manufacturing growth. As a consequence of the 2008–2009 global financial crisis, the worldwide demand for commodities has fallen and so have commodity prices. This chapter considers what implications this has for China’s resource driven engagement with Africa. Farooki first explores the 2003–2008 Commodity Boom, looking at the supply and demand factors behind the price rise, and contrasts this with the previous two commodity booms of 1951–1953 and 1973–1975 in order to learn if the latest boom was unique in any manner. She then looks at the nature of China’s structural demand for commodities and country’s future needs before discussing the implications of the commodity price fall for African countries, in relation to Chinese demand in the near future. In Chapter 8, Chi Zhang discusses different aspects of China–Africa energy diplomacy, with special attention paid to the Chinese government’s various energy-related diplomatic activities and Chinese national oil companies’ (NOCs) investment operations in Africa. Zhang examines the different motivations behind China’s energy diplomacy in Africa, indentifying key national and corporate interests behind them, and argues that China’s long-term friendship with Africa has helped foster deepening energy co-operation between both sides. Furthermore, the growing convergence of China’s national and corporate energy-related interests in Africa has helped Chinese NOCs generate higher levels of profit and realise corporate development strategy objectives, as well as helped the Chinese government improve the country’s energy security situation, gain more support for its multilateral diplomacy and increase its diplomatic leverage in Africa. However, Zhang also notes that China still faces some significant longer-term challenges concerning the relationship between its future economic development and energy security strategies, as will most likely be revealed in its energy diplomacy with African countries over forthcoming years. In Chapter 9, Christopher M. Dent concludes the text by presenting a generalised conceptual framework of ‘development relations’ to help better understand what new directions the Africa–China relationship, and more generally inter-developing country economic diplomacy, may take as the

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twenty-first century unfolds. The main premise of development relations is that primacy is, or should be afforded to the strengthening of development capacities as the core objective and purpose of economic interactions with developing country regions such as Africa. Here, Dent argues that marks a departure from the conventional neo-liberal thinking especially that the advancement of economic exchange per se between development partners is in itself sufficient to deliver optimal welfare outcomes. He lays out six different inter-related forms of development capacity (technocratic, institutional, industry, human capital, infrastructural, sustainable development) in outlining the analytical framework of development relations. This concluding chapter argues that the realisation of development capacity goals depends on certain functional aspects of the development relationship being accordingly aligned, namely compatible development-related policy principles and objectives, sharing domestic development best practice, and addressing balance of power issues. The chapter highlights where development relations between China and Africa have made good progress, but also where there remains room for improvement, and discusses the prospects regarding the latter, noting among other things the connections between domestic-level factors in both China and Africa and how this connects to their international development relationship.

Notes 1 In the meantime, the first Sino-African business conference was held in December 2003 in Ethiopia, resulting in 20 new agreements worth a total of US$680 million, and in August 2004 the inaugural China–Africa Youth Festival was held in Beijing (Eisenman and Kurlantzick 2006). 2 Africa holds around 8 per cent of the world’s proven oil reserves, 70 per cent of this being located off the west coast in the Gulf of Guinea. 3 Energy Information Administration (EIA). www.eia.doe.gov/emeu/cabs 4 Part of the deal required Angola to give preference to an approved list of 35 construction companies when undertaking railway infrastructure repairs. Such tied aid deals were once in normal practice amongst Western countries. However since the 1992 Helsinki Agreement, OECD countries have reduced their tied aid levels to around half of total aid, and residual tied aid was only thereafter to be used for genuine aid projects aimed at public good provision and not just commercially viable investments. Like most developing countries, though, China is not a signatory to the Helsinki Agreement. 5 Other countries are also offering similar investment-for-resource swap arrangements with Africa, including India, South Korea and Malaysia. 6 In Botswana, Chinese firms have won around 80 per cent of all government procurement contracts in this sector owing largely to their competitive advantages enjoyed on labour and material costs. Chinese firms are able to compete favourably against Africa’s domestic firms generally. For instance, migrant construction workers from China can be paid as little as US$1 per day compared to the average US$3–4 paid to Angolan workers, while imported cement from China can cost around half of that of Angolan-made cement. 7 Wall Street Journal, 15 September 2006.

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References Aning, K. and Lecoutre, D. (2008) ‘China’s Ventures in Africa’, African Security Review, Vol 17(1), pp. 39–50. Bates, G. and Huang, C.H. (2006) ‘The View from Washington’, paper presented at A Chinese Scramble? The Politics of Contemporary China–Africa Relations, 12–13 July 2006, Sidney Sussex College, Cambridge, UK. Breslin, S. (2007) China and the Global Political Economy. Basingstoke: Palgrave. Campbell, H. (2008) ‘China in Africa: Challenging US Global Hegemony’, Third World Quarterly, Vol 29(1), pp. 89–105. Chan-Fishel, M. and Lawson, R. (2007) ‘Quid Pro Quo? China’s Investmentfor-Resource Swaps in Africa’, Development, Vol 50(3), pp. 63–8. Davies, P. (2007) China and the End of Poverty in Africa: Toward Mutual Benefit? Stockholm: European Network on Debt and Development. Dent, C.M. (2002) The Foreign Economic Policies of Singapore, South Korea and Taiwan. Cheltenham: Edward Elgar. —— (2007) ‘Economic Security’, in A. Collins (ed.) Contemporary Security Studies. Oxford: Oxford University Press. Eisenman, J. and Kurlantzick, J. (2006) ‘China’s Africa Strategy’, Current History, Vol (105), pp. 219–24. Foerstel, K. (2008) ‘China in Africa: Is China Gaining Control of Africa’s Resources?’, CQ Global Researcher, Vol 2(1), pp. 1–26. French, H.W. (2006) ‘Commentary: China and Africa’, African Affairs, Vol 106, pp. 127–32. Gill, B., Huang, C.H. and Morrison, J.S. (2007) ‘Assessing China’s Growing Influence in Africa’, China Security, Vol 3(3), pp. 3–21. Gu, J. (2009) ‘China’s Private Enterprises in Africa and the Implications for African Development’, European Journal of Development Research, Vol 21, pp. 570–87. Jiang, W. (2009) ‘Fuelling the Dragon: China’s Rise and Its Energy and Resources Extraction in Africa’, The China Quarterly, Vol 199, pp. 585–609. Kaplinsky, R., McCormick, D. and Morris, M. (2007) ‘The Impact of China on Sub-Saharan Africa’, paper commissioned for the Policy Research on International Services and Manufacturing, School of Economics, University of Cape Town/School of Development Studies, University of KwaZulu-Natal. Konings, P. (2007) ‘China and Africa: Building a Strategic Partnership’, Journal of Developing Societies, Vol 23(3), pp. 341–67. Kragelund, P. (2008) ‘The Return of Non-DAC Donors to Africa: New Prospects for African Development’, Development Policy Review, Vol 26(5), pp. 555–84. Li, A. (2007) ‘China and Africa: Policy and Challenges’, China Security, Vol 3(3), pp. 69–93. Manji, F. and Marks, S. (eds) (2007) African Perspectives on China in Africa, Oxford: Pambazuka Press. Mawdsley, E. (2007) ‘China and Africa: Emerging Challenges to the Geographies of Power’, Geography Compass, Vol 1(3), pp. 405–21. Mbaye, C. (2007) ‘The Assertion of a Strategy of Power: The African Policy of China’. Available at: www.diploweb.com [accessed 14 January 2009]. Prah, K.K. (2007) ‘China and Africa: Defining a Relationship’, Development, Vol 50(3), pp. 69–75. Sautman, B. and Yan, H. (2007) ‘Friends and Interests: China’s Distinctive Links with Africa’, African Studies Review, Vol 50(3), pp. 75

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China–Africa relations and the European Union Ideology, conditionality, realpolitik and what is new in South–South co-operation Uwe Wissenbach

1 Introduction China’s new Africa policy since 2000 has sparked many debates and notably one on competing development models, opposing Western governance conditionality and the Chinese non-interference principle. It has also galvanised African policymakers to underline the new political and economic opportunities of a new era of South–South co-operation driven by the dynamism of East Asia in the global economy. Until the financial crisis hit, many African economies could translate these new dynamics into accelerated growth notably due to high earnings from commodities and oil. China poses as a leader of the developing countries’ quest for a new global order: that is, a less US/Western-dominated one (Shelton and Paruk 2009). South–South cooperation between China and Africa is an important part of this quest, as postulated by the Chinese White Paper on Africa (Ministry of Foreign Affairs of the PRC, 2006) and the Forum for China–Africa Co-operation (FOCAC) declarations. Few voices in this debate have questioned the underlying assumption of China’s Africa policy as an expression of traditional South– South co-operation and an emerging alternative model of development and governance to the established Northern one.1 Instead, analysts have focused on one of its elements, namely non-interference as a realpolitik dilemma for China (Bates et al. 2007, Berger and Wissenbach 2007, Wissenbach 2008). This chapter argues that a new, more complex relationship between developing countries is emerging which simply cannot be captured by the traditional (dependency theory-inspired) South–South template nor indeed by the allegation of neo-colonialism. The rise of Asian countries, including China, is in itself an indication that external factors (Western dominance of the global institutions, terms of trade, etc.) are not, by definition, an obstacle to development. This new pattern is driven by factors which in the traditional expression of South–South relations was anathema: capitalism, global value chains, unequal economic relations and interdependencies. Complex forms of engagement exercised by both China and Europe (or indeed other external partners such as the US or Japan) with Africa question the validity of simple prisms such as the proverbial ‘scramble for Africa’s resources’, the benign

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engagement of the Western development community or the Chinese solidarity with developing countries. All sides have multifaceted motives within a wider and complex global framework. The traditional ideology of South–South co-operation seems as outdated in the globalised world of today as the ideological confrontation between capitalism and communism – otherwise known as the Cold War – which had sparked the Bandung Conference in 1955 in the first place. Instead, South–South co-operation, as played out in the China–Africa relationship, has proven to be as challenging for African countries as relations with the North and requires a new strategy for African countries to deal efficiently with the complex mix of motives that drives China’s engagement with Africa (le Pere 2007). China’s increasing importance as an economic and political partner has provided welcome new opportunities and dynamic alternatives to the West, but has it really created a new option for Africa’s development? Indeed, does China have an economic model that differs so much from the Western capitalism that it can serve as a true alternative? China, in fact, pursued its reforms and opening-up policy not with a focus on South–South co-operation, as it urges African countries to do,2 but clearly focusing on the trade and investment relations with the rich industrialised countries and on joining the Western-dominated international institutions that it had rejected in the revolutionary period. Actually, economic and aid exchanges with Africa diminished in the first two decades of China’s reform policy. Since joining the World Trade Organization (WTO), China has not been particularly active as a leader of developing countries so far: Brazil and India have played more prominent roles. In fact, China’s approach and impact on Africa is merely a part of a bigger picture, a shift of its global approach founded on the intrinsic dynamics of its emergence as a major economy and manufacturing hub. This picture is characterised by China’s integration into the global economy, with Chinese imports (resources, components and machinery for manufacture) and exports (manufactured goods) focusing on the large industrialised economies, on the Asian region and, only for certain resources or segments, on Africa and Latin America. However, this integration of China into the global economy has led to a steep rise in the demand of commodities (see Chapter 7) and a sustained drop in the prices of manufactured goods. Both factors have strong impacts on African countries. The positive impact of the demand for energy, minerals and timber on countries endowed with these resources contrasts with a negative impact on those countries which have to import these commodities at higher prices. The competitiveness of Chinese consumer goods has been a mixed blessing for consumers with local industries unable to compete. The industrialisation process of African countries is thus under threat. Africa’s share of China’s global trade is around 3 per cent, at par with the share Africa has in other major economies’ trade. For many Chinese companies investing in Africa, the continent is a stepping stone for a wider global presence, a market in which there is far less competition than in the West and which is not a strategic market per se. South–South co-operation is

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thus a sub-strategy in a global pattern of change driven by China’s rise in the global economy. Some, such as infrastructure construction exports to Africa, are even a by-product of overcapacity in China. Still, this shift in the global economy sparked by China’s integration into the global economy provides other developing countries with opportunities and experiences – as well as competitive pressure for change – that African countries need to analyse for their own development. Incidentally, China does not provide the only model for study: Arguably, a country like South Korea, once a poor rural economy in a peripheral location, lacking resources and facing post-conflict reconstruction after a civil war and of comparable size to many African countries, could yield at least as useful lessons as China does. In the political realm, the traditional objective of South–South co-operation to break the Western global dominance has been dynamised by the rise of China, be that in the United Nations or in other global multilateral institutions. However, the United Nations Security Council (UNSC) reform, on which Africa had pinned high hopes, was also resisted by China. Behind the rhetoric of South–South co-operation, changes in interactions between developing countries have taken place, which requires a wider prism than a China–Africa focus to analyse the new dynamics. Just as North–South co-operation templates are fading into geopolitical irrelevance, new templates are required for understanding co-operation and competition between developing countries as the twenty-first century unfolds. The potential for pragmatic economic co-operation between developing countries has indeed never been greater since China’s global emergence has fundamentally changed the international division of labour (Broadman 2006, Eichengreen et al. 2007) and terms of trade (Kaplinsky 2008). This change affects both industrialised and developing countries, sometimes in similar ways, for example, consumer gains on the one hand, with factory closures on the other. Yet, this opportunity needs to be seized, not idealised or used for populist anti-Western purposes that often disguise domestic elite failure. China’s emergence would be unthinkable had it not resolved itself to co-operate with and learn from the West to better compete with it.

2 South–South co-operation: A new development pattern? 2.1 Context Globalisation, the now temporarily interrupted commodity boom and the tectonic shifts in global politics in the nearly two decades since the end of the Cold War have profoundly changed the way Africa, Europe and China look at each other. The European Union (EU) and China have entered into an increasingly dense strategic partnership, not least as an attempt to manage the challenges of globalisation and those of an emerging China. This partnership includes EU aid for China’s economic, social, environmental and political reform process. China has been one of the prime destinations of overseas development assistance (ODA), not only foreign direct investment (FDI).

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Originally, South–South co-operation was invented as a counter-model to Imperialism and Northern (Western and Soviet) dominance of the world in the bipolar area. Thus, if we want to examine this relatively vague concept critically in the context of China’s current Africa policy or partnership, we have to look at what place South–South co-operation has in China’s emergence and its foreign economic policy compared with co-operation with other regions and for China’s own development and at which alternatives China provides to North–South templates in the global context. We will start by looking at defining features of these patterns – trade and development – and then at the underlying normative approaches, restricting our comparison to the EU and China, with occasional references to the moribund Washington Consensus. The economic exchange pattern between Africa and Europe remains largely confined to one of natural, mineral and human resources leaving Africa and European manufactures. This type of interaction is replicated by that of China and Africa, where Africa is so far even more narrowly confined to the role of a raw materials supplier (Broadman 2006, Kaplinsky 2008). As Shelton (2008: 176) puts it, this is not in line with the postulated function of South–South co-operation: to offer ‘a shield against exploitation by industrialised nations and a realistic alternative to North–South trading patterns which have dominated global commerce since the colonial era’. The same author (2008: 178) warns African leaders: ‘Africa’s leadership must avoid switching from a dependency on the West to a dependency on China.’ An innovative aspect of China’s engagement with Africa is that China in some cases buys Africa’s resources not with cash but with a package of finance, infrastructure investment and turn-key aid projects, which have the merit of not easily being transferred to Swiss bank accounts. The Chinese engagement allows African countries to choose from different offers and to reject too intrusive alternatives, such as International Monetary Fund (IMF) conditionalities in Angola (Corkins 2008) or overly bureaucratic ODA from traditional donors. It also allows countries which are short of capital to finance large infrastructure investments quickly to kickstart the economy or to start re-building themselves after emerging from conflict, for example, Angola and the Democratic Republic of Congo (DRC). This attractive and competitive pattern is not risk free and needs to be monitored in respect of possible consequences of debt sustainability and social and environmental impacts (Dahle and Muyakwa 2008). Many countries still lack the institutional apparatus for sufficiently monitoring these impacts, while Western-dominated institutions are still perceived by many in Africa and elsewhere as not sufficiently neutral to do so. The specific nature of Chinese co-operation is most obvious in the infrastructure area. Such large investments are difficult to finance with ODA grants, of which China provides relatively little. The financing comes from more or less preferential loans by the cash-rich Chinese banks and are based on a business philosophy focusing on economic growth rather than on an all-encompassing sector-

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wide sustainable development approach with a much larger range of objectives. 2.2 Trade, investment and development Looking at trade in particular, we can see that China–Africa economic relations are dominated by familiar patterns of resource exports against manufacture imports. This gives rise to the old theory of dependency which explains Africa’s predicament by external factors and terms of trade, in this case favourable ones for Africa, although the significant interruption of the commodity boom in 2008–09 underlined the limits of this concept. The current trade pattern is thus more of the same (North–South pattern) but enhances the bargaining power of resource-rich countries because of competition and higher prices, yet also negatively affects resource-importing countries in Africa. Recent large annual increases of China–Africa trade are not only an expression of quantitative rise but are also driven by the sharp rise of the commodity prices, especially of oil. Despite huge growth in the aggregate level of recent two-way trade, there has been considerable stability in the top 10 trading partners since 2006 (Table 2.1). The top five countries accounted for 61 per cent of total two-way trade in 2008, with the top 10 accounting for 79 per cent. Table 2.2 lists trading partners ranked by the largest exporters to China between 2006 and 2008, showing that in 2008, 79 per cent of all exports from Africa came from just five countries. In the same year, 93 per cent of exports came from 10 countries, with little movement within the top 10. These countries tend to have a favourable trade balance with China, while most other African countries tend to import

Table 2.1 Rankings for China’s bilateral trade with African countries

1 2 3 4 5 6 7 8 9 10 Top 5 as a % of overall Top 10 as a % of overall

2006

2007

2008

Angola South Africa Sudan Egypt Nigeria Congo-Brazzaville Equatorial Guinea Libya Algeria Morocco 56%

Angola South Africa Sudan Egypt Nigeria Algeria Congo-Brazzaville Morocco Libya Benin 58%

Angola South Africa Sudan Nigeria Egypt Congo-Brazzaville Libya Algeria Morocco Equatorial Guinea 61%

78%

78%

79%

Source: China’s Ministry of Commerce (http://english.mofcom.gov.cn/statistic/statistic.html/).

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Table 2.2 Ranking of African exporters to China

1 2 3 4 5 6 7 8 9 10 Top 5 as a % of overall Top 10 as a % of overall

2006

2007

2008

Angola South Africa Congo-Brazzaville Equatorial Guinea Sudan Libya Gabon Mauritania DRC Morocco 77%

Angola South Africa Sudan Congo-Brazzaville Equatorial Guinea Libya Algeria Gabon Mauritania Nigeria 78%

Angola South Africa Sudan Congo-Brazzaville Libya Equatorial Guinea Gabon DRC Mauritania Algeria 79%

90%

91%

93%

Source: China’s Ministry of Commerce (http://english.mofcom.gov.cn/statistic/statistic.html/).

more from China than they export to it. South Africa is also virtually the only African country which has substantial investment in China. Table 2.3 gives some indications on China’s co-operation with Africa relative to that of the EU, which among others, shows that fears that China may soon be dominating Africa are far-fetched and, moreover, that patterns of engagement in trade are more diversified in EU–Africa trade than in China–Africa trade, which is more concentrated on resource (mainly oil) exports from Africa (Kaplinsky 2008). This explains the rankings in Tables 2.1 and 2.2 to a large extent. 2.3 Resource nationalism or regional co-operation? If resource nationalism is the new alternative (Baregu 2008), would it be a feature of South–South co-operation and in China’s interest? Arguably, resource nationalism has a deeper impact to change terms of trade with any external partner, whether from the industrialised or the developing world. As both a newcomer (disadvantaged by technology and management deficits) and a fast-growing client, China will have to bargain hard with resource-rich countries for access to make up for these comparative disadvantages. It can also further compensate by the strategic use of what Kaplinsky (2008) calls the three vectors of interaction (aid, trade and investment) that Beijing generally brings together in coherent ‘policy package’ arrangements to gain access to new sources. Furthermore, if South–South co-operation was a distinguishing feature of resource nationalism, then China would benefit from preferential treatment. For this, there is very little evidence in Africa as the deals are often not transparent, and most deals which look very favourable for China can be explained

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Table 2.3 EU and China in Africa at a glance

Trade

FDI

ODA total

Peacekeeping operations

EU–Africa

China–Africa

Total 2007: €232 billion. 23% of EU imports from Africa are manufactured goods and 11% are food and agricultural products. The EU is the biggest export market for African products. Approximately 85% of Africa’s exports of cotton, fruit and vegetables are imported by the EU. In 2007, the EU imported oil from Africa with a value of €62.5 billion, out of which €18.9 billion was from Sub-Saharan Africa (30%). Top partners for the EU are Libya, Algeria and Nigeria. African Least Developed Countries benefit from duty-free market access for everything but arms. EU FDI to Africa in 2005 and 2006 amounted to €28.124 billion.

Total 2007: €53.6 billion 71.8% of all imports from Africa are fuels and oils. In 2007, China imported 32% of its oil from Africa with a value of €19 billion, out of which €17 billion was from Sub-Saharan Africa (90%). Top partners for China are Angola, Sudan and Congo. China abolished tariffs on 450 types of goods from 29 Least Developed Countries in Africa.

In 2006, the EU (Member States and the European Commission) collectively gave together 62% of their bilateral, regionally allocated aid to Africa and provided more than half of the global aid flows to the region. EU Development Assistance Committee (DAC) members’ debt relief to Africa in 2006: €9.7 billion. The EU has set up a new instrument to finance peacekeeping operations, the African Peace Facility, with an amount of €300 million for 2004–07 and a further €300 million for 2008–2010. The EU, under the European Security and Defence Policy, has carried out eight peacekeeping operations in Africa at the request of the UN, the African Union or African countries.

Source: European Commission (2008b).

According to estimates, the accumulated investment by Chinese firms doubled from US$6.27 billion in 2005 to US$12 billion in 2006. China does not publish aid figures. Its aid, comparable to the DAC definition of ODA, is estimated at about US$1.5 billion per annum. China cancelled US$1.4 billion in debt owed by 31 African countries in 2006.

There are currently over 1,300 Chinese troops participating in all the UN peacekeeping missions in Africa.

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by a number of arguably more important factors. Examples include the shortterm interest in infrastructure construction for development and domestic political reasons (e.g. in Angola and the DRC) and lack of access to alternative sources of finance for political or other reasons. Most African countries seem intent on diversifying their clients and on extracting maximum gains from their different buyers. It is interesting to look at how China interacted with developing countries in its regional neighbourhood a decade before China’s new Africa strategy (Eichengreen et al. 2007). Then, China’s relationship with Southeast Asia started to move in a similar direction, with the region acting as a supplier of raw materials and components and as an investment location. This seems to confirm the hypothesis that the engagement with Africa is not a unique pattern but part of a bigger picture, with China developing that pattern first closer to home. There are also no indications that China enjoyed preferential treatment or market access by its Southeast Asian partners or vice-versa. Quite to the contrary, as China absorbed and gradually diverted FDI away from Southeast Asia, affecting the region negatively in its global trade and investment position. Southeast Asian fears of China were gradually allayed by China’s solidarity in the 1997–98 East Asian financial crisis and a progressive political and treaty-based engagement with the Association of Southeast Asian Nations (ASEAN). This is significant in two respects: the multilateral engagement broke with China’s bilateral foreign policy tradition, and it shows how important it is for the smaller partners to work collectively when engaging China. 2.4 South–South co-operation for development versus Western consensus China, Africa and the EU very much agree on the key objectives of development as enshrined in the UN framework (the only legitimate framework in the eyes of developing countries), but on the way to reach them, there are clear-cut differences. Beyond the value differences, China and African governments often agree to privilege economic development over sustainability or pro-poor policies. This approach is grounded in pragmatism, a widespread assessment of the failure of Western development approaches and experiences of China’s development path, with economic growth largely being the main criterion of success. However, so far, it has mainly been used by China to boost its credentials as an alternative – but not fundamentally different – commercial and development partner and by Africans to vent political frustration with past Western ODA practices. Promoting Africa’s development is a common declared objective of both the EU and China, yet their Africa policies seem worlds apart if one believes the pundits or Senegal’s President Wade.3 Biscop (2009) points to the discrepancy between the EU’s self-perception as a benign actor and the view of the Southern countries, which see the EU as an aggressive economic actor.

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Currently, debates in Europe about a more comprehensive view of development co-operation overcoming the strict separation of ODA and economic co-operation such as investment, trade and remittances seems to indicate that Western countries seek to emulate China’s successful strategy of engagement with Africa. But this development is also a logical consequence of the shift from a charity-based approach to one of equal partnership (including less preferential trade rules) embedded in the changes brought about by globalisation (Grimm 2008). 2.5 China’s Africa policy starts at home China pursues a limited national project (revival, recognition and reunification) rather than a vision of global change and implements it with a high degree of pragmatism, embellished by the rhetoric on its global role in helping foster a harmonised world, which partly caters for domestic constituencies but mainly aims at foreign opinion. Debates about China’s soft power are therefore all the rage in Chinese foreign policy journals. China aims at a maximum of stability and predictability abroad, which allows its leaders to concentrate on the domestic agenda (Men 2007). This agenda is therefore a stabilising factor in world politics and for institutions of global governance. China has a limited capacity to deal with external risks and thus often acts from a well-disguised position of weakness: low per capita gross national product (GDP) and social welfare indicators, widening income gap, environmental and governance problems, lack of hard power to project abroad and limited cultural or media influence (Wissenbach 2009). In fact, China’s reform process is still in a vulnerable stage, with domestic challenges looming at every corner. The foreign policy apparatus is also very small compared with Western countries and is simply not able to cope with the complexity of development policy as currently pursued in Europe or even the challenges of co-ordinating with so many partners or rivals. In international relations, China’s fundamental problem is that it has to balance national interest based on interdependent key domestic and subordinate foreign policy goals and pressure from international society (He 2007). Increasingly, this international pressure includes various economic demands and political pressures from African countries. China’s domestic policies impact in diverse ways on the world, sometimes more than Beijing’s positions taken in international fora, such as China’s economic development policies and their impact on global commodity prices. Thus, China has felt compelled to develop a global strategy and regional strategies that both deal with and explain these dynamics. These dynamics are also reflected in the evolution and adaptations of China’s foreign aid policy from a one-way solidarity based approach to a commercial win-win strategy (Zhou 2008). South–South co-operation is more and more part of that balancing act and is consistent with a genuine policy line which aims at rebalancing the current world order in China’s interest. China’s interest is simply assumed to be largely

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identical with that of other developing countries and limited to protecting China’s sovereignty and political system and enhancing its voice in global affairs. The often high expectations in Africa that China will lead the challenge to the West contrast with the dominant view that China is a status-quo power and deliberately acts as one. The harmonious world concept is clearly aimed at rejecting claims that China may attempt to challenge established powers. In the heyday of South–South co-operation in the Mao years, this re-balancing was supposed to be achieved through a global revolutionary struggle against imperialism and China played its part in both the anti-colonial struggle and the less glorious Cold War power games in Africa. At that time, interference through military or financial backing of various liberation or rebel movements was a common feature of Chinese policy (Zhou 2008). Since the opening-up and reform policy started 30 years ago, China’s policy towards Africa has gradually but radically changed, while its foundations and principles have been kept alive, such as Zhou En Lai’s eight principles of foreign aid (Shelton and Paruk 2009, Zhou 2008), although pragmatically adapted to new realities. The new realities are no longer a struggle against imperialism, capitalism or Soviet revisionism but a struggle for resources, markets, diplomatic interests and development. Any analysis of China’s African engagement also has to take account of the new diversity of Chinese actors and objectives. There are conflicts of interest between the central government’s aim of projecting a responsible image internationally and an image of sincere friendship to Africans more particularly and the aim of many Chinese companies, provinces or cities to make a profit in Africa regardless of development, ethical or image considerations. Competition takes place in a harsh environment and with companies from other emerging economies. Therefore, the behaviour of different actors prompts different reactions. But, since China’s government tries to project a consistent image abroad, many partners erroneously believe that every company is remote-controlled or at least can be influenced by a phone call by the Chinese Prime Minister. China’s government initially assumed that business combined with high-level visits, solidarity rhetoric, modest development assistance and putatively win–win-based co-operation was sufficient to achieve the central government’s objectives. It therefore neglected to analyse local political dynamics, state – society relations and social conditions inside countries and the consequences of ‘unleashing’ the various Chinese actors (e.g. provinces, state-owned enterprises [SOEs], private companies, individuals, and exporters and investors) in Africa (Guenther 2008). Adjusting the Ministry of Foreign Affairs’ discourse rooted in longstanding diplomatic traditions and objectives to complex realities is not an easy task. The problem is compounded by China’s strategic bundling of aid, investment and trade. While successful economically, politically this bundling creates challenges, for instance, by blurring the distinction between ‘aid = solidarity’ and ‘business = competition’, as well as between government and business actors. Given China’s competitiveness, the possibly

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negative impact on African industries may cancel out the positive effect of after all a small aid contribution, especially relative to China’s GDP. The consequences are that first there is a lot of criticism of Chinese ‘aid’ internationally and locally, where this is actually ‘business’ that cannot be measured against aid standards. Second, it creates high expectations in Africa, which China cannot meet. In fact, if China provides large amounts of finance (e.g. through the EXIM Bank or the China Development Bank), this is by no means all aid, only a small part of subsidised interests should be counted as such. The uncritical treatment of these volumes of finance as aid have led some to believe that China is suddenly a huge donor, whereas in reality, it is an investor with mixed objectives. International and especially African criticism of a relationship based on raw materials exports with little added value in Africa, strained labour relations and frequent violations of environmental, labour or immigration laws by Chinese companies does not fit into China’s proffered approach to Africa based on equality, friendship and solidarity (Heinrich Boell Foundation 2008). Challenges or criticism by African civil society are dismissed as Western driven or sponsored. This gives the impression of paranoia or conspiracy theory but not of a serious analysis on the ground. This discrepancy is not necessarily questioning the sincerity of the government’s Africa diplomacy but a result of the real-world complexity and tensions between different actors, even within the Chinese bureaucracy (Altenburg and Weikert 2006, Li 2008). Like investors, foreign and development ministers are not philanthropists, even if they sometimes portray themselves in such a way. Paradoxically, at the same time, as China’s economic interaction with Africa starts resembling the traditional North–South pattern and replicating its earlier engagement with Southeast Asia, politically the references to South– South co-operation as a framework for FOCAC abound (see Chapter 1). One can observe a rapprochement of the global South and a clear tendency to challenge Western agendas, in particular the development agendas such as aid effectiveness, good governance and the dominance of Organization for Economic Cooperation and Development (OECD) standards (Dahle and Muyakwa 2008) in the UN’s Human Rights Council. The challenge to the West in the areas of trade and finance is much more muted, given the huge disparities of trade interests between China and most other developing countries, the hard-nosed approach to the textile industry in Africa, the high concentration on a few resource-rich countries and the negative impact of Chinese exports of cheap manufactures on fledgling industries in Africa (Besada 2006, Kaplinsky and Morris 2008). Economic engagement remains dependent on the real business opportunities in Africa and whether Chinese companies can make profits. Falling commodity prices in 2008–09 have already led to a partial disengagement by some Chinese operators while state-backed companies go bargain hunting (Herbst and Mills 2009). If this were not the case, the government would have difficulties sustaining the comprehensive engagement it pledged to African leaders.

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2.6 The forum for China–Africa co-operation (FOCAC): a new South–South template? The FOCAC process still has to stand the test of results and the strengthening bargaining power of some African countries. Shelton and Paruk (2009) describe seven different reactions of African countries to the FOCAC – ranging from satisfied, need to fine-tune and limit interaction with China, fear of new dependence to Machiavellian playing off China against others to merging FOCAC with New Economic Partnership for African Development (NEPAD) or the African Union (AU) – which indicate that there is by no means a consensus on the benefits or benign character of this particular strand of South– South co-operation. This is not astonishing, because African countries are very diversely affected by China’s engagement and have different interests. Such divergence is also a feature of the Europeans’ dealings with China, although the EU has a much more powerful integrated process than the AU. FOCAC is presented as a ‘unique diplomatic mechanism … which will advance constructive South–South co-operation for mutual benefit’ (Shelton and Paruk 2009: 2). Yet, in reality, it is difficult to see where the FOCAC mechanism differs from other North–South templates (e.g. Japan’s Tokyo International Conferences on African Development [TICAD] and the EU’s Africa Caribbean Pacific [ACP] framework) except for the fact that the organiser – China – is a developing country. Like in the North–South mechanism, the pledges are one-way commitments that China’s President Hu made to African countries. Compared with the EU–ACP or the Africa– EU Joint Strategy, the institutional and management role of Africa is much more limited. For instance, there is no African secretariat or a monitoring mechanism. Some of the pledges are not easily measurable, for example, doubling aid if the baseline is not known and how the funds are spent. A number of activities are left to businesses. It is a loose framework or a multilateral mantle for bundling bilateral relations and co-operation. Collective bargaining by Africa, such as through the AU, is not yet a feature of the FOCAC. It is likely that this will change in the 2009 ministerial meeting of the FOCAC in Egypt, but given the abovementioned lack of African consensus on how to deal with the FOCAC, this will be a challenging process. The new joint mechanism to implement the Africa–EU strategic partnership could provide some inspiration. In terms of development model, China’s pragmatic approach to engage largely in the Western rules of the game to promote its own domestic development holds a set of important lessons for African countries to study (Dollar 2008, Ravallion 2008). At the same time, China’s policies fall foul of the Washington Consensus, which though is largely depassé in the EU thinking on development as well. This provides alternative partners to African countries, yet it is certainly not an alternative Southern set of prescriptions but a uniquely Chinese development path. China therefore stresses the need for every country to find its own development path and not to copy China’s.

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Sharing and exchanging experience – for example, through scholarship programmes and the International Poverty Reduction Centre in China – are thus valuable instruments of South–South co-operation in the FOCAC context. Thus, while China has provided evidence that the Washington Consensus cannot be regarded as a universal development paradigm, it has not produced an alternative template that would guide South–South co-operation on development but simply offered to share its own experiences.

3 Normative approaches to Africa: what is behind the rhetoric? 3.1 Changing conditionality The EU’s explicitly normative foreign policy has come under the spotlight in both academic circles and with policymakers in Europe and abroad. But so has the Chinese ‘passively normative’ approach, namely based on noninterference, laissez-faire and defence of established principles (Aggestam 2008, Wissenbach 2009). The EU and China both have problems reconciling their political and economic interests and impacts with their own rhetoric and the short- and long-term developmental needs on the African continent (Berger and Wissenbach 2007). Some European states carry post-colonial baggage (Adebajo 2008, Yates 2006) as well as certain misconceptions about external development such as the lack of local ownership, duplication of aid and the dogmatic ideas of the international liberal mainstream about political transformation (Kiely 2007). In response, the EU, driven by the European Commission (EC) to ‘Europeanise’ development and Africa policies, has refocused on ownership at continental, regional and national levels in Africa and has started to backtrack from ‘conditionality’ (Linklater 2005, Mayall 2005).4 This move can be explained by the failure of the earlier approaches to yield desired development outcomes, the success of the transformation of the Central and Eastern European countries, and societal pressure to use taxpayers’ money transparently in ways to fight poverty, promote social agendas and fight corruption and the enlargement of the EU to non-colonial powers. The EC now offers political and financial incentives for good governance. This is in part due to the confidence in the vitality of African democracy and good governance trends, as embodied in the AU Charter and developments in many countries, and partly also due to the realisation that change cannot be imposed from the outside. This marks a change from both the unconditional support to African dictators in return for strategic benefits during the Cold War and the overly prescriptive approach of the Washington Consensus. In fact, some of the new rhetoric is not dissimilar to that of China’s Africa policy: equality solidarity, common objectives and ownership (Ministry of Foreign Affairs of the PRC 2006). In turn, the Africa–EU Joint Strategy provides a new, more balanced partnership template which challenges the lop-sided FOCAC structure.

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3.2 China’s non-interference and the African Union Charter China’s normative approach is rooted in the 1955 Bandung Conference, which formulated the basic tenets of the anti-colonial struggle and South– South co-operation (see Chapter 1). The widely used reference to South– South co-operation in the Chinese discourse on its current relations with Africa certainly contrasts favourably with the traditional post-colonial image of Europe’s Africa policies. However, with the post-Cold War changes in Europe’s Africa policy generally and the trends of globalisation, this reference tends to look out of place and plays to collective psychology rather than to economic realities, as we have discussed previously. In fact, as Europe has adapted its post-colonial policy to a policy around responses to the challenges of globalisation and global governance, an alignment on Africa’s priorities and a partnership of equals, the question should be asked: Would not the tenets of South–South co-operation need a thorough revision to formulate specific and concrete responses to globalisation and development challenges instead of simply continuing ad nauseam to call for a change in the balance of global power? This is not to deny that the policy approaches of developing countries towards their peers are and probably have to be different from those of developed countries. In fact, the protest call of Bandung for a new international economic order is now in a transition from political solidarity to something more tangible. The economic dominance of the North has been eroded with East Asia becoming the most dynamic part of the global economy. China’s aid, trade and investment have become a new opportunity for Africa, but Africans will look critically at whether China will live by the shared aspirations of Bandung. However, the rhetoric of solidarity and noninterference is obviously at odds with political and especially economic realities, interdependence, competition (see the previous subsection) and outside interests played out in Africa and changes in the African agenda, notably on non-interference. This discourse seems increasingly out of tune with the evolving European policy towards Africa and with the AU’s normative agenda. China emphasises different international norms from the AU when basing its policy in Africa on the principles of sovereignty and non-interference in domestic affairs. These have hardly changed since 1949 and have been reaffirmed in the new Chinese Communist Party (CCP) Constitution (Zhou 2008). But they are general enough to allow some pragmatic adaptations in the margins (le Pere 2008). But how relevant are the Chinese principles in today’s world and how relevant are they in an anti-Western discourse when China has largely subscribed to the Western economic model? To some extent, the non-interference doctrine may simply provide a convenient cover for the lack of ability to influence other countries. Resource-rich countries can take advantage of China’s needs and lack of alternatives and developments in Angola and even China’s difficulties in convincing Sudan’s government to accept the UN–AU hybrid force point to

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this limited influence (Srinivasan 2008). China’s only real trump card (notably compared with other emerging powers) is its seat in the UNSC, but given China’s interest in not antagonising the other UNSC members, even that is of limited value. A neutral position based on non-interference may draw criticism, which can be damaging to China’s long-term interests. There are signs that China is preparing to react to challenges it has encountered without abandoning its fundamental principles. As China is becoming more proactive in international affairs generally, it is discovering that many countries maybe defined as fragile or quasi-states, where the concept of sovereignty has only a very limited meaning and may be at the mercy of a coup d’état at any moment. The sovereignty of governments in producer countries can be an obstacle to sustainable exploitation of resources and can increase business and political costs to investors. Taylor (2007) argues that the notional sovereignty of quasi-states may provide China with a stronger bargaining position regarding access to resources, but in the long-run, the absence of state rules and power may create a dangerous vacuum for all actors in Africa, including China. Hence, China’s insistence – in principle not to interfere in other countries’ domestic affairs – works only so far in its interest as these countries do not take decisions which affect vital Chinese interests, such as the security of Chinese nationals (e.g. killings or kidnappings in Ethiopia, Tonga, Solomon Islands, Zambia and Nigeria5) or investment operations. Beyond that point, it gets counter-productive, as it creates a credibility trap if China does act to protect its interests. The fact that China is a developing country does not protect it from the credibility dilemma, as the example of another developing country shows: South Africa already faces a similar credibility gap in Africa (n.b. being labelled a ‘sub-imperial agent’) between its espoused foreign policy principles and the aggressive pursuit of largely economic national interests (DIE Studies 2008, Landsberg and Monyae 2006). Tension between mediation and peacekeeping efforts and South Africa’s arms exports further erode its credibility, again mirroring the Chinese efforts to support UN and AU peacekeeping but at the same time supplying arms to conflict zones or unstable countries. But military co-operation with Africa has not increased in recent years as opposed to economic co-operation, and the privileged military partner of China seems to be democratic South Africa, not pariah regimes.

4 Conclusion: towards functional multilateral co-operation? South–South co-operation is a prominent feature of China–Africa co-operation. The mere fact of China’s global economic impact and its engagement with Africa give African countries more economic opportunities for trade and investment and more policy space and alternatives which allow them to challenge Western agendas and aid-related prescriptions. To this extent, one key objective of South–South co-operation can be said to have been achieved. But beyond this, it is difficult to discern innovative patterns of

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interaction which would point to a qualitative development of South–South co-operation or a fairer globalisation. Economic patterns of exchange are largely confined to traditional exchanges of resources against manufactures and infrastructure provision; development is predicated on business and capitalist logic, very much in line with the dominant neo-liberal Western model; and human and social development agendas are in line with the Millennium Development Goals (MDGs) but remain small in terms of funding, with Chinese officials discovering to their dismay that the approaches which are said to be more appropriate than Western ones also encounter difficulties on the ground. There is thus a lingering tension between these two strands of the political South–South development discourse and market-driven economic patterns of interaction which play out in the increasingly dense complexity of the China–Africa–EU relationship. This is not a question of good or bad, right or wrong, predator or saviour, market or mercantilism, or democracy or authoritarianism which have unfortunately dominated the debate about China and Africa. Rather, it is a problem of managing complexity, interdependence, competition and co-operation, which is not adequately described by the outdated categories of the twentieth century and which is not a uniquely Africa–China problem. These issues are part of all relationships and often require global responses. Thus, for African countries, South–South cooperation is simply an ingredient of a policy mix that they can use to promote their own interests. Politically, in international fora, there is a rapprochement between Chinese and African positions which is in line with the underlying politico-ideological imperative of South–South co-operation to challenge the dominance of Western policies and defending developing countries’ interests on the basis of solidarity. In fora where rhetoric and statements are less important than actual negotiations (e.g. the WTO), such an alliance is much less obvious, and South Africa and China have found themselves at odds about textile imports in a similar way as the EU and China, where China stressed the primacy of WTO rules and competition (Van der Westhuizen 2007). However, South–South co-operation is an important tradition in twentieth-century diplomacy and contemporary international relations. Not least, it provides a political and psychological boost to Africa’s emancipation and development by reducing dependence on and intellectual domination by the West. It is an attempt to create a forum for developing countries and mechanisms for a fairer globalisation and a more innovative approach to development after the failure of the Washington Consensus. Therefore, it is a useful template if it moves from sweeping generalisations and rhetoric to action, from a sterile anti-Western discourse that more often than not serves as a disguise for aggressive business practices or elite failure to proposing co-operative mechanisms and a co-operative model for dealing with globalisation that take account of global value chains, sustainable development, and business models and experiences and recognise interdependency. In the

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absence of efficient global institutions with ‘fair’ representation of all actors, groups of countries (e.g. the AU, the EU and China) could co-operate functionally in selected problem areas to deal with issues. These could enhance the identification of best practice and innovation and promote African interests. Global issues such as security, development, environment, climate change, and migration and other key issues need responses not only in North–South dialogue or South–South co-operation but in functionally structured co-operation of the majority of these actors. Ideological confrontation will be counter-productive. The EU and China are more likely to engage on a co-operative platform, with elements of competition proposed by Africa, than in a confrontation about resources or political influence in Africa. The scramble for Africa’s resources is a too narrow prism of analysis, as empirical studies are revealing (Ampiah and Naidu 2008). The EU–China strategic partnership is a good example of a constantly widening and deepening co-operation, regulated but intense competition and constant balancing of interests while strictly preserving normative differences (Wissenbach 2007, 2009). A possible confrontation over Africa could have affected this balance in the EU–China partnership, which is why the EC has proposed a co-operative platform in which it would like to see Africa’s interests at the core (European Commission 2008a). Complexity and interdependence and China’s own way of responding to this phenomenon point to the need of pragmatism, functional co-operation and bargaining, not ideology, to deal with development challenges. Different approaches increase Africa’s choices. There is no need for the conformism of Southern partners with Northern templates, but there is a need for dialogue and co-operation around these different approaches based on a collective African strategy on external relations. This is also because South–South co-operation not only provides more opportunities but also raises challenges for African trade, industrialisation and development norms, as discussed in this chapter. Interdependence between the different state and non-state actors, domestic and external policies, and political and commercial activities form a complex web of opportunities and challenges that cannot be captured by simple power games, such as South against North or the EU against China, or by rigid normative templates. The inter-linkages between the EU and China, the EU and Africa, and China and Africa have effects on each other, and synergies need to be found in order to create win-win-win situations. Functional multilateral co-operation regimes can be created despite value differences and competitive relationships on the basis of shared and jointly defined interests. With the hosting of the Six-Party Talks on the de-nuclearisation of the Korean Peninsula, China has engaged in such functional multilateralism. The Global Fund to Fight HIV/AIDS, malaria and tuberculosis is another example of functional multilateralism to bypass insufficient traditional set-ups, for example, compartmentalisation of the UN agencies and new types of donors. The multitude of different development challenges in Africa could give rise to more such functional partnerships which transcend North–South templates,

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such as the sustainable management of forest resources, improvement in renewable energy capacities, fight against desertification and continental infrastructure building.

Notes 1 In the Accra Agenda for Action, paragraph 19e, the following objectives of South– South co-operation are listed: ‘South–South co-operation on development aims to observe the principle of non-interference in internal affairs, equality among developing partners and respect for their independence, national sovereignty, cultural diversity and identity and local content. It plays an important role in international development co-operation and is a valuable complement to North–South cooperation’. From this definition, it is not clear what the postulated role is precisely. The principles listed are re-stating the universally accepted principle as enshrined in the UN Charter or the UNESCO Convention on Cultural Diversity, which is also promoted by the EU. In a more general way, South–South co-operation aims at jointly taking up challenges of globalisation to safeguard the legitimate rights and interests of developing nations and to strive for a just and fair new international and political order. These aims also underlie South Africa’s foreign policy, for instance (Shelton 2007). Once again, these aims are not very specific, and it seems therefore that the aim of South–South co-operation is essentially to oppose Western/Northern dominance of world affairs but that it lacks a specific agenda of results to achieve in this process and a strategy on how to achieve these objectives. The underlying idea of a global power struggle inherited from the systems conflict and the anti-colonial struggle hardly seems to take account of the interdependence between countries and people in the globalisation era. 2 Shelton (2007), for instance, quotes Chinese advice at the South Summit to strengthen South–South co-operation in order to keep pace with the world’s scientific and technological development. 3 The Financial Times, 24 January, 2008. 4 In the early years of EC–Africa co-operation (Yaundé and Lomé Conventions), the EC strictly respected the sovereignty and non-interference principles in its trade and aid agreements because of sensitivities after de-colonisation. Not all of its member states did that, of course. 5 In the case of the kidnappings of Chinese nationals in Nigeria, the analysis in the Chinese media was very much in line with what Western analysts were saying about corruption, rent-seeking, pollution and disappointment in local groups regarding the distribution of oil revenues being key reasons for kidnappings and attacks. China has now created a consular department in its Ministry of Foreign Affairs to deal with these crises.

References Adebajo, A. (2008) ‘An Axis of Evil? China, the United States and France in Africa’, in K. Ampiah and S. Naidu (eds), Crouching Tiger, Hidden Dragon? Africa and China. Scottsville: University of KwaZulu-Natal Press. Aggestam, L. (2008) ‘Introduction: Ethical Power Europe?’, International Affairs, Vol 84(1), pp. 1–11. Altenburg, T. and Weikert, J. (2006) ‘Möglichkeiten und Grenzen Entwicklungspolitischer Dreieckskooperationen mit Ankerländern’, DIE Discussion Paper 15/2006. Bonn: Deutsches Institut für Entwicklungspolitik (DIE).

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Ampiah, K. and Naidu, S. (2008) (eds), Crouching Tiger, Hidden Dragon? Africa and China. Scottsville: University of KwaZulu-Natal Press. Baregu, M. (2008) ‘The Three Faces of the Dragon: Tanzania-China Relations in Historical Perspectives’, in K. Ampiah and S. Naidu (eds), Crouching Tiger, Hidden Dragon? Africa and China. Scottsville: University of KwaZulu-Natal Press. Bates, G., Huang, C. and Morrison, S. J. (2007) ‘China’s Expanding Role in Africa: Implications for the United States’, CSIS Report, January 2007. Washington DC: Centre for Strategic and International Studies. Berger, B. and Wissenbach, U. (2007) ‘EU-China-Africa Trilateral Development Co-operation: Common Challenges and New Directions’, DIE Discussion Paper 21/2007. Bonn: DIE. Besada, H. (2006) ‘Foreign Investment in Africa: Challenges and Benefits’, South African Journal of International Affairs, Vol 13(1), pp. 159–68. Biscop, S. (2009) ‘The European Security Strategy: Now Do It’, in ‘Europe: A Time for Strategy’, Egmont Paper 27, January 2009. Brussels: EGMONT. Broadman, H. (2006) Africa’s Silk Road China’s and India’s New Economic Frontier. Washington DC: World Bank. Corkins, L. (2008) ‘All’s Fair in Loans and War: The Development of China–Angola Relations’, in K. Ampiah and S. Naidu (eds), Crouching Tiger, Hidden Dragon? Africa and China. Scottsville: University of KwaZulu-Natal Press. Dahle H. M. and Muyakwa, S.L. (2008) China in Africa: Lending, Policy Space and Governance. Oslo: Norwegian Campaign for Debt Cancellation, Norwegian Council for Africa. Deutsches Institut für Entwicklungspolitik/DIE Studies (2008) Donor Contributions to the Strengthening of the African Peace and Security Architecture. Bonn: Deutsches Institut für Entwicklungspolitik. Dollar, D. (2008) ‘Lessons from China for Africa’, World Bank Policy Research Working Paper 4531. Washington DC: World Bank. Eichengreen, B., Rhee, Y. and Tong, H. (2007) ‘China and the Exports of Other Asian Countries’, Review of World Economics, Vol 143(2), pp. 201–26. European Commission (2008a) ‘The EU, Africa and China: Towards Trilateral Dialogue and Co-Operation’, Communication from the Commission to the Council and the European Parliament, COM(2008) 654 final, 17.10.2008. Brussels: European Commission. European Commission (2008b) European Commission staff working document SEC(2008)2641 final, 17.10.2008. Brussels: European Commission. Grimm, S. (2008) ‘The European Union’s Africa Policy’, in W. Jung, D. Messner, G. Yang (eds), Chinese and European Perspectives on Development Co-operation in Africa: Values, Objectives and Modalities. Beijing: KAS Schriftenreihe 84. Guenther, B. (2008) ‘The Asian Drivers and the Resource Curse in Sub-Saharan Africa: The Potential Impacts of Rising Commodity Prices for Conflict and Governance in the DRC’, The European Journal of Development Research, Vol. 20(2), pp. 347–63. Habib, A. (2008) ‘Western Hegemony, Asian Ascendancy and the New Scramble for Africa’, in K. Ampiah and S. Naidu (eds), Crouching Tiger, Hidden Dragon? Africa and China. Scottsville: University of KwaZulu-Natal Press. He, W. (2007) ‘The Balancing Act of China’s Africa Policy’, China Security, Vol 3(3), pp. 23–40.

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Heinrich Boell Foundation (2008) China–African Civil Society Dialogue Dialogue Workshop Proceedings. Nairobi: Heinrich Boell Foundation. Herbst, J. and Mills, G. (2009) ‘Commodity Flux and China’s Africa Strategy’, China Brief, Vol 9(2), pp. 4–6. Kaplinsky, R. (2008) ‘Africa’s Co-operation with New and Emerging Development Partners: Options for Africa’s Development’, Report prepared for The Office of Special Advisor on Africa United Nations, New York. Kaplinsky, R. and Morris, M. (2008) ‘Do the Asian Drivers Undermine Export-Oriented Industrialization in SSA?’, World Development, Vol 36(2), pp. 254–73. Kiely, R. (2007) ‘Poverty Reduction Through Liberalisation? Neoliberalism and the Myth of Global Convergence’, Review of International Studies, Vol 33, pp. 415–34. Landsberg, C. and Monyae, D. (2006) ‘South Africa’s Foreign Policy: Carving a Global Niche’, South African Journal of International Affairs, Vol 13(2), 131–45. le Pere, G. (2007) China in Africa: Mercantilist Predator, or Partner in Development? Midrand: Institute for Global Dialogue. —— (2008) ‘The Geo-Strategic Dimensions of the Sino-Africa Relationship’, in K. Ampiah and S. Naidu (eds), Crouching Tiger, Hidden Dragon? Africa and China. Scottsville: University of KwaZulu-Natal Press. Li, W. (2008) Beijing Summit & the Third Ministerial Conference of the Forum on China-Africa Co-operation: Appraisal and Prospects. Shanghai: Shanghai Institute for International Studies. Linklater, A. (2005) ‘A European Civilising Process?’, in C. Hill and M.Smith (eds), International Relations and the European Union. Oxford: Oxford University Press. Mayall, J. (2005) ‘The Shadow of Empire: The EU and the Former Colonial World’, in C. Hill and M. Smith (eds), International Relations and the European Union. Oxford: Oxford University Press. Men, H. (2007) ‘Strategic Roadmap of China’s Idea Evolution’, World Economics and Politics (Chinese), Vol 7, pp. 13–20. Ministry of Foreign Affairs of the PRC (2006) China’s African Policy. Beijing: Ministry of Foreign Affairs of the PRC. Ravallion, M. (2008) ‘Are There Lessons for Africa from China’s Success Against Poverty?’, World Bank Policy Research Working Paper 4463, Washington DC: World Bank. Shelton, G. (2007): ‘China and Africa: Advancing South–South Co-operation’, in le Pere, G. (ed.), China in Africa: Mercantilist Predator, or Partner in Development? Midrand: Institute for Global Dialogue. Shelton, G. and Paruk, F. (2009) The Forum on China–Africa Co-operation: A Strategic Opportunity. Pretoria: Institute for Security Studies. Srinivasan, S. (2008) ‘A Marriage Less Convenient: China, Sudan and Darfur’, in K. Ampiah and S. Naidu (eds), Crouching Tiger, Hidden Dragon? Africa and China. Scottsville: University of KwaZulu-Natal Press. Taylor, I. (2007) ‘Unpacking China’s Resource Diplomacy in Africa’, in H. Melber (ed.), China in Africa. Uppsala: Nordiska Afrikainstitutet. Van der Westhuizen, C. (2007) ‘The Clothing and Textile Industries in Sub-Saharan Africa: An Overview with Policy Recommendations’, in le Pere, G. (ed.), China in Africa: Mercantilist Predator, or Partner in Development? Midrand: Institute for Global Dialogue. Wissenbach, U. (2007) The EU’s Effective Multilateralism But with Whom? Functional Multilateralism and the Rise of China. Berlin: Friedrich-Ebert-Stiftung.

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—— (2008) ‘The EU, China and Africa: Global Governance Through Functional Multilateralism’, Studia Diplomatica LXI, Vol 3, pp. 69–89. —— (2009) The EU and China: Reconciling Interests and Values In an Age of Interdependence. The Dilemma Between Economic Interests and Human Rights. Seoul: Friedrich-Ebert-Stiftung. Yates, D. (2006) ‘The Scramble for African Oil’, South African Journal for International Affairs, Vol 13(2), pp. 11–31. Zhou, H. (2008) ‘China’s Foreign Aid and 30 Years of Reform’ (Chinese), World Economics and Politics, Vol 339(11), pp. 33–43.

3

China and the geo-political imagination of African ‘development’ Marcus Power and Giles Mohan1

1 Introduction: China’s ‘soft power’ and ‘rogue aid’ China’s development, instead of hurting or threatening anyone, can only serve peace, stability and common prosperity in the world. President Hu Jintao (Jintao 2005).

China’s growth has required a concerted economic internationalisation as well as changing foreign policy discourses in which China has invoked long-standing principles of ‘partnership’ and ‘solidarity’ with a wide range of countries in Africa, Asia and Latin America. As a result, the orientation of China’s vision of ‘development’, both nationally and internationally, is shifting. Although still premised on historically significant claims of ‘peaceful’, ‘win–win’ co-operation, part of China’s recent internationalisation is the extension of a ‘new’, ‘pragmatic’ vision of development which is centred on economic liberalisation and is growth oriented, leading some observers to characterise it as market extremism (Wang 2003) or even a form of neo-liberalism (Harvey 2005). In its pursuit of this growth-oriented model, a number of African countries have come to occupy centrestage in Chinese foreign policy as potential sources of raw materials to fuel China’s growth or as emerging markets for Chinese goods. In this way, China’s foreign policy is understood by some to be shifting from a concern with ‘ideology’ to a preoccupation with ‘business’, using what Joseph Nye (2004) terms ‘soft power’ to cajole client states into accepting Chinese contracts. For observers such as Alden (2007) and Taylor (2007), soft power is part of China’s ‘oil diplomacy’ in which notionally unconditional aid, low-interest loans and technical co-operation agreements are used to cement bilateral deals over oil supply, engineering contracts and trade agreements. It is the effects on the governance of China’s overseas aid and investment packages that have particularly vexed most commentators in the West. In some policy circles, mainly those inhabited by what Nye (2006) terms the ‘China hawks’, China’s new aid offensive has been greeted with scepticism and concern, captured in the idea that China is some kind of ‘rogue creditor’

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practising opportunistic lending (Phillips 2006) and proliferating problematic forms of ‘rogue aid’ (Naim 2007). One of the biggest criticisms of Chinese aid is the lack of political conditionalities, which some argue will lead to a deepening of the debt and governance crises in Africa (Chidaushe 2007, Schoeman 2007: 95). Naim, for example, represents China as a ‘threat to healthy, sustainable development’, arguing that the Chinese ‘are effectively pricing responsible and well meaning organisations out of the market in the very places they are needed most’ while ‘underwriting a world that is more corrupt, chaotic and authoritarian’. Many observers and commentators have taken this focus on aid and conditionality further to argue that China is potentially a neo-colonial power (Manji and Marks 2007, The Economist 2008, Trofimov 2007) where African resources are ‘plundered’ by Beijing and sent back in the form of Chinese goods, thereby cementing the long-standing uneven division of labour between Africa and the rest of the world. In this chapter, we want to explore the relationships between China’s development, its foreign policy and Africa’s political economy and more broadly assess whether current theories in international relations (IR), political geography and development studies can adequately address these evolving relationships. While we are by no means ‘apologists’ for China, we pursue an international political economy perspective which sees China’s interests in Africa as not substantially different from those of other industrialised countries vying for the continent’s resources, either now or in the past. The tendency to demonise and over-determine China’s role by Western critics reflects their worries about competition from China, rather than realities on the ground. Our first question is: What theoretical tools are available in IR, political geography and development studies to begin the analysis of contemporary China–Africa relations? Within this, we argue for a broad political economy perspective which is not deterministic but treats the unrolling of ‘neo-liberalism with Chinese characteristics’ as a political process. For IR theory, this means deconstructing numerous discourses (notably Chinese discourses of geo-politics) alongside an analysis of how these discourses inform policy and practice. It also requires us to understand the mechanisms linking foreign policy discourses and events on the ground. For this, we propose a state-centred political economy informed by post-colonial theory that (among other things) examines how ‘markets’ are engendered and legitimated through seemingly non-market processes. Our second focus is essentially empirical in terms of using these theoretical insights to analyse contemporary China–Africa relations. We ask how ‘new’ is China’s aid offensive in Africa and to what extent does China re-work older discourses of geo-politics and development to legitimise its current engagement with Africa? Additionally, we seek to assess how China’s development model ‘travels’ and how its local manifestations differ through interaction with African institutions. This approach recognises the differences between African polities, the agency of African political actors, the flexibility of the apparently rigid ‘Beijing Consensus’ and the fractures and tensions within the supposedly monolithic ‘China Inc.’ as well as the extent to which

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China’s insistence on ‘non-interference’ really allows for locally relevant and ‘nationally owned’ development policy.

2 International relations, political geography and development: beyond reductionism 2.1 Context We want to begin by addressing our first question concerning what theoretical tools are available to analyse contemporary China–Africa relations. If China’s growth is changing its relationship with African states, it is necessary to investigate a range of disciplinary perspectives on China’s engagement with the continent. In this sub-section, we examine how IR and development studies have comprehended African politics and development, arguing that a structural analysis (Brown 2006) is needed. We also challenge the prevailing wisdom that knowledge about IR and regions is so culturally determined and geographically bounded that it is unable to illuminate conditions elsewhere. Rather than reify and/or exoticise theories ‘with Chinese characteristics’ or ‘Western rationality’, we need a more hybrid and emergent view of how theories of IR evolve. This opens up a space to analyse Chinese IR theories, albeit tentatively. From there, we move to understanding the mechanisms for analysing how these normative policy concerns coming from China are made real in Africa and how we can explain differences between African states. This relies on a more traditional political economy, but one tempered by the idea of neo-liberalisation as a political process that relies on a range of market and non-market discourses and practices. 2.2 International relations, Africa and the virtue of hybrid theories The linkages between development discourses and theories of IR are often implicit rather than explicit. However, both share something of a Eurocentrism and reductionism which places Africa as the subject of history and modernity (Pieterse 1995). That said, there have been a number of attempts in recent years at reconceptualising development and thinking past ‘Western’ IR, which has increasingly been seen as ‘ethnocentric, masculinised, northern and top-down’ (Booth 1995: 125, Chowdhry and Nair 2003), with many critics arguing that it has consistently ignored or misrepresented Africa in particular. In terms of development, our starting point is Hart’s (2001: 650) distinction between ‘D’ and ‘d’ development, whereby, ‘ “big D” Development (is) defined as a post-Second World War project of intervention in the “Third World” that emerged in the context of decolonisation and the Cold War, and “little d” development or the development of capitalism as a geographically uneven, profoundly contradictory set of historical processes’. While acknowledging the parallels with Cowen and Shenton’s (1996) framework, Hart takes a Polanyian view that the unleashing of markets

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generates a ‘counter-movement’. Hence, ‘Far from the counter-movement representing some sort of external intervention in an inexorably unfolding teleology, these opposing tendencies are contained within capitalism’. This forces us to consider not only how global capitalism must be actively ‘created and constantly reworked’ (ibid.) but also, in a Gramscian sense, how it can be resisted and made otherwise. Within this counter-movement, the relationship between power and knowledge is a form of governmentality which refers to ‘the emergence of particular regimes of truth concerning the conduct of conduct’ (Rose 1999: 21). In practice, this means analysing ‘the rationalities of rules, the forms of knowledge and expertise they construct, and the specific and contingent assemblages of practices, materials, agents and techniques through which these rationalities operate to produce governable subjects’ (Hart 2004: 92). Work from other scholars extends the concept of governmentality to examine international non-governmental organisations (NGOs) and multilateral agencies and the intersection of different spaces of govermentality (Ferguson and Gupta 2002, Watts 2003). Hence, knowledge about development and its practical application is very much about control and discipline and feeds into what we later discuss as the process of neo-liberalisation. IR remains configured, as it was in Hoffman’s designation over 30 years ago, as ‘an American social science’ (Hoffmann 1977, Tickner 2003). There have been some parallel debates about ‘critical geo-politics’2 and its neglect of the periphery of the world system (particularly Africa) in focusing on European or North American geo-political discourses (Berg 2004, Dalby 2007, Grundy-Warr and Sidaway 2003, Kelly 2006, Kofman 1994, Perry 1987, Sidaway 2007). Writing a few years after the establishment of the journal Political Geography, Perry (1987: 6) claimed that, ‘Anglo-American political geography poses and pursues a limited and impoverished version of the discipline, largely ignoring the political concerns of four fifths of humankind’. Kofman (1994: 437) reiterated this in the mid-1990s, noting ‘the heavily Anglocentric, let alone Eurocentric, bias of political geography writing’. In this, political geography is not alone; the same critique has periodically been levelled at ‘Anglo-American’ human geography more widely. In this Orientalist-inspired sense, knowledge about international relations serves to define and delimit the material practices of international diplomacy in which Africa is marginalised and managed. Dunn (2001) argues that Western IR ignores Africa because of its neorealist insistence on placing the state at the centre of explanations. Dunn goes on to argue that for Africa, the state is largely absent and so IR is incapable of comprehending the ‘real’ political dynamics of the continent. This is in contrast, he argues, to the clearly delimited and coherent states of Europe, which makes IR relevant to them. Brown (2006) is sympathetic to the broad project of a meaningful analysis of Africa in the world; he criticises Dunn and others for conflating IR with neo-realism. Brown’s argument is that neo-realism suffers from serious limitations that are evident even before one

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transplants it to Africa. In particular, the normalisation of the European state as the benchmark for analysis creates certain teleological arguments in which Africa, and some other regions, can only be found wanting. The effect of arguing that Africa shows up the limitations and is so different that it requires an, as yet, unspecified ‘new’ theory only serves to marginalise Africa from core debates of IR. So critiques of certain IR theories mirror those made of development in recent years in their identification of an implicit statism and their construction of hegemonic knowledges. We would however argue that there are other ways of approaching the development – IR nexus and that China–Africa relations offer the opportunity for de-centring the West from accounts of global politics and looking more closely at the ‘intertwining’ of knowledges. In developing the critique of the likes of Dunn, Bilgin (2008) argues that these laudable attempts to insert the periphery into IR are based on a reversal of ‘Western’ theorising. Bilgin argues that we should also ask awkward questions about the ‘Westernness’ of ostensibly ‘Western’ approaches to world politics and the ‘nonWesternness’ of others. What we think of as ‘non-Western’ approaches to world politics or ‘development’, in other words, may be suffused with ‘Western’ concepts and theories (e.g. the importance of modernisation discourses to China’s scientific or technocratic vision of ‘development’). Bilgin argues that this requires becoming curious about the effects of the historical relationship between the ‘West’ and the ‘non-West’ in the emergence of ways of thinking and doing that are in Bhabha’s (1994: 86) words ‘almost the same but not quite’. Rather than becoming fixated with China’s exceptionalism, it is possible that a process of ‘mimicry’ may emerge, in other words, as a way of ‘doing’ world politics or development in a seemingly ‘similar’ yet unexpectedly ‘different’ way. Here, then, we have been trying to comprehend contemporary approaches to IR coming from China. We know that there are close but not unidirectional links between IR theory and foreign policy (Shambaugh 2002, Wang 1994). In reviewing the state of Chinese IR, Zhang (2002: 102) identified three contrasting schools. One school argues that ‘Chinese scholars needed to catch up by importing Western IR theories’. In contrast, there is another seeking to re-work Marxism–Leninism in order to develop an IR ‘with Chinese characteristics’, what Leonard (2008) refers to as the ‘neo-comms’ (neo-communists). While potentially interesting, this is still mired in what Zhang (2002) sees as an ‘increasingly anachronistic’ Maoist orthodoxy based on Lenin’s reading of imperialism tempered with world-systems theory, which he believes fails to produce any new insights. The third school also seeks to capture the specificity of China’s development trajectory and argues that most IR theory has been developed in particular geo-political contexts which serve to extend the hegemony of the dominant powers. While seeking to capture what is unique about China – see, for example, Callahan’s (2008) discussion of tianxia – this third body of theory should ‘participate in theoretical debate in the global IR community while addressing theoreticalissues in terms of China’s national experience’ (Zhang 2002: 104). Although

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not explicit and still in what Zhang terms a ‘primary stage’, this mutual engagement may lead to a more ‘international’ IR theory. China’s integration into the liberal world order has produced hybrid results that require us to think carefully about ‘non-Western’ similarity/difference. However, in valorising ‘non-Western’ perspectives, we are not advocating an uncritical relativism, where, for example, the proclamations of the Chinese government are treated as any more legitimate than claims by rival governments vying for African resources. We would argue for the critical importance of historical context here in order to analyse continuities and identify traces of the past that influence (or are manipulated by) contemporary actors. What we want to avoid here is the suggestion that what China is doing has no historical precedents in terms of Chinese foreign policy or that it is a significant departure from the past practices of other external interests on the continent. 2.3 Political economy and an emergent Chinese neo-liberalism in Africa While the first theoretical intervention is essentially deconstructive, our second one attempts to develop a framework for analysing how China–Africa interactions actually play out. This is vitally important since too many mainstream accounts of this interaction take a binaristic stance, arguing that China acts uniformly venally across Africa and that the impacts on economies, polities and environments are essentially the same. The political outcomes of China’s involvement in Africa will primarily be shaped by state–capital dynamics, particularly how Chinese capital and parts of the Chinese state intertwine with fractions of capital and political blocs within Africa. The internationalisation of capital makes the relationships between capital and the state more complex and breaks away from a rigid territorialisation of the political and economic, which assumes that capital has a nationality (Glassman 1999). In the case of China, we need to be conscious of the limits of a state-centred perspective given the importance of transnational actors, connections and processes and the increasing importance of China’s role in global production networks (Cheung 2009, Pan 2009). We argue that it is necessary to examine the different fractions and combinations of capital and what role states play in enabling these to succeed or how capital itself exploits (unintended) differences in state policies. This is clearly a profoundly political process as different classes seek to transform the state in pursuit of their interests. This is also important as Chinese policy responds to local political conditions, while the Chinese doctrine of respecting sovereignty and non-interference is implicitly based on an assumption that a state exists in the first place. So understanding the political institutions that actually exist and with which the Chinese do business is crucial. This also has future implications for governance because if China seeks ‘stability’ in which to do business and is not bothered how it achieves it, then the state may not be the vehicle to attain this.

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By examining the state and its relations to capital, we want to avoid a determinism that simply treats Chinese involvement in Africa as some deus ex machina and implicitly robs African actors of any agency. In this regard, there have been some insightful debates in economic geography about the nature of neo-liberalism and the variety of forms it can take. Peck and Tickell (2002, 2003) make the case for a process-based analysis of ‘neo-liberalisation’, arguing that the transformative and adaptive capacity of this far-reaching political-economic project has been repeatedly underestimated. Among other things, this calls for a close reading of the historical and geographical (re)constitution of the process of neo-liberalisation and of the variable ways in which different local neo-liberalisms are embedded within wider networks and structures of neo-liberalism (Peck and Tickell 2002). Neo-liberalism operates at multiple scales and more attention needs to be paid to the different variants of neo-liberalism, to the hybrid nature of contemporary policies and programmes and to the multiple and contradictory aspects of neo-liberal spaces, techniques and subjects (Larner 2003). We hope to analyse China as a contingent variant that is neither universal nor particular.

3 Histories of the present: China’s geo-politics and the invention of history In this section, we examine China’s current engagement with African states and assess how foreign policy discourses ‘travel’ or circulate and are made real in concrete situations. If China’s development model requires a revitalised internationalism, which moves away from but builds upon past development trajectories, then we need to explore two key issues. First, an historical one that examines the current situation through the lens of history to evaluate how ‘new’ this development approach really is and what mechanisms were put in place that condition the forms of engagement we see today. Second, we want to examine how this history functions as a discursive field through which current foreign policy is legitimised. China’s engagement with Africa has changed and expanded significantly in the last decade or so – and we will return to these in the next section – but it also builds on longer geo-political traditions and histories of co-operation and interaction with the continent. While this history of China–Africa linkages is important for shaping contemporary development, it is used ideologically by China to legitimise its recent commercially centred activities. As recently as 2006, Chinese Premier Wen Jiabao remarked during a tour of Africa that for over 110 years, ‘China was the victim of colonial aggression. The Chinese nation knows too well the suffering caused by colonial rule and the need to fight colonialism’.3 It is this shared sense of colonialism that is used to defend China’s current interventions in Africa against accusations of imperialism and to situate China discursively as part of both the developing and the developed world. Beijing has also argued that both China and Africa are cradles of civilisation that both face common enemies and that, as a result, they have

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common strategic interests and a shared perspective on major international issues. Both Chinese and African people have found common ground in the belief that the West’s historical experiences in achieving ‘development’ are distant from the African experience and offer few transferable lessons. The particular shape of current China–Africa relations can be traced back to the 1950s and the connections forged during the anti-colonial struggles for independence during the revolutionary period of Chinese foreign policy (see Chapter 1). Harding (1995) identifies China’s foreign policy as both conflictual and co-operative, with the lines blurring between the two. Within the more co-operative approaches that have tended to typify China’s relationships with Africa, Harding identifies benefactors, clients and partners. The benefactors have been the Cold War superpowers at different times. The clients of China’s Africa policy have been various liberation movements whom it used to foster an alliance in Africa and preached nationalism as the guiding principle (Snow 1995). There have been many partners in Chinese foreign policy who received less support in terms of concessional aid than the client states and who had an uneasy relationship with China during the Maoist period. At this time, China’s foreign policy was fiercely critical of the bipolar Cold War world and was seeking to wrest the leadership of the non-aligned nations away from Moscow (Jung and Halliday 2006, Snow 1988). More broadly, the roots of China–Africa engagement are to be found in the wider climate of Third Worldism and in the Non-Aligned Movement. According to Cheng and Shi (2009), the earliest forms of Chinese diplomacy in the post-Cold War period primarily involved attempts to counter the international recognition of Taiwan and to compete with Western and Russian influence in Africa. China’s confrontation with the United States in the 1950s and 1960s and with the Soviet Union in the 1960s and 1970s were particularly important (Lyman 2005) here, as were the Asian–African Conference in Bandung, Indonesia, in April 1955 and the first Afro-Asian People’s Solidarity Organisation (AAPSO) conference in 1957. Afro-Asian solidarity in particular, forged in the crucible of independence struggles, would go on to provide an important political foundation for the evolving China–Africa relationship. Given China’s colonial history and struggle against poverty, the Chinese claimed that their unique understanding of Africa’s economic dilemma lies at the root of Sino-African solidarity and could serve as a strong foundation for cordial relations (Tjønneland et al. 2006). Bandung thus became ‘a symbol of Afro-Asia as a viable political concept’ (Larkin 1971: 28) and China invoked the Bandung spirit to gain support for initiatives that China favoured.4 In 1964, following a tour of 10 African countries, Chinese Premier Zhou Enlai confirmed Beijing’s support for African struggles against imperialism (which he called ‘the poor helping the poor’), setting the stage for Africa as an ideological battleground with both Washington and Moscow (Adie 1964, Ismael 1971). The principles for aid and co-operation reflected China’s own experience as an aid recipient itself over the preceding 60 years, where the

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Chinese had not appreciated their ‘client’ status (Snow 1988) and were partly calculated to ‘show up the North’ (Snow 1995: 287). According to Snow (1988: 146), Chinese assistance to Africa at this time was considered to be a ‘heroic endeavour’, with the continent as the ‘object of a philanthropic crusade’ and China seeking to discharge its ‘missionary duty of setting Africa free’ (ibid.: 153). However, Peking’s failures in Africa during the late 1960s may partly be attributed to the ignorance of China’s leaders and their failure to grasp the significance of regional antagonisms and cultural and historical differences between the various countries while trying to apply a general model of revolution to all African ‘liberation movements’ (Neuhauser 1968). During this time, China tried to provide support to liberation movements in Angola, Mozambique and South Africa, for example, but ‘backed the wrong horse in all three cases’ (Cheng and Shi 2009: 89). Similarly, Snow (1995) argues that the Chinese were not especially interested in domestic developments in African countries, let alone in actively propagating Communism there. China’s relations with its ‘Third World partners’ and ‘poor friends’ were ‘either thin or troubled through much of the Maoist period’ (Harding 1994: 394) as it refused to join key organisations such as the G77 or the Non-Aligned Movement. China’s emphasis on South–South co-operation5 has long been seen as a key element in its efforts to oppose unilateral global dominance and an important way of building a relationship that will support Beijing’s diplomatic offensive against ‘hegemonism’. For Taylor (2006), the link connecting all Chinese foreign policies over the past 50 years is a desire to diminish and contain the influence of hegemonic powers and also to carve out a rightful place for China in the world, born from a sense that China has been ‘muscled out’ of IR. Some authors (Alden 2005, Marks 2006, 2007, Melville and Owen 2005) are sceptical about China’s interest in Africa as a form of ‘South–South co-operation’, while development in China itself remains immensely uneven and the domestic basis for Chinese prosperity is in fact politically volatile (Chan 2008). So does China represent a new form of development ‘partnership’ extending across the South? In what follows, we argue that China has always engaged strategically with Africa and used the continent to bolster its national and geo-political interests, which marks it out as similar to other superpowers (Harding 1994, Taylor 2006). Therefore, perhaps this is not a new form of South–South development co-operation but rather something quite similar to what other countries have done (and do) with respect to Africa.

4 The geo-politics of China’s Africa policy 4.1 Context While China’s engagement with Africa is premised upon this long-standing ‘solidarity’, it is but one way in which its ‘vision’ of development is exported

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and embedded. As we have argued, there are multiple ways in which development is governed and the mediation of China’s vision as it is refracted through individual African states is the key to the development outcomes of this engagement. Hence, we want to shift focus to China’s recent involvement in Africa that emerged in the post-Cold War period and to examine Chinese discourses around aid and governance in particular. Then, we examine how development is ‘delivered’ and how political discourses around respect for sovereignty are used to legitimise these interventions and briefly to flag how Chinese practices seem to be changing, largely as a result of its experiences in Sudan. We may be seeing a growing engagement with multilateralism by the Chinese and one where its non-interference dogma is beginning to break down. 4.2 Chinese neo-liberalism? The idea of China being ‘neo-liberal’ is often queried given the traditional understanding of ‘neo-liberalism’ as entailing strict market features unimpeded by state planning, which is seen to be irreconcilable with the reality of the Chinese experience. Our characterisation of China’s economic vision as ‘neo-liberal’ is necessarily tentative and provisional and our research is very much interested in understanding further the applicability and appropriateness of this classification. In this process, we look to and seek to learn from the experiences of other ‘post-socialist’ states undergoing transformation, particularly the Soviet Union.6 China’s development over the past half century has always relied on international markets, whether for raw materials or technology transfer, although the 1960s was a period of more internally focused development, which saw intensive militarisation and a devolution of development in order to make provinces self-sufficient, both of which were responses to China’s perceived threat of invasion from outside. Since the late 1980s, the economy has been considerably liberalised, although regional government has stayed powerful and unaccountable (Leonard 2008) and has been one of the driving forces behind investment in engineering and infrastructure projects in Africa. Yet how to characterise this development trajectory and the processes and mechanisms deployed to drive this? In joining the World Trade Organization (WTO), seeking to attract foreign direct investment (FDI), in its articulations of belief in marketised economies, in its dependence on cheap labour and in its apparent disregard for the environmental consequences of growth, China would seem to be ‘neo-liberal’. In China, the state remains officially critical of the neo-liberal ideology, even as it encourages the forces of neoliberalism, while it also counters neo-liberalism with nationalism. The form of primitive capitalism (Huang 2008) that has emerged in China is not the latest form of Deng’s ‘socialism with Chinese characteristics’, as some have tried to argue, but is one where state actors, often at the local level, remain central to the functioning of an economic system. As Breslin (2004: 2) puts it,

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the emergence of this system ‘owes more to the agglomeration of numerous initiatives to interpret and implement economic change to serve particular interests than it does to the plans and strategies of national level decision making elites’. The whole period since 1989 represents the beginnings of a historical process that the Chinese government has called ‘transitional’. For Harvey (2005), the economic liberalisation in China started by Deng Xiaoping was initially intended as an attempt to empower China in relation to what was going on in Taiwan, Hong Kong and Singapore as the Chinese were very aware of these developments and wanted to compete with these economies. Initially, Harvey argues, the Chinese did not want to develop an export-led economy, but what their reforms led to was the opening up of industrial capacity in many parts of China, resulting in China’s ability to market commodities on the world stage due to good technology, a reasonably educated and certainly very cheap labour force, which was often spatially concentrated in the newly designated special economic zones (SEZs). The Chinese quickly found themselves moving into the global economy and, in doing so, they gained much more in terms of FDI, leading to greater interest in the neoliberalisation process. Whether it was by accident or by design, it is not clear, but it certainly has made a huge difference to how the global economy is working. Wang (2003) observes that ‘transitional’ refers to a historical process and a government-inspired historical ‘myth’. There can be no natural transition from economic to political reform because the process is driven by certain power dynamics and social forces foreshadowing a new era of state capitalism and neo-liberal economics in which both the means of production and political power will be controlled by a few. Wang argues that it is a myth to say that China’s transition from socialism is a natural and spontaneous historical development brought on through the introduction of market mechanisms when this is actually the product of violent state intervention. Wang argues that terms such as ‘free trade’ and ‘unregulated’ are ideological constructs masking coercive government actions that favour particular groups and classes. This supposedly ideological neutrality is found in analyses of China’s Africa policy, which is presented as commercial, pragmatic and rational (Zhao 2007). Moreover, Harvey’s (2003) argument that neo-liberalism functions by redistributing wealth (capital accumulation by dispossession) rather than by generating it in the first place (accumulation by wage labour) is important here. Accumulation by dispossession in Africa dates back many centuries when value transfers began via the appropriation of slave labour, natural resources and raw materials. These processes often amounted to a kind of ‘primitive accumulation’ by which the capital available to Northern countries grew by virtue of looting Africa (Bond 2006). In recent decades, wealth extraction through imperialist relations has intensified and some of the same kinds of primitive ‘looting’ tactics are arguably now once again evident. Concerns remain that the neo-liberalised trade and

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investment relationships established between China and Africa might soon turn into systems of dispossession. There has been considerable debate about whether China’s recent engagement with Africa might be described as imperialist in some ways, but it is perhaps not imperial in the sense that China does not intend to actively manage the societies of Africa but rather primarily seeks to access the continent’s natural resources. 4.3 Liberal internationalism and China’s foreign policy Over the past decade, China’s stance on foreign relations has shifted. China’s transformation from a revolutionary power to a post-revolutionary state is reflected in the apparent shift in national priorities since the birth of the People’s Republic of China (PRC) in 1949 between the two major periods of PRC history: the era of ‘revolution’ under Mao Zedong (1949–76) and the era of ‘modernisation’ under Deng Xiaoping (since 1978) (Zhao 2007). Beijing’s advancement of the concept of multipolarity, which can be defined as the construction of more or less flexible alliances to contain every form of hegemony and to build a new and just international order, has often motivated China’s increasing engagement with Africa (Cheng and Shi 2009, Tull 2006). In the second phase, Leonard (2008) sees a broad left-right schism within the PRC, with old guard communists being much more belligerent towards other international powers and seeing the need to enhance domestic military capability. The ‘new right’ are a small but influential group (although their influence has waned since the mid-1990s) that wants complete liberalisation and a market-oriented foreign policy. The current leaderships are variously described as ‘populist’ (Wang and Lim 2007) and ‘new left’ (Leonard 2008) because they espouse a belief in markets tempered by the need to reduce inequality. Within them is a liberal internationalist group that wants engagement with the norms of the international community based on the idea of peaceful ascendance. Since late 2003, top-level Chinese officials have used the term ‘peaceful ascendance’ to describe an ideal growth plan for Chinese economic, political, and military expansion, but the implications of this policy remain ambiguous. The populist concept of scientific development currently guides the socio-economic ideology of the Chinese Communist Party (CCP), seen as the latest version of ‘socialism with Chinese characteristics’ and an extension of the ideas of Mao and Deng, one that was ratified into the Party’s constitution at the 17th Party Congress in October 2007. It is dominated by egalitarian concepts such as the creation of a ‘harmonious’ and ‘person-based’ society, sustainable development, increased democracy and social welfare. Very much associated with Hu Jintao, it seeks to shift the focus of the official government agenda from ‘economic growth’ to ‘social harmony’. What does ‘pursuing development in a scientific way’ mean? Could it be modernisation discourse dressed up as something different, something Chinese, with its

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belief in the law of development and its focus on questions of efficiency, science, industrialisation, education and the technical? 4.4 China’s Africa policy These general principles are reiterated in the more focused polices towards Africa, a key driver of which has been the demand for energy supplies and natural resources. By the mid-1990s, this had become a mainstay of China’s foreign policy. China began importing oil in 1993 and what has followed is a deepening reliance and dependency on imported oil and gas so that China has increasingly been looking at ways of obtaining supplies and securing transport routes. This need to increase and diversify sources of oil is clearly not unique to China (Klare and Volman 2006) and has seen a renewed interest in Africa as a source of oil and other strategic minerals such as copper and cobalt.7 China’s 2006 Africa Policy document is the most recent focus of China’s engagement with the continent. The policy is premised on partnership and a respect for sovereignty and ‘non-interference’ in national political processes, which marks it out as different from Western approaches that inevitably come with conditions. Indeed, non-interference has been claimed to be a long-standing principle of China’s engagement with Africa – ever since the principles of co-operation were laid out by Zhou Enlai in the 1960s – but has this ever been more than just a rhetoric used to conceal deeper interests? Arguably, partnership and conditionality are contradictory objectives, meaning that development partnerships with Western donors today are often ‘intrinsically one sided’ (Slater and Bell 2002: 346). It is not yet clear whether Chinese discourses around South–South co-operation and partnership are different to this, but there is clearly a much longer history of thinking about co-operation across the South within China, although socialism also had its own forms of trusteeship. Clearly, China’s growing economic strength means that it is unlikely to have a partnership of equals with its new African friends, but we need to know much more about how China understands co-operation and more about the oft-invoked win–win claims made for this. That said, China’s involvement in Africa does permit the revival of triangulation (Large 2008), which means African states can pursue relations with more than one external state – epitomised by Angola’s turn to China as its negotiations with the International Monetary Fund (IMF) faltered in 2003 – and play donors and investors off against one another. Chinese discourses of partnership also relate to its role in multilateral organisations, to its contestation of hegemony and to its desire to become a major centre of influence in a multipolar world. As part of its liberal internationalism, its recent ascension to the WTO, China recognises its need to court votes to protect and promote its interests.8 ‘Respect for sovereignty’ and ‘non-interference’ represent two key phrases that have been repeated in China’s rhetoric surrounding its aid disbursements

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to Africa. This rhetoric encourages the impression that China is not imposing its political views, ideals or principles onto recipient countries (Davies et al. 2008). According to Liu Guijin (2006: 3), the Chinese government’s special representative to Africa, speaking in Pretoria in 2006: [t]o begin with, China has no intention to undermine Africa’s democracy. China is working hard to build a socialist democracy and promote human rights and good governance at home. And China is a responsible major country in the world. I doubt there is any tiny political gain China can get by doing such things against the historical trend and the common wish of the people of all countries. In a later speech in Sudan in 2008, then acting as the Chinese government’s special representative for Darfur, Guijin added: ‘We [China] have never, and will never in the future, attach any kind of political conditions to these aid and development projects, because we think that providing assistance is just for the benefit of the people, it is not for political purposes, not for showing off to the outside world.’9 This forms the core of its non-interference policy and the perception that China is now ‘non-ideological’ and pragmatic, since its concerns are for securing resources rather than for transforming hearts and minds. At the same time, there is a discourse of mutual interdependence, which fits with China’s foreign policy doctrine of peaceful ascendance. At the core is an acknowledgement that ‘[a]lthough Africa might need China, China definitely needs Africa more for her development process’ (Anshan 2006: 10). This reveals the essentially commercial and transparent nature of China’s engagement with Africa. It is less about a managed process of ‘catching up’ with more developed nations but an even-handed recognition that Africa’s resources are vital for China’s growth and that this is a win–win situation for both parties. This commercialism over aid model infuses much policy, but it remains to be seen whether the dividends from this growth reach poorer sections of African societies (Kaplinsky 2008). We would argue that non-interference has always been a flexible practice, depending on the circumstances, and also that such a principle necessarily cannot be permanent. Where deals are signed with unpopular dictatorial regimes that could later be revised by a new government, China feels obliged to protect such regimes. Karumbidza (2007) is probably correct in his view that the Chinese are themselves well aware that their non-interference stance is untenable in Africa. Given that the economic relationship matters to China, its government has a vested interest in long-term stability and its current rhetoric suggests an understanding that this is best procured by harmony and the careful balancing of interests, not by force. Non-interference is a principle that is certainly breaking down, as shown by China’s recent involvement in Sudan and by the emerging strategy of proactive non-interference that has been used in negotiations for a post-Mugabe regime in Zimbabwe.10 The fact that China is doing so goes against some of the ‘rogue aid’ discourses since

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China is now acting more responsibly in seeking to resolve internal governance issues. Sudan is a case in point for how China’s stance has changed. China’s stance on human rights was framed in its anti-imperialist rhetoric, which has two elements. One is historical, which argues that Western powers are hypocritical given the colonial abuses. As Anshan (2006: 10) argues: This is indeed ironic, coming from Western countries talking about abuse of human rights, when they have committed relentless human right abuses during their colonial periods. … It is almost shameful for these countries to accuse China of human rights abuses, when they have committed much more atrocious acts in the past. The second rebuttal is related in that any conditionality around human rights is seen by the Chinese as necessarily an abuse of human rights. It is this defence of sovereignty that has characterised China’s Sudanese engagement. Over the past 10 years, China’s ‘blind-eye’ support for various Khartoum governments in return for uninterrupted running of the oil industry by the Chinese National Petroleum Corporation (CNPC) has had massive political impact. Sudan’s oil-rich regions generate considerable revenue, but there have been negligible improvements in service delivery for affected civilian populations. Moreover, China has supplied arms to Sudan and helped develop Northern Sudan’s arms manufacturing industry. China’s diplomacy on Darfur became more public from 2006 to the point where it cannot be said to be not interfering. Beijing has however underestimated the political risk posed by Darfur to its interests in Sudan as well as its standing in Africa and on the international stage. The appointment of a new special ambassador in May 2007 was part of China’s efforts to bolster its image and contribute to solutions. For example, more aid has been given to Darfur. Such moves also enabled China to promote its own interests through more vocal diplomacy and participation in multilateral forums and initiatives on Darfur. Yet China’s more proactive diplomacy was accompanied by its continuity in defending the sovereignty of Sudan and arguing against further sanctions as well as in deepening economic links. Thus, for this pariah state, the impact of oil has been to further concentrate wealth rather than achieve broader development, and this seems likely to worsen even if, as a result of diplomacy, it may lose some of its pariah status (Alden 2007). The Sudan case is pivotal, not only for showing how China is changing, but also for the ways that Western donors are seeking to co-operate with China in finding solutions to African development. Hence, there are questions about the delivery of Chinese aid and the possibilities of development co-operation between donors. The view that China is not imposing its political views, ideals or principles onto recipient countries is further cemented by the complexity of disassociating Chinese aid and investment and the lack of transparency in China’s overseas aid allocation and disbursement. There is clearly no official definition of aid in China

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and some considerable ambiguity about what constitutes aid, and the Ministry of Commerce is currently trying to define this (Davies et al. 2008). The realities which are selected for critique are the lack of transparency on how Chinese aid is allocated, its amount and level, and its effectiveness. Compounding the perception of China as a ‘rogue creditor’ is the lack of details about the level and terms of its own aid to other countries, so data and information in this regard are sketchy (Jacoby 2007). The volume of Chinese aid is often regarded as a state secret (Lancaster 2007) and data on this is not collected in the same way as it is by Western aid donors. According to Lancaster, the Chinese justify this secrecy to avoid criticism and competition from major donor countries and domestic criticism of providing aid to foreign countries instead of eradicating poverty domestically. China is not a member of the Development Assistance Committee of the Organization for Economic Co-operation and Development, which reports on members’ international aid (Jacoby 2007). Very little is yet known, for example, about the new round of major Chinese-led infrastructure projects in Sudan, Ethiopia, Nigeria, Angola, Tanzania, Zambia and Gabon (King 2007). It seems entirely possible that while it may seem appropriate for Westerners to pick out the education and health sectors as obvious categories to be treated as aid, China’s own preference has been to think of its relations with individual countries in a much more holistic way (Mohan and Power 2008). Chinese practice is unfamiliar (or at least uncomfortable) with the notion of development policy as an independent policy field of the kind that emerged among the Western nations in the course of the 1950s. Aid is also often tied up with other forms of assistance and economic co-operation and neither is it given by a single Ministry: China’s Ministry of Commerce provides most bilateral aid through its Department of Foreign Aid, but bilateral aid also comes from the Ministries of Health and Education, while the Ministry of Finance provides multilateral aid. Additionally, aid and development assistance do not just come from central government sources but also from provincial governments and urban administrations, for example, through twinning arrangements. In concrete terms, the blurring of aid, investment and development is realised through the mechanisms for funding projects. Sautman and Hairong (2007) contend that in contrast to Western aid, which increasingly goes directly to national budgets as ‘sectoral support’, Chinese aid is usually assigned to designated projects, usually infrastructure related, and is therefore harder to siphon off. Budget and sectoral support may increase ‘ownership’ by recipient governments but it might also be seen as introducing Western donors more deeply into the heart of government (Batley 2005). In some ways, it could be argued that China, with its emphasis on non-interference, has not sought to blur inside and outside in quite the same way as Western donors and that by its insistence on bilateral relations, it has actually done something rather different. There is also limited evidence that the move to direct budget support and sector-wide

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approaches by Western donors is any better than this bilateral, project-based approach favoured by the Chinese. The Chinese also usually part pay for their oil and other resources in infrastructure, which potentially means that there is less free-floating cash for unscrupulous diversion. One argument for project-led development approaches is that they are bounded and one can more easily see if they are not completed, whereas the other approaches potentially put money into a rather opaque pot from where it can be siphoned off at every stage of implementation. One example of this is the oil-backed US$2 billion credit line from China’s ExIm bank to the Angolan government in 2004. When the Chinese received intelligence that the ExIm loans were being misappropriated by officials at the Angolan Ministry of Finance, these concerns were relayed to the Angolan state and a Gabinete de Reconstrução Nacional (GRN; Office for National Reconstruction) was set up to administer the loan and to increase transparency.11 The routes for aid and investment are the privileged Chinese corporations selected as part of the Chinese Government’s ‘Go Out’ Policy of 2002 (Reilly and Na 2007). These national champions form the brunt of China’s internationalisation strategy, but as more companies internationalise, it becomes harder for the Chinese state to maintain a coherent strategic and regulatory hold over them. China’s corporate engagement with Africa has been exaggerated, while the China Inc. model is far less efficient and monolithic than is often assumed (Gill and Reilly 2007). There is also the increasing presence of smaller, provincially backed companies operating overseas (Reilly and Na 2007). Schuller and Turner (2005) argue that Chinese companies are seen by the state as part of its geo-political positioning in Africa since state-owned enterprises (SOEs) contribute to an overall programme of foreign economic policy. Yet many of the companies concerned do not see their role in Africa as part of some wider geo-political practice, and there are multiple points of disjuncture between the activities of some SOEs and this wider foreign policy. Thus, as China’s Africa strategy comes to rely on a growing number of bureaucratic principles and corporate agents, contradictions will increase. Beijing is relying on an increasingly complex set of government oversight agencies, including the State Council, Chinese embassies, the Forum on China–Africa Co-operation (FOCAC), the Ministries of Finance, Commerce, Foreign Affairs, Chambers of Commerce, state-owned companies, and a variety of commercial and development banks, to accomplish its Africa policy but this is ever harder to manage. McGregor (2008) reports, for example, that a range of diplomatic scholars in Beijing have recently noted how the SOEs have often hijacked China’s diplomatic initiatives in Africa (especially in Sudan), pursuing profit at the expense of broader national interests. These oversight agencies do not enjoy direct lines of authority over Chinese corporations overseas. China has clearly upset the dominant aid regime, but donors cannot be too critical for fear of upsetting China, so they instead call for and promote

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dialogue and partnership. The UK’s Department for International Development (DFID) is very active in this and, rather than pledge much aid to Chinese development, it is more concerned with Millennium Development Goal 8: building a global partnership for development. Here, the assumption is that China can be socialised into the norms of the international aid business and community. Such critics contend that China’s engagement with Africa should still be guided by Western values and should conform to established patterns of Western involvement in the continent (Wilson 2005), yet rather than outright criticism, they prefer a ‘dialogic’ approach (Tjønneland et al. 2007). China, for example, is a signatory of the 2005 Paris Declaration on Aid Effectiveness – evidently from a recipient perspective – which seeks increased harmonisation and alignment between donors and between donors and recipients. Despite this commitment, however, China’s Africa policy remains focused on bilateral aid. A not dissimilar issue around the politics of aid concerns China’s relations with the African Union and New Economic Partnership for African Development (NEPAD), both of which China actively supports and are test beds for its changing stance on multilateral politics. Whatever the efficacy of NEPAD, it posits a multilateralist approach to solving Africa’s development problems. While the Chinese state-backed investors are relatively lax about transparency, accountability and sustainability of investments, NEPAD has been developing the African Peer Review Mechanism in an effort to encourage African countries to set standards and put in place procedures for vetting and monitoring investments. Again, there are potential tensions and it seems likely that in the rush to attract and maintain Chinese investments, African countries may be tempted into a race for the bottom in terms of labour and environmental standards.

5 Conclusion: the geo-politics of China’s relations with Africa on development From the case of China’s engagement with Africa, we believe that there needs to be an intensification of the dialogue between critical geo-politics/IR and critical development theory. IR and development theory are conventionally kept apart by a well-established social scientific division of labour which assumes that the domain of the geo-political is discrete and separable from the supposedly economic and technical domain of development (ÓTuathail, 1994). Picking up on our earlier discussion of development and IR, it is impossible to understand the contemporary making of development theory and practice without reference to geo-politics and the geo-political imagination of non-Western societies. As Slater (2004: 224) argues, ‘power and knowledge … cannot be adequately grasped if abstracted from the gravity of imperial encounters and the geo-political history of West/non-West relations’. This is not to say that development is little more than the continuation of politics by another means, since we cannot dismiss aid as simply part of some past and therefore ‘outdated sideshow in the repertoire of geopolitics’

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(Sogge 2002: 10). Yet all major conceptualisations of development in the post-1945 period contain and express a geo-political imagination which conditions and frames their meanings and relations (Slater 1993). China’s contemporary vision of development does not envisage a domain completely separate from foreign policy concerns and actively mobilises historical discourses of geo-politics (respect for sovereignty, non-interference in political affairs and anti-hegemonism) and the language of commonality and mutuality (solidarity, friendship and anti-imperialism) in order to justify its contemporary Africa policy. Rather than separating out the geo-political from the economic and technical aspects of development theories and practices, we have critically explored the geo-politics of China’s relations with African development in a more open and inclusive way than to speak only of aid or development assistance in isolation. This required unravelling the complexity of China’s aid disbursement and disentangling the blurring of aid, trade and overseas investment, which themselves have complex routes to Africa. Davies et al. (2008) make a distinction between aid and development assistance, but it is not always as easy as they suggest to differentiate between the two (Brautigam 2007). Aid was historically used as an important geo-political tool for the Chinese in the contest with Taiwan (also an aid giver) and the Soviet Union, where the Chinese aimed to shame the Kremlin by stepping up their charity and economic aid and by providing fewer arms. Aid thus became an important way of exposing the limitations of China’s opponents, both Western and Soviet. A critical geo-politics of China–Africa engagement must therefore examine how China’s historical imagination of IR and its discourses of foreign policy have enframed the meanings attached to development and the relations forged with African partners as a result. This historical imagination of geo-politics remains crucial since it forms a discursive field through which current foreign policy is legitimised. Further engagement with Chinese (and African) approaches to IR is an important first step in this regard. While Chinese ‘aid’ is used to further geo-political claims, it has been different from Western approaches. A continuing point of distinction is the bilateral disbursement of aid and the emphasis on South–South co-operation. China’s strategy is ‘one of humanitarian and development aid plus influence without interference, in contrast to the West’s coercive approach of sanctions plus military intervention’ (Qian and Wu 2007). A critical geo-politics of China– Africa relations must acknowledge the Orientalisms at work in Western characterisations of China as an exception and that there may be aspects of China’s vision of development that are almost the same as those of Western donors but not quite. To a certain extent, a process of mimicry is at work in China’s ‘neo-liberalised’ vision of successful economic development which may be producing seemingly similar yet unexpectedly different outcomes. Furthermore, China is not the only show in town and Chinese engagement with Africa needs to be understood in the context of the wider contemporary scramble for Africa of which it is a part. This includes the efforts of the

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European Union (EU), of the US Africa Command (AFRICOM), the India–Africa Forum, the Turkey–Africa Summit and the Tokyo International Conference on African Development (TICAD).12 Allied to this is the need to disaggregate ‘China’ and ‘Africa’ since neither represents a coherent and uniform set of motivations and opportunities (Mohan and Power 2008). We also need to know much more about the range of impacts China is having on forms of African governance, the role China takes in situations of conflict and about the relations China has with local, regional and global institutions. A critical geo-politics must also engage with the media discourses on China’s engagement with Africa that draw on a range of Orientalist assumptions that essentialise China and over-simplify its motivations while remaining deeply uncritical of Western interactions with the continent. This requires a postcolonial analysis of the constructed imaginaries of China and Africa and the geo-political images and representations of Chinese and African ideologies, foreign policies and cultures. Allied to this is a concern for the dynamics of class and race in particular African countries.

Notes 1 The authors would like to acknowledge the support of the UK Economic and Social Research Council in funding the research project (Ref: RES-062–23–0487) from which this paper derives. More details are available at www.geography.dur. ac.uk/projects/china-africa/. An earlier version of this paper was presented at the BISA Africa and International Studies Working Group workshop on 9 July 2008, entitled ‘New Directions in IR and Africa’. We would also like to thank Christopher M. Dent for his support and encouragement. 2 As a body of scholarship that first emerged in the early 1990s, ‘critical geo-politics’ sought to bridge the disciplines of Geography and IR and was initially inspired by the pioneering work of ‘dissident’ scholars, including Simon Dalby, John Agnew and Gearoid Ó Tuathail. Grounded in a corpus of work emerging from the discipline of IR in the 1980s and bolstered by post-structuralism and political economy, these contributions sought to radically reconceptualise ‘geo-politics’ as a complex and problematic set of discourses, representations and practices (Tuathail 1996). Through the 1990s, a number of geographers used the term ‘critical geo-politics’ to encompass a diverse range of academic challenges to the conventional ways in which political space was written, read and practised. Since then, the research agendas of ‘critical geo-politics’ have flourished and developed considerably. 3 ‘China’s Premier Wen Gives Press Conference in Cairo’, Peoples Daily, 19 June 2006. Available at: http://english.peopledaily.com.cn/200606/19/eng20060619_ 275294.html (accessed 27 April 2010). 4 It does not appear that Africa was important to China at Bandung however, and although it marked the beginning of significant Chinese initiatives in Africa, there is little evidence that China foresaw this with clarity. Furthermore, Chinese wishes were often stubbornly and effectively resisted within these organisations and by no means did China fully control them (see Neuhauser (1968) and Larkin (1971)). 5 Zhou Enlai foreshadowed the concept of ‘South–South’ co-operation in his 1964 African tour by attacking the bullying of small and weak countries by the ‘big and strong’. China staged its own conference on South–South co-operation in Shanghai in April 1983, and Beijing’s rhetoric of unity and practical backing have

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Marcus Power and Giles Mohan constituted an area of broad consensus on which African leaders have been happy to agree. Russian President Dmitry Medvedev’s visit to Nigeria in June 2009 was the first ever visit to Africa from a Russian President and underlines the increasing importance Russia attaches to being able to access the continent’s natural resources (particularly oil and gas in view of China’s recent engagement with Africa) and in seeking to bolster its status as a global power. More recently, discussion is around agricultural production and the need to supply China’s growing demand for food. African votes have been crucial in blocking resolutions at the UN Commission on Human Rights, condemning alleged human rights abuses in China or garnering sufficient support to win a second bid to host the Olympics in 2008. ‘Chinese Envoy: China to Provide More Humanitarian Aid to Darfur’, Xinhua News, 26 February 2008. In June 2009, Zimbabwean Prime Minister Morgan Tsvangarai announced that credit lines worth nearly US$950 million had been secured from China (BBC 2009). Ironically, the NGO Global Witness has raised concerns about the transparency of the procurement process of construction tenders managed by the Office for National Reconstruction (Global Witness 2009). In this regard, we might also explore the recent efforts of Brazil and Russia in Africa.

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4

Chinese soft power, insecurity studies, myopia and fantasy Shogo Suzuki1

1 Introduction China–Africa friendship is embedded in the long history of interchange. Sharing similar historical experience, China and Africa have all along sympathised with and supported each other in the struggle for national liberation and forged a profound friendship (China’s Africa Policy).2

Such were the words in the People’s Republic of China’s (PRC) White Paper on China’s Africa policy which sought to demonstrate China’s benign intentions in the continent. The document, which epitomises the Chinese ‘charm offensive’ in the developing world, emphasises the PRC’s commitment to multilateralism, ‘peaceful co-existence’, ‘mutual benefit’ and ‘common development’ and seems to be at pains to reassure the rest of the world that Beijing’s increasing involvement in Africa is beneficial and not going to disrupt the international order. In spite of these soothing words, China’s critics remain unconvinced. Most do recognise that these moves are part of the PRC’s attempts to implement its ‘one China’ policy and thwart Taiwan’s attempts to gain diplomatic recognition as well as valuable Third World votes for avoiding international censure over its poor human rights record. They are also cognisant that these diplomatic manoeuvres are part of Beijing’s attempts to gain access to valuable natural resources, notably oil. However, we are beginning to observe a new layer of criticism which is centred on the relatively novel concept of Chinese soft power. Put simply, the main thrust of this argument states that Beijing is propagating its authoritarian model of economic growth as a source of attraction to create a sphere of influence among non-democratic states. An increasing number of analysts have begun to argue that the PRC’s growing influence may culminate in an attempt to ‘shift influence away from the United States (US), creating its own sphere of influence … [i]n this sphere, countries would subordinate their interests to China’s and think twice about supporting the United States should there be any conflict in the region’ (Kurlantzick 2007: 43).

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The main aim of this chapter is to scrutinise Chinese policies and debates and argue that the latest wave of literature on Chinese soft power is overshadowed by an excessive search for threats to Western dominance. In particular, it critiques the suggestion that Beijing’s use of its soft power entails the propagation of the ‘Beijing model’ of development and the undermining of the Western-dominated international order. These claims are made in two parts. First, I suggest that China’s so-called ‘charm offensive’ is much more multifaceted than critics have charged and neither appears to be aimed exclusively at the developing world, nor necessarily promoting a ‘Beijing model’ of domestic governance at the expense of the West. This is demonstrated through a brief case study of Beijing’s participation in United Nations Peacekeeping Operations (UNPKO) in Africa. Since the end of the Cold War, UNPKO have taken on a more intrusive form aimed at reconstructing states along liberal democratic lines. While China has traditionally been seen as one of the staunchest supporters of non-intervention, in recent years, it has – in contradiction to its self-proclaimed ‘championing’ of the sovereignty norm – been surprisingly active in these paternalistic UNPKO. I argue that this is a part of China’s ‘charm offensive’ to allay Western fears of a ‘China Threat’ and to improve the image of the PRC as a potential revisionist power. Second, the chapter argues that fears of challenges to Western/US primacy result in myopia and fantasy within analyses of Chinese soft power. While these anxieties are at times justified, they do result in a tendency to ‘look for enemies’ at the expense of empirical accuracy. Consequently, such works ignore the fact that the Chinese themselves are by no means united on whether China actually possesses adequate soft power or whether there is a ‘Beijing model’ of development which can serve as a source of Chinese soft power. Many analysts fail to notice that China’s desire to avoid being labelled a ‘threat’ to the international community (something that could diminish Chinese soft power) means that it is frequently at pains to reassure the Western powers of China’s ‘peaceful rise’, as the Chinese UNPKO case shows. Instead, we are presented with somewhat dubious claims that Beijing is actively trying to boost its ‘attraction’ with the aim of building up an anti-Western coalition through the ‘cultivation of isolated autocrats’ (Kurlantzick 2007: 54).

2 Chinese soft power: the latest ‘China threat’? 2.1 Soft power in context Soft power has been defined most famously by Joseph Nye as an ability of a state to get ‘other countries to want what it wants’, primarily through attraction. The source of this attraction ranges from ‘cultural attraction’, to ‘ideology’, to ‘international institutions’ (Nye 1990: 166–7). This concept has been eagerly embraced by the Chinese political and intellectual elites. The Chinese Communist Party (CCP) Central Committee report adopted at the 17th Party Congress in 2007 stated that China needed to ‘enhance culture as part

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of the soft power of our country’,3 and President Hu Jintao himself has ‘called for bringing about a new upsurge in socialist cultural development, stimulating the cultural creativity of the whole nation and enhancing culture as part of the soft power of China’.4 Hu does not really specify what this soft power is and how it is going to enhance China’s ability to get others to ‘want what it wants’. Nevertheless, debates among Chinese intellectuals suggest that the source of China’s soft power is said to derive from its cultural traditions, domestic governance structure and foreign policy (Wang and Lu 2008, Zhang 2007, Zhang and Li 2003). It is also clear that the Chinese elite believes that soft power is extremely important in facilitating China’s rise in the international community and has taken active steps to enhance the PRC’s attraction (Wang and Lu 2008, Yan 2006). The opening ceremony of the 2008 Beijing Olympics, which heavily emphasised China’s cultural heritage, was aimed precisely towards this end. The opening of Confucius Institutes across the world is similarly geared towards promoting Chinese language learning and culture and ultimately enhancing Chinese soft power. 2.2 The latest threat to Western primacy? Just as their Chinese counterparts, Western commentators are also beginning to show a growing interest in Chinese soft power. However, some of their interpretations are decidedly pessimistic. As a report prepared for the US Senate Committee on Foreign Relations notes, some ‘have attributed the perceived decline in American soft power as relative – largely a comparative decline based on the rise of other powers – in particular the rapid emergence of China as a US peer competitor’ (Congressional Research Service 2008: 3). It is interesting to note the influence of realistic thinking in these statements. First, and most importantly, we see that the rise of Chinese soft power is seen in zero-sum terms: a gain in Chinese soft power is interpreted as a loss of Western/US soft power. Second, the international realm is seen as inherently competitive and therefore Chinese and Western/US soft powers are assumed to be in a conflictual relationship with very little scope for co-operation or co-existence. Viewed through this lens, it is not surprising that many aspects of Chinese soft power become potential threats. Confucius Institutes are thus seen as potentially serving to advance China’s foreign policy goal of marginalising Taiwan’s international influence. This could be achieved ‘by teaching Beijing’s preferred version of Chinese and utilising readings from a Beijing perspective, rather than the traditional Chinese characters used in Taiwan or Taiwan-based points of view’ (Gill and Huang 2006: 18). However, it is the PRC’s alleged export of its model of economic development and its threat to Western interests which appears to have garnered the most attention in Western studies of Chinese soft power. Kurlantzick (2007: 56), for instance, asserts that ‘China clearly promotes its socioeconomic model through speeches overseas, a model of

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top-down control of development and poverty reduction in which political reform is sidelined for economic reform’. This model, most recently dubbed as the ‘Beijing Consensus’ by Ramo (2004: 4, 33), is said to be characterised by a ‘desire to have equitable, peaceful high-quality growth’ but ‘does not believe in uniform solutions’ – such as economic and political liberalisation often propagated by the West – but in a ‘ruthless willingness to innovate and experiment’ and a ‘lively defence of national borders and interests’. Furthermore, attraction to these ideas and the Chinese model of development are assumed to result in the growth of Chinese soft power, which will ultimately make it a competitor to the US, albeit on ‘asymmetric’ non-military grounds. What is worrying is that ‘this model stands in direct contrast to democratic liberalism, the economic and political model emphasising individual rights and civil liberties that has underpinned the societies of the West’ (Kurlantzick 2007: 56–57). At first glance, these views have some merit. Although Nye’s later works shifted to advocating the cultivation of soft power in the wake of the Bush administration’s unilateralism and the subsequent rise of anti-Americanism (Nye 2004), in his earlier works, his emphasis was primarily on attraction. As one Chinese scholar puts it succinctly, it was about ‘you coming over to me of your own accord’ (Zhang 2004: 10). The PRC however has known from the outset that its soft power is no match for that of the US. This is partly why Beijing admits that it needs to actively engage in a ‘charm offensive’ to try and attract others. Furthermore, it should also be noted that China’s growing economic prowess has boosted Chinese peoples’ confidence in their country and its system of development, resulting in a widespread nationalist ‘sentiment that the Chinese people must tomorrow take over the mission that has been carried by Americans since World War II …, the mission of civilising the world’ (Nyíri 2006: 106). It is, however, debatable as to whether China is propagating its soft power to undermine Western preponderance. While it is true that some Chinese commentators do argue that China’s model of development is part of its soft power, does it necessarily follow that the PRC’s soft power strengthens autocratic regimes? Beijing is in fact criticised for not caring about the nature of the regime it deals with: it gives out aid with no strings attached and does not promote ‘good governance’ based on Western liberal democratic models. If it does not attach many ‘strings’ to its relations with other states (with the exception of the ‘one China’ principle), there is no à priori reason to assume that Beijing is going to start ‘selling’ the ‘Beijing model’ of development. So should the West be worried about Chinese soft power? Is China really attempting to enhance its soft power to counter Western influence, as is often alleged? In the following section, I propose to explore these questions by examining the case of China’s participation in UNPKO in Africa. Chinese peacekeeping operations in Africa are of particular utility in assessing Beijing’s oft-cited ‘charm offensive’ for two reasons. First, there appears to be broad consensus by both Western and Chinese analysts that UNPKO participation is an important component of Beijing’s attempts to enhance its

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soft power (Gill and Huang 2006, Kurlantzick 2007). Second, 71 per cent of Chinese contributions to peacekeeping operations to date have been in Africa, so the examination of Beijing’s actions in peacekeeping operations in the region make an ideal case for testing existing arguments on Chinese soft power. If the pessimistic views on China’s propagation of its soft power are correct, we can expect that this is also the region where the Chinese wish to increase their influence. After all, if the PRC can export its own ‘Beijing model’ of development through its participation in UNPKO, it may foster the emergence of pro-China regimes that could give it the edge in its quest for international influence. Furthermore, this could help give the PRC favourable access to natural resources in the host country and alleviate China’s energy insecurities – something which is argued to be a key motivator for Beijing’s increased activities in the area.

3 Propagating democracy?: China’s UNPKO participation in Africa 3.1 Context Beijing’s participation in UNPKO missions in Africa is of particular interest to our discussions on Chinese soft power because they hardly serve as a useful means for Beijing to ‘sell’ its so-called ‘Beijing Consensus’. In fact, many of these missions aim to transform the host state into liberal democracies, which seems antithetical to the so-called ‘Beijing model’ of autocratic development. Traditionally, UNPKO were mandated to prevent inter-state disputes and concentrated on enforcing ceasefires and patrolling buffer zones between the warring states. Since the end of the Cold War, however, security threats are commonly seen as emanating from civil wars within ‘failed states’, rather than as inter-state war. Accordingly, peacekeeping operations now aim to achieve security through state reconstruction. In the context of post-Cold War ‘liberal triumphalism’, there has been a strong belief that the ‘precondition for international peace … was political stability within states, which in turn depended on securing the rights of ordinary people and small nations to democratic self-determination’ (Paris 2004: 41). For peace to be restored, it is now deemed necessary to transform ‘failed states’ into liberal democratic, market capitalist states. Recent UNPKO missions to Africa mirror this agenda of constructing liberal democratic political institutions in war-torn states. The UN Secretary General’s 2005 report on Sudan, for instance, states clearly that the UNPKO there would ‘promote the development of a judicial system based on democratic principles and international human rights standards’ (United Nations 2005: 16). Another report the following year also states that the mission would assist in ‘the empowerment of the legal profession and civil society’ (United Nations 2006: 21), a move which is clearly designed to transform Sudan from an autocratic state into a liberal democratic state. Similarly, the

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mandate of the UN mission in Liberia includes ‘monitoring and restructuring the police force of Liberia, consistent with democratic policing’ (United Nations 2003: 4). Chinese contributions to these operations present something of a puzzle. Many of these UNPKO were set up in response to civil wars and have a substantial ‘social engineering’ element to them. Beijing’s participation in these operations makes no sense from a domestic political view. The promotion of democracy through UNPKO is hardly going to garner much support from an autocratic CCP elite bent on maintaining its monopoly of power. This, of course, raises the question as to why Beijing appears to risk alienating its domestic political constituencies. Similar questions could be raised from an international angle. Recent UNPKO go directly against the sovereignty norm by suspending host states’ sovereignty and transforming them into liberal democracies. It is also important to note that even if ‘consent’ by the host state is given in such operations, the accusation of encroachment on sovereignty is likely to persist, as it is hard to determine who can legitimately give their consent to international administration in the cases of state failure, and in many cases, ‘consent’ is not always given under perfect conditions of freedom from power or coercion. If the critics of Chinese soft power are right, we would expect Beijing to not only refuse to participate but also actively oppose any mandates that aim for social engineering on the host state’s territory as part of its ‘solidarity’ with post-colonial states. Failure to do so would risk undermining Beijing’s self-appointed role as a guardian of the sovereignty norm. Furthermore, it could result in the emergence of a democratically elected leader who may not rely on Beijing’s support to maintain power and be beyond Chinese influence. One potential explanation for China’s participation could be that Beijing is using UNPKO to stabilise the host state and secure its access to strategic goods. This could certainly account for the PRC’s participation in operations in the Sudan and the Democratic Republic of Congo but does not quite explain the cases of Côte d’Ivoire, Liberia, Ethiopia or Eritrea. These states do not produce any goods that Beijing is dependent on and neither are they significant producers of strategic goods such as copper or iron (African Development Indicators 2005). While one exception may be the oil reserves in Côte d’Ivoire – where Chinese national oil companies have signed agreements for equity participation in oil fields – it is not immediately obvious whether Côte d’Ivoire is a crucial player in China’s oil strategy. According to Downs (2007), 81 per cent of Chinese national oil companies’ production in Africa comes from Sudan, followed by Algeria (15 per cent), Angola (3 per cent) and Tunisia (1 per cent). In fact, imports from Côte d’Ivoire amounted to only 0.1 per cent of China’s imports of mineral fuels, lubricants, asphalt and mineral wax in 2005. The country is a small player in the African oil sector, and the economic viability of its oil assets is questionable, to say the least. As Downs (2007: 44) notes, ‘most of the African assets held by China’s NOCs (national oil companies) are of a size and quality of little interest to international oil

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companies (IOCs). In fact, many of these assets were relinquished by the IOCs’. 3.2 Chinese UNPKO: charming the West So why does China participate in UNPKO that appears to totally contradict its alleged attempts to promote authoritarian development as part of its ‘charm offensive’? The key to this question lies in Beijing’s attempts to gain Western acceptance of its rise and counter the discourses of the ‘China Threat’, which is extremely harmful to China’s image (Wang and Lu 2008). One of the strategies adopted by Beijing to this end has been the projection of an image of a ‘responsible power’ which upholds the international normative status quo, and it is interesting to see that this image is now seen as part of the PRC’s soft power (Dent 2008). In the absence of any immediate need to secure access to natural resources in the host state, the main motivation for Chinese participation in UNPKO in African states according to a research interviewee is to ‘establish an image of a good great power’.5 It allows the PRC to gesture that its foreign policy is contributing towards promoting the normative agenda of ‘good governance’ – a hallmark of ‘big D’ Development as discussed by Power and Mohan in Chapter 3 – that is espoused by the Western powers. Crucially, the intended audience for this ‘charm offensive’ is the West: While the promotion of democratic governance and solidarity with the developing world is not necessarily mutually exclusive, it must be noted that in doing so, Beijing does risk annoying quite a few autocratic leaders in the world and undermining its identity as a ‘champion’ of the developing world. Naturally, Chinese scepticism towards the utility of exporting liberal democratic political institutions remains,6 and it is important to note that the PRC’s displays of ‘contributing’ towards democratisation are somewhat superficial. However, this neither means that the Chinese are adamantly opposed to transplanting liberal democracies overseas per se, nor does it suggest that they wish to promote the ‘Beijing model’ as an alternative, as has so often been claimed by pundits of China’s soft power. In fact, Beijing’s attitude can best be described as indifferent. As one analyst stated, as long as a ‘failed state’ is stabilised, China does not care what model of domestic governance is adopted.7

4 Chinese soft power: myopia and fantasy 4.1 Context The above discussions have important implications on debates on China’s alleged cultivation of its soft power. Most important to our discussion is – assuming that participation in UNPKO is an important component in promoting soft power – that the Chinese ‘charm offensive’ does not appear to be

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the threat that it is often purported to be. The PRC does not appear to be a monolithic entity single-mindedly promoting a ‘Beijing Consensus’ that is antithetical to Western models of governance and neither is the audience of this ‘charm offensive’ exclusively ‘isolated autocrats’. Curiously, these complexities and contradictions within China’s relations vis-à-vis the developing world discussed above seem to fade away in debates of Chinese soft power. Instead, it is simply assumed that there is a systematic attempt by the PRC to woo the world away from the Western-dominated international order. Why, then, do such idiosyncrasies pervade our analyses of China’s soft power? 4.2 Myopia The primary reason for this lop-sided view of Chinese soft power seems to stem from the fact that the vast majority of these works are written by Western-based scholars or analysts for a Western policy audience. The works of Kurlantzick (2007), Ramo (2004), and Gill and Huang (2006) are typical representatives of such studies, each carrying lengthy discussions of how the US and its concerned allies should deal with China’s growing soft power. This is, of course, not to deny the diversity or analytical rigour within such policy-informed studies: The Congressional Research Service’s (2008) report on Chinese soft power provides a balanced analysis and concludes that China’s ‘charm offensive’ has had mixed success and its influence remains modest. Gill and Huang (2006) do not subscribe to the view that the PRC is purposefully promoting its ‘soft power’ to undermine Western primacy. Instead, they point out that the rampant corruption and growing poverty gap that has accompanied China’s development makes the so-called ‘Beijing Consensus’ less attractive than is assumed. Furthermore, they note that China’s soft power in the diplomatic realm is limited in its legitimacy because of its support for odious regimes and that Chinese ‘cultural attractiveness’ is often eclipsed by that of the US. It is worth noting that Chinese analysts agree with these points as well (Zhang 2007). Nevertheless, it should also be recognised that as the sole superpower in the international system with strategic interests in the Asia-Pacific region, the US is most likely to be sensitive to the effects of China’s rising influence. Not surprisingly, this can result in a preoccupation with ‘crystal ball gazing’ and attempting to find the most likely challenger and threat to Pax Americana or Western primacy, and Chinese soft power has been unable to escape being viewed through this lens. Indeed, the highly influential works of Kurlantzick (2007) and Ramo (2004) seem to mirror the concerns of Western political circles. A recent BBC report claimed that there were growing fears that ‘[u] nder the slogan of “peaceful rising”, China is selling itself to the developing world as an alternative model for ending poverty’ and that a senior American official was being sent to Beijing to ‘determine how much can be put down to simply business and how much China plans to export its own political system and power’.8 Both authors’ works are precisely intended as an answer to this

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agenda. As one Chinese analyst observes with some irony: ‘For those who still hold on to the “China threat” thesis, [Chinese soft power has] enriched their “scope of threats”’ (Zhang 2004: 11). This myopia, however, gives rise to a number of problems in some analyses of Chinese soft power. First, there is a tendency to ‘look for enemies’ which results in a problematic postulation of a monolithic Chinese political elite with latent revisionist intentions, systematically – in Ramo’s (2004: 3) words – ‘assembling the resources to eclipse the US in many essential areas of international affairs and constructing an environment that will make US hegemonic action more difficult’. There is no doubt that Beijing’s model of development is attracting the interest of others. Gill and Huang (2006: 20) correctly note that despite the lack of ‘systematic information … to assess the popularity of this model … it is clear that China’s astonishing progress in the past decades is leading to a rethinking of both development economics and the relationship between economic and political freedoms’ in states such as Russia or India. This, however, does not in itself demonstrate a systematic, PRC-led campaign to propagate a Chinese model of development. In fact, it is other states that have actively embraced the ‘Chinese model’ of their own accord. Second, analysts also tend to gloss over any diverse views on Chinese soft power which exist within the PRC in order to prove the existence of a ‘China Threat’. While many Chinese scholars do recognise the importance of soft power in enhancing Beijing’s influence, they seem far from united in their determination to promote and wield their so-called soft power and there is no consensus as to what the content of this soft power ought to be. Zhan (2006), for instance, notes that although China does have tremendous potential to develop soft power, it has failed to fulfil its promise. Despite the growing interest in China’s culture, Zhan (2006: 5) argues that ‘most of this is because people want to understand China better to make more money out of China; it has nothing whatsoever to do with a deep attraction to Chinese culture’. Another case in point is the so-called ‘Beijing Consensus’. It is true that some Chinese scholars have embraced this concept as part of China’s soft power. Luo (2007: 251) echoes Ramo’s (2004) characterisation of China’s developmental model and states that ‘China’s rapid economic growth and continuous political stability has no doubt presented itself as a successful model for the developing states, and stimulated enthusiastic attempts by a wide range of African states to learn from and emulate it’. China’s experience in poverty reduction was also debated in the 2004 Shanghai Conference on ‘Scaling Up Poverty Reduction and Global Learning Process’ and the 2006 China–Africa Summit was also aimed at exchanging views on ‘experiences in the areas of domestic governance and development’ (Luo 2007: 252). Hu (2005: 170–71) thus enthuses that ‘the time has come … [for China] to share our experiences [of development] with the developing states’. Such assumed attraction to China’s developmental model fits comfortably with China’s own mission civilisatrice discourse which, according to Nyíri (2006: 104),

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claims that ‘unlike Western colonialists, … [China does] not go about educating or ‘reforming’ natives, but show[s] them an example of success. This difference underlies the claims of altruism that Chinese officials use to indicate subtly the moral superiority’ of China ‘over the more socially interventionist aid schemes of the West.’ It is for this reason that the ironic ‘fact that the major force initially disseminating the Beijing Consensus is neither the Chinese government nor Chinese scholars but rather foreign scholars and foreign media is a very encouraging sign’ (Cho and Jeong 2008: 463). However, not all Chinese adhere to this view. For a start, it is important to note that the ‘Beijing Consensus’ was not a concept coined by the Chinese but by a Western scholar. The Chinese are far from united in their understanding of what this ‘Consensus’ is. Many are in fact quite sceptical about whether this concept really exists at all. Hu (2005) sums this up nicely when he states that the ‘Beijing Consensus was brought forward spontaneously by international opinions in the context of China’s rapid economic development. … It does not have universally recognised documents and its content is still under debate’.9 Zhang (2004: 11) also states that ‘if there is a consensus in Beijing, then it is a consensus that China’s reforms are by no means complete’. The lack of a unified and clear understanding of what the Chinese model of development is, in turn, makes it difficult to ‘sell’ the ‘Beijing Consensus’ as an alternative model of development and enhance China’s attraction. At worst, it only amounts to ‘a proxy measure to propagate China’s official stance’ (Cho and Jeong 2008: 463), and it is thus no wonder that China’s actual behaviour seems to contradict the highly rhetorical ideology of the ‘Beijing Consensus’. Similar problems undergird assertions that part of China’s ‘charm offensive’ includes its strong commitment and willingness to uphold the sovereignty norm. It is often stated that Beijing’s rigid adherence to the sovereignty norm results in high levels of respect from autocratic regimes (Taylor 2006, Thompson 2005). These arguments, however, cannot explain why China participates in UN-led peacekeeping operations, which are seen as the modernday ‘mission civilisatrice’, as part of their ‘charm offensive’ (Paris 2002). This is because of their reliance on outdated understandings of Beijing’s views on non-intervention to justify their argument that China’s soft power consists of championing the sovereignty of developing states. Such analyses ignore the fact that the PRC’s socialisation into the international community has resulted in a much more flexible view of this norm. Chinese analysts accept that the meaning of sovereignty is not static and note that states willingly surrender part of their sovereign prerogatives in order to facilitate co-operation (Wang 2001). Chinese leaders also adhere to external demands placed on certain aspects of their domestic governance, as can be seen by China’s entry into the World Trade Organization (WTO). Furthermore, the PRC’s accelerating (if sometimes reluctant) socialisation into the global human rights regime has meant that the Chinese elites are gradually accepting the view that sovereignty cannot be upheld as an absolute, particularly in the case of a humanitarian catastrophe (Carlson 2005).

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Many Chinese scholars still rhetorically state that ‘the principle of noninterference in the internal affairs of others remains constant’ in Chinese foreign policy (He 2007: 33). However, Chinese understandings of sovereignty and human rights are much more multifaceted than they seem. As legitimate membership in the international community has become defined in terms of a willingness to uphold human rights norms since the end of the Cold War, the PRC has found it harder to risk international opprobrium (particularly from the Western powers) by turning a blind eye to human rights abuses for the sake of upholding sovereignty. This was most clearly illustrated in Chinese responses to the Kosovo crisis of 1999 when Beijing criticised North Atlantic Treaty Organization (NATO) for its failure to obtain authorisation from the UN Security Council for its bombing against Serbian targets but chose not to condemn NATO’s actions on the grounds of violating the sovereignty norm (Wheeler 2004). In this context, it is not particularly surprising that some of Beijing’s policies towards unsavoury regimes are not necessarily characterised by ‘solidarity’ in their resistance to the West. With regard to China’s policies in Sudan, Gill et al. (2007) point out that ‘progressives in the Chinese policy-making elite … have suggested scaling back relations with Khartoum in an attempt to burnish China’s image and international reputation’ and in 2007, the PRC government removed Sudan’s ‘preferred trade status’ and refused to ‘provide financial incentives to Chinese companies to invest in Sudan’(ibid.: 13–14). While some of its actions vis-à-vis Khartoum have indeed been limited, there is also growing evidence that Beijing has worked behind the scenes to make the Sudanese government accept a UN–African Union peacekeeping presence in Darfur (Downs 2007). 4.3 Fantasy The policy agenda to ‘prove’ the existence of latent threats from Chinese soft power to Western interests also results in the problem of engaging in a somewhat dubious exercise of tracing back many unsavoury aspects of China to its soft power or inflating the potential threats emanating from Chinese soft power. The issues are diverse, ranging from environmental degradation, to undermining Western attempts to introduce transparency and accountability, to the propping up of repressive regimes. However, these tend to be simply assumed, and it is never clear whether these issues really are a result of China’s growing soft power. With regard to environmental degradation, Kurlantzick states that, ‘China’s growing soft power also could lead it to export its environmental problems’ and that this ‘environmental recklessness spreads across borders as China’s global influence grows’ (2007: 163–64). However, linking global environmental damage to Chinese soft power implies that pollution will spread because other states somehow feel a strong sense of attraction to the environmentally unfriendly Beijing model of economic development and that its devastating

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effects on the environment mean very little to them. The reality, however, seems quite the contrary. Many of the PRC’s neighbours have in fact complained about the pollution generated by China and the environmental damage it inflicts upon other states – hardly the behaviour we would expect from states entranced by the PRC’s ‘charm’. Chinese analysts are also aware of this and state that while China’s economic growth could serve to enhance Chinese soft power, the environmental degradation that accompanies it could actually reduce its attractiveness (Zhang 2004). This ‘search for enemies’ also results in the fantasy of an ‘anti-Western coalition’ led by China whose ‘charm offensive’ is targeting the developing world with the aim of undercutting Western influence in the international community while downplaying the multifaceted nature of China’s soft power policies and the fact that these are directed to multiple audiences. Critics charge that China’s no-strings aid and other facets of soft power have made China so popular among the developing states that in some regions ‘it now rivals the United States, France, and international financial institutions for influence’ (Kurlantzick 2006: 1). Angola’s refusal of International Monetary Fund restructuring programmes is thus linked with China’s use of its soft power. The PRC’s revisionist intentions are further substantiated by utilising Chinese policy-makers’ remarks made during official visits to developing countries, where they routinely profess their solidarity with the developing world. Given the context, however, it is highly possible that these utterances are rhetorical and cannot be used as proof of Beijing’s real intentions. Moreover, the absence of concrete evidence of a systematic Chinese campaign to tout their system of governance makes it difficult to tell whether autocratic regimes are propped up by their ‘attraction’ to China’s culture, ideology and institutions or simply economic benefits associated with trading in China, which seem to fall under the categorisation of ‘hard’ material power. In fact, even in the latter case, Beijing’s role has been subject to exaggeration. While it is certainly true that the PRC’s unscrupulous quest for oil has resulted in blunting the International Monetary Fund’s reforms in states such as Angola, Downs (2007: 56–7) notes: ‘The near-myopic focus on China’s role in changing Luanda’s position on pursuing a formal financial arrangement with the IMF has obscured the … dominant role played by soaring oil revenues in reducing the Angolan government’s interests in IMF and other lending facilities provided by Western donors’. In fairness, many analysts have noticed that Chinese soft power does not always seem to be directed against the West and realise that ‘[if] the rest of the world doesn’t know where China is going, neither does China’ (Leonard 2005). Kurlantzick (2007), for instance, points out that Beijing appears to have used its soft power in positive ways, as evidenced from its participation in UNPKO, the brokering of multilateral talks for the North Korean nuclear crisis and AIDS prevention. However, despite this awareness, Kurlantzick’s focus on highlighting potential threats to US interests means that he cannot (and does not) explain the reasons behind China’s

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seemingly contradictory behaviour of participating in intrusive UNPKO with a ‘democratising’ agenda.

5 Conclusion Much of the recent interest in China’s soft power is a by-product of the obsession with China’s rise and the challenges it may pose to the international order. While not wishing to deny that there are many aspects of Beijing’s behaviour which could destabilise the moral fabric of the international community, the case of Western studies of Chinese soft power demonstrates that it is necessary to be aware that Western hegemony may at times motivate the Western International Relations (IR) community to ask myopic questions which reflect the interests of their policy elite. Such policy-influenced research results in a number of pitfalls. First, the excessive focus on American hegemony and its maintenance could contribute to scholarship which ‘looks for enemies’ at the expense of other arguably more important questions. Second, and more importantly, looking for potential threats to American unipolarity leads to a tendency to portray the other in a simplistic manner. Some scholarship on Chinese soft power seems to fall unwittingly into this trap by focusing excessively on latent challenges to American unipolarity. Consequently, it ignores the fact that China’s promotion of its soft power is simultaneously directed at both the developed and the developing world and is often shot through with contradictions as a result. It also glosses over the various points of view which exist in Chinese domestic circles on how to utilise China’s growing soft power. Third, and in the specific case of Chinese soft power, analyses which look for signs of revisionism within this concept risk depicting the peoples of the developing world as empty vessals waiting to be filled with the so-called ‘Beijing Consensus’. In fact, China’s ‘charm offensive’ has not been as successful in these regions as many pundits think. Many recent studies of Chinese soft power have ignored the fact that China’s own identity as an ally or friend of the Third World is (and has been) highly questionable. This has the effect of tarnishing the image of Chinese soft power in this area, which is the alleged target audience for China’s ‘charm offensive’. While many pundits believe that shared antipathy towards Western dominance bonds the PRC and the developing world, Van Ness (1993: 213) notes that ‘when the opportunity became available for China to take the fast track to wealth and power by co-operating with the capitalist West … China’s Third World identity rapidly slipped away except for propaganda purposes’. While Beijing did actively cultivate relations with the developing world based on ‘solidarity’ against imperialism during its diplomatic isolation in the 1950s and 1960s, once the Chinese began engaging with the developed world and reaped the economic benefits, their aid and assistance to Africa quickly dried up, prompting a comment by a Tanzanian official that ‘the senior member of the club is no longer one of the club’ (cited in Snow 1994: 309). As Philip Snow (1994: 309)

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notes, ‘regimes which had gone so far as to borrow some elements of the Maoist political and economic model were both embarrassed by the isolation in which China’s change of course had left them’. In the context of the post-Cold War world, where market capitalism and liberal democratic governance are argued to be the new ‘standard of civilisation’ that denotes legitimate membership of the international community (Fidler 2001), the PRC cannot afford to ignore these norms completely if it wishes to seek acceptance from the West. It is these IR debates of global norms and legitimacy that meet development studies and form the IR– development nexus, as discussed elsewhere in this book. While debates surrounding the ‘appropriate’ trajectories of development may appear to be of a technical nature on the surface, they are in fact deeply connected with discourses of the ‘standard of civilisation’ in the international community which deeply influences acceptable forms of ‘modern’ and ‘legitimate’ statehood. In the late nineteenth century, mechanised industrialisation provided a ‘scientific’ and ‘objective’ benchmark to gauge whether a particular polity or race was ‘civilised’ or ‘savage’ (Adas 1990, Gong 1984). The deeply cultural aspects of development norms were similarly visible in more recent attempts to diffuse Western-centric models of ‘modernisation’ led by industrialisation, some of which ended up in dismal failure due to differences in local conditions. Today, the regime of ‘truth’ about development – ‘democratic governance’ and ‘liberal market capitalism’ – has also become a concept that has to be propagated to those deemed ‘underdeveloped’ or, even worse, those incapable of ruling their own territories. By participating in intrusive UNPKO that aim to rebuild states based on these discourses of development, China appears to be playing the role of a ‘civiliser’ that enforces these particular concepts of ‘pathways to happiness’ which originate from the West. The so-called hallmark of Chinese soft power, the ‘Beijing Consensus’ is hardly a powerful ideological alternative to modernity and development. It is hardly surprising, then, that many African states and peoples do not look to China to help them escape poverty and oppression. Alden’s (2005) work has reported that considerable cynicism towards China exists today in Africa. China’s flooding of African states’ markets with cheap consumer products has damaged local economies, and Beijing frequently fails to deliver the aid it pledges – with much fanfare – to developing countries. In fact, China’s ‘charm offensive’ is ‘based on a self-interested approach that focuses only on those issues on which all sides supposedly can agree’, while sidestepping any disagreements (Congressional Research Service 2008: 11). It is also worth noting that be it proponents of the ‘Beijing Consensus’ or advocates of Chinese participation in UNPKO, both sides do not seem to question the notion that China has the duty to lead the underdeveloped world. This Chinese ethnocentrism, or China’s own sense of ‘cultural arrogance’ (Van Ness 1993), further undermines China’s appeal to the developing world. Nyíri (2006: 312–14) points out that Chinese attitudes towards developing states and peoples ‘such as gypsies in Eastern Europe and, especially,

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Africans … is strongly tinged with a Spencerian idea of racial inferiority’ and African countries are often described as both backward and uncivilised’. Such attitudes and events can hardly go unmissed in regions already sensitised to racism and exploitation. China’s growing engagement with the concept of soft power has no doubt garnered the world’s attention and put the spotlight on a previously neglected area of research. However, scholars should be aware of the policy agendas which colour much of this new field and pay closer attention to the diverse voices which exist on both sides to obtain a more nuanced and critical perspective. It is only then that we can get a more accurate picture of this Chinese soft power which will no doubt be of greater importance in the near future.

Notes 1 The author is grateful to Adekeye Adebajo, Kweku Ampiah, Daniel Bach, Elena Barabantseva, Shaun Breslin, Christopher M. Dent, David S. Goodman, Christopher Hill, Inderjeet Parmar and Shannon Tow for their help and encouragement in various capacities. A special thanks also to Natasha Hamilton-Hart for allowing the author to use a part of the title of her excellent article, ‘Terrorism in Southeast Asia: Expert Analysis, Myopia and Fantasy’, which appeared in The Pacific Review (Vol 13(3), 2005, pp. 303–25). The research for this chapter was made possible by a Universities China Committee grant. The chapter is based on an article that originally appeared in Third World Quarterly (Vol 30(4), 2009, pp. 779–93) and has been revised for this collection. The author is grateful to Routledge and Third World Quarterly for permission to reproduce the basis of the article here. 2 ‘China’s African Policy’, People’s Daily Online, January 2006. Available at: http://english.peopledaily.com.cn/200601/12/print20060112_234894.html (accessed 6 September 2007). 3 ‘Full Text of the Resolution on CPC Central Committee Report’, 21 October 2007. Available at: www.china.org.cn/english/congress/229158.htm (accessed 20 May 2008). 4 ‘China Enhances National Image on Cultural Front’, People’s Daily Online, 9 January 2008. Available at: http://english.people.com.cn/90001/90782/90873/ 6335367.html (accessed 9 April 2008). 5 Research interview, China Institute of Contemporary International Relations, Beijing, 19 April 2007. 6 Research interview, Chinese Institute of International Studies, Beijing, 23 April 2007. 7 Research interview, China Foundation for International Strategic Studies, Beijing, 23 April 2007. 8 Hawksley, H. (2008) ‘Chinese Influence in Brazil Worries US’, BBC News, 3 April 2006. Available at: http://news.bbc.co.uk/1/hi/world/americas/4872522.stm (accessed 9 April 2008). 9 ‘The “Washington Consensus” and “Beijing Consensus” ’, People’s Daily Online, June 2005. Available at: http://english.peopledaily.com.cn/200506/18/ print20050618_190947.html (accessed 5 September 2007).

References Adas, M. (1990) Machines as the Measure of Men: Science, Technology, and Ideologies of Western Dominance. Ithaca: Cornell University Press.

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African Development Indicators (2005) Washington DC: World Bank. Alden, C. (2005) ‘China in Africa’, Survival, Vol 47(3), pp. 147–64. Carlson, A. (2005) Unifying China, Integrating with the World: Securing Chinese Sovereignty in the Reform Era. Stanford: Stanford University Press. Cho, Y.N. and Jeong, J.H. (2008) ‘China’s Soft Power: Discussions, Resources, and Prospects’, Asian Survey, Vol 48(3), pp. 453–72. Congressional Research Service (2008) China’s Foreign Policy and ‘Soft Power’ in South America, Asia, and Africa. Washington DC: US Government Printing Office. Dent, C.M. (ed.), (2008) China, Japan and Regional Leadership in East Asia. Cheltenham: Edward Elgar. Downs, E.S. (2007) ‘The Fact and Fiction of Sino-African Energy Relations’, China Security Vol 3(3), pp. 42–68. Fidler, D.P. (2001) ‘The Return of the Standard of Civilization’, Chicago Journal of International Law Vol 2(1), pp. 137–58. Gill, B. and Huang, Y. (2006) ‘Sources and Limits of Chinese “Soft Power” ’, Survival, Vol 48(2), pp. 17–36. Gill, B., Huang, C. and Morrison, J.S. (2007) ‘Assessing China’s Growing Influence in Africa’, China Security, Vol 3(3), pp. 3–21. Gong, G. (1984) The Standard of ‘Civilization’ in International Society. Oxford: Clarendon Press. He, W. (2007) ‘The Balancing Act of China’s Africa Policy’, China Security, Vol 3(3), pp. 23–40. Hu, A. (2005) ‘Dui Zhongguo Zhi lu de Chubu Renshi’, in H. Ping and C. Zhiyuan (eds), Zhongguo Yu Quanqiuhua: Huashengdun Gongshi Haishi Beijing Gongshi. Beijing: Shehui kexue wenxian chubanshe. Kurlantzick, J. (2006) ‘Beijing’s Safari: China’s Move into Africa and its Implications for Aid, Development, and Governance’, Policy Outlook no. 29, November. Washington DC: Carnegie Endowment for International Peace. —— (2007) Charm Offensive: How China’s Soft Power is Transforming the World. New Haven: Yale University Press. Leonard, M. (2005) ‘The Road Obscured’, Financial Times, 8 July 2005. Available at www.ft.com/cms/s/2/9d653a78-eddb-11d9–98e5–00000e2511c8.htm (accessed 17 November 2009). Luo, J. (2007) ‘Ruhe Youhua Zhongguo Heping Jueqi de Guojia Xingxiang’, in M. Honghua (ed.), Zhongguo: Ruan Shili Fanglüe. Hangzhou: Zhejiang renmin chubanshe. Nye, J.S. Jr. (1990) ‘Soft Power’, Foreign Policy, Vol 80, pp. 153–71. —— (2004) ‘The Decline of America’s Soft Power: Why Washington Should Worry’, Foreign Affairs, Vol 83(3), pp. 16–20. Nyíri, P. (2006) ‘The Yellow Man’s Burden: Chinese Migrants on a Civilizing Mission’, The China Journal, Vol 56, pp. 83–106. Paris, R. (2002) ‘International Peacebuilding and the “Mission Civilisatrice” ’, Review of International Studies, Vol 28(4), pp. 637–56. —— (2004) At War’s End: Building Peace after Civil Conflict. Cambridge: Cambridge University Press. Ramo, J.C. (2004) The Beijing Consensus. London: The Foreign Policy Centre. Snow, P. (1994) ‘China and Africa: Consensus and Camouflage’, in T.W. Robinson and D. Shambaugh (eds), Chinese Foreign Policy: Theory and Practice. Oxford: Clarendon Press.

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Taylor, I. (2006) ‘China’s Oil Diplomacy in Africa’, International Affairs, Vol 82(5), pp. 937–59. Thompson, D. (2005) ‘China’s Soft Power in Africa: From the “Beijing Consensus” to Health Diplomacy’, China Brief, Vol 5(21), p. 2. United Nations (2003) ‘United Nations Security Council Resolution 1509’, 19 September 2003, UN Document S/RES/1509(2003). —— (2005) ‘Report of the Secretary General on Sudan’, 31 January 2005, UN Document S/2005/57). —— (2006) ‘Report of the Secretary General on Darfur’, 28 July 2006, UN Document S/2006/591). Van Ness, P. (1993) ‘China as a Third World State: Foreign Policy and Official National Identity’ in L. Dittmer and S.S. Kim (eds), China’s Quest for National Identity. Ithaca: Cornell University Press. Wang, H. and Lu, Y.-C. (2008) ‘The Conception of Soft Power and its Policy Implications: A Comparative Study of China and Taiwan’, Journal of Contemporary China, Vol 17(56), pp. 425–47. Wang, Y. (2001) ‘Zhuquan Fanchou Zai Sikao’, in Y. Chengxu and W. Miaofa (eds), Xintiaozhan: Guoji Guanxi Zhong de ‘Rendao Zhuyi Ganyu’. Beijing: Zhongguo qingnian chubanshe. Wheeler, N.J. (2004) ‘The Humanitarian Responsibilities of Sovereignty: Explaining the Development of a New Norm of Military Intervention for Humanitarian Purposes in International Society’, in J.M. Welsh (ed.), Humanitarian Intervention and International Relations. Oxford: Oxford University Press. Yan, X. (2006) ‘The Rise of China and its Power Status’, Chinese Journal of International Politics, Vol 1(1), pp. 5–33. Zhan, Y. (2006) ‘Zhongguo Shi Ruan Shili Daguo Ma?’, Shijie Zhishi, Vol 20, p. 5. Zhang, J. (2004) ‘ “Beijing Gongshi” Yu Zhongguo Ruan Shili de Tisheng’, Dangdai Shijie Yu Shehui Zhuyi, Vol 5, pp. 10–14. —— (2007) ‘Lun Ruan Shili Yu Zhongguo Fazhan’, Fazhi Yu Shehui, Vol 12, pp. 576–7. Zhang, Z. and Li, H. (2003) ‘Guoji Zhengzhi Zhong de Zhongguo Ruan Shili San Yaosu’, Zhongguo Tese Shehui Zhuyi Yanjiu, Vol 4, pp. 45–9.

Part II

Country case study perspectives

5

The end of abstraction China’s development relations with Sudan Daniel Large

1 Introduction The current importance of China in Sudan was demonstrated in three official political anniversaries celebrated in 2009. The first was the ‘Golden Jubilee’ anniversary commemorating 50 years of diplomatic relations between China and Sudan, celebrated with a series of events starting on 4 February 2009 and a glowing rhetoric about the historic successes and future promise of today’s burgeoning ties. The second was the twentieth anniversary of Sudan’s military coup of 30 June 1989 orchestrated by the National Islamic Front (NIF), the forerunner of today’s ruling northern National Congress Party (NCP). The third anniversary marked Sudan’s first decade as an oil exporter. At the end of August 1999, just over two decades after oil was first discovered, Sudan’s first cargo of Nile Blend crude shipped from Port Bashair, south of Port Sudan, following a process of accelerated, militarised oil development in which Chinese oil companies played a crucial role in turning Sudan into a functioning oil exporter. More than any other event, this symbolised the end of China as a benevolent development abstraction in Sudan. The unique historical lineages behind China’s current role provide vivid examples of ‘China’ or ‘the Chinese’ invoked in abstract terms across colonial and post-colonial Sudanese history as a route to alternative ‘development’.1 What developed in different phases after 1989 has entailed a process of transition: China’s previous role as a development partner with Sudan was state directed and mostly state controlled, involved in limited, time-bound ways. This, in a sense, was detached from any longerterm, embedded developmental or political role and lacked any noteworthy extractive interests. The growth of an independent multifaceted Chinese engagement after 1989, intertwined as this has been with the politics of the central state in Khartoum, has meant that the experience of China in Sudan has radically shifted in an ongoing process representing a basic underlying change in the nature, experience and impact of Chinese engagement. The brief, general survey of China’s Sudan engagement from the perspective of ‘development relations’ that follows seeks to open up select themes concerning the nature and rationalisation of ‘China’s’ economic role as

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played out in the political economy of development in Sudan. After contextualising relations, it first argues that the Chinese contribution has provided a practical alternative, enabling and rejuvenating aspects of the grand developmental ambitions seen at different points in Sudan’s history. Second, relations are underpinned by economic links that have moved beyond, but remain anchored within, oil-dominated resource extraction concerns. Using the case of the oil industry, the third section suggests that the official narrative of progress as modernisation that has accompanied this on the one hand is counter-balanced on the other by a practical reinforcement of a historically produced political economy of central state rule in which development is profoundly uneven, between and within different regions of Sudan and in which coercion, dislocation and concentrated elite benefit predominate. Finally, the relationship between development and conflict is considered as more problematic than the idea that development somehow overcomes the causes of armed conflict. Beijing’s more public recourse to economic development as an argument justifying and rationalising the positive benefits of China’s role in Sudan but cannot ultimately avoid returning its role to a matter of political contestation and consequence.

2 Contextualising China and development in Sudan Unusually salient in China’s most recent engagement with the African continent, China’s relations with Sudan have provoked wide media, academic and policy interest. If the prominence of the Chinese government’s international relations with the Sudan government over the Darfur conflict, particularly in the run up to the August 2008 Beijing Olympic Games, upstaged the expanding Chinese role and changing political trajectories of its engagement within Sudan (Large 2009), then the consideration of the developmental aspects of China’s engagement with Sudan has also been marginalised. ‘Development relations’, nonetheless, have been integral to modern Sudan–China relations. These remain so at a time when developmentally premised Chinese initiatives continue to expand, despite continuing conflict in the Darfur/ Chad region and considerable uncertainty about the future of the North– South Comprehensive Peace Agreement (CPA) signed in January 2005 between the NCP and the Southern People’s Liberation Movement (SPLM). This created a Government of National Unity dominated by both parties, a semi-autonomous Government of Southern Sudan (GOSS), and allows for a referendum in 2011 on the possible secession of Southern Sudan. The Chinese role in Sudan developed after 1989 as part of a new phase in a longer history of the political and economic dominance of central ruling elites in Sudan’s riverain Nile Valley. As such, in certain ways, the entry and consequential expansion of China within Sudan from the early 1990s betrays a degree of continuity when approached from the perspective of Sudanese politics. The post-1989 Chinese engagement inserted itself into, compounded and would later itself be affected by a prior-existing political economy produced,

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generally speaking, by a history of unbalanced development that has contributed much towards independent Sudan’s series of interlocking conflicts. Anglo-Egyptian colonial rule (1899–1956) was influential in defining the economic geography of modern Sudan (Sanderson 1985), operating a quasimonopoly of cash-export cotton production and dominating most large-scale commercial sectors. British economic rule has been referred to as ‘a holding operation’ (Tosh 1981: 275) in which Southern Sudan was particularly neglected and, as a result, was unprepared for independence (Johnson 2003). The historically rooted political and economic marginalisation of Southern Sudan, as with the different contexts of Darfur and Eastern Sudan, has been a rallying call for a series of armed rebellions and different politics of self-determination. Importantly, however, colonialism also bequeathed a political legacy at the state level. This has been manifested as a deep authoritarianism of the central state, although one combined with an inability to impose central control over Sudan’s entire geographical extent, and an orientation towards income-generating resource extraction schemes benefiting the ruling centre (de Waal 2007a). Two phases of China’s post-colonial relations with Sudan in which development has featured highlight the contrast between the philanthropic role of the People’s Republic of China (PRC) before 1989, particularly during the 1970s, and that emerging after 1989 (Ali 2006). The first phase was politically driven and featured close relations forged in the context of Chinese assistance to President Nimeiri, who ruled from 1969 to 1985. It entailed a noteworthy, if comparatively minor, role in Sudan’s Cold War foreign relations external assistance, including that after the 1972 peace agreement. While trade remained relatively healthy between the PRC and Sudan, most importantly in cotton and sesame, China did not play an influential role within Sudan and nor did it have any significant engagement or approach, the importance that American aid came to assume in the later Nimeiri period. The result, however, was a confirmed history of aid and development-related interventions, sometimes remembered positively by Sudanese, frequently in juxtaposition against the more recent Chinese role. This second post-1989 phase followed the combination of Cold War geo-politics, debt crisis, famine, domestic political turbulence and the spread of civil war in Southern Sudan that dominated Sudanese politics during the difficult 1980s. The political turning point of 1989 was followed by efforts to expand trade. Most significant were China’s oil investments and later a growing Chinese commercial role, which combined might be said to constitute the core of its current ‘developmental’ apparatus in Sudan.

3 Grand development reprised Elevated in importance by Sudan’s particular circumstances of political isolation and an international sanctions regime imposed over the 1990s, China has provided a practical economic and developmental alternative for Khartoum. Sudan was off limits to Western business due to legal restrictions

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and war-related investor risks and was capitalised upon by the Chinese government and corporations. China’s links with Khartoum have involved a state-mediated process featuring close relations with the NCP. The official Chinese point of departure has been to facilitate and practically help deliver the infrastructural foundations deemed to be prerequisites of economic growth. This has evolved in an ad hoc, opportunistic manner and in many ways has been contingent upon circumstances. China’s official approach appears to be founded on an underlying rationale of modernisation that prioritises outcomes, even at the expense of social impacts. Proceeding as it does within political relations constructed on the basis of political equality and, crucially, non-interference, as well as in a manner supporting the needs of the NCP, it is hardly surprising that the Chinese government’s approach is valued by the Sudan government. Additionally, however, there has been a competitive dimension to China’s oil diplomacy, which overcame other contenders to win its lead stake in the Greater Nile consortium. The official rationalisation of China’s economic role partly involves the reinvention of state-directed grand developmental ambition seen at different points in Sudan’s colonial and post-colonial history. This has involved ambitious but ultimately flawed central state-directed initiatives to drive economic productivity by generating export revenue mainly through agriculture2 or infrastructure projects intended to improve agricultural export schemes.3 Captivating notions of economic modernisation seen in different periods in Sudan are in practice being reprised with Chinese characteristics amidst an attendant – albeit ambivalent – belief in the efficacy of Sudan’s enforced ‘Look East’ policy. As materially refracted within Sudanese politics, and as socially experienced, the teleology of the modernisation narrative that China has contributed to most recently has been counter-balanced by a practical reinforcement of a pattern of central state rule that has often entailed violent means of engaging its peripheries on a North–South and East–West basis. The Chinese imprint upon Sudan’s ‘development’ has involved the financial underwriting and practical delivery of a range of hard infrastructural projects, from energy projects to roads. Chinese investment has contributed to rehabilitating old and constructing a range of new energy infrastructure projects in Sudan, at first in Northern Sudan. The El Gaili Power Station in Northern Sudan, cited as exemplifying China’s positive contribution to developing Sudan’s energy sector and improving livelihoods, is a gas and oilfired power plant initiated by the Sudanese Ministry of Energy and Mining and Sudan National Electricity Corporation. The manager of the Harbin Power Engineering Company, involved in the second-phase extension of the power station, argued that the project had answered Sudan’s need for power: ‘local people lovingly refer to Chinese and Sudanese workers taking part in the project as “bringers of light”’.4 It first came online in August 2004 and officially was to account for approximately one-third of Sudan’s national total generation capacity.

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The Merowe Dam is a prominent example of an ambitious development scheme being realised long after it was first conceived in the nineteenth century. The first completed phase of the dam, at the fourth cataract of the Nile River, was inaugurated in March 2009 by President Bashir, a year after he opened the Chinese-built ‘Bridge of Chinese–Sudanese Friendship’ linking Merowe with Karima. The possibility of constructing the dam had ebbed and flowed in the 1990s when the Sudan government failed to secure funding, but China’s Export-Import (ExIm) Bank agreed to underwrite the project in 2002 to the tune of US$520 million. Backed up as it then was by additional Middle Eastern financing for a project totalling some US$2 billion, this was an example, also seen in the oil industry, of how China’s involvement spurred the interest of other external investors. Work began in November 2003 and was led by Chinese contractors, working with other companies from Germany, France and Switzerland. The dam has been controversial and divided opinion. Some, including the Chinese government, argue that the dam will bring positive benefits for Sudan’s economic development by doubling power generation capacity. Indeed, when initiated, the project was touted – in the language evoking the spirit of the 1970s – as the biggest energy project in Sudan and China’s biggest such project overseas to date. Others, notably representatives of Nile Valley communities displaced by the dam, have opposed the project and expressed concern at its social and environmental impacts, including strong Sudanese criticism of the Chinese role5 (Askouri 2007). This has also been the case for the smaller Kajbar Dam downstream of Merowe on the third cataract, which has also involved Chinese financing and contractors.

4 Formal economic growth Underpinning China’s relations with Sudan has been a development as economic growth dynamics founded in the business links that have expanded since the early 1990s and can be seen in terms of trade, growing Chinese business activity within Sudan and, most importantly, the Chinese role in Sudan’s oil sector. Sudan had for some time been comparatively significant as an investment destination for Chinese overseas investment in Africa – oil investment after 1995 having predated serious investment in other parts of the continent. Sudan has had, and retains, a high position in China’s net overseas direct investment (ODI), accounting for US$57.5 million of a total of US$446.2 million accumulated net ODI at the end of 2007, as compared with South Africa, which ranked first with US$70.2 million (China Statistical Yearbook 2008). Despite the Darfur conflict, Sudan continued to occupy a high position in China’s economic relations with Africa. Further evidence of this is seen in one measure, the turnover of economic co-operation: Sudan’s total for 2007 (US$222.1 million) ranked second to Algeria (US$240.5 million), ahead of Angola (US$118.0 million) and Nigeria (US$142.3 million) (China Statistical Yearbook 2008). The Chinese economic contribution has spearheaded the

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wider reorientation of Northern Sudan’s foreign economic relations away from its former trade partners in Europe and the US and towards China, India, and other Asian and Middle Eastern economies. In recent years, before the oil price decreases of 2008, the Sudanese economy experienced officially declared economic growth driven by an oil-powered boom, which saw real gross domestic product (GDP) growth run at 11.3 per cent in 2006 and 10.2 per cent in 2007.6 Trade is the first area where economic relations can be seen to be significant. Sudan has been China’s third largest overall trade partner in Africa, behind Angola and South Africa, with total trade reaching just over US$5.7 billion (US$4.1 billion Sudanese exports to China and US$1.5 billion Chinese imports into Sudan) in 2007 (China Statistical Yearbook 2008). This is predominantly due to the strength of Sudan’s oil exports to China, which comprehensively dwarf all other exports, including cotton, previously top of the list of Sudan’s exports to China. Rising overall trade volumes also reflect a trend of rising Chinese exports to Sudan. This can in part be attributed to the fact that one effect of the creation of an oil export sector amidst international sanctions in the late 1990s was to increase business opportunities for Chinese goods (among others) in the Sudanese market, particularly in the North. Sudan has grown appreciably as an export destination for Chinese goods, although it was China’s eight largest export market in Africa in 2008 (George 2009). The broad China–Sudan trade pattern is consistent with China’s wider Africa trade profile in being characterised by the export of primary commodities to China (crude oil as well as cotton, timber or copper) and the import of manufactured Chinese products into Sudan, with appreciable increases in Sudanese imports from China since 2000 of items such as garments, textiles, furniture, electronic goods, cars, or construction materials such as steel or cement. The development of a more multifaceted Chinese commercial engagement with Sudan has also contributed to, and benefited from, recent economic growth. This remains anchored in resource extraction operations, principally but not exclusively oil,7 but has developed into a broader spectrum of economic activities. Following the growth of a Chinese business sector from the early 1990s during the North–South conflict, Sudan’s post-war market presented opportunities for expanded Chinese business engagement. One effect of oil wealth was to stimulate the demand for urban and infrastructure construction. Khartoum was at first the key market.8 The oil boom was thus conducive to Chinese business market expansion, a process featuring an expanded Chinese service sector (featuring restaurants, shops and hotels) and efforts to establish manufacturing ventures targeting the Sudanese market and beyond, with Sudan being seen as a gateway to regional markets.9 Southern Sudan has also seen a growing Chinese economic presence and engagement following the CPA.10 This is a reflection of the emerging geographies of Chinese investment in Sudan, involving different local and regional political dynamics and specificities operating within the parameters of

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national politics. In addition to Darfur, which has produced its particular political imperatives for China’s development activities (noted below), more recent expressions indicative of the widening scope of Chinese engagement with Sudan beyond its former, predominantly northern concentration have been seen in Eastern and Southern Sudan. In 2009, a US$36 million Chinese government loan was earmarked for assorted ‘development projects’ in Eastern Sudan.11 Following the cultivation of relations between Beijing and the GOSS following the CPA, Chinese assistance has also been directed towards Southern Sudan, including proposed financial assistance, hydroelectric dam projects and further road construction. A recent agreement between China and the GOSS opened up new Chinese financing for the GOSS that, following the collapse of oil prices, was welcomed by Juba.12 An important but still emerging area of economic relations concerns intergovernmental co-operation in the agricultural sector. Sudan remains a predominantly agricultural economy, even if the oil sector has rapidly become the most important income-generating sector over a comparatively short period of time and accounts for over one-third of Sudan’s GDP. Agriculture was a central component of Sudan’s failed 1970s ‘open door’ development strategy when Khartoum’s ‘breadbasket of Africa’ briefly saw Sudan being considered ‘the hope of a hungry Arab world’ (Kaikati 1980: 122). The potential importance of agricultural co-operation in the future of China–Sudan relations, one theme of the Golden Jubilee celebrations, was reinforced after the sharp downturn in oil prices in 2008, which prompted wide calls by Sudan government figures for Sudan to diversify beyond its oil dependency.13 For Sudan and China, state-anchored mutual benefit is operative: Khartoum looks to China for technology and technical assistance, and Beijing appears to look to Sudan as a country with good agricultural potential, but there remains uncertainty about the nature and scale of plans. A programme of official agricultural co-operation was officially set to expand following fresh agreements signed in 2008 and plans to establish a Chinese ‘agro-technology’ demonstration centre in al-Gezira State.

5 Oil development Chinese investment in Sudan has been economically important, and politically most consequential, in the oil sector. This is the centrepiece of China’s economic relations with Sudan, as it is for India and Malaysia. China’s main national oil companies, particularly China National Petroleum Corporation (CNPC) but also Sinopec, and a range of their subsidiaries have important stakes and play an important role in the Sudanese oil sector, operating the largest overall share in this sector.14 The oil sector exemplifies the ways in which official state narratives of progress as modernisation are counterbalanced by a practical reinforcement of a historically produced political economy of central state rule in which development is uneven and in which coercion, dislocation and concentrated elite benefit predominate. Oil was

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connected with conflict in Sudan long before the arrival of CNPC. However, the construction of a functioning oil export sector during the 1990s became a fundamental part of the fabric of armed conflict in Southern Sudan. It would see the Chinese role in Sudan become embedded in a conflict in which the oil sector was central to the Sudan government’s war aims (Rone 2003). Oil offers a practical demonstration of the relations of mutual benefit between the Sudan government under the NIF/NCP and China’s national oil companies. The former benefited from the delivery of a vital strategic industry, and the latter benefited from operations in Sudan that contributed towards developing its experience and knowledge of overseas oil operations. Sudan’s first crude exports in 1999 represented the success of an intensive, militarised oil development surge in which Chinese investment was particularly important. Sudan’s oil export industry was established via a state-driven process featuring Chinese together with other national oil companies, including Malaysia’s Petronas, together with an assortment of other oil companies (Patey 2007). This partnership between Khartoum and Chinese national oil companies might be said to distil the notion of development co-operation as mutual enhancement of capabilities at the state–oil corporation level.15 Oil development had been at the forefront of the political ambition of modern Sudan’s ruling elites. It became ingrained in the wars in Southern Sudan in the 1990s. Oil and the territorial control of oilfields became fundamental to the wars between Northern and Southern Sudan and within Southern Sudan itself. The oil sector produced a greatly expanded resource base for Sudan’s ruling elites. From China’s perspective, Sudan was important in the process of China’s overseas oil expansion and retains something of an iconic pioneering status. Operations during the 1990s spanned an important phase in the restructuring and overseas expansion of China’s national oil companies and, for a time, would constitute China’s most successful case of overseas foreign oil involvement (Jakobson and Zha 2006). CNPC and other oil operations can thus be said to have helped in the development of China’s own overseas oil sector, particularly given that its operations largely predated those later mounted in other African oil-producing regions. If oil embodied tangible mutual benefit at the ruling political level in Sudan, it had a particularly violent impact in Southern Sudan and had its own political consequences. The macroeconomic impact of oil has served to further reinforce the historic concentration of wealth in Sudan, even if oil wealth has often accrued to interests linked to the ruling NCP more than the traditional political parties and its elites whose power bases and wealth traditionally resided in agriculture or other business interests. Official government arguments concerning the positive developmental impact of oil or China’s contribution to economic growth in Sudan only partially capture what is a more multidimensional process with a highly uneven impact that has compounded Sudan’s historic centre – periphery economic grievances. The establishment of a wealth-sharing mechanism in the CPA has enabled oil income transfers from the central Government of National Unity based in Khartoum to the

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GOSS and Southern Sudan. Overall, and to date, however, the Chinese economic contribution in the oil sector has fed into and reinforced historic patterns of Sudan’s concentrated pattern of wealth and political dominance of the centre. In this sense, critiques of China’s relations with Sudan that focus on narrow conceptions of governance impacts have underestimated the importance of the prior-existing political economy in Sudan that the conjunction of a new regime and Chinese investment would combine to exacerbate. The Sudan government rapidly developed a dependency on oil revenues. Oil income came to dominate government revenues and comprised around 63 per cent of total government revenue in 2008. Oil failed to resolve Northern Sudan’s underlying, protracted crisis of public finance and external debt. Despite the availability of oil money, Khartoum has been unable to control its enduring fiscal crisis: its total external debt ran at close to US$32 billion in 2007. The regional GOSS has been utterly dependent on oil transfers from the central government in Khartoum since the CPA. These accounted for roughly 99 per cent of total GOSS revenues in 2006 and an estimated 93 per cent in 2008.16 Dependency on oil revenues also meant an extreme vulnerability to oil price fluctuations, the impact of which was seen in late 2008 and early 2009 when GOSS received an equivalent of U$126 million in transfers from the Government of Sudan (GOS) in the first quarter, barely one-sixth of its average quarterly revenue in 2008. Oil reinforced the paradoxical pattern of Sudanese governance whereby ‘the state is failing to deliver on basic governance functions for most Sudanese citizens, while the establishment demonstrates an astonishing capacity to not only survive but also prosper’ (de Waal 2007b: 7). Tangible benefits of oil have yet to be widely delivered in oil-producing regions for the majority of affected civilians. Oil exploration and production increased after the CPA, especially in Unity State and Upper Nile State. Forced civilian displacement in Southern Sudan resulting from oil activity continued, largely overshadowed by the attention directed towards Darfur. The oil-rich regions began to generate considerable revenue. There were negligible improvements in service delivery, however, and ongoing grievances concerning the environmental impact of oil. Despite the fact that the oil-related provisions of the CPA represent a model template for oil management, these have not been implemented and have been undermined by provisions protecting the existing oil regime. The absence of oil benefits for local communities have contributed towards a recrudescence of conflict motivated by economic grievances, spliced into a long-standing discourse protesting against the underdevelopment of Sudan’s periphery. The most dramatic example was the killing of five Chinese oil workers in October 2008, targeted in an apparent effort to apply leverage against Khartoum using oil companies as proxy.17 Local grievances are thus channelled through but not confined to Chinese and other oil companies and express more general frustrations at the lack of a tangible ‘peace dividend’ and compensation for wartime impact of oil development (Moro 2008).

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6 Peace through development? The Chinese role in Sudan became popularly synonymous with violent conflict largely as a result of the US-led advocacy campaign that mobilised a global ‘Genocide Olympics’ campaign to which the government of China, confronting an unexpectedly challenging new ‘hot spot’ diplomatic issue, responded (Srinivasan 2008). However much Beijing’s multistranded economic, military and political support for the NCP over Darfur represented support for and complicity with a brutal regime, one-dimensional attributions of Chinese causation of conflict in Darfur by Darfur advocacy groups were clearly misplaced given, among other factors, the history behind the conflict and the centrality of Khartoum in unleashing a militia-based counterinsurgency campaign in Darfur (Daly 2007, de Waal 2007a, Flint and de Waal 2008). Nonetheless, one dimension of the Chinese government’s diplomatic response to the Darfur crisis was recourse to an argument justifying its relations with Khartoum and economic investment in Sudan more generally, in terms of their contribution to development as a vehicle for realising peace. Official Chinese responses to external criticism on Darfur evolved to feature a defence of its economic impact and an affirmation of the value of increasing development.18 Following earlier such debates in Sudan, and the instrumental political appropriation of an ideology of ‘peace through development’, it could be said that China is the latest actor to rearticulate, reinvent and promote economic development as the solution to Sudan’s protracted conflicts. Furthermore, it has done so in a manner that dovetails with, and indeed might be said to actively necessitate, further Chinese economic engagement. The notion that more economic development can overcome armed conflict has been understandably attractive. Official Chinese perspectives concerning China’s position and role in the Darfur crisis, besides pointing to its positive, successful diplomacy or peacekeeping contribution, reiterate the fact that flourishing commerce between China and Sudan can help to resolve the root of the Darfur crisis. As Assistant Foreign Minister Zhai Jun reiterated in June 2008: ‘In essence, it [Darfur] is an issue of development and must be resolved by rebuilding the economy and enhancing development’.19 At a more basic level then, and alongside any political process aimed at a negotiated resolution, development is upheld as a means to resolve the crisis. The Chinese government has rolled out a programme of different sponsored development activities in different parts of Darfur, implemented by a combination of Chinese peacekeeping contingents and contracted Chinese companies. While linked to a programme of officially designated humanitarian assistance, these developmentally framed interventions have involved particular assistance to the water, education, infrastructure and energy sectors.20 By September 2009, China had provided ‘about one hundred million and four hundred thousand Chinese Yuan in development assistance to Darfur.’21 This was relatively small in proportion to China’s overall economic engagements with Sudan but was disproportionately significant in political terms as

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part of Beijing’s diplomatic efforts to respond effectively to its international reputational concerns and those within Sudan. Faith in the efficacy of economic development to overcome conflict has in practice been undermined by a number of problems and by the reality that conflict has been integral to ‘development’ processes in Sudan. The first area where this is apparent concerns the dominance of the centre in Sudanese politics, which has been further entrenched. Chinese analyses of the underlying causes of conflict in Darfur have tended to highlight underdevelopment, resource scarcity and environmental change. These are widely recognised contributing factors to the conflict but cannot be taken on their own in isolation from the importance of the particular nature of political relations with the central ruling state apparatus in Khartoum in the combination of centrifugal development, political marginalisation and exploitation that has fuelled conflict in Darfur and other parts of Sudan. ‘Development’ has been mobilised by the NCP as an ideology of progress combining an outwardly positive rationale and a justification for what has been experienced as often a coercive, disruptive process of socio-economic dislocation underpinned by relations of dislocation and exploitation (Duffield 2001). ‘Development’ as such has never been pursued or achieved in a manner that significantly addresses the needs and grievances of a majority of marginalised areas. Despite bringing differentiated economic benefits, oil represented a new phase in a longer history in which the process of unequal development has contributed to armed conflict. One effect of the very success of constructing Sudan’s oil export sector in the midst of Southern Sudan’s civil wars was to contribute towards fuelling further discontent in Darfur at its economic neglect and marginalisation. Conflict long predated the discovery of oil in 1978, but the historically produced causes of the Sudan’s series of interlocking conflicts would be intensified by its arrival as a new economic reality bearing important political consequences. Conflict in Darfur spread during negotiations between the SPLM and the NCP that produced the CPA, which enshrined the principle of and mechanism for wealth sharing between Northern and Southern Sudan. While this allowed the new GOSS to benefit from oil export revenue for the first time, the CPA underlined Darfur’s extreme neglect. The oil prosperity that came to be more visibly and most symbolically manifest in Khartoum sharpened the contrast between the prosperity of parts of Khartoum and the underdevelopment prevailing in Darfur. This served in part to fuel conflict and featured in the political grievances expressed by Darfur’s rebel movements. In this context, ‘development’ – as infrastructure or provision of much needed basic social services from health to education – might appear on the surface to provide a potential remedy of sorts. In current circumstances, amidst continuing conflict, an uncertain peace process and political uncertainty about the related North–South peace process, the idea of actual ‘development’ as a vehicle to achieve lasting peace in Darfur might be said to be distant in the face of an entrenched regional war economy, continued suffering of large communities of the displaced in camps

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throughout Darfur and the poor prospects of a lasting political settlement. In Southern Sudan, the GOSS’s attempts to navigate a political and economic development path since 2005 have faced tremendous, daunting challenges on top of political uncertainty concerning the future of the peace agreement and outcomes of the scheduled referendum on Southern Sudanese secession in 2011.

7 Conclusion Following a history of successive waves of external involvement, notably British colonial and American post-colonial involvement in Sudanese politics and foreign relations, the Chinese engagement has become an immensely significant part of the Sudanese economy over the past two decades. As such, and despite the continued engagement of other powers and the largest UN presence in the world, the Chinese engagement has been at the forefront of recent economic development in Sudan. This chapter has broadly contextualised China’s development relations with Sudan in terms of its relations with the central state and a prior-existing political economy of unbalanced development that the Chinese engagement entered, contributed to and has itself been affected by. The cultivation and thickening of multistranded relations between China and Northern Sudan has involved political ties, economic links, military assistance, cultural exchange and educational support as well as state-inspired development schemes. China has rejuvenated a historically familiar theme of ‘grand development’ in Sudan as part of an approach characterised by the mobilisation of a modernisation discourse rationalising and legitimating such interventions. The Chinese government’s emphasis on its development role in Sudan as a source of legitimacy to different external as well as Sudanese constituencies is countered within Sudan by a more contested situation. Economic development may justify and rationalise the benefits of China’s role in Sudan but ultimately returns its role to a matter of political contestation within Sudan. Instead of achieving development as a broadly experienced phenomenon, programmes as implemented have rather tended to fit with the ambitions of the central state and, in the process, further concentrate wealth and conflict-fuelling economic grievances. Each anniversary celebrated in 2009 testified to the changed and current importance of the Chinese role. The Golden Jubilee demonstrated the very different role that China plays in Sudan today from the different phases of its post-colonial relations. It underlined the transition to a more multifaceted, commercial role that involves substantial investments in Sudan, in contrast to previous decades of trade and limited aid relations. The NIF coup anniversary highlighted the significance of China’s post-1989 involvement in Sudan in terms of its political contribution towards supporting the regime. It also evoked the contrast between China’s earlier and post-1989 relations with Sudan. The Chinese role in Sudan’s oil sector has been the engagement that

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differentiates China’s present role most from its previous incarnations. While China’s national oil companies were by no means the only force operating Sudan’s oil sector, they have importantly contributed to a new phase in a longer history of a particular political economy involving central state dominance, wealth extraction and protracted conflict. Following the historic anniversaries of 2009, Sudan was faced with what could be a defining process that the CPA allows for, namely the referendum on Southern Sudanese secession for 2011.

Notes 1 Or, rather, the opening up of Central Africa to further European resource extraction imperatives through the use of Chinese labour under European direction, an idea mooted in the late nineteenth century. While in the Egyptian province of Equatoria in May 1881, Emin Pasha was convinced ‘that if it is possible for Central Africa to be opened up, it can only be accomplished by means of the Chinese’ and even questioned: ‘Would not the introduction of Chinese settle the slave-trade once and for all?’ (Schweinfurth et al. 1888: 417, 419). Despite being a minority view and, unlike other colonial contexts, not translated into a practical programme, this imaginary narrative nonetheless provides an interesting point of comparison for later visions of more autonomous and diverse Chinese role in Sudan. Hassan al-Turabi, the leading political Islamist in Sudan, is held by some to, at one point, have apparently advocated Chinese migration to Sudan that could create a hard-working people able to advance their condition but this is cited by Sudanese as an urban myth. 2 The key examples were conceived in the colonial period, most notably the Gezira scheme, an ambitious irrigation, dam and cotton-growing initiative that was inaugurated in 1925. Exports of cotton became the mainstay of the colonial economy and for independent Sudan. 3 The Jonglei Canal being the leading example. Conceived in the early twentieth century, this was designed to cut a 360-km-long waterway to reduce evaporation from the White Nile and make more water available for export agriculture irrigation further north. Work began in 1979, but renewal of the war and a crippling Sudan People’s Liberation Army (SPLA) attack prevented its completion. Debate about the merits of restarting the scheme continues. 4 ‘Sudanese Minister Commends Energy Co-operation with China’, Xinhua News, 15 July 2007. 5 Following a flawed environmental assessment in 2002, a number of studies raised concerns about the project, including the displacement of some 70,000 people from the fertile Nile Valley land to the desert. In August 2007, the UN Special Rapporteur on housing rights expressed concern at violations of civil and political rights in the government response to demonstrations against the dam. 6 Economist Intelligence Unit (2008) ‘Sudan Monthly Report: August 2008’, p. 8. 7 This additionally features other mining interests. In May 2009, for example, the Sudanese Ministry of Energy and Mining granted gold exploration licenses in the eastern Red Sea State to the Dan Fodio Corporation, a Sudanese corporation, and the Chinese Poly Technology Company. 8 While Khartoum is hugely important, Chinese business is not confined to the capital city. For instance, in January 2009, a 10-year agreement between the government of Unity State and a Chinese construction company, Bin He Real Estate Company Ltd., was signed and was reported to involve considerable numbers of state housing, shops, and education and health facilities (Luk Riek Nyak,

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‘Unity State Government Signs MoU with Chinese Company’, Gurtong, 13 January 2009). One example being the Chinese car manufacturer, Shuanghuan Automobile Co, which reportedly began production at its first plant in Sudan, jointly built with the Sudanese GIAD Motor Co. (‘China’s Shuanghuan Auto Opens First Overseas Plant in Sudan’. Autonews, 26 August 2009. Available at: www.theauto channel.com/news/2009/08/26/475281.html (accessed 28 August 2009). Chinese construction work was initially most prominent in Juba. Chinese business has since spread to other Southern towns. Listed projects included a specialist hospital, vocational training centres and two bridges on Atbara River besides a water grid and fishery project in the Red Sea (‘China Grants US$36M Loan for Development Projects in Eastern Sudan’, Sudan Vision, 25 July 2009). ‘China to Help in South Development’, Miraya FM (Juba), 11 April 2009. Agriculture was even touted as having the potential to become an even more important co-operation area than oil (‘International Society Should Help Darfur People as China Has: Sudan Ambassador’, Xinhua News, 20 March 2008). CNPC has a 40% stake in the Greater Nile consortium, which operates blocks 1, 2 and 4 and began exporting good-quality Nile Blend crude in August 1999. Output from these blocks declined from a peak of nearly 300,000 barrels per day (bpd) to around 235,000 bpd at the end of 2007. CNPC has a 41% stake in the Petrodar consortium, whose two blocks (3 and 7) came on stream in April 2006 and in which Sinopec, active in Sudan’s downstream sub-contracting, has a 6% stake. CNPC also has a 95% stake in block 6 (which produces very poor-quality oil mainly for domestic consumption), is an operator of the partly deepwater block 15 and, at the end of June 2007, took a 40% stake in offshore block 13 (Patey 2006). CNPC has a ‘Sudanisation’ human resource agenda. Employment practices in the oil industry have been politicised and subject to controversy and cannot be detailed here. ‘Government of Southern Sudan: 2009 Budget Speech’. Presented to the Southern Sudan Legislative Assembly by Kuol Athian Mawien, Minister of Finance and Economic Planning, 10 December 2008. Juba: Government of Southern Sudan. This was led by a Misseriya commander, who formerly fought for the government, who explained: ‘The government always looks with disdain at our rights, while the oil companies in the region work for the sake of Khartoum only and do not give our people anything. … China supports the Khartoum government militarily and helps it marginalize our region. But our case is with the government in Khartoum.’ (‘Sudan: Rebel Says Chinese Hostages Moved to Area Government Forces Cannot Reach’, Al-Sharq al-Awsat website, 25 October 2008). For example, the chairman of China’s ExIm Bank, Li Ruogu, said in May 2007: ‘Chinese aid and investment will in the long run help in the resolution of the Darfur problem’ (Christopher Bodeen, ‘Chinese Official Defends Sudan Ties’, Associated Press, 15 May 2007). ‘Sudan: Rebel says Chinese Hostages Moved to Area Government Forces Cannot Reach’. Address at the opening ceremony of an international seminar on ‘Darfur: Peace and Development’, Beijing, 26 June 2008. Al-Sharq al-Awsat website, 25 October 2008. China’s water interventions include financing and helping to implement the digging of twenty-six wells that are scattered in North Darfur and twenty wells in South Darfur. Most significantly, the Nyala water supply project, which started in early 2008 and was scheduled for completion in September 2009, is designed to transport some 40,000 tons of deep-well water pumped in Gride village via an 85-km pipeline to Nyala. One of the fifty-four primary schools donated to South Darfur State by the Chinese government, built by Chinese engineers in its

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peacekeeping contingent, was officially opened in early September 2009 by the Chinese Ambassador and Nyala State’s Deputy Governor (‘China-Donated Primary School Put To Use in Darfur’, Xinhua News, 6 September 2009). Chinese peacekeepers have engaged in road construction, like their counterparts in Southern Sudan: China’s first batch of 315 engineering peacekeepers in Darfur completed a 14-month mission in January 2009, having constructed facilities and over 6,250 km of roads. Chinese assistance has also helped to construct twenty small-sized power stations in Darfur (‘Darfuri IDPs Feel Tangible Benefits from Chinese Assistance’, Xinhua News, 26 February 2008). 21 ‘Sudan: China Extends Financial Assistance to Darfur’, Suna (Khartoum), 28 September 2009.

References Ali, A.A. (2006) The Sudanese-Chinese Relations Before and After Oil. Khartoum: Sudan Currency Printing Press. Askouri, A. (2007) ‘China’s Investment in Sudan: Displacing Villages and Destroying Communities’, in F. Manji and S. Marks (eds), African Perspectives on China in Africa. Oxford: Fahamu Books. China Statistical Yearbook (2008) Beijing: China Statistical Press. Daly, M.W. (2007) Darfur’s Sorrow: A History of Destruction and Genocide. Cambridge: Cambridge University Press. de Waal, A. (ed.), (2007a) War in Darfur and the Search for Peace. London: Justice Africa. —— (2007b) ‘Sudan: The Turbulent State’, in A. de Waal (ed.), War in Darfur and the Search for Peace. London: Justice Africa. Duffield, M. (2001) Global Governance and the New Wars. London: Zed Books. Flint, J. and de Waal, A. (2008) Darfur: A New History of a Long War (2nd edition). London: Zed Books. George, M. (2009) ‘China Africa Two-Way Trade: Recent Developments’, DFID policy briefing paper, 30 January 2009. Beijing: DFID. Available at: www.dfid.gov. uk/Where-we-work/Asia-East—Pacific/China/China-and-Africa/. Kaikati, J.G. (1980) ‘The Economy of Sudan: A Potential Breadbasket of the Arab World?’, International Journal of Middle East Studies, Vol 11(1), pp. 99–123. Jakobson, L. and Zha, D. (2006) ‘China and the Worldwide Search for Oil Security’, Asia-Pacific Review, Vol 13(2), pp. 60–73. Johnson, D.H. (2003) The Root Causes of Sudan’s Civil Wars. Oxford: James Currey. Large, D. (2009) ‘China’s Sudan Engagement: Changing Northern and Southern Political Trajectories in Peace and War’, The China Quarterly, Vol 199, pp. 610–26. Moro, L. (2008) ‘Oil, Conflict and Displacement in Sudan’, D. Phil thesis, University of Oxford, Oxford, United Kingdom. Patey, L. (2006) A Complex Reality: The Strategic Behaviour of Multinational Oil Corporations and the New Wars in Sudan. Copenhagen: DIIS. —— (2007) ‘State Rules: Oil Companies and Armed Conflict in Sudan’, Third World Quarterly, Vol 28(5), pp. 997–1016. Rone, J. (2003) Sudan, Oil, and Human Rights. New York: Human Rights Watch. Sanderson, G.N. (1985) ‘The Ghost of Adam Smith: Ideology, Bureaucracy, and the Frustration of Economic Development in the Sudan, 1934–40’, in M.W. Daly (ed.), Modernization in the Sudan: Essays in Honor of Richard Hill. New York: Lillian Barber Press.

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Schweinfurth, G., Ratzel, F., Felkin, R.W. and G. Hartlaub (eds), (1888) Emin Pasha in Central Africa: Being a Collection of his Letters and Journals. London: George Philip and Son. Srinivasan, S. (2008) ‘A Marriage Less Convenient: China, Sudan and Darfur’, in K. Ampiah and S. Naidu (eds), Crouching Tiger, Hidden Dragon: Africa and China. Scottsville: University of KwaZulu-Natal Press. Tosh, J. (1981) ‘The Economy of the Southern Sudan under the British, 1898–1955’, The Journal of Imperial and Commonwealth History, Vol 9(3), pp. 275–88.

6

Chinese development co-operation and Africa The case of Tembisa’s Friendship Town Chris Alden and Anna Ying Chen

1 Introduction Chinese development co-operation in Africa has invoked admiration and criticism, much of which is based on limited empirical or anecdotal evidence, contributing to conflicting perceptions as to its purpose, means and outcomes. Unpacking the policies, institutions and instruments of Chinese development co-operation is a necessary prerequisite to understanding the impact that this form of assistance has on African economies and livelihoods. Moreover, examining particular case studies of development co-operation provides an opportunity to assess the relative success and failure of what the Chinese government likes to characterise as a unique form of foreign assistance. The focus of this chapter will be on one example of Chinese development co-operation, a housing project based in the South African township of Tembisa. While clearly only a single case study of a specific grant-based project, nevertheless, the example of the Tembisa Friendship Town provides useful insights into the differing dimensions of this key feature of Chinese engagement with Africa.

2 Overview of Chinese development co-operation in Africa The history of Chinese development assistance to Africa in many respects mirrors the changing dynamics of Chinese domestic politics and economic circumstances. Starting in 1956, and coinciding with Egypt’s diplomatic recognition of the People’s Republic of China, the Chinese government initiated a modest development co-operation scheme towards African countries. The historical context of this foreign assistance is crucial to understanding the form that it has taken, in terms of both the rhetoric associated with it and the actual programming involved. The notion that developing countries faced a similar set of challenges, be they developmental or nation-building, that distinguished their interests from those in both the West and the Soviet Union is a fundamental feature of the 1955 Bandung Conference era (see Chapter 1). The central tenets of Chinese foreign policy were formulated in this period, with the emphasis on mutual respect, non-interference in domestic affairs and

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mutual benefit in forging economic co-operation ties between developing countries. These primarily shaped China’s approach to development cooperation, as is reflected in the eight principles of foreign aid co-operation towards Africa outlined by Zhou En-lai in his tour of the continent in 1963–64. What some critics would characterise as the explicitly political aspects of Chinese development co-operation in this period – namely the idea of solidarity, sovereignty and non-interference as well as mutual benefit as the basis for co-operation – bear closer examination as they continue to influence contemporary programming. Solidarity is important as it not only highlights the shared developmental context of China and the host countries it is working with but also provides assurances that political fidelity plays as much a part in the purpose of co-operation as does any economic rationale. Sovereignty and non-interference not only speak of the need for post-colonial consolidation through nation-building in virtually all developing countries but also recognise that these principles serve as a stabilising mechanism in an international system subject to claims and counter-claims of legitimacy rooted in factors such as ethnicity and competing historical narratives. Finally, the centrality of mutual benefit – which is often passed over as merely rhetorical posturing of the day – promotes the notion that any economic interaction between developing countries must be predicated on ensuring that gains are experienced by both countries. This principle has the effect of identifying areas of common interest where each participant is able to derive some form of benefit from a particular project and use that as a platform for building further cooperation. This deliberate forging of interest-based links between China and the host country has the potential to create sustainable forms of engagement between the participants to these projects. In effect, elements of what is known as ‘tied aid’, that is, the use of donor materials, companies and personnel to provide technical and project-based assistance, are recast as ‘South–South co-operation’ and its attendant expression of ‘mutual benefit’ is a development strategy that builds on the ideals of solidarity. Indeed, scholars of South–South aid are quick to underscore the pragmatic features of South– South co-operation which allow for the pursuit of national self-interest in conjunction with more broadly framed enhancement of development aims: Although theories of dependency and self-reliance can help us understand the conceptual framework for South-South co-operation, also important for our analysis of South-South aid are the immediate goals and national interests of developing country governments. Whatever multilateral commitments to South-South co-operation by developing countries (which) may exist, developing countries’ bilateral development assistance may be provided for a variety of motives, many of which may be unrelated to promoting the global objectives of South-South co-operation. (Bobiash 1992: 9)

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The shift from the ideological basis for development assistance to the mutual benefit framework marked a major turning point away from any ideological considerations as a basis for co-operation. In December 1982, China’s Premier Zhao Ziyang embarked on a tour of eleven African states with the aim of explaining the changes in foreign aid policy to African governments (Brautigam 1998). Behind these changes was both a desire on the part of Beijing to revive its foreign policy in Africa, which had suffered neglect during the Cultural Revolution and its aftermath (when all but the Chinese embassy in Cairo had been shut down), and a concomitant need to bring China’s foreign economic co-operation policy in line with the changes in its domestic economic policy and its ‘new independent’ foreign policy. Specifically, the new orientation of ‘opening up and reform’ of Chinese economy was predicated on introducing the market mechanism into sectors through gradualism and as well as on attracting foreign capital and technology into China. In keeping with this, the ‘Four Principles on Sino-African Economic and Technical Co-operation’ declared that China’s foreign assistance would in future be provided on a mutual benefit basis alone, no longer responding to the ideological shibboleths of the past, but would nonetheless continue to respect principles of sovereignty and non-interference; it would be oriented towards achieving practical results; technical co-operation will conform to the needs and specificities of the host country; and the aim of mutual benefit and common development would be to enhance self-reliance (Brautigam 1998). The contemporary structure of China’s economic co-operation with Africa derives from this period, revolving around three basic instruments: grants, interest-free loans and concessional loans. Grants are aimed at social projects, technical assistance, training and disaster relief. The primary modality of this form of assistance is decidedly not cash but rather grants in kind, with housing, clinics and schools being the favoured application of this support. Interest-free loans are provided towards larger infrastructure such as roads, railroads and dams. According to Davis (2007: 52–3), ‘(d)ebts derived from these loans – and some debts from concessional loans – have been subject to debt cancellations, in effect turning loans into grants’. Finally, concessional loans, which the Chinese commonly called ‘preferential loans’, are lowinterest loans provided over a period as long as 20 years at below markets rates subsidised by the government. The key institutions involved in Chinese development co-operation reflect the centrality of mutual benefit to the contemporary formulation of foreign assistance policy (Davies 2007). The Ministry of Commerce’s (MOFCOM) Department of Foreign Aid handles the bulk of the aid flows to Africa. It is charged with formulating and implementing policies and monitoring aid, be it in the form of grants or interest-free loans. Regional units within the MOFCOM, namely the West Asia and African Affairs Division, play an advisory role in this process. MOFCOM manages the tendering process for specific projects from a group of approved companies. The Economic and Commercial Counsellor is MOFCOM’s representative in a given recipient

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country and, as such, is in charge of overseeing the implementation of particular projects as part of his or her overall role in managing bilateral aid. The China Export-Import Bank (China ExIm Bank), a state-run financial institution founded in 1994, is directly under the State Council (China’s highest administrative body) and has been the leading financial institution involved in providing concessional loans for projects in Africa. In 2006, for instance, the bank provided an estimated US$12–15 billion in concessional loans to Africa, more than the World Bank. More recently, the China Development Bank (CDB), also established in 1994 as a policy bank, has been authorised by the State Council to handle the US$5 billion China–Africa Development Fund launched at the Forum for China–Africa Co-operation in November 2006. China’s Ministry of Foreign Affairs (MOFA) plays a part in shaping the country’s Africa policy, primarily through the work of its Department for African Affairs, and has some direct role in dispensing humanitarian assistance through a discretionary fund. Notably, though MOFA officials are often called upon to serve as public spokesmen for aspects of the government’s aid policy, their actual involvement in shaping it seems to be secondary when compared with MOFCOM. Moreover, there are concerns that the commercial rationale behind the MOFCOM approach is not always fully attuned to the ‘win-win’ nature of economic co-operation espoused by the Chinese leadership.1 Finally, while the Ministry of Finance annually allocates the budget for economic co-operation and aid that ends up as bilateral aid dispersed by MOFCOM, funds aimed at multilateral aid are dispersed directly from it to any of the African regional development banks and international financial institutions. There are certain elements of the Chinese economic co-operation which are worth highlighting as they either differ from contemporary Western donor practice or, rhetorical assertions to the contrary, replicate aspects of it. Financing in the form of cash gifts, a much less budget support, is not favoured by Beijing and rarely utilised. Chinese scholars have suggested that the preference for projects in kind reflects in part a desire to manage closely funds expended by them and ensure that they are not wasted by recipients (Weizhong 2008). Of equal importance is the fact that the application of ‘mutual benefit’ has made the use of Chinese factors of production – management, labour, equipment and supplies – a feature of any prospective project. This stands in contrast with the Organization for Economic Cooperation and Development (Development Assistance Committee) (OECD (DAC)) donors who have committed themselves to eliminating this sort of ‘tied aid’ (as the use of donor materials and manpower are characterised), though only two have in fact fully implemented this. As with the financing of projects, a strong domestic rationale in the form of Chinese competitiveness, the oversupply of local firms in areas such as construction, cultural cohesion and work ethics as well as familiarity with Chinese government procedures are all features which explain the preference for the use of Chinese firms and factors of production in the delivery of projects.

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Another element in the Chinese approach that differs from the traditional actors is that the Chinese insist that their project personnel conform to local standards and that they do not receive ‘special treatment’, which effectively means that their wages and living arrangements are equivalent to those found in the host country. Needless to say, Western and South African firms operating in Africa have traditionally had considerably higher wages, standard of living allowances and other packages which inflate the costs of their work. And, unlike the OECD (DAC) countries, the Chinese government does not publish any annual statistics on its development assistance, either in aggregate form or in terms of particular projects. The result is that what is known is usually anecdotal and not subject to comparison, either across other Chinese programmes over time or with other countries’ foreign aid. The result is that despite assurances by Chinese officials (and, indeed, a rationale given by Beijing as to why it would not join OECD (DAC) and adapt itself to what it characterised as its ‘less efficient’ donor practices), objective judgements about the efficiency of Chinese aid are difficult to make. Finally, a crucial characteristic which has distinguished Chinese aid cooperation from many (though not all) traditional OECD (DAC) donor forms of assistance over the years has been the effort to integrate this assistance within the context of the recipient government’s stated developmental needs. This process of consultation and, indeed, negotiation between Beijing and the host government introduces a strong element of ‘local ownership’ of the project. This increases the likelihood that the project meets a recognised need and, as such, is more apt to win the sometimes elusive support of the African government, explicitly targeted beneficiaries and the local community. Such a support can be crucial in building a local constituency that can fulfil longer-term commitments such as providing for the recurrent costs associated with the upkeep and maintenance of a project. At the same time, as experience has demonstrated to the Chinese government in the past, even this approach doesn’t guarantee a positive developmental outcome. For instance, in the case of Senegal in the mid-1970s, which like South Africa in the mid-1990s was poised to switch official diplomatic recognition to Beijing, the Senegalese government’s insistence that the building of a sports stadium take precedence over that of an ongoing agricultural project – despite there already being four stadia in the area – resulted in it being prioritised. In fact, the Chinese government had indicated that it was keen on supporting an agricultural project which involved technical training in high-yield rice cultivation in the country’s Casamance district. Subsequent discussions between Chinese and Senegalese officials became entangled in contrary desires within the Senegalese bureaucracy for a dam as well as for the afore-mentioned stadium, eventually leading not just to the closure of the agricultural project but also to disagreements over the degree of involvement of local contractors and even the architectural style of the stadium, which were to delay construction for several years (Bobiash 1992). In this sense, the

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efficacy of Chinese development co-operation is ultimately dependent upon the knowledge, policy choices and commitment of the African partner.

3 The origins of the Tembisa Friendship Town Project As in other African states, the pattern of China–South Africa relations bore the imprint of the Cold War. Under the National Party, official ties with the Republic of China in Taiwan were upgraded after 1979, reflecting a shared form of virulent anti-communism outlook and, concurrently, the growing diplomatic ambivalence experienced by both governments from the West (Geldenhuys 1990). At the same time, the People’s Republic of China had by 1984 moved towards developing cordial ties with the African National Congress (ANC) – which had traditionally closely associated with the Soviet Union, Beijing’s Cold War rival – as South Africa’s key liberation movement. With the advent of democratic elections in April 1994, the widespread expectation was that a switch in official recognition to Beijing would swiftly follow. The fact that it didn’t became a matter of controversy within South Africa, drawing politicians, businessmen, trade unionists, human rights activists and scholars into a very public debate as to the merits of recognition (Alden 2001). Competitive promises of investment and aid packages emanating from Beijing and Taipei captured the headlines in South Africa, but by late 1996, the weight of evidence had compelled President Nelson Mandela to abruptly announce a switch to Beijing which would formally transpire after a 13-month ‘grace’ period. It was in this context that the first Chinese development co-operation project was devised and launched. The Chinese government had told their South African counterparts that there were funds available for a ‘gift’ project in acknowledgement of the change in diplomatic relations scheduled for 1 January 1998. These resources, which were R145 million (approximately US$25 million2) in total, were not earmarked for any particular sector, but the Chinese government was open to projects which were deemed to be important by the incoming ANC government. Hearing of this prospective new source of finance, Wynand Theron, the former manager of Urban Planning and Economic Development in the then Edenvale/Lethabong Regional Services Council, undertook to travel to China at his own expense to investigate the possibilities of securing Chinese support for development projects. In particular, Theron (2008) wished to explore the possibility of using Chinese funds to support the development of an area previously zoned for mixed commercial and residential use, which had been unable to attract investor finance, and to put that assistance towards building low-cost public housing there. Given the housing backlog in the Johannesburg-based township, with an estimated 18,000 houses needed to meet local demand at the time, the project fitted in well with the priorities of the ANC and its local constituents. At the same time, though supportive of the idea of public housing, the Council was not keen on using Chinese sources for the project (Theron 2008). Once he

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received the go-ahead from the Council, Theron contacted the South African Treasury and, working in conjunction with the Chinese Economic and Commercial Counsellor’s office, which was authorised to release and monitor funds, eventually he was able to secure the support of all parties necessary to begin the project. The project was finally agreed upon in 1998, with formal agreement signed between the two governments and a project implementation agreement signed between Edenvale/Lethabong Local Council and China National Corporation for Overseas Economic Co-operation (CCOEC). The aim was to build 664 units of low-cost housing on the site, Commercia Extension 9, in the Tembisa township. A unique feature of the project was the decision to build houses that were aimed at the lower- to middle-income residents of the township. This was because of the fact that the existing government programmes were oriented at providing basic housing – the so-called ‘sites and services’ or Reconstruction and Development Programme (RDP) housing – for former squatters and homeless people but no provisions were being made for those individuals who were better off but unable to afford the more costly housing outside of the township. Moreover, the housing project would be built in the form of a security village, reflecting the growing concerns over crime by better-off township residents, and, unlike the RDP houses which were provided free of charge to qualifying applicants, it would be put on a self-sustaining basis. To realise this, the Council agreed to establish the Lethabong Housing Institute (LHI) as a Section 21 (i.e. limited liable) company to oversee the development and manage revenue generated through sales of the housing units to the public as well as to address the legal requirement of South African building regulations. This meant that each housing unit would be developed and sold on a commercial basis, as would be the case with any commercial housing development. However, the proceeds of sales would be pooled and invested by the LHI so as to create a larger capital base for the funding of future housing projects (Theron 2008, Schoon 2008). According to Alfred Sepirwa, an ANC counsellor with the Edenvale/ Lethabong Local Council at the time, consultations were held with the local community in Tembisa to assess their interests in the property to be developed (Sepirwa 2008). When asked whether they wished the Council to continue to try to attract industry to locate at the site (the original intention being job creation) or instead to develop residential housing, the community indicated that they would prefer to have housing (Sepirwa 2008). At the same time, it was recognised that some of the employment requirements of the community could be met by including them in the actual project activities. The result was that it was agreed by the Council and the Chinese representatives that the Chinese firm contracted to do the construction would hire and train local sub-contractors to ensure that the project generated skills and income for the local community (Theron 2008). In the meantime, MOFCOM held an internal tendering process and selected CCOECas the implementing agent for the construction of the

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housing project. The CCOEC had a track record of construction work outside of China, primarily in Southeast Asia, but increasingly in other parts of the world.3 Many of these projects were contracted through MOFCOM and funded by the China ExIm Bank and included road and housing construction. As the key contractor, CCOEC was given a seat on the LHI, along with Council members, and a project manager was appointed to oversee the day-to-day activities of the Chinese firm and, once they were hired, its local sub-contractors. Funds for this ‘gift’ project were to be provided from the Ministry of Finance and administered through MOFCOM. The first tranche of money, R800,000 (approximately US$140,000), was paid by CCOEC to the LHI to purchase the land in Commercia Extension 9.

4 Implementing the Tembisa Friendship Village Project 4.1 Overview of the project The proposed timeline for the project was two years, starting in 1998 and finishing in 2000. A turnkey project with 664 units of housing4 was to be developed. It was however not an easy project and did not go smoothly according to the schedule. With delays caused by visa problems and delays in zoning and other applications, the project was finalised and handed over to the Ekurhuleni Metropolitan Municipality on 16 November 2001. To begin with, the Chinese implementing agent, CCOEC, faced tremendous challenges. Though most of these were commercial in nature, starting up a new business in South Africa was not an easy task for a Chinese company that had little knowledge about doing business there. Among these, visa application was at one stage one of the most conspicuous barriers to entry. Instead of issuing the appropriate work permit, the South African Home Affairs Department only granted them temporary business visa, which made setting up the office extremely difficult as almost all set-up applications, for example, lease of office and residence or applying for a telephone or cell phones, required a valid work permit. It was with the help of Theron5 that CCOEC got its office and telecommunication necessities set up. According to a former employee of CCOEC, problems with visa applications were a constant issue for the company, delaying the arrival of the technical team and eventually impacting on the project delivery date. Getting to know the rules and procedures of property development in South Africa is yet another barrier to entry where CCOEC had experienced a sharp learning curve and might have paid a higher cost. Although CCOEC had substantial experience in operating in some African and Southeast Asian countries prior to this project, South Africa, being an unfamiliar country with a mixed economy and a lot of building standards similar to that of the developed countries, was indeed challenging to CCOEC. The company needed to learn the rules and comply to them accordingly. According to Smiley Schoon – the property and legal affairs consultant for the Edenvale/ Lethabong Local Council – the Friendship Town was developed in the same

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way as all other commercial developments in South Africa. The CCOEC followed the same re-zoning and application procedures with the Council. No South African government exemption had been granted to CCOEC to avoid any rules associated with this sort of project. However, due to high costs experienced by CCOEC to maintain its operations in South Africa (i.e. after project completion and fulfilling its maintenance responsibilities for two to three years to the National Home Builder’s Registration Council [NHBRC]), the CCOEC entered into a cash settlement agreement with the LHI whereby a further R800,000 (approximately US$140,000) was paid by CCOEC to LHI to cover its liability and allow LHI to take over the maintenance responsibility of the Friendship Town project thereafter. 4.2 Assuring community ‘ownership’ A key dimension of the Friendship Town project was the Edenvale/Lethabong Local Council’s desire to involve the local community throughout the process. According to Councillor Alfred Sepirwa, who was a ward councillor elected from the Tembisa community and served as the Mayor of the Council during the project period, the community was consulted before the project was even formally initiated. When housing was identified as the need for the area and the idea of converting the land use of Commercial Extension 9 into low-cost housing instead of mixed industrial development, the community was consulted. It was the consent of the homeless and jobless community to get houses developed for the area. The Council’s decision to go with the Chinese government was also conveyed to the community through public assembly. However, the councillor emphasised to the community that Chinese grants and expertise were to be utilised in the project for the benefit of the community because only local labourers were to be employed for the project (Sepirwa 2008). After the project was initiated, the Edenvale/Lethabong Local Council and the CCOEC formed a steering committee for the smooth implementation of the project. The committee meets every fortnight, discussing problems related to the project and working on resolutions to the problems. Two community representatives were authorised to attend and observe the meeting and convey their concerns, if there were any. CCOEC’s sub-contracting tendering notice was given to the community so that everyone in the community had equal chances of tendering and a potential to benefit from the project. Moreover, the community also decided the list of beneficiaries according to a ‘point system’. The Council then chose from the list those who could qualify neither for the RDP houses nor for a commercial loan, and the CCOEC was not involved in this decision-making process. 4.3 Building local capacity Creating employment opportunities and helping build local capacity were not only stipulated in the project agreement but also strictly implemented by

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CCOEC and closely monitored by the community as well as the Council. This was understood to mean providing opportunities for locals to develop new skills which have application to development, though its definition was broad enough to accompany the generation of employment for locals as well as the sourcing of materials from host suppliers. Besides the project manager, who was appointed by the Council to supervise the project on behalf of the Council and to help co-ordinate the working relationship between the CCOEC and the Council, a community liaison officer was appointed by the community whose main responsibility was to make sure that only local labourers were employed for the project. As emphasised by Councillor Sepirwa, the community must build the houses by themselves and for themselves (Sepirwa 2008). At the peak time of the project, there were about seven Chinese people working on it in South Africa, which included management, technical and engineering staff. Apart from the foundation work, which requested technical specialty due to the special geological conditions in the area, all building work was completed by local sub-contractors using local workers. All eleven local builders were informed of the sub-contracting tender for the Friendship Town project. Initially, four builders were selected to carry out the work. However, with the building work progressing and the project extending at its full scale, all eleven builders were taken on board. The CCOEC, together with the project manager, provided on-site training to the local sub-contractors. To begin with, each builder was only given one house to build. Only after the building passed its quality check could a second house be granted the goahead. As they grew in number, more houses could be granted to one builder each time depending on his or her own capacity, an example being Annah Mabelane’s team, one of the local sub-contractors, which was promoted from building single houses to building three-storey apartment buildings. The training was, however, not limited to direct building-related skills. Business operation skills were also passed on to emerging entrepreneurs. Many of the builders did not even have a bank account when they started. The CCOEC or the project manager had to assist them with opening a bank account so that the performance payment could be paid into their account. They were also taught how to start and run a business. Besides technology transfer, the CCOEC played an important quality control role. Its engineers working with the project manager passed the comments and requirement of the NHBRC to the builders and closely supervised the building process on site, identifying problems and offering solutions to them. The local sub-contractors learned to improve the quality of their work over the project period (Mabelane 2008). According to Annah Mabelane, the CCOEC managed quality control, maintained regular sited inspections, conducted on-site training and gave advice to the builders. The CCOEC did not interfere with their work. Mabelane’s company – Can Be Fast Company – grew from a team building projects of less than R100,000 in value to building contracts such as a youth centre for R480,000 and an old age home with a contract value of R680,000.

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Her company now has a net worth of R1.5 million (Mabelane 2008). To her, the Friendship Town project served as a stepping stone for her business to develop and prosper. Can Be Fast Company hired fifty-two people at the peak of its building work in the project. With a growing business capacity, she is now involved in facilitating other land deals and negotiating with tribal chiefs. She felt empowered and is ambitious about her future. As a developer of the project, the CCOEC not only managed the building process but also offered finance to its sub-contractors. Instead of requesting the sub-contractors to organise and provide their own building materials on site, which was surely financially challenging to the local sub-contractors, the CCOEC financed the procurement of all building materials and distributed the materials to the building teams according to their progress. Such extra steps taken by the CCOEC not only eased the financial burden of the subcontractors but also served to control material quality and monitor project delivery and enhanced economies of scale through bulk purchase, leading to substantial cost savings for the project. 4.4 Addressing socio-cultural factors It is hard to assess the impact of socio-cultural factors on the project, especially one which involved a Chinese company running a housing project in a South African township where the possibility of a clash of cultural values might seem inevitable. The negativity of the Council at the outset, though slowly and definitively transformed over the life of the project, was but one indicator of the obstacles faced by the Chinese. The other was the initial hostility of some ordinary South Africans to the Chinese which, in the words of Theron, was made evident. He said that ‘nobody would take them into their houses … and the Chinese were very lonely’ (Theron 2008). Language has always been identified as a barrier to success for a Chinese company operating overseas. Because of the lack of English language skills of some engineers, a friendly joke sometimes could have been misinterpreted as an offensive behaviour. However, in general, the good faith and friendliness of the Chinese, their hard-working work ethics, hands-on management style and the strictness in quality control won the trust and support of the community and its people. Perhaps, an indicator of the emerging goodwill between the Chinese and the local community was the fact that in an area where security is one of the utmost concerns, very few thefts and other criminal offences occurred during the project’s work period. This was due to not only the good work of the community security company6 but also, most importantly, the support of the local people. 4.5 Sustainability A sustainable business model for aid/grant project was developed through the Friendship Town project. As noted above, the recipient – Edenvale/

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Lethabong Local Council – formed a non-profit-making business mechanism (the afore-mentioned LHI) through which the project was handed over upon completion. With this scheme, the business plan was to take advantage of the property boom in South Africa and reinvest the proceeds of this project into more commercial property development so that more funds can be created to build houses and thus address the housing backlog of Tembisa. After selling the houses at Friendship Town, and upon paying off the loan for the land purchase, the LHI had a fund of R38 million available for reinvestment. Thereafter, another R10 million was generated before the LHI was handed over to Ekurluleni Development Agency after the municipality demarcation. It was the only profit-making business of the whole Ekurhuleni Metro at the time (Theron 2008). The sustainability of the project was deliberately enhanced by targeting the needs and gaining the support of the community; the subsequent close interaction between the community, the CCOEC and the Council; the leadership of Councillor Sepirwa; and the forceful drive of Wynand Theron. Together, all stakeholders of the project shared the vision that the project had great potential and benefit for the community. It is, though, disappointing that the sustainable business development model of the LHI did not enjoy prolonged existence. With the passage of a law in early 2000s banning council officials and councillors from acting in business entities, former board members had to resign and were replaced by new members appointed by the public.

5 Assessing the Tembisa Friendship Village Project The Tembisa Friendship Town project has been a success. It can lay claim to being the first Chinese government grant project in South Africa. It was also the very first project implemented and delivered by a Chinese state-owned enterprise in the country. More importantly, it provides a sustainable model for foreign aid projects that could be emulated elsewhere. The model, linking and involving all stakeholders of the project, demands co-operation between the donor and the aid-receiving government, between government and communities, and between the implementing organisation and the community. The remarkable achievement of the Friendship Town project is largely due to the following factors. First and foremost, the involvement of the community: the need for the project (improved housing) was identified locally by the Council in consultation with its people and also recognised and supported by the donor, the Chinese government. Thereafter, transfers of skills and capacity-building throughout the project assured further benefits to the community beyond the houses delivered by the project. Through this process, people of the community were empowered and a closer community spirit developed. Second, the project was driven by the enthusiasm of two forceful leaders. Councillor Sepirwa was the key force in driving the project, consulting with the community and getting their understanding and support. In addition,

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Theron, with his personal belief, confidence and capability, drove the project from beginning to end. Without these two individuals, the project might have lapsed into a difficult situation owing to the tremendous challenges associated with being the very first project of such nature in the country. Third, the CCOEC was a responsible implementing party. With extensive international experience, it could speedily adapt to the South African business environment. It worked hard to ensure strong support for the local community through its consultation and skills transfers, going beyond simply fulfilling its responsibilities as a construction company. This offset the language and cultural barriers which had posed problems early on and won the support of the community. These conclusions must, however, be tempered by that fact that no substantive, independent evaluation of the project was formally conducted. Of course, to a certain degree, the CCOEC’s work was controlled and checked by MOFCOM through its Economic and Commercial Office at the Chinese embassy. Both Theron and the Council-appointed project manager had to sign off a project progress certificate before the CCOEC could claim and obtain each of its project payments from the embassy. However, a comprehensive evaluation scheme would be advantageous, as it is always necessary to make a balanced assessment of the positive and negative aspects of development projects. Unfortunately, no evaluation was conducted by either the South African or the Chinese government.7 According to all local participants of the project, the CCOEC was responsible and handled the project well. However, lack of transparency had always been an issue with the Chinese companies. Even when the locals highly praised the achievement of the Friendship Town project and the successful management of the CCOEC, the CCOEC did not respond to the authors attempts to interview them. As a result, the hardship and challenges faced by the organisation during the project, as well as their endeavours and lessons they might have learned, were hardly disclosed or shared. This is a pity given the positive outcomes and lessons that arose from the project’s work.

6 Conclusion Drawing out over-arching conclusions about China’s role in development cooperation in Africa based on one case study would, of course, have to be treated with caution. In large measure, this is due to the nature of Chinese development co-operation itself: While it follows its own internal dynamics around areas such as tendering for projects, the process of engagement and negotiation with the recipient country gives each such project a large degree of local specificity. Integral to this approach is the vision, skills and development orientation of the individuals involved in various projects. Where commitment and knowledge are combined by both Chinese and African development policy-makers and practitioners, the possibility of positive outcomes obviously increases. And while this is certainly the case for any form

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of development co-operation, the level of influence over project selection afforded Africans in this process is striking. The implications of the Chinese approach to development co-operation are possibly quite profound. By structuring local ownership more deeply into the development process itself, the Chinese seem set on allowing for greater local influence over its scope of activities and even its outcomes. At the same time, as the afore-mentioned case of Senegal and the debate over priorities suggests, the possibility of introducing positive contingencies through greater local commitment to a given project may be in some cases offset by other factors such as elite interests versus community priorities. It would be interesting to examine and evaluate Chinese development co-operation projects in a more comprehensive manner to assess these trends more readily. The Tembisa Friendship Town project, though it may be but one example of Chinese economic co-operation in Africa, nonetheless points the way to the constructive impact that engagement with China can have in Africa. The emphasis on consultative practices, identifying the needs in conjunction with the local community, served both Chinese and African interests and, coupled to a conscious effort to transfer skills and hire locally, brought concrete benefits to the township. Concurrently, the desire to ensure that the project would be commercially oriented and sustainable over the long haul laid the financial foundation for the extension of this success in the future. The fact that this commercially oriented foundation for additional low-income housing projects did not last beyond this initial project, in part due to the absence of any evaluation or review by the government parties involved, has meant that the lessons of the Tembisa Friendship Town project will unfortunately not be systemically integrated into future endeavours. The spirit of co-operation demands otherwise.

Notes 1 Research interview, MOFA official, Beijing, September 2008. 2 The South African Rand:US dollar exchange rate at this time was 5.8:1. From 1998 to 2002, this rate peaked at around 13.7:1 by late 2001–early 2002. From 2003 to 2008, it then remained in a relatively stable bandwidth of between 8.0:1 and 5.6:1, but rose to around 10:1 during 2009. 3 www.ccoec.co.cn (accessed 23 March 2009). 4 There are mixed types of units ranging from two to three bedroom single-stand houses with their own garden to three storey flats. 5 Mr Theron was however charged at a Council disciplinary hearing for signing surety on his own behalf for CCOEC’s application of telephone and cellphone lines. 6 At the beginning of the project, another security company (not based in Tembisa) was manning the site where there were thefts and even armed robbery. Following Councillor Sepirwa’s advice, the CCOEC switched to a security company that was based in Tembisa and the situation changed dramatically. 7 All our interviewees confirmed that they were not aware of any evaluation of the project.

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References Alden, C. (2001) ‘Solving South Africa’s Chinese Puzzle: Democratic Foreign Policy Making and the “Two Chinas” Question’, in J. Broderick, G. Burford and G. Freer (eds), South Africa’s Foreign Policy: Dilemmas of a New Democracy. Basingstoke: Palgrave. Bobiash, D. (1992) South–South Aid: How Developing Countries Help Each Other. Basingstoke: Macmillan. Brautigam, D. (1998) Chinese Aid and African Development: Exporting the Green Revolution. Basingstoke: Macmillan. Davies, P. (2007) China and the End of Poverty in Africa: Towards Mutual Benefit?. Sundbyberg: Diaknia/EuroDad. Geldenhuys, D. (1990) Isolated States: A Comparative Analysis. Cambridge: Cambridge University Press.

Interviews and meetings • • • •

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Annah Mabelane, Executive Director, Can Be Fast Company, Johannesburg, 20 May 2008. Smiley Schoon, property and legal affairs consultant for the Edenvale/Lethabong Local Council, Johannesburg, 28 May 2008. Alfred Sepirwa, former Mayor of Edenvale/Lethabong Local Council, 20 May 2008. Wynand Theron, former manager of Urban and Economic Planning and Development of Edenvale/Lethabong Local Council (now retired), Johannesburg, 9 June 2008. Xu Weizhong, Director – Africa Division, Chinese Institute of Contemporary Studies, SAIIA meeting in Johannesburg, 2 June 2008.

Part III

Resource sector perspectives

7

China’s structural demand and commodity prices Implications for Africa Masuma Farooki

1 Introduction As a source of wealth, commodities offer a great domestic resource and yet their ability to deliver growth – especially for developing countries – has been under question. From the 1950s onwards, commodities suffered from volatile prices, short-lived price booms and deterioration of terms of trade relative to manufactures. The low and often volatile commodity prices over a short term can have negative consequences for export revenues. Sustained changes over a medium or long term have relevance for a country’s terms of trade and therefore for the industrial and trade policies and the priority that is given to the commodities sector within an economy. Countries that have natural resources can benefit from trading with countries in need of these resources. In an increasingly integrated world, emerging economies unable to meet their demand from domestic sources are turning towards international markets to source raw materials for their growth. As the demand and supply of commodities becomes increasingly global, the factors affecting the price of these goods are also becoming increasingly international. Commodity prices, particularly in the metals and minerals category, began to rise towards the end of 2003 and continued to rise for the next five years. The 2003–08 commodity price boom was the third price boom experienced since World War II. The price rise in base metals brought new opportunities for investment in resource-rich countries, including those in Africa. China, the largest expanding economy in this period, was seeking raw materials to fuel its domestic infrastructure and manufacturing growth. In the middle of 2008, a financial crisis interrupted this trend, and by June 2009, commodity prices had lost half their value compared with their peak in early 2008. Advanced economies have been in recession and China has seen the slowest gross domestic product (GDP) growth for over a decade. The 2008–09 global financial crisis induced slowdown in the Organisation of Economic Co-operation and Development (OECD) economies and emerging economies, which has depressed the demand for commodities. With the prospect of lower commodity demand from these countries lingering as a consequence of the expected slow recovery from the crisis, what expectations can we have for

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commodity prices? How will the behaviour of these prices affect the resourcedriven engagement between China and Africa? In order to answer these questions, this chapter first examines the three post-World War II commodity price booms in 1951–53, 1972–75 and 2003–08, looking at the supply and demand factors behind the price rises. It then contrasts the 2003–08 period with the previous two to assess whether the latest boom was unique in any way. Thereafter, we examine the largest driver of commodity demand, China, and the structural nature of this demand. In the following section, we turn towards the resource-driven trade and investment from China towards Africa and the policy issues that arise from the long-term nature of this engagement. Since the metals and minerals sector experienced the most sustained price gains in this period, we focus on base metals in particular and the term ‘commodities’ refers to this sector.

2 Commodity price behaviour and the commodity price boom 2.1 Context Commodity prices tend to be cyclical, fluctuating over a period of time. They tend to respond to physical market fundamentals as well as to other financial indicators such as interest rates, stock markets and currency fluctuations. Commodity cycles tend to be asymmetrical and expansion and contraction phases are not equal in length. Studies by Labys et al. (2000) and Cashin et al. (1999) both indicate that commodity prices tend to spend longer times in contraction when compared with expansion. The length of the expansion and contraction will differ between agricultural and mineral commodities and within each sector. Cashin et al. (1999) also indicate that the time spent in expansion is not an indication of the time spent in contraction and vice versa. A commodity price boom occurs within a price cycle and is identified as its expansionary phase. It is a sharp increase or ‘explosion’ in international commodity prices in all the sub-categories of agricultural, metals and minerals, and energy commodities (Radetzki 2008). Since there is no formal definition of a commodity price boom, for our purposes, we define a commodity price boom as one in which a price peak is achieved that is higher than previous localised peaks and study the three identified price booms. Increases in prices are usually triggered by a shock in market fundamentals, which may be caused by unanticipated changes in either demand or supply or both. Although shocks can drive changes in the cyclical movement, some shocks are temporary, while others are permanent. Depending on their nature, the degree of persistence of the shock will differ as well (Cuddington 1992, Reinhart and Wickham 1994). For commodities, three price booms have been identified post World War II. The first was in 1951–53, the second in 1972–75, and the latest started in 2003 and ended in mid-2008.

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2.2 The first commodity price boom of 1951–53 The first post-World War II boom in commodity prices occurred over the 1951–53 period. Commodity prices peaked in the first quarter of 1951 and were 45 per cent above their 1949 values. However, the boom rapidly lost momentum, with prices only rising by 16 per cent over their 1949 values in the second quarter of 1952 (Figure 7.1). The rise in prices was not spread equally across all commodities. Agricultural raw materials prices rose more than metal prices and peaked in early 1951, while metals prices peaked in mid-1952. Energy prices remained stable around their 1949 values. The 1950 price boom appeared at the end of an economic recession as the global economy experienced a recovery. As industrial production (IP) began to pick up pace, the demand for industrial raw materials increased. The International Monetary Fund’s (IMF) IP index for advanced industrial countries rose from 16 to 21 over the 1949–53 period. However, expectations of widespread shortages, spurned by memories of the Great Depression, led to an increase in consumer purchases and hoarding. The second impetus underlying commodity demand in the early 1950s was a result of the Korean War. As the United States went on to a war footing, increased industrial production increased the demand for commodities. The metals sector saw the second highest increase in prices in this boom, which can be linked to the increased spending within the United States, reflecting the strong demand for metals. Threats to the security of supply, with the Korean War in a major production area of industrial raw materials, led to increasing pressure to build inventories and prices in this sector responded by rising quickly. The push for increased inventories was responsible for short-term supply constraints rather than fundamental constrictions in the supply side. The two sectors, energy and food, where supply security was not perceived, and therefore stockpiling was not an issue, did not experience the same level of price increase as did the

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Figure 7.1 Quarterly index of commodity prices in nominal US$, 1949–52 (1949 = 100). Source: Radetzki (2006).

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industrial raw materials sector. The major consumers of agricultural products and energy were in general self-sufficient during this period of time and so a major import demand did not originate in the global economy. The United States was an oil exporter at this stage, and there had been no significant harvest failure to cause security scares in the food sector. Security issues did not arise in the energy and food sectors and so no efforts were made to stockpile in these sectors. The 1951–53 commodity price boom was more about perceived supply security issues rather than the actual bottleneck in the supply side. Eventually, the very increase in inventories that was responsible for rising prices was also the cause of the end of the price boom when large destocking took place. 2.3 The second commodity price boom of 1972–75 In the second commodity price boom, all commodities experienced increasing prices, with differences in the timing and duration of that price increase. Prices started to rise in the last quarter of 1972, finally peaking in the last quarter of 1974 (Figure 7.2). Agricultural raw materials prices were the earliest to peak in the first quarter of 1974, followed by food prices peaking in the last quarter of 1974. Compared with 1971, prices had just about doubled in these two sectors. The largest price increases were seen in the oil sector: prices initially doubled between the first and the last quarter of 1973, but by the end of 1975, rose by four-and-a-half times their 1971 values. In contrast, metals prices only doubled between the first quarter of 1972 and the second quarter of 1974. Although the price index for all commodities was higher at the end of 1975 than its value in 1972, only the increase in oil prices was permanent, while the others returned near to their pre-boom levels.

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Figure 7.2 Monthly averages of UNCTAD commodity index, 1970–75 (2000 = 100). Source: UNCTAD Statistics online 1889&lang=1 (accessed February 2009)).

(www.unctad.org/Templates/Page.asp?intItemID=

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The early 1970s was a period of expanding economic activity in the Western world. The IMF IP index for the advanced economies rose by 15 per cent between 1971 and 1976. The demand surge for commodities came from the simultaneous economic expansion of three major industrial regions: the United States, Western Europe and Japan. On average, the OECD economies experienced annual GDP growth of 4.4 per cent in 1969–71 and 3.2 per cent in 1972–75. Japan’s annual average GDP growth was 9.3 per cent and 4.6 per cent, respectively, over the same periods. The Soviet Union experienced bad harvests for two consecutive years in 1971 and 1972, with South Asia and North America suffering crop failure in 1972. The resultant shortfall in supply to meet demand led to an increase in food prices. Agricultural raw materials prices were affected when the traditional producers of these commodities turned land towards growing food crops rather than cash crops. Thus, the supply deficits from the food sector were passed on to the cash crops sector. Politically, the major event during this period was the Arab–Israel war that led to oil embargos being raised by certain Middle East oil producers on Western countries. This was also the period in which the Organization of Petroleum Exporting Countries (OPEC) cartel asserted its power over oil prices, leading to the first of the oil price shocks to the global economy in 1973. In the hard commodities sectors, prices rose due to supply constraints. Strikes in Chile had reduced copper exports, while Jamaica and, later, other bauxite producers imposed huge tax increases on this mineral commodity (Fried 1976). This led to increasing supply constraints in the metals and minerals sector, leading to rising prices in the metals category. More generally, these supply constraints occurred at a time when demand was strong. The price boom receded when economic recession took hold towards the end of 1975, and most prices receded near to their pre-boom levels of 1971. 2.4 The third commodity price boom of 2003–08 The 2003–08 commodity price boom is associated with a major expansion of the global economy. International commodity prices began to rise for most sectors from 2003 and continued on an upward trend until mid-2008. Between 2000 and 2003, the United Nations Conference on Trade and Development (UNCTAD) All Commodities Price Index rose from 100 to 105, and by 2007, it had doubled to 207. Different commodities experienced different price increases, and as Figure 7.3 shows, oil, and metals and minerals experienced much higher prices than agricultural or soft commodities. By mid-2008, when the global financial crisis emerged, prices crashed for all sectors, although by the end of 2008, the indices for all sectors were still above their 2000 values. The demand for commodities was generated in two main country groupings. The first was the IMF IP index for the advanced industrial economies (70 per cent of the world’s GDP), which rose from 98 in 2003 to 108 in 2007.

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2000–2007

Figure 7.4 Per cent increase in global demand for metals accounted for by China. Source: Macquarie Commodities Research (2008).

The second was the non-OECD economies, such as China and India, which exhibited growth at a per annum average of 10 per cent over the 2000–07 period. The demand for base metals from China has been responsible for the bulk of increase seen in global demand for base metals (Figure 7.4). Over the 1995–2000 period, China’s share in the new demand was less than 50 per cent, but in 2000–07, it accounted for more than half the increase in the demand for aluminium, nickel and steel and nearly all of the increase in the demand for copper and zinc.

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Whereas substantial growth was seen in the demand for commodities, the supply side remained constrained in the metals sectors in 2003–08. The initial increase in demand in the early 2000s was met by using long built-up inventories and stocks at producers, consumers and international exchanges. The London Metals Exchange, which is the premier metals trading exchange, saw inventories of copper drop from 856 metric tons in 2002 to 49 metric tons in 2004 and slightly rising to 199 metric tons in 2007.1 Only in the second half of 2008, as the recession set in and global demand decreased, did inventory levels begin to rise again. Exploration budgets in mining and investment into new capacity was also limited during the initial years of the price boom and only began to materialise after 2005. Exploration budgets in the 1990s averaged at US$3.7 billion per annum, and only after 2003, did budgets begin to rise, from US$3.8 billion in 2004 to US$10.5 billion in 2007. The 2003–08 commodity prices were mainly driven by an unanticipated demand surge from China and an inadequate supply response from the metals and minerals sector. As inventories began to be drawn down, with limited new supply coming on line, the price surge was a logical reaction to the physical market fundamentals. Only as growth slowed and demand receded in the second half of 2008 did inventories rise, leading to an end in the commodity price boom. 2.5 Comparing the commodity price booms Supply and demand imbalances are likely to trigger a commodity price hike. In the 1951–53 and 1972–75 period, price increases were a response to events occurring in the supply side of the equation rather than the unanticipated demand itself. The demand for hard commodities is generated by industrial production and GDP growth. The 1951–53 boom occurred at a time when the world was recovering from both a serious economic recession and the aftermath of World War II. The recovery started as early as the end of 1949 or early 1950 and the demand for commodities was expected to continue to rise. It was the possibility of supply disruptions due to the Korean War (1950–53) that increased inventory demand as a response to supply insecurities. In the 1972–75 boom, economic expansion had been prevalent in the previous few years and industrial demand for commodities had been fulfilled. Western Europe and Japan’s industrial expansion was gradually building up in the late 1960s and was not unanticipated. As in the previous boom, it was supply side insecurities that triggered responses in the demand to build up inventories. As global recession started to set in by 1975, the demand for commodities also decreased. The 2003–08 commodity price boom came at a time when the global economy was recovering from the East Asian financial crisis of 1997–98 and there was the bursting of the Dot Com bubble in 2000–01. Removed from these financial events to a large extent was the strong GDP growth in China, which was sustaining an average 8 per cent growth rate per year for over a decade. No major supply disruptions are evident in this period, and it was the unanticipated demand from China that played a more important role in the 2003–08 boom.

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The first two booms were driven by disruptions in supply and were also over when supply came back in balance with demand. The third boom on the other hand was very much about demand, and subsided after the demand element receded, rather than due to a major response from the supply sector. In the two earlier booms, the demand drivers were the industrialised economies. However, in contrast, the 2003–08 commodity prices have been driven to a very large extent by the economic expansion in China. In order to understand the impact of Chinese demand on commodity price trends, we turn to examine the structural nature of China’s GDP growth.

3 Structural change in China and commodity demand Commodity demand in the real economy is derived from the usage of commodities as inputs or intermediate products. The intensity of usage per capita is dependent on the structural nature of the economy. Metals and minerals are intensively used in a number of sectors: infrastructure, construction (urbanisation) and manufacturers. Therefore, any economy where the major share of the GDP comes from manufacturing and infrastructure expenditure will be using more commodities relative to other economies with similar GDP levels but where the primary or the services sector is driving growth. At low per capita income levels, only basic needs can be met and as such metal consumption remains low. As income levels rise, demands for consumer products, housing and infrastructure are likely to grow, generating higher demand for metals and minerals. As advanced economy status is reached and domestic growth in infrastructure and construction slows down, consumption of metals falls as well. Therefore, low-income or less developed countries (LDCs) – which tend to have small industrial sectors – will have low rates of industrial commodity consumption. Advanced economies (AEs) – typically having a much larger service sector than the industrial sector – will too have a low industrial commodity consumption rate. Generally, emerging or newly industrialising economies will experience higher rates of industrial commodity growth per percentage point increase in the GDP in relation to both LDCs and AEs (Radetzki 2006). The income elasticity of demand for commodities will change as an economy moves from an agrarian to an industrial structure. This shift will also be accompanied by rural-to-urban migration, and rising urbanisation rates will further spur the demand for commodities. The income elasticity of demand for commodities is higher for economies with emerging industrial sectors in comparison to when the primary or services sector is the lead sector in GDP, leading to demand disruptions in commodity prices in the former case. Figure 7.5 provides a cross-country comparison of GDP per capita and the share of metals and minerals costs in industrial production for selected emerging and advanced economies. GDP per capita is used to indicate

China’s structural demand and commodity prices

% Cost of Minerals in Industrial Production

Indonesia 6.00

4.00

129

R Sq Quadratic = 0.475

Madagascar South Africa Chile Bangladesh Vietnam Malaysia Zambia China Tanzaria Thailand Philippines India Poland Morocco Turkey

2.00

Australia Canada Finland Hong Kong

Korea, Rep of

Brazil Mexico

Spain Sweden

Botswana

Japan Belgium Germany France UK

Singapore US

0.00 0

10000

20000

30000

40000

GDP/Capita (PPP Current $)

Figure 7.5 Per cent share of costs of minerals/extractive sector in industrial production and per capita income (purchasing power parities (PPP)), 2004. Source: Author’s calculations based on data from the Global Trade Analysis Programme (www. gtap.agecon.purdue.edu) and the World Development Indicators (December 2008) database (www.worldbank.org/data (accessed June 2009)).

development levels, while the share of metals and minerals costs is used as a proxy for metals consumption within an economy. A simple quadratic equation is fitted to the data points to indicate a trend line. Starting from the left-hand side of the figure, low per capita income is associated with the highest relative consumption ratios of metals and minerals within an industrial economy. As we move along the curve, middleincome countries correlate with lower consumption, while towards the right-hand side, the cluster of advanced economies is associated with the lowest consumption of metals and minerals in the industrial sector. From Figure 7.5, we note that China is in the region of low-income countries and lies just below the curve. This would indicate that its expenditure on metals and minerals conforms to patterns seen in other developing countries and is in no way exceptional. China’s current consumption patterns of metals are in line with the normal patterns of growth, and as its income levels rise, we expect it to move down and along the curve. However, given the large size of China, the impact that its demand makes on the international markets is through the large volume rather than differing consumption patterns.

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China’s economic growth has been phenomenal by any standard of development, with the GDP growth averaging 10 per cent per annum from 1990 to 2007. In 2006–07, this rate climbed to 12 per cent per year. This growth has been driven mainly by the industrial sector, which accounted for 48 per cent of value added in GDP in 2006. The increasing economic activity within China is a major driver for its domestic growth. The share of the industrial sector accounts for nearly half of China’s national output, considerably higher than the 22 per cent average for advanced economies (29 per cent for Japan) and even in comparison to transition and emerging economies such as South Korea (40 per cent) and Russia (40 per cent). Expenditure on physical capital investment in China was 43 per cent of GDP in 2006, much higher than the 18 per cent for Germany and the 29 per cent for South Korea.2 Rapid urbanisation growth in China has also further intensified the country’s demand for commodities. The United Nations Population Division expects Chinese urban population to rise to 684 million by 2015 and to 890 million by 2030. In order to accommodate such large urban populations, construction and infrastructure needs will generate still further demand for metals and minerals. The resource-intensive stage for China is likely to continue for a mediumto-long term. Although it is one of the largest economies in the world, it is still in many respects a developing country. In comparison to high-income OECD economies, where the per capita income was around US$35,000 in 2007, China’s per capita income was just US$5,083.3 As China achieves higher per capita income levels, its consumption patterns should be similar to that of a middle-income country, such as Korea, and eventually of an advanced economy, such as the United States. Therefore, its demand for commodities will eventually taper off, but not in the near future. As the scale of the financial crisis began to manifest itself in the second half of 2008, by early 2009, China’s expected GDP growth rate fell to 8 per cent from the anticipated 12 per cent estimated the previous year. As consumption levels in its major export markets began to fall, manufacturing activity decreased in China and unemployment increased. In order to combat the recession and avert an economic slowdown, the Chinese government employed various stimulus packages to help domestic growth to replace lost export markets. In November 2008, China announced US$586 billion to be spent on rebuilding houses destroyed in the summer earthquake and still more infrastructure projects, including railroads, airports, subways and bridges, in the next two years. A fall in interest rates and other schemes to encourage domestic consumption have been put into place, although it is too early to tell as to what degree these programmes will be successful in maintaining domestic growth in the long term. Trade is a large driver of China’s economic growth, accounting for 72 per cent of GDP in 2006, but the Chinese growth miracle has not all been about its exports. In 2006, exports were valued at 40 per cent of GDP, but importantly, imports were valued at 32 per cent. As China sources industrial and

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agricultural raw materials through imports, its growth is increasingly becoming a source of revenue for natural-resource-exporting developing countries. With a rise in China’s demand for commodities, increasingly developing countries are benefitting from higher exports to China. The importance of China for commodity-exporting developing countries is rising and vice versa. Low- and middle-income countries as a whole accounted for 30 per cent of Chinese base metal imports in 1990 (Table 7.1). By 2006, they accounted for 56 per cent of these imports. The largest increase was seen in the share of the Latin American region, which is China’s main source of copper imports. Asia is China’s major source of tin, and the region’s share of base metal imports increased from 6 per cent in 1990 to 13 per cent in 2006. Sub-Saharan Africa’s share in Chinese imports has tended to remain stable since the early 1990s. As important as these developing regions are as a source of imports for China, China’s importance for these regions as a primary export destination is also increasing. As the second section of Table 7.1 indicates, China increasingly accounts for the exports of these developing countries. In 1990, as an export destination, it accounted for only 2 per cent of their base metals export market. By 2006, this had increased to 27 per cent. Asia’s exports have seen the greatest export diversion, from 2 per cent to 80 per cent, followed by Latin America (from 1 per cent to 24 per cent) and Sub-Saharan Africa (from 2 per cent to 26 per cent). China’s still burgeoning economic growth rate and growing importance in commodity trade for developing regions suggests that it will continue to be an important source of export revenues for developing countries over forthcoming years. Table 7.1 China’s importance for commodity-exporting developing countries, 1990–2006 Per cent share of regions in Chinese imports of base metals Region Low and middle income Latin America Asia Sub-Saharan Africa

1990

1995

2000

2006

30 9 6 6

46 17 6 9

46 18 8 6

56 27 13 5

Per cent share of China in regions’ exports of base metals 1990 Low and middle income Latin America Asia Sub-Saharan Africa

2 1 6 2

1995

2000

2006

7 5 18 10

11 9 35 12

27 24 80 26

Source: Author’s calculations from COMTRADE database accessed via WITS (World Integrated Trade Statistics, http://wits.worldbank.org/witsweb) in July 2009.

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4 Chinese ‘resource diplomacy’ engagement with Africa 4.1 Context As other chapters in this book have examined, Africa’s importance for China has been steadily increasing, linked to its potential as a largely untapped source for oil and metals and minerals. One of the major vectors of this deepening engagement has centred on the natural resources sector. Africa has some of the largest reserves of metals and minerals on the planet, and the potential for further growth in production is considerable. In 2006, the ratio of production to reserves for manganese, cobalt and aluminium was as low as 34 per cent, 33 per cent and 9 per cent, respectively (Table 7.2). For other metals, the production to reserve ratio is quite high, such as for platinum (90 per cent), gold (48 per cent) and chromium (91 per cent). The United States Geological Survey estimates that between 2000 and 2013, Africa’s production of platinum, aluminium and copper will increase by 119 per cent, 109 per cent and 360 per cent, respectively.4 Raw materials supply security for the future is a major issue for the Chinese, and given the recent period of high international commodity prices, China is looking for continued secured access to raw materials. The Chinese presence within Africa is increasingly being viewed as China’s attempts to secure its ‘resource basket’ (Kaplinsky and Farooki 2009). China’s activities in the continent are mainly seen as resource-seeking, where trade, aid and foreign direct investment (FDI) are often linked to the resource-rich countries. The Chinese government itself acknowledges that part of its strategic policy is to secure supply of essential commodities and oil for its own development. Chinese assistance to Africa is covered by the State Council and three main ministries: The Ministry of Finance, the Ministry of Commerce and the Ministry of Foreign Affairs. Other institutions such as the Export-Import Bank of China and Chinese embassies in African countries also assist in finding and funding projects. Between 2007 and 2009, the Forum on China Africa Corporation (FOCAC) aimed to provide preferential loans of US$3 billion and credits worth US$2 billion for preferential export buyers in Table 7.2 Africa’s share of global production and reserves (per cent share) Mineral

Production

Reserves

Ratio

54 20 40 28 51 18 4

60+ 42 44 82 95 55+ 45

0.90 0.48 0.91 0.34 0.54 0.33 0.09

Platinum group metals Gold Chromium Manganese Vanadium Cobalt Aluminium Source: African Development Bank (2008).

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Africa. The China–Africa Development Fund will provide US$5 billion to support Chinese firms investing in Africa and the establishment of special export zones. Other financial assistance includes debt cancellation for some of the LDCs in Africa. Between 2000 and 2003, an estimated US$1.27 to US$1.38 billion loans were converted to grants. In 2005, a further commitment to reduce loans by a value of US$1.3 billion was made. Broadman (2008) reports that concessional loans to Africa reached US$800 million in 2005, covering 55 projects in 22 countries. As China began to emerge on the international global scene, its outward FDI flows remained small, equivalent to just US$916 million in 2000, not much higher than the US$830 million in 1990.5 However, after 2000, FDI outflows rose significantly, rising to US$17.8 billion in 2006. The flows are expected to continue to increase and reach an impressive US$72 billion by 2011 (Economist Intelligence Unit 2007). China’s investment in Africa is fairly well divided over different sectors. Over the 1979–2000 period, 46 per cent of this investment was in the manufacturing sector, textiles being the main category. Services, mainly construction, accounted for 18 per cent of the FDI inflows, with resource extraction accounting for 28 per cent (UNCTAD 2007). By 2007, there were an estimated 700 Chinese enterprises operating in Africa (UNCTAD 2007). Meanwhile, China’s exports to Africa increased from US$2.4 billion in 1995 to US$36.8 billion by 2007, and imports also saw a significant rise from US$1.4 billion to US$35.8 billion over the same period. China’s US$1 billion trade surplus with Africa in 1995 changed to a trade deficit of US$1 billion by 2007. Oil-related products are mostly responsible for this deficit, as China’s non-oil trade balance has been in surplus, rising from US$1.3 billion in 1995 to US$18.8 billion by 2006 (Figure 7.6). In 1995, most of the Chinese exports to Africa were in the low-technology6 (47 per cent) and medium-technology sectors (26 per cent). By 2006, hightechnology products were taking a larger share of the exports (16 per cent)

60,000 50,000

$ Millions

40,000 30,000 20,000 10,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 China’s Exports

China’s Imports

Figure 7.6 China’s exports and imports from Africa in US$ million, 1990–2008. Source: IMF (2009).

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and there was also an increase in the share of medium-technology products (33 per cent). Low-technology products lost their share and now account for 39 per cent of Chinese exports to the continent. The top five products account for only 22 per cent of China’s total exports to Africa. Telecommunication equipment (6 per cent), and cotton fabric and garments (13 per cent) were some of the top Chinese exports in 2006. On the import side, China’s imports from Africa were biased towards the primary (42 per cent) and resourcebased (39 per cent) sectors in 1995. Over time, this bias has been accentuated, with these two categories accounting for 96 per cent of total imports in 2006. Petrol oils are the largest imports from Africa and have risen from 22 per cent in 1995 to 78 per cent by 2006. Ores and concentrates of base metals are the second largest, and although their share has decreased from 11 per cent in 1995 to just 5 per cent in 2006, their value has actually increased from US$100 million to US$1.3 billion over the same time (Kaplinsky and Farooki 2009). Cascading tariff barriers for African exports is also an issue where China encourages the imports of unprocessed products while taxing processed goods. This has implications for manufactured exports (or potential exports) from African countries. However, recently, China has granted Generalised System of Preferential (GPS) status to African exports, although it remains unclear as to how this will affect processed goods. 4.2 China’s strategic interest in Africa China engages with a large number of countries in Africa, often funding investment in parts of the continent that are considered politically risky by other donor countries. In terms of both trade and FDI, China’s main endeavours have been in the oil and minerals sectors and in the infrastructure sector. But the range of activities is growing rapidly, including small-scale businesses such as trading, restaurants, beauty salons and Chinese medicine centres. China’s assistance to the continent has taken several shapes and forms, from health and education projects to the construction of official buildings, stadiums and roads. There has been a significant strategic integration by China in its approach to Africa. FDI and aid have been concentrated in economies which either have large oil and commodity sectors (Angola, Nigeria and South Africa) or show potential as raw materials suppliers in the future, such as the Democratic Republic of Congo (DRC). A distinctive feature of China’s presence in Africa is a traditional reluctance to exert pressure on African governments with regard to patterns of governance (e.g. refusal to participate in Paris Club transparency initiative in Angola), internal politics (e.g. Darfur and Zimbabwe) or process standards in production, for example, on ethical trade and environmental standards. However, there are signs that this hands-off approach is changing, with China providing an increasing number of peacekeeping troops in Africa (see chapter 4). China is also very sensitive to criticism of its profile in Africa, to some extent reflected in its recent aid–FDI–trade venture in the DRC,

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which appears to have answered some of the criticisms made of its approach towards exploiting Africa’s abundant resources. China has initiated a number of fora to enhance China–Africa relationships – the largest of these is the afore-mentioned FOCAC (see chapter 1). The first FOCAC ministerial meeting was held in Beijing in 2000, followed by the second in Addis Ababa in 2003. The third forum was held in 2006, also referred to as the China– Africa Summit, which was widely seen as China’s attempt to shift gears in its engagement with Africa. Non-resource-rich countries have opportunities to gain from this engagement with Africa as well. The spread of Chinese FDI has become more dispersed in 2005 in comparison to 1990. Assistance projects cover a wide range of countries, including the non-mineral economies. Fabric and telecommunication equipment are some of the largest Chinese exports to the continent and can be a source of expansion of light manufacturing and services sectors. Apart from minerals and oil, China also imports cotton from Africa, which can help the agricultural sector gain from trade (Kaplinsky and Farooki 2009). The challenge therefore is to build on these minerals and agricultural sectors and improve value addition for exports. Of the emerging economies, China has the most resources at its disposal and is actively seeking markets and opportunities for engagement. Africa provides such a base, and well-designed policies can help both regions gain from the experience. China has a clearly developed strategic approach towards Africa, involving multiple parties on the Chinese side. The strategic objectives are twofold: first, to obtain longterm access to Africa’s abundant resources (oil and minerals), and second, to obtain Africa’s support in the global arena. Chinese aid to Africa is free of conditionality (subject to a proviso that recipient countries do not recognise Taiwan), although there have been recent signs that it is more willing to consider the quality of internal governance in some African countries, for example, providing peacekeeping forces or gentle pressures on Sudan with regard to Darfur. Insecurity in many parts of Africa is both a problem for Chinese operations and an opportunity. The opportunities are perhaps more evident, since it is the very insecurity of oil and minerals extraction in Africa (Sudan, Nigeria and the DRC) which provides the space for Chinese firms to enhance their presence. This brings both opportunities and risks to the African countries. Even with the 2008 decline in commodity prices and economic growth, China has continued to pursue a minerals sector-based engagement with Africa. In January 2009, China signed a US$2.3 billion deal with Liberia, the biggest FDI project in the country, for iron ore mining. Revamping the country’s rail network and electricity generation system is also part of the agreement.7 There are also reports in Zambia that Chinese-owned firms opened copper smelters in January 2009 while other competitors were shutting down their plants.8 Despite the global downturn, Chinese investors are still looking to expand their markets in Africa, especially in the telecommunications sectors. Other firms that are looking to buy in the metals and minerals sector given the lower price for these resources due to a fall in commodity prices.

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China’s growing presence in Africa has both positive and negative implications. If we focus on the direct impact, consumers, producers and governments can draw major benefits from engagement with China. However, policy concerns remain in connection to this engagement. The implications of China–Africa engagement cover a whole variety of direct and indirect issues, as well as macro-, micro- and meso-level outcomes. On the one hand, China has brought much needed aid, trade and investment to African countries. In return, it has access to oil and other industrial commodities, which are important for the country’s own economic development. While China has made contributions towards developing the infrastructure sector in African countries, its exports may harm the manufacturing sector. The Chinese demand for commodities has led to increased investments by Chinese and Western mining firms in Africa, but environmental, labour and equity issues remain. The increase in commodity prices is advantageous for natural-resourceabundant countries in attracting a higher price for their exported product and increased investments in their commodity sectors. A change in the direction of their terms of trade – driven by the growth in large emerging economies such as China, India and Brazil – brings new non-Western-derived opportunities of growth. However, making the most of domestic natural resources raises policy issues that must be addressed by African countries, as is discussed below. 4.3 Dealing with rent-seeking behaviour Rent-seeking behaviour by the state does not allow for mineral wealth to be shared for the benefit of the entire population. Development is impeded when royalties from mineral resources received by the state are not transferred to the population through redistributive expenditures on health, education and other public goods. The general population will also suffer if the state uses its mineral wealth on non-development expenditure such as presidential palaces and expenditure on luxury vehicles for state officials. Finally, in receiving resources from outside the country, the state will not consider itself accountable to its own people. This often leads to non-democratic state behaviour. In extreme cases, conflict and civil war may break out, with opposing factions trying to take control of the centre to which resource rents are paid. Such rent-seeking has caused conflict in most African countries that China has closer economic relations with, and with increasing commodity prices, there is now more wealth to fight over. Recent efforts to circumvent rent-seeking states have included the Chad–Cameroon pipeline supported by the World Bank (Heller 2006, Pegg 2005). Rents from the resources were earmarked for specific development sectors from the beginning, and monitoring and evaluation teams were trained to ensure that the funds flowed to their appropriate budget heads. There are also other successful cases such as Angola, where the African Development Bank has been assigned a key role in monitoring resource revenues. These kinds of policy options can be used to ensure that

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development from mineral resources is delivered to a wider population, leading the entire country to benefit from its natural resources. With higher competition for Africa’s resources, mining deals are coming under increased scrutiny from international institutions. The case of the DRC is the first example, and more will follow, where mining investment deals have come under strong scrutiny by other international financial institutions. The DRC government negotiated a mining investment deal worth US$9 billion with China, giving the latter extensive mining rights in the region. A sum of US$3 billion was to be invested in the mine area itself, while the remaining money was to be divided further into two tranches, to be spent on developing roads, railways, hospitals and universities. Although this was the largest ever foreign investment in the DRC, the IMF and OECD were cautious about the negative impact of this deal on the DRC’s debt repayment obligations. After tense negotiations, the deal went ahead, although the US$3 billion for infrastructure support was suspended.9 The negotiations involving the African host country, the Chinese and the IMF indicates the growing scrutiny that new mining deals are receiving and the importance being given to ensure that such investments are not harmful to the country in the long run. 4.4 Dealing with the Dutch Disease The Dutch Disease arises from two related processes. The first is the deindustrialisation of the economy due to a growing domestic natural resource sector (e.g. oil or gas) that crowds out other sectors. The second is from the appreciation of the exchange rate due to growing demand for the same domestic natural resource that makes exports from non-resource sector less price competitive in international markets. However, as the Netherlands has shown, with a comprehensive industrial and monetary policy, these affects can be dealt with effectively. Industrial and trade policy can address issues of de-industrialisation within the domestic economy and support the nontrade sector. Malaysia has used a balanced approach to develop its natural resource and manufacturing sectors together, with success. New Zealand and Australia are both examples of commodity-exporting countries that have diversified their economies without abandoning their resource sectors. The de-industrialisation problems associated with the Dutch Disease also need to be considered in the context of resource-rich developing economies. Some of these countries do not have a substantial manufacturing sector to speak off, as applies to many if not most African nations (Kaplinsky and Morris 2008). Concentrating on commodity exporting may further exacerbate problems in the fledgling manufacturing sectors. On the other hand, with China’s high income elasticity of demand for commodities, the absorption of its commodity export output is largely guaranteed. The balancing act between export sectors that will generate high revenues for the medium term, at the cost of further ignoring the manufacturing sector, becomes even more

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important for these developing countries. These are not easy policy challenges, but for the present, it is argued that effective policy support is required by these countries to mitigate the effects of the Dutch Disease. The use of industrial and monetary policy in these cases, to dissipate the impact of a strong commodity-exporting sector, with appropriate state interventions has been suggested by a number of scholars (McMahon 1997, Ross 1999, 2001, Sarraf and Jiwanji 2001). 4.5 To industrialise or not to industrialise? Industrialisation has long been held as a panacea for development and is evidenced to have delivered growth for a wide range of countries. Now that the rise in commodity prices can also contribute to growth, should naturalresource-abundant countries still focus on industrialisation? This is a difficult question to answer. Natural resources are now in a better position as a sector to assist growth, with the capability of generating higher export revenues relative to previous periods of lower commodity prices. However, effectively using these export revenues for economic growth and development and ensuring that the proceeds are spent for the greater good of the local population remains challenging. The enclave nature of the mining sector, with its limited forward and backward linkages, tends to restrict its multiplier effect within an economy. Given the capital-intensive nature of mining, the sector makes greater demand on capital investments, which are scarcer in a developing country relative to labour. The mining sector will not generate the same amount of employment as does the manufacturing or agricultural sector. There are also issues of rentseeking behaviour on part of the state, which can have a detrimental effect on economic growth (Auty 2001, Moore 2001). When a government receives royalties for its natural resources, without a strong system of accountability and responsibility to the people in place, the temptation for the state to ransack the country for its own gains can be large (Mkandawire 2005). On the more positive side, in the late nineteenth century and early twentieth century, commodity exploitation and industrialisation moved in parallel, and with the right policy mix and state intervention, economic growth was possible in a number of countries (Wright and Czelusta 2004). If countries are to benefit from their natural resource sectors and not remain focused on industrialisation alone to deliver economic growth, strong political and institutional policies need to be developed. Resource rents can be accompanied by a positive growth effect as long as a country has good institutions (Collier and Goderis 2007). Arezki and van der Ploeg (2007) and Mehlum et al. (2006) show a negative impact of resource dependence on growth rates only when the quality of institutions is worse than a critical level. Fasano (2002) documents the case for United Arab Emirates, which spent its resource rents on modern infrastructure and education, turning the curse into a blessing. Acemoglu et al. (2003) offer similar findings for resource-rich Botswana.

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This chapter focuses on resource-rich developing countries, particularly those exporting metals and minerals. However, there are a large number of non-resource-rich developing countries. During the high oil and food prices in mid-2008, most of them suffered from ballooning import bills while facing intense competition in their manufactures export markets from China. These countries do not have the luxury of exploiting natural resources. At the same time, manufactured exports from China are a direct threat to their domestic manufacturing sector and an indirect threat to their export markets. It is difficult to offer a simple answer as to whether these countries should continue to industrialise. A helpful way forward is offered by Kaplinsky (2009) in analysing the impact of China’s growth on African countries. If Africa exports what China imports, then Africa benefits, as is the case when China exports what Africa imports. This leads to a win–win situation. For example, Africa’s exports of metals and minerals are beneficial as Chinese demand for these products has increased prices and can generate revenues for African countries. In the case of Chinese exports, low-cost manufactured items (e.g. footwear, clothing and household electronic items) when imported into Africa benefit domestic consumers. Therefore, the benefit to the African consumers of low-cost Chinese imports, while the revenue from high-price commodity exports can result in a win–win situation. Kaplinsky (2009) also points out that there are indirect trade vectors that may harm Africa. This is likely to occur when Africa exports the same goods as China or when Africa imports the same commodities as China. For example, China’s demand for oil has had some impact in increasing oil prices, which has also increased the oil import bill for African countries. While Angola and Nigeria may benefit from high oil prices, the rest of the African nations are oil importers. Similarly, textiles and clothing are a major African export to the United States under the Africa Growth and Opportunity Act (AGOA). With increased Chinese exports after the removal of the Multi-Fibre Agreement in 2005, exports from the AGOA region declined by 21 per cent between 2005 and 2007 (Kaplinsky and Morris 2008). Domestic policy issues have to ensure that cheap Chinese imports do not severely challenge or destroy local manufacturing capability. Similarly, in signing agreements over minerals rights and concessions, the State has to ensure that an equitable distribution of rents takes place and the benefits are passed on to the local communities. Environmental and labour standards also need to be enforced. Therefore, while Chinese engagement may bring opportunities, the African governments need to ensure that policies are in place to fully benefit from these ventures. These are complex political and economic issues, and the most important component of this engagement has to be the response of the African governments. The policy proposals, agreements and implementation by the African States are in large part going to determine how beneficial Chinese engagement with the continent will be.

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5 Conclusion The 2003–08 commodity price boom saw a sustained increase in prices over the period, and unlike the previous two post-World War II commodity price booms, was driven by unanticipated shifts in demand rather than supply disruptions. The major increase in base metals demand originated from the resource-intensive stage of economic growth in China and is likely to lead to a prolonged increase in commodity prices for over a decade or more, referred to as a ‘commodity price super cycle’. The Chinese demand for metals and minerals is largely due to the increased expenditure on infrastructure, construction and manufacturing. China may be the world’s second largest economy by size, but it is still essentially a developing economy and far from reaching a mature economy status. The structural nature of China’s commodity demand indicates its continued need for natural resources. China’s deepening engagement with Africa has also centred on access to these resources, aimed at securing raw materials over the long term, and hence it continues to invest in mining and investment activities in the continent. Beijing has tended to focus its combination of aid, trade and FDI policies on Africa’s resource-rich countries, although China is also expanding into other parts of the African continent. We can expect this engagement to be a reasonably long one, until China reaches a mature economy status and its commodity consumption rate begins to decline. Yet with its size and current state of development, China can absorb potentially very high levels of imports from developing countries. As an engine of global economic growth, China plays an important role in generating development for other developing economies. This provides African countries with an opportunity to benefit from their natural resources, but policy issues remain around growth led by the commodities sector. Rent-seeking behaviour and the Dutch Disease remain of notable concern for countries where the manufacturing sectors are already struggling to take root. Good governance is also under stress where resource rents are concerned, as large resource revenues can cause more harm if not handled effectively. However, international financial institute support from the African Development Bank, the World Bank and the IMF can help to balance these issues and ensure that Africa’s mineral wealth is used for improved public benefit. The responsibility to deal effectively with the Chinese and to negotiate contracts for access to minerals rests primarily with the state. The DRC government’s negotiations with Beijing demonstrate the opportunity to gain valuable infrastructure and social sector investments in return for mining rights. With increased competition for these commodities, African states will find themselves in a stronger position to negotiate treaties that suit their development goals more effectively. The context of commodities and growth covers complex political and economic policy issues, and the most important component of this engagement has to be the response of the governments of developing countries. The policy proposals, agreements and implementation

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by these states are in large part going to determine how beneficial economic engagement based on commodities will be.

Notes 1 Bloomsbury Mineral Economics (2009). The Copper Briefing Service (January edition). London: Bloomsbury Mineral Economics. 2 World Development Indicators (December 2008) database. Available at: www. worldbank.org/data (accessed June 2009). 3 Ibid. 4 http://minerals.usgs.gov/minerals. 5 The reporting mechanism for FDI may have also changed after 2000 and therefore may account for the change in reported figures. 6 Technology category based on the Lall’s (2000) taxonomy of such products. 7 Voice of America News, 23 January 2009. 8 Reuters News, 28 January 2009. 9 ‘China and Congo Change Tack on Deal’, The Financial Times, 18 August 2009.

References Acemoglu, D., Johnson, S. and Robinson, J. (2003) ‘An African Success: Botswana’, in D. Rodrik (ed.), In Search of Prosperity: Analytic Narratives in Economic Growth. Princeton: Princeton University Press. African Development Bank (2008) African Development Report 2007. Abidjan: African Development Bank. Arezki, R. and van der Ploeg, F. (2007) ‘Can the Natural Resource Curse Be Turned into a Blessing? The Role of Trade Policies and Institutions’, IMF Working Paper WP/07/55. Washington DC: International Monetary Fund. Auty, R. (2001) ‘The Political Economy of Resource Driven Growth’, European Economic Review, Vol 45, pp. 839–46. Broadman, H.G. (2008) ‘China and India Go to Africa’, Foreign Affairs, Vol 87(2), pp. 95–109. Cashin, P., McDermott, C.J. and Scott, A. (1999) ‘Booms and Slumps in World Commodity Prices’, Reserve Bank of New Zealand Discussion Paper Series No. G99/8. Wellington: Reserve Bank of New Zealand. Collier, P. and Goderis, B. (2007) ‘Commodity Prices, Growth, and the Natural Resource Curse: Reconciling a Conundrum’, Munich Personal RePEc Archive (MPRA) Paper 17315. Munich: University Library of Munich. Cuddington, J.T. (1992) ‘Long-Run Trends in 26 Primary Commodity Prices’, Journal of Development Economics, Vol 39(2), pp. 207–27. Economist Intelligence Unit (2007) World Investment Prospects to 2011: Foreign Direct Investment and the Challenge of Political Risk. London: Economist Intelligence Unit. Fasano, U. (2002) ‘With Open Economy and Sound Policies, U.A.E. has Turned Oil “Curse” into a Blessing’, IMF Survey, Vol 31(19), October 21, pp. 330–32. Fried, E.R. (1976) ‘International Trade in Raw Materials: Myths and Realities’, Science, Vol 191(4228), pp. 641–46. Heller, T.C. (2006) ‘African Transitions and the Resource Curse: An Alternative Perspective’, Economic Affairs, Vol 26(24), pp. 24–33.

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International Monetary Fund/IMF (2009) Direction of Trade Statistics. Washington DC: IMF. Kaplinsky, R. (2009) ‘Trends in South-South and Triangular Development Cooperation’. Paper presented at the UNCTAD Expert Group Meeting, Ethiopia, 10–11 February 2009. Kaplinsky, R. and Farooki, M.Z. (2009) ‘Africa’s Cooperation with New and Emerging Development Partners: Options for Africa’s Development’, Report prepared for the Office of Special Advisor on Africa. New York: The United Nations. Kaplinsky, R. and Morris, M. (2008) ‘Do the Asian Drivers Undermine ExportOriented Industrialisation in Sub-Saharan Africa?’, World Development, Vol 36(2), pp. 254–73. Labys, W.C., Kouassi, E. and Terraza, M. (2000) ‘Short Term Price Cycles in Primary Commodities’, Developing Economies, Vol 38(3), pp. 330–42. Lall, S. (2000) ‘The Technological Structure and Performance of Developing Country Manufactured Exports 1985–98’, Oxford Development Studies, Vol 28(3), pp. 337–69. Macquarie Commodities Research (2008) Overview of Commodities Outlook with Focus on Copper, Zinc and Coking Coal. Company presentation received through personal communication. McMahon, G. (1997) ‘The Natural Resource Curse: Myth or Reality?’, Mimeo, Washington DC: World Bank Institute. Mehlum, H., Moene, K. and Torvik, R. (2006) ‘Institutions and the Resource Curse’, The Economic Journal, Vol 116(1), pp. 1–20. Mkandawire, T. (2005) ‘Maladjusted African Economies and Globalisation’, African Development, Vol 30(1/2), pp. 1–33. Moore, M. (2001) ‘Political Underdevelopment: What Causes Bad Governance?’, Public Management Review, Vol 3(3), pp. 385–418. Pegg, S. (2005) ‘Can Policy Intervention Beat the Resource Curse? Evidence from the Chad–Cameroon Pipeline Project’, African Affairs, Vol 105(418), pp. 1–25. Radetzki, M. (2006) ‘The Anatomy of Three Commodity Booms’, Resources Policy, Vol 30(1), pp. 56–64. —— (2008) A Handbook of Primary Commodities in the Global Economy, Cambridge: Cambridge University Press. Reinhart, C. M. and Wickham, P. (1994) ‘Commodity Prices: Cyclical Weakness or Secular Decline?’, IMF Staff Papers, No. 41, pp. 175–213. Ross, M.L. (1999) ‘The Political Economy of the Resource Curse’, World Politics, Vol 51(2), pp. 297–322. —— (2001) Extractive Sectors and the Poor, Boston: Oxfam America. Sarraf, M. and Jiwanji, M. (2001) ‘Beating The Resource Curse: The Case of Botswana’, World Bank Environment Department Papers, Environmental Economics Series, Washington, DC: World Bank. United Nations Conference on Trade and Development/UNCTAD (2007) ‘Transnational Corporations, Extractive Industries and Development: World Investment Report 2007’, Geneva: UNCTAD. Wright, G. and Czelusta, J. (2004) ‘The Myth of the Resource Curse’, Challenge, Vol 47(2), pp. 6–38.

8

China’s energy diplomacy in Africa The convergence of national and corporate interests Chi Zhang

1 Introduction China’s energy diplomacy in Africa is a relatively new phenomenon in world economy and politics. It helps promote economic development in both China and Africa. On the one hand, energy has become a bottleneck for China to continue its rapid economic development. The country’s energy (especially oil and natural gas) consumption has expanded substantially with its economic takeoff. Although China itself is a big energy producer, its domestic production does not meet its demand. As a result, it is more and more dependent on overseas energy supply. About half of China’s oil consumption relies on imports. Thus, energy supply is directly linked to China’s economic development and social stability. Among those regions exporting energy to China, Africa is playing an increasingly important role. On the other hand, China’s worldwide search for energy provides African countries an opportunity to further utilise their energy to support their economic development. Together with its energy diplomacy, China provides lots of aid and assistance to many African countries, apart from bringing them growing energy revenues. China has also been playing the role of an emerging significant energy buyer and investor beside Western countries, giving those energy-rich African states another choice regarding the development of their energy resources and the international energy co-operation. These help boost the economic development of many African countries, and offer them more economic and political interests. Recently, China’s energy diplomacy has been developing fast in Africa. This movement consists of two aspects – the China government’s energyrelated diplomatic activities, and Chinese national oil company (NOC) investment and operations in Africa. Highlighted at the Forum on China– Africa Co-operation (FOCAC) summit of November 2006, China’s fastexpanding engagement with Africa in the past few years has aroused global attention, and China’s energy diplomacy across the continent has given rise to a heated debate in the media and policy and academic circles worldwide. There is a small but growing literature on China’s energy diplomacy in Africa. Much research to date has focused on the inter-state level to discuss

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Beijing’s energy diplomacy and Chinese NOC business on the continent, as well as the implications of this engagement on the rest of the world. They tend to view Chinese NOCs as agencies of the China government, their overseas expansion following the government’s directive to secure energy supply simply because they are state-owned enterprises (SOEs). Their corporate interests are considered to be subordinated to China’s national interests, and their transnational operations are often regarded as more likely for the purpose of realising national interests compared with seeking corporate interests. However, such assumptions underestimate the NOCs’ corporate interests and self-motivation in pursuing transnational operations, and have insufficiently explored the key momentum of China’s energy diplomacy in Africa. This chapter attempts to provide a more comprehensive explanation of the motivation of China’s energy diplomacy in Africa, especially the national and corporate interests behind it. I will focus on oil and natural gas issues as they take up leading positions in China’s energy imports. It is argued that China’s long-term friendship with Africa boosts its recent energy cooperation with the continent. The convergence of national and corporate interests is the fundamental motivation of China’s energy diplomacy in Africa. This movement is beneficial for Chinese NOCs to generate profits and fulfil their corporate development strategies, as well as helps China improve its energy security position, gain more support for its multilateral diplomacy and increase its diplomatic leverages. But, China’s energy diplomacy in Africa faces some notable problems, as this chapter will discuss. It is divided into four sections. The first section identifies China’s energy diplomacy in Africa within the discourse of ‘new diplomacy’. The second section is a brief review of China’s engagement with Africa since the 1950s. The third section discusses in detail the national and corporate interests behind China’s energy diplomacy in Africa and the recent development of this phenomenon. The last section deals with the key problems with the movement.

2 China’s energy diplomacy in the context of ‘new diplomacy’ China’s energy relations with Africa involves both traditional intergovernmental diplomacy and also the operations of relatively autonomous Chinese NOC business operations in the continent. This is a new type of diplomacy in a broad sense, and can be understood with respect to ‘new diplomacy’ analysis, as articulated by Stopford and Strange (1991). As they noted, the traditional perception of diplomacy as inter-state activities or government – government relationships have to be expanded to include government – firm and firm – firm interactions. Strange (1996) later argued that transnational corporations (TNCs) have certainly encroached on governments’ domains of power, and increasingly exercise a parallel authority alongside governments. This perspective attaches great importance to TNCs’ growing role in world economy and politics, beyond the traditional

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conception that only identifies diplomacy in the inter-state domain. Similarly, this chapter views Beijing’s diplomatic efforts and Chinese NOCs’ overseas expansion as two equally important components of China’s energy diplomacy in Africa. As to the relationship between the government and NOCs of China, although these companies are technically state-owned enterprises, they have significant autonomy and their corporate interests are not subordinated to China’s national interests. Today, in China where the market economy has been initially established, the NOCs are first and foremost business enterprises, and then state-owned. During the course of the country’s economic reforms, the China government has decentralised substantial administrative power to the NOCs. They are increasingly powerful economically and politically. The government’s control over them is not as strong as often assumed. Just like many other firms, the NOCs consider their corporate interests as the priority of their operations. As a result, some of their activities are not in line with the government’s preferences, presenting challenges for China’s energy diplomacy in Africa.

3 China’s ‘friendship’ in Africa China’s energy diplomacy in Africa is drawing on the long-lasting China– Africa friendship developed in the past five decades or so. Beijing’s constant emphasis on ‘China–Africa friendship’ is more than a slogan. The year 2006 marked the 50th anniversary of the People’s Republic of China’s (PRC) engagement with Africa. Since 30th May 1956 when China and Egypt established diplomatic relations, China’s long-term co-operation with African countries has helped Beijing make significant achievements in energy cooperation with Africa in a short time over recent years. In general, China has provided aid and assistance to the best of its ability to Africa. A symbol of this long-term friendship is the construction of infrastructure facilities such as schools, hospitals, hotels, stadiums, dams and government buildings by Chinese companies in many African states. By the end of 2005, China had helped built more than 720 projects for Africa. Beijing has also offered over 18,000 governmental scholarships for African students studying in China, dispatched more than 15,000 medical personnel to Africa and treated about 170 million patients. Since the three visits made by Chinese Premier Zhou Enlai to Africa in the 1960s, there have been more than 800 exchanges of high-level visits between China and Africa by their eminent leaders.1 China’s engagement with Africa can be divided into two periods, the first period of Mao Zedong (1950s to mid-1970s), and second that since Deng Xiaoping (late 1970s onwards). During the first period, the primary motivation for China’s engagement with Africa consisted of strategic and ideological considerations. China was involved in strategic competition with both the United States and the Soviet Union, and Mao had the ambition to export communism, expanding China’s political influence and becoming the

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leader of the Third World. Economic objectives of co-operation were almost neglected. China provided large amount of aid, assistance and the construction of infrastructure facilities. Among those projects built by China the most well-known is the Tanzania–Zambia railway, built from 1970 to 1976 at the request of the two African countries. China poured considerable financial and personnel resources into this extremely difficult project, for the purposes of ‘helping African people’s struggle to resist imperialism and colonialism and to strive for national independence, and helping African countries to develop their national economies and enhance their national independence’.2 Costly assistance of this kind did bring Beijing some political returns, such as China’s resumption of its seat at the United Nations in 1971 and most African nations’ diplomatic links with the People’s Republic of China instead of Taiwan. Although Mao’s unrealistic dream of becoming the leader of the Third World was never realised, China’s engagement with Africa during this period laid a solid foundation for China–Africa friendship. The coming to power of Deng Xiaoping in the late 1970s marked a shift in China’s Africa policy from primarily an ideologically motivated approach to a much more pragmatic and diversified one. While the China–Africa relationship during Mao’s period was narrow in scope and without a sustainable foundation, China’s current co-operation with Africa includes many aspects such as trade, education, public health, military and other matters (Li 2007). Indeed, Beijing has long abandoned its previous fantasy of leading the Third World and has been following the principle of pragmatism. Now the China’s government is focusing on domestic economic and social development and tries to realise a favourable international environment for its modernisation drive. These have been the prime strategic motivations of China’s Africa policy of recent years. Past motives of competing for ideological influence with the United States and the former Soviet Union, or becoming the Third World leader, have been replaced by winning African countries’ support in multilateral institutions and gaining more diplomatic leverage. With China’s economic rise in recent years, China–Africa co-operation is gaining momentum, adding to the dynamic of China’s engagement with the continent. The FOCAC was first established in 2000 as a platform for promoting co-operation and held two ministerial-level meetings in 2000 and 2003 (see Chapter 1). It was elevated to summit level in 2006. In 2005, the China–African Chamber of Commerce was set up in Beijing to promote trade and economic relations with initially five African countries. It is only the latest among a fast growing number of initiatives and agreements between China and Africa. By 2005, China had bilateral trade and investment agreements with 75 percent of African countries (Tull 2006). There has been a massive growth of the trade between the two sides. China has overtaken Britain as Africa’s third largest trading partner, after the United States and France. The value of China– Africa trade amounted to US$106.8 billion in 2008. China has also cancelled about US$1.4 billion worth of debt by 31 heavily indebted and least developed African countries since it forged diplomatic relations with the continent five

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decades ago. At the opening ceremony of the Beijing summit of the FOCAC, Chinese President Hu Jintao pledged to double China’s aid to Africa by 2009, increasing from 190 to over 440 the number of tariff-free import items from the least developed African states having diplomatic relations with China, cancel debt in the form of all the interest-free government loans that matured at the end of 2005 owed by African countries that have diplomatic ties with China, provide US$3 billion in preferential loans and US$2 billion of export credits over the next three years, and establish a US$5 billion special fund to encourage Chinese investment in Africa.3 Furthermore, the increasing cultural exchanges have promoted understanding between China and Africa. In the past five years, more than ten African countries sent over 20 government cultural delegations to China and China–Africa cultural exchange is featured with large-scale activities such as the Sino-African cultural year hosted in China in 2004. Up to the end of 2005, China had signed 65 cultural agreements with African countries and implemented 151 plans of cultural exchanges. China has also set up Confucius Institutes jointly with Kenya, South Africa, Rwanda and Zimbabwe to teach Chinese language and culture.4 In January 2006, then Chinese Foreign Minister Li Zhaoxing’s trip to six African states was accompanied by the release of China’s African Policy, a Chinese official policy paper aimed at promoting economic and political co-operation between China and Africa.5 It was the first time that the Chinese government published a policy paper to elaborate its policy towards a specific region in the world. In May 2007, China hosted the annual conference of the African Development Bank. Also, at the 60th World Health Organization (WHO) annual meeting in Geneva, then Chinese Minister of Health Gao Qiang announced that the Chinese government would donate US$8 million to the WHO to improve African countries’ ability to deal with public health emergencies (Gill et al. 2007). In the same year, Beijing increased its support for investments in Africa by providing loan finance through China ExportImport Bank and establishing the China–Africa Development Fund to support African countries’ investments in agriculture, manufacturing, energy, transportation, telecommunication, urban infrastructure and resource exploration (UNCTAD 2008). China is in many ways Africa’s most enduring partner (Alden 2007). Beijing has pursued a foreign policy that has conformed to Africans’ interests and need more than any other external power. Campbell (2007) also noted that although the United States and World Bank claimed to be fighting poverty in Africa, the conditions of the Africa poor have worsened after two decades of structural adjustment, and further argued that ‘Chinese investment potentially provides an alternative for African leaders and entrepreneurs, while providing long-term potential for the development of African economies’ (Campbell 2007: 129). In addition, Beijing’s diplomacy, ‘provided space for manoeuvre for Africans by laying the basis for an alternative international system in the 21st century’ (Campbell 2007: 121). Furthermore,

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the Chinese government held that Africa is on the verge of a developmental take-off, and it is time for China to expand its role in the region. This idea is well received among African countries (Gill et al 2007). Besides, China is considered by more and more Africans as an alternative political and economic model to the Washington Consensus (Obiorah 2007). What China calls its long-term friendship with Africa is important for the government and enterprises in China, and is likely to be continued and enhanced in the future. The stable foundation of China–Africa relations has contributed to China’s energy diplomacy in the continent.

4 The convergence of national and corporate interests 4.1 Context I argue that the convergence of national and corporate interests behind China’s energy diplomacy in Africa is key to understanding the nature and dynamics of this diplomacy. Such movement not only serves Chinese NOC corporate interests like gaining profits and becoming leading transnational oil corporations: it is also beneficial for China’s national interests such as improving energy security, enhancing multilateral diplomacy and increasing diplomatic leverage. Accordingly, in recent years, Chinese NOC business in Africa has been rapidly developing, and the Chinese government has been actively carrying out energyrelated diplomatic activities across the continent. In this section, we first discuss corporate interests that are shaping Chinese NOC business operations in Africa. We then examine the contribution of energy diplomacy to China’s national interests, and Beijing’s recent energy diplomacy actions in Africa. 4.2 Corporate interests and Chinese NOC operations in Africa Largely due to their monopoly in the Chinese market, the NOCs’ financial capacity has been growing quickly with the development of the economy of China and the expansion of their business in China. Due to the limitations of China’s domestic energy resources and the fierce competition within China’s home market, it is difficult for all the huge surplus capital of the NOCs to be re-invested in China. Meanwhile, thanks to China’s transformation from a planned to market economy, its integration into the world economy, and the liberalisation of the government’s restriction of outward foreign direct investment, the NOCs realised that investment in oil and natural gas assets abroad can bring them more revenues and corporate development opportunities. Therefore, like their foreign counterparts, Chinese NOCs are pursuing transnational operations for the purpose of optimising profit earnings. Usually, upstream industry activities, such as exploration and production, are the most profitable part of the oil industry operations. The NOCs seek profit through the acquisition of foreign upstream assets. They seek to optimise profit margins that exist between the cost of producing

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a barrel of oil and the price of a barrel of oil in the international market. In times of high international oil prices, the upstream sector is much more than usually profitable in comparison to the downstream sector. For example, the China National Petroleum Corporation (CNPC) viewed overseas investment as a means to quickly bolster its output and has a strong incentive to sell its foreign produced oil in the international market because the international oil price is higher than the China government’s set domestic price for oil products (Downs 2006). For the NOCs, Africa is thus an important element of their corporate development strategies. Although established much later than their Western counterparts and with little experience of overseas operation, Chinese NOCs have clear goals and plans to become modern transnational corporations, and the world’s firstclass oil firms with globalised business systems. For instance, CNPC aims to build itself into an ‘integrated international energy corporation’ through increasing resources, expanding market and seeking a greater international role.6 Its subsidiary, PetroChina, too has clear and ambitious development objectives and strategies. According to its website, the company ‘is dedicated to implementing three strategies of resources, markets and internationalization’.7 Specifically, it plans to increase its acquisition of overseas resources and continuously promote its competitiveness in the world market. In order to realise these corporate development goals, their investments in overseas oil and gas assets and their operation abroad is vital. Africa is a critical element in their strategy to transform and internationalise themselves. From a global strategic perspective, Africa is critically important to Chinese NOCs. The continent has rich oil and natural gas resources. The proved oil reserves in Africa at the end of 2008 were 16.6 billion tonnes, accounting for 10 per cent of the world’s total oil reserves. Several African countries – such as Algeria, Angola, Egypt, Libya, Nigeria and Sudan – have substantial oil reserves and have gradually increased their oil production capacity over time. In 2008, Africa produced 488.1 million tonnes of oil, accounting for 12.4 per cent of the world’s total oil output. Also, Africa’s proven natural gas reserves in 2008 were 14.7 trillion cubic metres – 7.9 per cent of the world’s proved reserves. Algeria, Egypt and Nigeria are important natural gas producers.8 But the continent’s abundant energy resources are yet to be well explored. New oil deposits have been discovered in Madagascar, Zambia and Uganda, showing that Africa has significant potential reserves of energy resources. It is estimated that the Gulf of Guinea will contribute one out of every five new barrels of oil to the world market by 2010, with the bulk of this from Angola and Nigeria (Rocha 2007). More importantly, China’s long-term friendship with African countries is beneficial for Chinese NOCs’ business there. In general terms, Chinese NOCs’ operations in Africa face two disadvantages and four advantages vis-à-vis Western oil companies. Their first disadvantage is that they are relative latecomers to investments in the continent, and have little experience in transnational operations, while Western oil firms are able to build upon generations of engagement with Africa dating back to

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the colonial period to secure their investment. The second main disadvantage is that they have a lack of advanced technologies compared to their Western counterparts. Nevertheless, they have four advantages compared with Western oil firms. First, Beijing’s insistence of its non-interference principle allows Chinese NOCs to invest in any state in Africa. They meet less competition in some African countries like Sudan where Western energy companies’ activities are limited by their governments that imposed multilateral sanctions against these countries. Second, the managerial and labour costs of Chinese NOCs are much lower than those of Western oil companies. Third, Chinese NOCs are often able to call upon the Chinese government’s support for specific diplomatic efforts and development assistance that help their operations in Africa (Alden 2007). Fourth, Chinese companies are more ready to share technologies with their African partners. Although Chinese firms’ technology lags behind Western or Japanese firms, ‘some poorer nations think that Chinese companies will be more willing to share what they know, and that Chinese firms, with backgrounds in the developing world, might be better suited for Africa or Latin America or Southeast Asia’ (Kurlantzick 2007: 92). This is also true for Chinese NOCs, whose technologies are not as advanced as their Western counterparts. Since Western oil firms are usually reluctant to share their advanced technologies, Chinese NOCs’ willingness to transfer technologies to the African side is an advantage for their competition with Western oil companies in Africa. Therefore, in the past few years, Chinese NOCs have increased their investment in African oil and natural gas assets and expanded their operation across the continent. Currently, Chinese NOCs have investments in at least ten African countries including Algeria, Angola, Chad, Equatorial Guinea, Libya, Mauritania, Niger, Nigeria, Sudan and Tunisia. For instance, CNPC, the number one Chinese NOC, has oil and gas assets and oilfield services business in all of the above-listed African countries except Angola. Yet compared with Western oil companies, Chinese NOCs are relatively small players. Especially, they are still minor actors among those foreign investors in the continent’s leading oil reserves owners like Libya, Nigeria, Algeria and Angola. The current African output of Chinese NOCs is mostly concentrated in Sudan. In 2006, Chinese NOCs’ overall output in Africa was about 167,000 barrels of oil equivalent per day, with 81 per cent from projects in Sudan. Also, Chinese NOCs lag behind their Western counterparts regarding the value and production of their African assets. Due to the fierce competition for access to Africa’s oil, Chinese NOCs’ acquisitions in the region are modest. Even if they have sufficient funds for their commercial expansion, they often lack the advanced technologies necessary to compete for some of the continent’s most desirable oilfields (Downs 2007). Perhaps the most prominent example of China’s energy co-operation with Africa is CNPC’s investment and operation in Sudan. The company has transformed Sudan’s oil sector ‘plagued by war and Western sanctions into the country’s leading export’, demonstrating its ability ‘to manage all facets

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Figure 8.1 Sudan’s net oil exports/imports, 1990–2007 (thousand barrels per day) Source: US Energy Information Administration, Country Energy Profiles: Sudan (http://tonto.eia. doe.gov/country/excel.cfm?fips=SU, accessed 30 November 2008).

of a petroleum extraction operation to international industry standards’ (Alden 2007: 12). Due to Sudan’s north–south civil war and US sanctions, there is a dearth of competition from Western oil companies in the country. CNPC took this opportunity to establish itself as the leading oil investor and producer there. Its oil production in Sudan is more than that elsewhere in the world except Kazakhstan, and its assets there are valued at about US$7 billion. The essential part of CNPC’s Sudanese assets is a 40 per cent ownership in the Greater Nile Petroleum Operating Company which is a joint venture with Sudan’s Sudapet, Malaysia’s Petronas and India’s Oil and Natural Gas Corporation Limited (ONGC), and produces most of the country’s oil. CNPC’s investment helped turn Sudan from a net oil importer to a net oil exporter in 1999, just as the international oil price began to surge from less than US$15 per barrel in 1998 (see Figure 8.1) (Downs 2007). 4.3 National interests and Beijing’s diplomatic activities in Africa Improving China’s energy security China’s oil diplomacy in Africa helps improves the country’s energy security, mainly because it diversifies and increases China’s energy import sources. The Middle East has been China’s top oil supplier for a long time, accounting for around 80 per cent of China’s imported oil by the early 2000s. But more recently, the importance of Africa in China’s oil import structure has been rapidly increasing. Currently, it is the second largest oil supplying region for China (see Figure 8.2). In 2008, China imported 53.9 million tonnes of oil from Africa, accounting for about 25 per cent of its total oil import.9

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Others, 15.23%

Africa, 25%

Former Soviet Union, 10.28%

South and Central America, 7.50%

Figure 8.2 Distribution of China’s oil imports from various regions, 2008 (share of total) Source: US Energy Information Administration, Country Energy Profiles: Sudan (http://tonto. eia.doe.gov/country/excel.cfm?fips=SU, accessed 30 November 2008).

Oil imports from Africa helps reducing China’s over-reliance on oil imports from the Middle East, a region characterised with unstable geo-political situations. The political instability in the Middle East caused by the US-led military intervention and occupation of Iraq and Iran nuclear disputes may affect China’s oil import. Hence, Africa becomes more and more important in China’s global strategic consideration (Alden 2007). China’s oil import from Africa is also diversified among various regions within the continent (see Figure 8.3). Thus, if the oil export from one of the regions is affected by regional instability or even conflict, the other regions may still supply oil for China. Such diversification helps reduce the risks to China’s oil imports. Moreover, Chinese NOCs’ investment and operation in Africa increases the overall oil production in the world, as well as providing China with more sources of oil for import. Particularly, in some African countries like Sudan where Western oil companies’ operations are limited by political reasons, Chinese NOCs’ production of equity oil (i.e. the proportion of oil production that a concession owner has the legal and contractual rights to retain) there is beneficial for both China and the rest of the world, because it increases China’s oil import from these countries, hence reducing the country’s oil imports from elsewhere in the world. On the other hand, even if some of the equity oil produced by Chinese NOCs is not sent to China but sold in the international market and purchased by some other countries, it just increases

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East and Southern Africa, 19.67%

North Africa, 8%

West Africa, 72.54%

Figure 8.3 Distribution of China’s oil import from Africa, 2008 (share of total) Source: US Energy Information Administration, Country Energy Profiles: Sudan (http://tonto. eia.doe.gov/country/excel.cfm?fips=SU, accessed 30 November 2008).

these countries’ imports of Chinese equity oil while reducing their oil imports from other sources. Thus, China can import more oil from those sources, although it does not get all of Chinese equity oil. In this sense, China swaps oil with those countries in the global market. This helps ensure that China get sufficient oil supply from the world market. Besides, the price of equity oil is cheaper than the international oil price. So, Chinese NOCs’ production of equity oil overseas helps easing the negative influence of international oil price fluctuation upon China’s oil imports. Promoting Beijing’s multilateral diplomacy China’s energy diplomacy and energy co-operation with Africa is an increasingly important element of China’s engagement in the continent. It provides Beijing with a new platform to reinforce its relationship with African states and secure their diplomatic support in multilateral institutions. Africa is always critical for Beijing’s multilateral diplomacy. Africa’s 53 nations make up more than one-fourth of the 192 UN member states, and the African Union (AU) is an emerging important player in the international arena. The continent is the largest single regional grouping of states with the tendency towards ‘bloc voting’ in multilateral institutions such as the UN and its agencies. African governments have proved to be a reliable source of political support whenever China’s behaviour is criticised (Alden 2007). African countries have demonstrated themselves as ‘reliable supporters of China’s position in opposing hegemony and power politics’ (He 2007: 26–27). During the past decade, the African states that hold 15 of the 53 seats at the UN Commission on Human Rights have played a prominent role in frustrating

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efforts by some Western countries to bring about a formal condemnation of China’s human rights record in the commission 11 times. Beijing could not have done this without the diplomatic support of African nations (Li 2007). Furthermore, 16 African states have recognised China’s full status as a market economy, a crucial marker after China’s entry into the World Trade Organisation (WTO), helping it to avoid accusations of dumping. Seven of these countries announced their recognition during the Beijing summit of the FOCAC, bringing the total number of countries supporting China’s market economy status to 64.10 Besides, China and African nations have united in fighting for ‘fair and equitable international economic trade rules’ such as in the WTO’s negotiation over agricultural issues (He 2007: 27). Two recent examples of African support for Beijing’s multilateral diplomacy are the dispute over the expansion of the UN Security Council in 2005 and the election of a new Director-General of the WHO in 2006. To a large extent, both cases indicated China’s securing of African support to impede Japan’s diplomatic moves. The chilly political relationship between Beijing and Tokyo at that time was accompanied by fierce diplomatic competitions between them. The proposed UN Security Council expansion was part of a broader UN reform plan spearheaded by the former UN Secretary-General Kofi Annan.11 Japan is one of the countries that are likely to become a permanent member of the Security Council if such an enlargement plan were implemented. However, historical and territorial disputes intertwined with the contemporary rivalry between the two countries make Beijing unwilling to see Tokyo get a permanent seat in the Security Council. Although as a permanent member of the Council, China could block Japan’s proposal at the second stage, it has successfully done so much earlier, even before the procedure began, thanks to the co-operation of African countries. There were three competing proposals in 2005. The first and most well-prepared plan was from the Group of Four (G4) established in September 2004 which was promoted by Japan, Germany, India and Brazil. They proposed adding 10 new members in the Security Council with six permanent ones and four non-permanent ones. They hoped to occupy the Asian, West European and Latin American slots and leave two seats for Africa. The second proposal was from a group called Uniting for Consensus, which proposed adding ten nonpermanent seats. Although the G4 countries worked very hard trying to win support from Africa, the AU voted at a summit in Ethiopia to reject the G4 plan and ratify their own alternative proposal calling for the addition of 11 members and proposed two permanent and two non-permanent seats for African states.12 Without support from the AU, it is unlikely that the G4 plan could be approved with a two-thirds majority in the first round of voting by the UN General Assembly, not to mention proceeding to a second round. As a result, the G4 countries have to shelf their bid for now. Another case is the Chinese candidate Dr Margaret Chan who was elected Director-General of the WHO in 2006, following the sudden death of her predecessor Dr Lee Jong-wook. Eleven candidates were recommended by

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their respective governments of whom five were selected as finalists. Among them was Margaret Chan, the former health chief of China’s Hong Kong Special Administrative Region. She joined the WHO in 2003 and became the agency’s top official for pandemic influenza as well as the assistant DirectorGeneral for communicable diseases. Her strongest challenger was the Japanese candidate Dr Shigero Omi, Head of the WHO’s operation in the Western Pacific region. As an experienced senior official of the WHO, Omi was widely expected to succeed Lee as the next Director-General. But in view of Taiwan’s frequent attempts to join the WHO as a sovereign state in recent years and Japan’s vague attitude towards the Taiwan Issue, Beijing was concerned that the election of Omi would boost Taiwan’s case among WHO members and harm China’s national interests. Therefore, the election of Chan was a setback for Japan as well as Taiwan’s pro-independence Democratic Progressive Party authorities. The election took place soon after the Beijing summit of the FOCAC and Africa’s support certainly contributed to Chan’s success. Among the 34 countries on the WHO Executive Board, nine were African – Djibouti, Kenya, Lesotho, Liberia, Libya, Madagascar, Mali, Namibia and Rwanda – making up more than one-fourth of the board. After four rounds of secret balloting by the WHO Executive Board, Chan was nominated as the next DirectorGeneral and the nomination was formally approved by the World Health Assembly, the WHO’s top decision-making body, with a two-thirds majority. Chan took office in January 2007 for a five-year term, and became the first Chinese national to head a UN specialised body. Increasing Beijing’s diplomatic leverage China’s energy diplomacy with Africa adds to its leverage over some African states, and promotes its international influence. As one author noted, China’s willingness to invest in any country having oil resources has not only improved China’s energy security by diversifying its oil import away from the politically unstable Persian Gulf, but also given Beijing significant leverage in oilrich Africa (Tu 2008). China’s energy relationship with some countries such as Sudan provides Beijing with another important, sometimes even unique, instrument to exert influence over these countries. A typical example is China’s role in finding a solution to the Darfur Crisis. Initially, China’s oil and other interests in Sudan and its insistence on the non-intervention principle made the Chinese government reluctant to get involved in the issue. However, due to several considerations, Beijing has been playing a more constructive and active role in tackling the issue in the past few years, and has contributed to the UN peacekeeping mission there (see Chapter 4). First, the issue is directly related to China’s international image. Second, the deteriorating situation and escalating violence in Sudan would harm China’s economic interests there. Some Chinese experts noted the potential spill-over of unrest from Darfur to the south of Sudan where peace was not well

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restored. Third, China resumed its diplomatic ties with Chad in 2006 and signed several oil deals with it at the beginning of 2007. As Sudan’s neighbour, Chad had always been urging for efforts to stop refugees and rebels from Darfur crossing its border. Around Western Sudan, there is a belt of China’s energy interests that stretches from Libya to Ethiopia. Thus, the stability in the region is important to China’s energy security (Downs 2007, Holslag 2008). Therefore, Beijing enhanced its efforts to persuade Khartoum to cooperate with the international community regarding the Darfur Crisis, winning praise from Washington, London and the UN. As both Chinese and American officials have stated, the Chinese government played a critical role in convincing the Sudanese government to allow an UN–AU hybrid peacekeeping force to be deployed in Darfur. In addition, China has agreed to send 275 military engineers to participate in that force. Andrew Natsios, US Special Envoy for Sudan, complemented Beijing’s subtle behind-the-scenes diplomacy with Sudan as a useful complement to Washington’s blunt and highly visible approach. It seems that the United States that usually plays the ‘bad cop’ needs China to take the role of ‘good cop’ for progress to be made in negotiations with countries like Sudan, Iran and North Korea. Notably, between the two justifications Beijing has given for its continued economic engagement with Sudan, one is that such linkages provide China with a source of leverage over Sudan that other members of the international community do not have (Downs 2007).13 Also, China’s approach towards the Darfur issue is not imposing measures, but clarifying the different options and building trust to find a feasible consensus. Such approach was quite successful from the Chinese perspective, because it dispelled the political criticism from the international community, increased Beijing’s moral influence, safeguarded its economic interests in Sudan, maintained its prerequisite of sovereignty and state consent, reassured its partners in Africa and the West, and consolidated its position in multilateral institutions such as the UN, the Arab League and the AU (Holslag 2008).

5 Problems with China’s energy diplomacy in Africa 5.1 Beijing’s focus on inter-governmental relationships Although progressing quickly, China’s energy diplomacy is encountering some problems and tensions in Africa. The first main problem relates to Beijing’s traditional approach to focus on state-to-state relationships when engaging African countries. For instance, its aid to Africa is not very transparent and the deals are made at the inter-state level (Chidaushe 2007). Beijing’s unsophisticated aid apparatus is primarily controlled by the Ministry of Finance, the Ministry of Commerce, the Ministry of Foreign Affairs and state-owned banks such as China Export–Import Bank and China Development Bank (Alden 2007). Aid is disbursed bilaterally and

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directly to recipient governments. Beijing has no experience in providing aid to non-governmental organisations (NGOs) in Africa and Chinese officials appear wary of designing aid projects to support NGOs (Kurlantzick 2006). A major reason for this is that the development of NGOs in China is still in its infancy and is uneven across various sectors. Chinese NGOs have not yet become strong enough to ‘go global’ together with Chinese businessmen and diplomats to engage the Africans. As a result, some people held that China’s engagement with Africa has been primarily centred on capturing the elites and natural resources, with shallow roots in wider African society (Alden 2007). The civil society in Africa is increasingly concerned about China’s role in Africa especially Beijing’s close relationship with Sudan and Zimbabwe (Obiorah 2007). Some authors argued that although the African leadership views China–Africa relationship as ‘a golden opportunity to escape Western domination and make the West less relevant to Africa’, the people in Africa have yet to see whether this relationship will benefit them or just the leadership (Chidaushe 2007: 107). Meanwhile, Chinese NOC operations in the continent have met with a kind of backlash. For example, militants in the Niger Delta have warned Chinese NOCs to stay clear through violence and hostage taking. In certain African countries like Ethiopia and Sudan, some Chinese oil workers were kidnapped or even killed by rebels. It is likely that China will increasingly face such incidences in the coming years. An important reason is the uneven distribution of the benefits reaped by China–Africa economic and energy cooperation among various groups within Africa. As elsewhere, it is impossible for all social groups to benefit from engagement with China, but if such benefits cannot reach more people, especially at the grassroots, China will face stronger resistance in the future. Also, state-to-state relationships are usually opportunistic. Campbell (2007) argues that, in the long run, transnational civil society links between the Chinese people and the African people will be more important than the relationship between leaders. Alden (2007) too contends that the future China–Africa relationship will increasingly be determined by the experience of Africans and Chinese on the ground, rather than by the Chinese government or African elites. There is no doubt that Beijing has been making efforts to increase the contact between Chinese people and African people and providing aid and assistance to the people in Africa for decades. Such efforts need continuing and reinforcing to build a more solid and sustainable foundation for China’s energy diplomacy in the continent as well as the overall relationship between China and Africa. 5.2 Chinese NOCs’ corporate social responsibility The second main problem concerning China’s energy diplomacy with Africa is that as Chinese enterprises in some other industries, Chinese NOCs’

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relatively weak corporate social responsibility (CSR) practices has caused concerns among some observers and resistance from some local people. Although China’s rapid economic development during the past three decades is a great achievement, its negative effects are also obvious, such as poor working safety, environmental pollution and problematic social welfare systems. Some negative practices are making their way to Africa with Chinese enterprises’ operations there, which will affect the well-being of the people in Africa and China–Africa relations (Li 2007). This will not only affect Beijing’s diplomacy and national interests in Africa but harm Chinese enterprises’ own reputation and long-term interests. A typical problem is the negative impact of Chinese enterprise operations on the local environment. Some people maintained that Chinese firms are causing the same kinds of environmental damage and community opposition that Western firms have generated around the world (Chan-Fishel 2007). For example, in 2006, Gabon ordered Sinopec to stop exploration in the Loango National Park after a US conservation group accused it of damaging the forest and operating without an approved environmental impact study (Gill and Reilly 2007). Another issue often under severe criticism by some Western and African observers is Chinese companies’ use of significant numbers of Chinese workers in their projects in Africa. Admittedly, Chinese firms have their justification to use Chinese workers, such as low cost, high productivity, easy communication and cultural familiarity. They are accustomed to bringing workers from China and most managerial positions are taken by Chinese nationals. It is more efficient and convenient for Chinese enterprises to recruit skilled workers in China than to train local workers in Africa. Chinese workers are more familiar with the technologies and have few language and cultural obstacles in communication with the management. Also, Chinese workers are more compliant to the demanding labour practices of Chinese firms, and are used to working extra shifts and hours (Li 2007). Nevertheless, from the perspective of these companies’ long-term interests and development in the continent rather than short-term benefits, they have to serve more or less the interests of local communities, and realise a good and sustainable relationship and win–win situation with the local people. In this regard, their localisation such as the recruitment of as many local staff as possible is important. The Chinese government has realised these problems and are trying to address them. For instance, several Chinese senior officials have criticised the socially and environmentally damaging actions of Chinese companies overseas, and have urged them to improve their CSR. During his stay in Namibia in 2007, President Hu Jintao met representatives of Chinese enterprises in Africa including CNPC and China National Offshore Oil Corporation (CNOOC) and talked to these businessmen. He emphasised the importance of China–Africa economic co-operation for the overall relations between the two sides, and pledged to expand the common interests between China and Africa and continue delivering concrete benefits to the African people.

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Moreover, he made three points of expectation for Chinese enterprises in Africa, including regarding quality and prestige as the priority of their operation, and promoting local harmony and bringing benefit to local people. He urged these Chinese enterprises to take into consideration of the long-term development of China–Africa co-operation and cultivate harmonious relations with local communities. In particular, they should actively fulfil their CSR, contribute to local interests such as promoting employment, improving living conditions, building public welfare projects, training personnel, protecting ecological environment, and increase the positive influence and reputation of Chinese enterprises among African societies and the African people.14 More importantly, the Chinese government has made attempts to standardise Chinese corporate behaviours abroad through the establishment of environmental and corporate laws. For instance, Beijing has put into effect a series of laws and regulations in order to improve the management of China’s foreign aid and foreign co-operation projects. Due to these regulations, Chinese firms operating abroad have to attach more importance to their CSR and the Chinese government will improve its supervision over them and enhance its approval system for project application (Li 2007). Many key Chinese enterprises have begun to make more substantive efforts to improve their CSR practices. The three leading Chinese NOCs (CNPC, Sinopec and CNOOC) now publish their annual reports and CSR reports every year to demonstrate their efforts in this regard. For example, CNPC’s 2007 Annual Report outlined the enterprise’s plans to make significant improvements in standards of worker safety, environmental protection and energy conservation, and had actively participated in activities that support public welfare in various ways. For example, with regards to public welfare in Sudan, the company has been helping the needy people and disadvantaged groups, and supporting social welfare and charities in local areas for a long time. In 2007, CNPC donated to two orphanages, a senior citizens’ home, a school and a hospital. It signed an agreement with Khartoum’s local authorities to provide US$1 million to improve the living conditions and medical facilities in local orphanages, senior citizens’ homes and medical institutions. In addition, the CNPC launched a US$200,000 project to support various local public welfare initiatives, such as offering 500 school dropouts access to professional education and production facilities, providing financial assistance to local social welfare authorities, and offering services and teacher training for 100 primary schools. In 2007, it also provided humanitarian assistance to floodafflicted victims around the country’s River Nile zone, providing temporary housing, food, anti-mosquito materials and financial support to the local peoples (CNPC 2008). Li (2007) has argued that over time Chinese firms will make increasingly important contributions to the development of African society. In the past, Chinese enterprises were merely involved in short-term infrastructure projects. But now those profit-motivated Chinese enterprises are increasingly establishing

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themselves in Africa with long-term considerations. Although at present these companies tend to recruit Chinese workers because of the short-term benefits, their practices will be more localised with the expansion of Chinese business in Africa. This shift can potentially reduce production costs and reach a virtuous cycle of more investment by Chinese firms and benefits to local communities.

6 Conclusion China’s energy diplomacy in Africa has been developing fast in recent years. It is beneficial for economic development in both China and Africa. For China, Africa is an increasingly important energy supplier, while for Africa, China is an increasingly significant energy buyer and investor. China’s energy diplomacy in Africa consists of two elements – the Chinese government’s energy-related diplomatic activities in Africa, and Chinese NOC investment and operation in the continent. This chapter has argued that the fundamental momentum of this movement is the convergence of national and corporate interests. Specifically, China’s energy diplomacy in Africa not only helps Chinese NOCs generate more profit and realise their corporate development strategies, but also helps the Chinese government improve energy security, secure more support for its multilateral diplomacy and increase its diplomatic leverages. Yet, two obvious problems remain. The first is the Chinese government’s primary emphasis on state-to-state relations. Although Beijing has successfully developed good ties with many African governments, China’s engagement with African societies, ordinary people and NGOs need substantial improvement. After all, people-to-people relationships are the key to the future of China– Africa relations. The enhancement of China’s engagement with not only elites but also Africa’s general public is more likely to promote better economic and social development in the continent. The second problem is Chinese NOCs’ still-poor CSR record, which not only harms China’s international image but is also negative for these firms’ long-term operations and interests in Africa. These enterprises especially need to improve the working conditions and general treatment of their African employees, pay more attention to environmental protection in their African projects, and employ more local workers. These efforts will help them better contribute to the development of African societies and realise more harmonious relationship with local communities. Important questions therefore remain concerning how China’s NOCs can help China generally make further contributions to Africa’s social and economic development, how the Chinese state should deal with its relationship with controversial governments in Africa such as Sudan and Zimbabwe, and how should China work with other foreign players in Africa like the EU, US, Japan and India. Whether the Chinese government and NOCs are able to properly address these issues, realise critical national and corporate interests in the continent, reach a win–win situation with African societies, and continue consolidating the traditional China–Africa friendship constitute a difficult set of challenges.

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Notes 1 People’s Daily, ‘Roundup: China–Africa co-operation fruitful over past 50 years’, 01.11.2006. 2 For details of this project, see the website of the Ministry of Foreign Affairs of the PRC ‘Zhongguo yuanjian Tanzan Tielu’ (‘China helped built Tanzania–Zambia railway’. Available at: www.fmprc.gov.cn/chn/ziliao/wjs/2159/t9001.htm (accessed 7 November 2000)). 3 People’s Daily, ‘China to cancel more debt owed by poor African countries’, 04.11.2006. People’s Daily, ‘Action plan encourages joint energy exploration, stressing sustainable development’, 06.11.2006. 4 People’s Daily, ‘Roundup: Africa, China usher in 50th anniversary of sincere co-operation’, 31.10.2006. 5 Xinhua News, ‘Full text: China’s African Policy’, 12.01.2006. 6 Website of CNPC Group, www.cnpc.com.cn/eng/company/presentation/ Strategy/ (accessed 10 June 2008). 7 Website of PetroChina, www.petrochina.com.cn/Ptr/About_PetroChina/ Business_Strategy/ (accessed 24 March 2008). 8 British Petroleum (2009) BP Statistical Review of World Energy June 2009, www. bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_ publications/statistical_energy_review_2008/STAGING/local_assets/2009_ downloads/statistical_review_of_world_energy_full_report_2009.pdf (accessed 26 July 2009). 9 Based on the statistics from BP (2009) BP Statistical Review of World Energy June 2009. 10 Xinhua News, ‘Ministry of Commerce: there have been 64 countries recognising China’s full status as a market economy’, http://news.xinhuanet.com/fortune/200611/07/content_5302214.htm (accessed 7 November 2006). 11 According to Article 108 of the UN charter, the Security Council expansion procedure is: at the first stage, the General Assembly should vote in favour of a proposal by a two-thirds majority; then at the second stage, the vote has to be ratified by all permanent members of the Security Council. BBC News, ‘Battle joined on Security Council reform’, http://news.bbc.co.uk/2/hi/americas/4675823. stm (accessed 12 July 2005). 12 A big difference between the G4 plan and the AU plan is that the latter insisted that those new permanent members should have veto power while the former did not mention it. 13 The other justification is that there is a wide perception in China that the Darfur crisis is rooted in poverty and China’s aid and investment can help resolve the issue through economic development (Downs 2007). 14 Xinhua News, ‘Hu Jintao: promoting the all-round co-operation between China and Africa in a broader scope, in a wider sphere and at a higher level’, http://news. xinhuanet.com/world/2007-02/07/content_5706003.htm (accessed 7 February 2007).

References Alden, C. (2007) China in Africa. London and New York: Zed Books. Campbell, H. (2007) ‘China in Africa: Challenging US Global Hegemony’, in F. Manji and S. Marks (eds), African Perspectives on China in Africa. Cape Town, Nairobi and Oxford: Fahamu – Networks for Social Justice. Chan-Fishel, M. (2007) ‘Environmental Impact: More of the Same?’, in F. Manji and S. Marks (eds), African Perspectives on China in Africa. Cape Town, Nairobi and Oxford: Fahamu – Networks for Social Justice.

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Chidaushe, M. (2007) ‘China’s Grand Re-entrance into Africa: Mirage or Oasis?’, in F. Manji and S. Marks (eds), African Perspectives on China in Africa. Cape Town, Nairobi and Oxford: Fahamu – Networks for Social Justice. China National Petroleum Corporation/CNPC (2008) 2007 Annual Report. Beijing: China National Petroleum Corporation. Downs, E.S. (2006) ‘China’, Energy Security Series. Washington DC: Brookings Institution. —— (2007) ‘The Fact and Fiction of Sino-African Energy Relations’, China Security, Vol 3(3), pp. 42–68. Gill, B. and Reilly, J. (2007) ‘The Tenuous Hold of China Inc. in Africa’, The Washington Quarterly, Vol 30(3), pp. 37–52. Gill, B., Huang, C.H. and Morrison, J.S. (2007) ‘Assessing China’s Growing Influence in Africa’, China Security, Vol 3(3), pp. 3–21. He, W. (2007) ‘The Balancing Act of China’s Africa Policy’, China Security, Vol 3(3), pp. 23–40. Holslag, J. (2008) ‘China’s Diplomatic Manoeuvring on the Question of Darfur’, Journal of Contemporary China, Vol 17(54), pp. 71–84. Kurlantzick, J. (2006) ‘Beijing’s Safari: China’s Move into America and Its Implications for Aid, Development, and Governance’, Policy Outlook. Washington DC: Carnegie Endowment for International Peace. —— (2007) Charm Offensive: How China’s Soft Power is Transforming the World, New Haven, CT: Yale University Press. Li, A. (2007) ‘China and Africa: Policy and Challenges’, China Security, Vol 3(3), pp. 69–93. Obiorah, N. (2007) ‘Who’s Afraid of China in Africa? Towards an African Civil Society Perspective on China–Africa Relations’, in F. Manji and S. Marks (eds), African Perspectives on China in Africa. Cape Town, Nairobi and Oxford: Fahamu – Networks for Social Justice. Rocha, J. (2007) ‘A New Frontier in the Exploration of Africa’s Natural Resources: the Emergence of China’, in F. Manji and S. Marks (eds), African Perspectives on China in Africa. Cape Town, Nairobi and Oxford: Fahamu – Networks for Social Justice. Stopford, J.M. and Strange, S. (1991) Rival States, Rival Firms: Competition for World Market Shares. Cambridge: Cambridge University Press. Strange, S. (1996) The Retreat of the State: The Diffusion of Power in the World Economy. Cambridge: Cambridge University Press. Tu, J. (2008) ‘Sino-African Relations: Historical Development and Long-term Challenges’, China: An International Journal, Vol 6(2), pp. 330–43. Tull, D.M. (2006) ‘China’s Engagement in Africa: Scope, Significance and Consequences’, Journal of Modern African Studies, Vol 44(3), pp. 459–79. UNCTAD (2008) World Investment Report 2008: Transnational Corporations and the Infrastructure Challenge. New York and Geneva: United Nations.

Part IV

Conclusion: China, Africa and development relations

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China, Africa and conceptualising development relations Christopher M. Dent

1 Introduction There are a growing number of texts on China–Africa relations but very few aim to make a new conceptual or theoretical contribution to the subject. This chapter develops the concept of ‘development relations’ that is partly based on the actual evidence from the Africa–China relationship and how it may ideally and potentially evolve in the future. Such a conceptualisation of ‘development relations’ has applicability to other key emerging interdeveloping country relationships, and hence points to new possible paradigms of economic diplomacy that differ from those driven by developed countries. For example, whereas developed country powers have tended to conceive of their relations with Africa in distinct donor–recipient terms, China – as a strong and well-resourced developing country power – has related to Africa more in terms of ‘development partnership’. As is argued below, this approach is essential to fostering development relations, where ideally partners work to mutually enhance various forms of development capacity. The extent to which an equal or balanced partnership can be achieved between China and Africa in both current and foreseeable conditions is a moot point, as discussed in this chapter.

2 The development–international relations nexus From an academic disciplinary perspective, development studies and international relations studies have remained quite distinct fields of enquiry. Connections between the two exist in established areas such as comparative development studies, and certain strands of international political economy and economic geography. Yet, there are relatively few discourses that examine how relations between different parts of the world, such as China and Africa, are functionally oriented by mutual imperatives of development. We have seen how relations between China and African countries are largely determined by their domestic development needs and strategies, and in addition linked foreign commercial interests. While there is a body of work that focuses on international economic relationships between developing

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countries (what some chapter authors refer to as ‘South–South’ relations), there is still a tendency among scholars to use the same terms of reference or concepts as applied to the relationship between developed and developing countries. Before we discuss the concept of ‘development relations’, it is important to define key terms. Previous chapters have all discussed different aspects of development, and some authors such as Power and Mohan (in Chapter 3) have specifically addressed many of the fundamental philosophical and ideological issues concerning how we should understand ‘development’. From a functional or technical perspective, we can specify development as a process of various inter-related human activities and endeavours that, in ideal terms, realise certain indivisible goals, these primarily being poverty reduction, rising and equitable distribution of welfare levels, and the improving competitiveness, efficiency and environmental sustainability of a nation’s or society’s economic-related activities. As we have seen, there exist key debates about the organisation, governance and sustainability of development practice, and how the ideological and philosophical comprehensions of development have changed over time. For example, Chapters 3 and 4 (by Power and Mohan; Suzuki) note how in the past the West’s ‘gift’ of development to Africa through its overseas aid programmes was very much conceived as part of a wider modernisation process, in other words, a technoindustrial expansion of materialistic activities and a ‘taming of wilderness’. More recently in the post-Cold War era, market capitalism and liberal democratic governance have been peddled as the conventional wisdom on aspired to paradigms of economic, social and political development. As Suzuki argued, such ‘appropriate’ trajectories of development should not just be understood in technical terms but also closely associated with Westernoriented discourses and ideas regarding economic and political ‘standards of civilisation’ in the international community. Of course, China has assimilated forms of Western economic practice, both directly by becoming a major global centre of capitalist development albeit within the political and policy framework of a socialist market economy. The extent to which China’s own economic development paradigms both shape its relations with Africa and are presented as models for inspiring other African countries are discussed later in the chapter. At a general level, the concept of ‘development relations’ is an attempt to break free of traditional designations for international economic relationships between states and other actors. The term ‘trade relations’ is now used to cover a multitude of inter-linked forms of economic exchange, including trade itself, foreign investment, production networks or supply chains, aid and other types of financial transactions. Based on theories of comparative advantage, neo-liberal thinkers and neo-classical economists have long maintained that encouraging developing countries to expand their international trade is the most assured way to improve their levels of economic development. However, this is not such a simple equation. Many developing

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countries that have opened up their markets (primarily under pressure from developed countries and Western-dominated institutions) without taking parallel measures to improve the export competitive capacities of domestic industries and firms have suffered at the hands of injurious foreign competition, particularly from more developed countries. A key principle of ‘development relations’ is that it alternatively designates primacy to strengthening of development capacities above all else as the core objective and purpose of economic interactions with developing country regions such as Africa. As will be explained, the following generic conceptual elements of development relations relate in an inter-locking and reinforcing manner to each other. It will also be argued that there are a number of imbalances and problems in the development relations between China and Africa that need to be addressed. At the same time, there are many aspects of this relationship that have had positive demonstration effects for other development partners of Africa.

3 Enhancing of development capacities 3.1 Context In Chapter 1, the key motivating or determinant drivers behind the China– Africa relationship were analysed in terms of pursuing certain economic security objectives. At another fundamental level, we may contend that developing countries specifically are looking for how foreign economic partnerships may lead to general enhancements of the country’s various development capacities. This perspective places ‘development’ more centrally when analysing relations between China and Africa. There is more scope for mutualising this process when these partnerships are with other developing countries owing to the more proximate levels of development and common development challenges existing between them. By ‘capacity’ we are referring to the various development-related functions of the nation or economy concerned, namely:

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Technocratic capacity: The quality and quantity of the nation’s technocrats, either directly employed or contracted by the government that possess the ability to develop, manage and implement an effective development-oriented foreign economic policy. This is constituent to the overarching objective of fostering good economic governance. Institutional capacity: The ability of the nation’s institutional frameworks (e.g. legal, socio-cultural) to accommodate the various development policy-related commitments embodied within international economic agreements. Examples of ‘institutions’ in this sense mainly relate to agencies (e.g. fiscal authorities, environmental agencies, small business development organisations) and associated new laws, rules and policy regimes devised to enforce legislation once enacted or implemented. There are strong links to technocratic capacity in this regard.

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Christopher M. Dent Industry capacity: The ability of the economy’s industry sectors to compete in international markets, and against foreign imports and business operations in their own domestic markets, including the capability to undertake the necessary structural adjustments required to compete effectively against foreign firms. This also entails the ability of the economy’s industries and firms to participate in international production networks and supply chains, and secure welfare-enhancing and value-added benefits from the process. Infrastructural capacity: The ability of the country’s various forms of physical (e.g. transportation, communications and energy-generation systems) and social (e.g. educational establishments and health-care systems) infrastructures to continually facilitate development generally as earlier defined. Human capital capacity: Broadly relating to the education, skills, entrepreneurship and other aspects of human capital embodied within the populace (i.e. human resources for development), and how effectively this human capital underpins or helps facilitate the above-mentioned other development capacity functions. Sustainable development capacity: This requires the above-mentioned development capacity functions to be oriented to establishing environmentally sustainable economic practices generally, for example in terms of institutional or policy frameworks and industry activities.

The enhancing of the these capacity functions in the development relations framework may be achieved through various means of foreign economic policy practice (e.g. trade, foreign investment, technical and financial aid). Although developed country partners invariably possess better technocratic knowledge and resources than developing country partners to assist on matters of development capacity improvement, developed country interests are very rarely focused on enhancing their own development capacity in their relations with poor nations. Rather, developed countries are generally more concerned with how development assistance helps bring greater stability and security in the international system, realises their own resource supply security interests, and often with helping advance their geo-political influence in developing regions of the world. Developing country partners like China are, of course, interested in similar objectives in their dealings with other developing countries. However, there is more likely to be empathy between developing country partners in terms of development capacity needs. From this perspective, China and Africa could be said to be entering into various development capacity ‘bargains’ with the other. These are, however, somewhat skewed at present, given that China’s own development capacities are considerably stronger than those of most African states, and is therefore currently seeking mostly resources from Africa to maintain industry capacity development trajectories. In this sense, the significant capacity asymmetries between China and Africa have meant

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that the former has more to offer the latter in terms of development capacity enhancement. 3.2 Assessment Regarding technocratic and institutional capacities, while the Chinese Government has provided various funds and schemes to help train up African technocrats working in development-related fields, Beijing’s reluctance to ‘interfere’ on matters of domestic governance limits its scope to assist on improving the institutional capacities of African nations, unless of course African governments request such assistance, which to date appears to be rare. One could argue, however, that China’s substantial assistance to improving education facilities (especially schools) in many partner African nations has or will indirectly bring improvements to these development capacity functions. This point links closely to human capital capacity. East Asia’s own case provides strong evidence for the vital contributions played by high investment levels in mass primary and secondary level education (as opposed to concentrated investment in elite education, e.g. university or tertiary level) to improved development capacity per se (World Bank 1993). It has been long recognised that most African states need more and better educated, skilled and trained policy-makers and institutional architects. The nature of the investment–return benefit relationship in education means that a long-term commitment is required for human capital investments. As previous chapters testify, China’s record to date on enhancing Africa’s human capital capacity is mixed. In Chapter 8, Chi Zhang noted that the Chinese government and Chinese enterprises have come under severe criticism by both Western and African observers for using significant numbers of Chinese workers in their projects on the continent. Zhang details the motives behind this approach, such as cost and skill level factors, reasons of socio-cultural familiarity, etc. There is growing evidence of China’s understanding of this criticism and actions required to address it. Good development relations partners should look to invest in each other’s development capacities, and human capital is one of the most vital areas in this regard. As Zhang recommends, Chinese partner agencies should all improve their local recruitment and human capital investments in host African societies. To date, little appears to have been achieved by China’s Africa policy on improving industry capacities in the continent, partly owing to concerns of protecting China’s own producers in lesser developed parts of the country. In Chapter 2, Uwe Wissenbach argued that China has in many ways replicated Western patterns of economic exchange between itself and Africa, where the latter largely plays the role of raw materials supplier, thus running counter to the principles of ‘South–South’ co-operation of developing country partners offering ‘a shield against exploitation by industrialised nations and a realistic alternative to North–South trading patterns which have dominated global commerce since the colonial era’. In Chapter 7, Masuma Farooki discussed the so-called ‘Dutch Disease’ predicament that faced by economies that

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still rely heavily on their natural resource sectors for generating national prosperity. As she noted, appreciations of the nation’s currency arising from growing demand for natural resources such as oil, gas and minerals will make manufactured exports more expensive in international markets, thus diminishing the prospects for infant industry development and causing deindustrialisation more generally. Although Farooki also made the point that a comprehensive industrial and monetary policy can be deployed to counter Dutch Disease effects, China should ideally look to build up new sources of sustainable industry-based wealth in African nations where Chinese enterprises and projects are gradually sapping the resource-based wealth of these nations. There are indications that Beijing is increasingly acknowledging the need for this. In Chapter 5, Daniel Large noted how China has recently developed a broader spectrum of economic activities in Sudan beyond the natural resource sector, especially in the Khartoum area of the country, and the establishment of a Chinese ‘agro-technology’ demonstration centre in al-Gezira State was a cited example of new and rising Chinese technology transfers. Arguably the most important prospect, China’s contributions towards improving industrial capacities of Africa, though, were the plans embodied in the 2006 Africa Policy document to create a series of Sino-African trade and economic zones. Alden and Hughes (2009) outline how five special economic zones have been announced thus far in Egypt, Mauritius, Nigeria, Tanzania and Zambia. A number of free-trade zones have too been launched, with many supported by China’s provincial and city governments. This is a good example of how one development capacity function can reinforce, or indeed be dependent upon, another. These zones have the potential to foster industrial district and cluster development, from which African firms would be better positioned to more effectively engage in international production networks and other types of value-chain activity. For the zones to work effectively, they will require investments in developing sufficiently large pools of skilled workers, improving localised physical and social infrastructure development, enhancing local technocratic capacity, and other forms of fostering local competitive advantages. They also empower African producers to better exploit the preferential terms of trade offered by the EU’s Partnership Agreements and the US’s AGOA arrangement. At the same time, there is the risk that such zones will become a means by which the most environmentally and socially damaging elements of Chinese industry will simply be relocated to these part-Chinese managed zones in Africa, and thus run counter to the aims of fostering sustainable development capacity in the continent. The international transfer of ‘dirty industrial’ activities from one location on the planet to another has come under increasing scrutiny in relation to global endeavours to address climate change. Given that China is highly relevant in this debate, the new trade and economic zone programme provides it with the opportunity to develop new clean industry practices in Africa and present a model of good environmental practice in relation to foreign investment and

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development assistance. Beijing should also ensure that the new zones are not just a means for China to transport African resources more efficiently from interior parts of the continent. Generally speaking, China has to date prioritised improving the infrastructural capacities of African states over the other development capacity functions. Chapters throughout this book have provided a wide range of examples of China’s infrastructural investment approach in Africa, which is being copied increasingly by other development partners. Investments in infrastructure are more effectively embedded within the economy and society in the sense that the development assistance funds cannot be easily siphoned off by predatory state officials, especially when the development partner closely oversees the management of the infrastructure projects concerned. Britain’s North South Corridor initiative – a programme to transform regional infrastructure links for enhancing trade between Central and Southern Africa – launched in April 2009 has drawn some inspiration from China’s approach. However, as with industry capacity, China’s assistance towards improving the infrastructural capacity in African nations has been criticised for incurring significant social and environmental costs. In Chapter 5, Daniel Large highlighted such problems regarding dam construction projects in Sudan, while Alden and Hughes (2009) discussed the criticism of another Chinese dam project located in one of Gambia’s national parks. Ideally, all practices of development relations should be subordinated to the principles and objectives of sustainable development capacity.

4 Compatible development-related policy principles and objectives The formulation of foreign economic policy is in some way shaped by some form or forms of cognitive-ideological approach, i.e. underpinning ideas, principles, values and ideologies (Dent 2002). Some level of compatibility in the principles and objectives underpinning development-related policies is conducive to engendering development relations between the countries concerned. In ideal terms, a rationale for mutual development capacity enhancement should be evident in the stated cognitive-ideological approaches adopted by the developing country partners, which inter alia identifies the commonalities of their development challenges and the commitment to mutually address these. The earlier-mentioned premises and conditions are not essential for closer economic partnership to form between developing countries, as pragmaticism may be sufficient as a binding force, but a cognitive-ideological articulation of the need and benefits of development capacity enhancement provides a stronger foundation on which to cultivate development relations. This may be codified in policy strategic documents (e.g. China’s 2006 Africa Policy document) or international agreements, although the level of cognitiveideological definition and detail found here can vary significantly. Examples of this can be found in the 1955 Bandung Conference’s some of the underlying Five Principles of Peaceful Co-Existence (i.e. mutual

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benefit, the needs and rights of developing nations), the inaugural 2000 Forum on China–Africa Co-operation (i.e. promotion of greater economic co-operation between developing countries), and perhaps articulated most definitively in the 2006 Africa Policy paper. To restate, China expresses here commitments on realising various ‘mutual’ development-oriented goals, i.e. mutual benefit, reciprocity and common prosperity; mutual support and close co-ordination on achieving peace and development in the international system; mutual learning and common paths of development. We saw how this approach has been, to some extent, informed by China’s concept of Xiaokang society, which aspires to establish a more equitable sharing of prosperity. As noted earlier, the core principles orienting China’s development relations have gravitated away from geo-politics to geo-economics. To restate Uwe Wissenbach’s point made in Chapter 2, China is no longer engaged in a struggle against imperialism, capitalism or Soviet revisionism, but rather is concerned with pursuing resources, markets, its diplomatic interests and economic development objectives. However, there are gaps between the policy document rhetoric and implemented policy reality. Thus far, China has yet to convince many commentators both inside and outside Africa that it is closely adhering to the laudable principles and aspirations of its 2006 Africa Policy document. Chris Alden and Anna Ying Chen contend in Chapter 6 that China has made comparatively greater efforts than most traditional OECD-DAC donors to integrate its development assistance within the context of the partner African government’s stated developmental needs, hence engendering stronger elements of ‘local ownership’. However, owing to the fact that many African nations have a weak state apparatus or suffer from chronic political instability, they often lack the technocratic and institutional capacities to formulate coherent and operational development strategies over sustained periods of time, whether on an individual nation-state basis or as a collective of nation-states. Moreover, there is no real of ‘African consensus’ on the continent’s development relations with China or any other partner. Africa comprises numerous and diverse countries that tend to conduct their development partnerships on a bilateral basis. In addition, quite relatively limited progress has been made at regional or sub-regional community building in Africa, hence making it difficult to construct robust joint strategies on development relations. While the continent is replete with regional organisations, only a very few function as well as their counterparts in developing Asia and Latin America (e.g. Southern African Development Community), and even these have limited ‘external relations’ policies. The African Union had devised a detailed strategic framework for regional co-operation and integration over the 2004–2007 period based on commonly agreed principles of achieving mutual development in the international system (African Union 2004) but experienced continued inertia with implementing its operational mechanisms, and moreover has not since been superseded by the new strategic framework. Thus, the relative lack of robustly articulated and ‘core principles’ based development strategies among many African states means that development

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partners such as China are often compelled to work with them on a pragmatic and flexible basis at the cognitive-ideological level. Yet, as Uwe Wissenbach notes in Chapter 2, this is compatible with the Chinese government’s view that every country should find its own development path and not imposing China’s own model on other nations. Wissenbach also details how the European Union has expanded its programme of offering incentives to African nations for practicing ‘good’ economic and political governance, and argues that China should adopt a similar approach. Insofar and they can be disaggregated, China has been generally criticised in the West more for issues pertaining to political governance rather than economic governance regarding both its domestic and foreign development policies. In Chapter 5, Daniel Large discusses China’s engagements in Sudan, and how this has been vilified in the West in particular as ‘rogue aid’ at its worst. However, Large in turn criticises the one-dimensional attributions of China’s causation of conflict in Darfur contending that the reality is far more complex, and details how nevertheless China’s government has felt compelled to rearticulate, reinvent and promote the ‘peace through development’ effects of their substantial aid to the country. While the virtues of economic development should not be used to excuse political or social malpractices, economic development capacity building can provide a stronger foundation for improving political governance although this is a process that has to be carefully managed to ensure socially equitable outcomes. Effective development relations require a balanced dialogue between all partners when formulating and operationalising their linked development strategies. At present, owing to the significant development capacity deficiencies faced by most African states, a generally imbalanced dialogue exists here between China and Africa. Greater efforts are thus needed to improve the endogenous development strategy-making capabilities of African states, and improvements in China’s assistance on technocratic and institutional capacity building would help make these states stronger development partners.

5 Sharing domestic development best practice In the broad context of mutual learning, developing countries often seek to emulate the best development practices of others. African delegates have frequently visited China and other newly industrialising economies of East Asia (e.g. South Korea, Taiwan, Singapore and Malaysia) to learn how their impressive economic transformations were achieved. To some extent, this is a unique aspect of inter-developing country relations. While developed countries have much useful technocratic advice to offer developing countries, the substantial differences in development levels between them mean that developing countries are often best learning from the best development practice of other developing countries. The poor historic record of multilateral development assistance organisations such as the World Bank and IMF on providing good advice on development policies has brought further salience to this issue.

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There are close connections here with technocratic capacity, and while as previously commented China has helped train up development technocrats in African countries and shared some policy lessons with willing partner governments on the continent, Beijing’s reluctance to disturb the domestic polity of any African partner state limits the scope of this aspect of development relations. As a more general point, the transferability of best development practice from one country to another is constrained by the endogenous factors and processes (i.e. ‘localised’ political, economic, institutional and cultural determinants) that have facilitated successful development in the developing country in question. For example, the business cultural (e.g. guanxi) and political economy (e.g. socialist market structures) that have shaped both the context and technical practices of development policy in China cannot be transposed onto another country’s development strategy template. To some extent, this narrows the scope for the transfer of best development capacity practice between China and Africa. Nevertheless, China and African nations face a number of common development challenges – including rural development, labour migration, urbanisation and population growth, regional imbalances in development, the development of the domestic market and integration with the international market (Yang 2004) – and the sharing of best practice on meeting such generic development challenges can form an important basis for development relations. When analysing the China’s contemporary development practice and its development relations with foreign partners, Strauss and Saavedra (2009: 561) remind us of the need for a ‘more careful disaggregation of the different layers of Chinese state, how these layers cohere (or go off in quite different directions), and how they support or ignore different kinds of Chinese actors in Africa’. One of the most important distinctions to make within the Chinese state concerns central and local government actors and policies. A fundamental aspect of China’s reform process has been the devolution of many forms of economic policy control to provincial and city governments with the effect that they enjoy considerable levels of autonomy in determining the terms of local development. Such an approach may be most suitable for African states that have strong national political coherence as devolutions of power to separatist-minded regions may lead to political instability. Learning from the serious challenges that confront China regarding the social and environmental sustainability of the country’s current growth trajectory is equally important. As a 2009 Institute of Development Studies (IDS 2009: 3) report on China summed up: Inequalities are deepening – along traditional lines such as region, ethnicity and between rural and urban populations as well as new ones. These include the marginalisation and stigmatisation of minority groups, rural migrants, people living with HIV-AIDS or other illnesses … Environmental degradation, the appropriation of land for infrastructure and industrial development, regulatory failures that cost lives (through food,

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health and occupational hazards), and a growing perception of corruption, and are factors contributing to a growing awareness that some groups are paying too high a price for the current development path. The report goes on to contend that China’s achievement of a more harmonious society will require a ‘greater commitment to reforms and policies that strengthen the redistributive functions of government’ … and ‘require the development of institutions and mechanisms that give voice and legitimacy to marginalised groups’ (IDS 2009: 3). The closer adherence to the aforementioned Chinese concept of Xiaokang society should help achieve these ends. In Chapter 8, Chi Zhang examines how despite the recent progress made in the corporate social responsibility (CSR) policies and practices of Chinese enterprises – and the national oil companies (NOCs) in particular – that there is still much to be done in terms of improving the working conditions and general treatment of their African employees, paying more attention to environmental protection in their African projects, and their recruitment of local workers. No nation is a paragon of good development: each has their faults and weaknesses but these have to be recognised when assessing nations from which best development practice lessons are drawn. We can also discern ‘best development practice’ from both a policy framework and agential level. Chapter 1 outlined how there are multiple actors operating within the parameters of China–Africa development relations,1 and we may therefore single out particular agencies of the Chinese state engaged in specific projects as model examples. Chris Alden and Anna Ying Chens’ work on the Tembisa’s Friendship Town housing and social infrastructure project, as discussed in Chapter 6, provided some illustration of good development practices working at a micro-level of analysis, China’s ‘investment’ here having notable positive multiplier effects for local labour and firms. The project’s community ‘buy-in’ approach, which entailed high levels of consensual decision making between Chinese state agencies and the local community in Tembisa, is also noteworthy. Ironically, as indicated by the earlier mentioned quotations, this kind of local community consultation has been quite rare in China’s own domestic development experience. Yet the more that China practices Tembisa Friendship Town type projects abroad, mediated through foreign localised experiences, the more likely it is to adopt similar practice at home. African nations can in this sense, where possible, show Chinese state agencies the benefits of engaging with strong local stakeholders to optimise socio-economic welfare outcomes. As Alden and Hughes (2009) argue, the lack of a strong civil society inside China means that its policy-makers are not able to benefit from the expertise and various forms of complementary assistance from NGOs that is available to traditional donor states. This is a crucial point given the holistic nature of development relations, where a broad range of inter-related development capacity issues are in play. Following on from the above-mentioned point, and notwithstanding the multiplicity of actors linked to Chinese state engagements with Africa’s

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development, Chi Zhang explores in Chapter 8 the problems arising from China’s state-centricity in approaching development challenges generally, and the emphasis on state-to-state relations when working with African nations more specifically. As he contends, China’s closer engagement with not only Africa’s elites but also its general public is more likely to promote better economic and social development in the continent. Sautman and Yan (2009) interestingly report the results of their comprehensive survey of almost 2,000 African university students, which reveals that African views on China’s development relationship with Africa are on the whole more positive than often portrayed in the Western media, and moreover that Africans generally hold more favourable views on China’s development assistance than that from Western countries. These views, though, vary notably from country to country (Zambia and Tanzania being generally negative), and the country-based variable accounts more than gender-, age- or education-related variables in explaining differentiated views across the sample of Africans surveyed. Overall, their survey results would seem to indicate that despite all the problems often generated or associated with China’s development assistance in Africa, younger Africans are looking to China with a generally positive perspective as a development partner with which it can work with and learn from in the future.

6 Addressing balance of power issues There is often a significant power asymmetry between one developing country partner and another in their economic relationship. This especially applies to large developing countries such as China, India and Brazil in their dealings with smaller developing nations. As established earlier, China possesses greater development capacities and financial resources that have given it a generally stronger bargaining position in its relations with Africa. Neorealists would especially argue that it is difficult for powerful nation-states to avoid the temptation of using any means of leverage at their disposal to secure the best deal for their country’s interests in international agreements. Yet powerful developing countries such as China are mindful to avoid their Africa policies being perceived as exploitative and opportunistic, in short being associated with the past failures of Western nations and Westerndominated organisations. Moreover, there are growing expectations on China, India, Brazil and other leading developing countries to defend developing country interests and foster developing country solidarity in the international system. These factors may in some way temper power asymmetries in inter-developing country relations. In Chapter 3, Marcus Power and Giles Mohan note how China–Africa relations are historically rooted in the Afro-Asia partnership formed in the 1950s to stand against Western dominance of the international system. The progression of globalising forces since then, though, has meant that developed and developing countries have become increasingly interdependent, especially in an economic sense, and thus de facto stakeholders in each other’s

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destinies. At the same time, the income gaps between developed and developing countries have continued to diverge globally. If China is to help buck this trend, as Power and Mohan discuss, we need to know much more about how China understands international co-operation, the oft-invoked ‘win–win’ claims made by Beijing on relations with Africa, about Chinese discourses of partnership, its contestation of hegemony and its desire to become a major centre of influence in a multipolar world. Also relevant here is the extent to which China adheres to the principles of solidarity and mutual benefit, as articulated in its 2006 Africa policy paper. A strong level of adherence to these principles would inherently militate against China’s abuse of the relative power advantages it possesses over African nations. As Chris Alden and Anna Ying Chen comment in Chapter 6, embodied within the notion of mutual benefit is the idea that any economic interaction between developing countries must be predicated on ensuring gains are experienced by both countries, and implicitly based on the identification of areas of common development interest. They furthermore argue that such a deliberate forging of interest-based links between China and the host African country has the potential to create sustainable forms of engagement between the participants to these projects. Yet, evaluating the balance of outcomes from development partnerships can be contentious as they are always based on value judgements and are hence subjective. For example, some observers may be of the view that China is securing Africa’s indigenous resources ‘on the cheap’ in the development capacity bargains it is striking with African nations while others may hold that these nations are substantial net beneficiaries from these deals. It depends on perceptions of ‘value’ and how the benefits derived from it are seen to be distributed among the stakeholders concerned. Development relations should additionally not exacerbate balance of power asymmetries and problems within the development partners themselves. In Chapter 5, Daniel Large argues that China’s assistance in helping develop Sudan’s oil sector has further reinforced historic patterns of the country’s concentrated pattern of wealth and political dominance of the centre. Thus, both international and domestic balances of power must be taken into account.

7 Conclusion The China–Africa relationship has captured the attention of notably those analysts interested in China’s growing impact on the world system, how the country is responding to global challenges such as poverty alleviation and energy security, and how African nations are looking to cultivate new kinds of development partnerships with non-traditional donors. Moreover, to many the relationship is a litmus test for how China is taking on new international responsibilities in an emerging new multipolar world order. To a large extent, academic texts and reports on the China–Africa relationship have hitherto tended to place great emphasis on how China’s economic interests in

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Africa are ultimately driven by its burgeoning demand for natural resources to continue feeding its dynamic industrialisation process. This, of course, remains an important thematic dimension of the relationship, but this book has sought to move the debate on China–Africa relations into new empirical and analytical territory. Based partly on the evidence of how the China–Africa economic relationship has evolved thus far, the book’s concluding chapter has presented a generalised conceptual framework of ‘development relations’ to help better understand what new directions this relationship, and more generally inter-developing country economic diplomacy, may take as the tweny-first century unfolds. The main premise of development relations is that primacy is, or should be afforded to the strengthening of development capacities as the core objective and purpose of economic interactions with developing country regions such as Africa. This marks a departure from the conventional neo-liberal thinking especially that the advancement of economic exchange per se between development partners is in itself sufficient to deliver optimal welfare outcomes. Six different inter-related forms of development capacity were identified (technocratic, institutional, industry, human capital, infrastructural, sustainable development) in outlining the analytical framework of development relations. It was argued that the realisation of development capacity goals depended on certain functional aspects of the development relationship being accordingly aligned, namely compatible development-related policy principles and objectives, sharing domestic development best practice, and addressing balance of power issues. The chapter highlighted where development relations between China and Africa had made good progress but also where there remains notable room for improvement. The prospects regarding the latter are to a significant degree contingent upon a range of domestic level factors relating to evolving political and economic governance in both China and Africa.

Note 1 Examples include the Chinese National Mining and Electricity Company, China’s Non-Ferrous Metal Mining Group, China International Finance, China’s national oil companies such as CNPC (see Chapter 8), private Chinese enterprise ‘national champions’ such as Huawei (which used to be a state-owned enterprise, and the North Industries Corporation (NORINCO), a commercial enterprise controlled by the People’s Liberation Army (Alden and Hughes 2009).

References African Union. (2004) 2004–2007 Strategic Framework Plan of the Commission of the African Union. Addis Ababa: Commission of the African Union. Alden, C. and Hughes, C.R. (2009) ‘Harmony and Discord in China’s Africa Strategy: Some Implications for Foreign Policy’, The China Quarterly, Vol 199, pp. 563–84. Dent, C.M. (2002) The Foreign Economic Policies of Singapore, South Korea and Taiwan. Cheltenham: Edward Elgar.

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Institute of Development Studies/IDS (2009) ‘China’s Rise – Implications for International Development’, IDS in Focus Policy Briefing, No. 8 (October 2009). Sautman, B. and Yan, H. (2009) ‘African Perspectives on China–Africa Links’, The China Quarterly, Vol 199, pp. 728–59. Strauss, J.C. and Saavedra, M. (2009) ‘Introduction: China, Africa and Internationalisation’, The China Quarterly, Vol 199, pp. 551–62. World Bank (1993) The East Asian Miracle: Economic Growth and Public Policy. Oxford University Press, Oxford. Yang, L. (2004) China–Africa Relations: Review and Perspective, paper presented at the African Study Centre, Leiden University, The Netherlands, September 2004.

Index

In this index tables and figures are indicated in bold, notes by n. Accra Agenda for Action 38n.1 accumulation, primitive 52 actors, Chinese 30, 175 Africa Caribbean Pacific (ACP) framework 32 Africa–EU Joint Strategy 32, 33 Africa policy and strategy, of China 6–8 Africa policy, China’s 29–31, 54–9 Africa Policy document 2006 6, 11, 14, 54, 170, 172 African Development Bank 7 African Growth and Opportunity Act (AGOA) 13, 139, 170 African National Congress (ANC) 108 African Peer Review Mechanism 59 African Union (AU) 32, 59, 172 African Union Charter 34–5 Afro-Asia partnership 176–7 Afro-Asian People’s Solidarity Organisation (AAPSO) 49 agricultural raw material prices 124–5 agricultural trade policies 13 agriculture, Sudan 93, 100n.13 aid see also foreign assistance; conditionality 43, 55, 135; criticisms of 30–1; distribution of 156–7; efficiency of 107; governance of 42; and Hu Jintao 147; model for projects 114–15; and mutual benefit 105; ownership of projects 107, 111, 116, 172; politics of 59, 60; as symbol of friendship 145; tied 104; and transparency 57–8; turn-key projects 24 American hegemony 80 Angola 19n.4, 58, 79, 136

Association of Southeast Asian Nations (ASEAN) 28 attraction, China’s, 71 see also charm offensive; cultural 69; and influence 68 attractiveness, cultural 75 Bandung Conference 1955 5, 7, 22, 49 banks; African 7, 10; Chinese 24, 58, 91, 106, 110, 147 Beijing consensus 14–16, 71, 72, 75, 76–7, 80, 81 Beijing model 72 best practice, domestic development 173–6 Botswana 19n.6 Bridge of Chinese–Sudanese Friendship 91 Can Be Fast Company 112–13 capacity building; aid projects 111–13; economic development 173; capacity, development 167–71 capital; internationalisation of 47; and the state 48 capitalism, global 45 Chad 156 Chad–Cameroon pipeline 136 Chan, Margaret 154–5 charm offensive, China’s, 69, 71, 74, 77, 79, 80, 82 China; as developing country 3; meaning of 14; rise/emerging role of 4–5 China–Africa Development Fund 106, 133, 147 China–Africa interactions 47 China–Africa relations 5–6, 14–15, 49–50 China–Africa Summit 135 China–African Chamber of Commerce 146 China–Angola agreement 10

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China Development Bank (CDB) 106 China Export-Import Bank see ExIm Bank China hawks 42 China Inc. model 58 China National Corporation for Overseas Economic Co-operation (CCOEC) 109–11, 115 China National Petroleum Corporation (CNPC) 56, 93–4, 100n.14, 100n.15, 149, 150–1 China Threat 69–72, 74, 76 China’s Africa policy 54–9 China’s African policy 147 Chinese Communist Party (CCP) 34, 53 Chinese White Paper on Africa 21 civil society, lack of in China 175 civilisation, standard of 81 cluster development 11, 170 co-operation; China–Africa 35–6; EC–Africa 38n.4 Cold War 49, 108 colonialism 48, 89 commodity demand 128–31 commodity price boom 122–8, 140 commodity prices 121–2, 123 community building, regional/ sub-regional 172 competition, Chinese 11 competitive advantage, China 19n.6 competitiveness, Chinese consumer goods 22 complexity, managing 36 conditionality; and aid 43, 55, 135; changing 33 Confucius Institutes 70, 147 Congressional Research Service 75 co-operation, development 103–8, 115–16 corporate behaviours, Chinese 159 corporate social responsibility, and NOC’s 157–60, 175 Côte d’Ivoire 73 Cotonou Agreement 2000 13 critical geo-politics 45, 61n.2 cultural attraction 69 cultural attractiveness 75 cultural development 70, 81 cultural exchange, China–Africa 147 Darfur crisis 96, 155, 161n.13, 173 see also Sudan de-industrialisation 137 see also industrialisation

debt, Third World 10, 105, 133, 147 demand, for metals/minerals 126, 140 democracy, promotion of 73 Democratic Republic of Congo 134, 137 Deng Xiaoping 52, 146 Department for International Development (DFID) 59 Department of Foreign Aid 105 dependency, of Africa 24, 25 development; assistance 12–13, 14; capacities, enhancing 167–71; challenges 174; China–Africa 25–6; Chinese model 71; co-operation 103–8, 115–16; cultural 70, 81; and ‘D’ Development 44; ideologies, contesting 12–16; industry sector, Africa 11; international 4–8; and international relations 59–60; meaning of 166; models 21; objectives of 28; partnerships, evaluating 177; and peace 96–8; project-led 58; relations 166–7, 176, 178; sharing best practice 173–6; in Sudan 87–99 Development Assistance Committee (DAC) 106 development–international relations nexus 165–7 devolution, China 174 diplomacy, energy 143–8, 155, 156–60 diplomatic activity, of China 151–6 domestic policies, China 29 Dutch Disease 137–8, 169–70 economic co-operation, with Africa 105 economic development; capacity building 173; China during Maoism 6; and energy diplomacy 143, 160; and FIEs 9; negative effects 158; strategy, China 11–12 economic engagement 31 economic exchange, Africa/Europe 24 economic growth; China 130; Sudan 91–3 economic liberalisation, China 52 economic relationship, Africa/China 3 economic security 8–12 economy; Chinese 9; global 125 Edenvale/Lethabong Local Council 109, 111, 113–14 El Gaili Power Station 90 employment, aid projects 111–13 energy diplomacy 143–8, 155, 156–60 energy needs, China 143 energy resources in Africa 149

Index energy security, of China 151–3, 156 engagement; of China with Africa 24, 30, 145–6; economic 31; other countries with Africa 61; with stakeholders 175 environmental degradation 78–9 environmental impact, of Chinese operations 158 equity oil 152–3 EU–China strategic partnership 37 European Commission (EC) 33 European Union (EU); foreign policy 15; perceptions of 28; strategic partnership 23 EU’s Partnership Agreements 170 evaluation; development partnerships 177; foreign aid projects 114–15 ExIm bank 58, 91, 106, 110, 147 exporters, African to China 26 exports see also imports; to China 26, 131, 131; Chinese 92, 130–1, 133, 133–4, 139 finance, by China 31 finance-credit security 9–10 financial crisis, global 125, 130 financial resources, China 4 five balances 7 Five Principles of Peaceful Co-Existence 5 Five Year Plan, 11th 7 foreign assistance, China’s in Africa 103–5 see also aid foreign direct investment (FDI) see also overseas direct investment (ODI); in China 23, 52; from China 133, 135; EU–China, in Africa 27; resource-rich countries 132, 134 foreign economic policy, formulation of 171 foreign invested enterprises (FIEs) 9 foreign policy; China 42, 49, 50, 103–4, 105; and international relations 46; and internationalism 53–4; Western– EU 15, 33 Forum for China–Africa Co-operation (FOCAC) 21, 31, 32–3, 132–3, 135, 143, 146 Four Principles on Sino-African Economic and Technical Co-operation 105 fragile states 35 free-trade zones 170

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friendship, China–Africa 145–8 functional multilateralism 37 Gao Qiang 147 Generalised System of Preferential (GPS) status 134 geo-politics; China’s Africa policy 50–9; critical 45, 61n.2; and history 48–50; IR/development theory 59–60 global economy, China’s integration/ rise 22, 23 Global Fund to Fight HIV/AIDS, malaria and TB 37 global production/reserves, Africa 132 globalisation 23, 34, 36, 38n.1 Go Out Policy 2002 58 governance; African states 13, 33; of aid/ investment packages 42; global 34; oversight agencies 58–9; political/ economic 5, 15, 173; and resource rents 140; Sudanese 95 Government of Southern Sudan (GOSS) 88, 95 government power, and transnational corporations 144 governmentality 45 grants, Chinese 105, 133 Greater Nile Petroleum Operating Company 151 growth, China 130–1, 174 harmonious society 175 harmonious world concept 30 hegemony, Western 80 Helsinki Agreement 1992 19n.4 housing, South Africa see Tembisa Friendship Town project Hu Jintao 5, 6, 70, 147, 158 human capital capacity 168, 169 human rights 62n.8, 77, 78, 154 Human Rights Council 31 imperialism 48, 49 imports see also exports; Chinese from Africa 134; Chinese to Africa 133 industrial districts/clusters 11 industrialisation see also deindustrialisation; advantages/disadvantages 138–9; African countries 22; China 8; Western models 81 industry capacity 168, 169 inequalities, and growth 174–5 influence; and attraction 68; China’s lack of ability to 34–5

184

Index

infrastructural capacity 168, 171 infrastructure investments 10, 24, 57, 90–1, 171 institutional capacity 167, 169 inter-governmental relationships, Beijing’s focus on 156–7 interaction, three vectors of 26 interests; China’s 29–30; national/ corporate 148–56 international development, and China and Africa 4–8 International Monetary Fund (IMF) 24, 79 international relations (IR) 29, 43, 44–7, 59–60 internationalisation; of capital 47; China’s 42; strategy 58 internationalism, and foreign policy 53–4 investment, China–Africa 6, 8, 25–6 Japan, and Beijing 154 Jiang Zemin 6 labour, use of Chinese in Africa 158 leadership, and aid projects 114–15 Lethabong Housing Institute (LHI) 109, 110 Li Zhaoxing 147 Liberia 73 Liu Guijin 55 loans, Chinese 12, 93, 105, 133, 147 Look East policy 90 looting, of Africa 52 Mabelane, Annah 112–13 Mao Zedong, and Africa 145–6 Maoism, economic development 6 Merowe Dam 91 metals/minerals sector 125, 126, 126–7, 128, 129, 132 Middle East, political instability 152 Millennium Development Goals (MDGs) 36, 59 Ministry of Commerce (MOFCOM) 105–6, 109, 110 Ministry of Foreign Affairs (MOFA) 106 modernisation 81 Multi-fibre Agreement (MFA) 11, 139 multilateralism 53 multipolarity 53 mutual benefit 177; aid projects 104, 105, 106

national oil companies, Chinese see NOCs National Party 108 nationalism, resource 26, 28 Natsios, Andrew 156 neo-colonialism, and China 43 neo-communists 46 neo-liberalism 47–8 new diplomacy 143 New Economic Partnership for African Development (NEPAD) 59 new right 53 Niger Delta 157 NOCs; in Africa 143, 148–51, 159; backlash against 157; and corporate social responsibility 157–60, 175; and energy diplomacy 145, 160; and equity oil 152–3 Non-Aligned Movement 49 non-governmental organisations (NGOs) 157 non-interference 34–5, 38n.1, 47; and aid 55; China’s changing position 134; and development relations/ co-operation 104, 174; EU’s 38n.4; and NOCs 150; and Sudan 155; untenability of 56 non-intervention see non-interference North–South Comprehensive Peace Agreement (CPA) 88 North South Corridor initiative 171 oil; China’s strategy 73; equity oil 152–3; imports by China 8, 151–2, 152, 153; payment for 58; price shocks 125; reserves in Africa 19n.2; Sudan 93–5 one China policy 68 Organization for Economic Cooperation and Development (OECD) 31, 106 Organization of Petroleum Exporting Countries (OPEC) 125 overseas development assistance (ODA) 23, 24, 27, 29 overseas direct investment (ODI) 91 see also foreign direct investment (FDI) oversight agencies, government 58–9 ownership, aid projects 107, 111, 116, 172 pariah states 15, 56 Paris Declaration on Aid Effectiveness 2005 59

Index passively normative approach, of China 33 pathways to happiness 81 peace, and development 96–8 peaceful ascendance 53, 55 peacekeeping 27, 71–4 people-to-people relationships 160 People’s Republic of China (PRC); and ANC 108; and human rights 77; as potential threat 75; White Paper on China’s Africa; policy 68 PetroChina 149 policies, domestic 29 policy banks 10 policy, China’s towards Africa 30 policy-making, strategic 14 policy principles/objectives, development-related 171–3 political economy, and Chinese neo-liberalism 47–8 population, urban China 130 post-colonial policy 34 power asymmetry 176–7 power, of China 34–5 see also soft power power, soft see soft power preferential loans 105 production/reserves, Africa 132 project-led development 58 quasi-states 35 re-balancing 30 Reconstruction and Development Programme (RDP) 109 reform process, China’s 29, 174 regional/sub-regional community building 172 rent-seeking behaviour 136–7, 138 resource demands, Chinese enterprises 8–9 resource diplomacy 132–9 resource nationalism 26, 28 resources, energy in Africa 149 risks, external 29 rogue aid 43, 173 rogue creditor 57–8 Russia, and Africa 62n.6 Scaling Up Poverty Reduction and Global Learning Process 76 Schoon, Smiley 110 security concept, new 14 security drivers, economic 8–12 security, energy 151–3, 156

185

Senegal 107 Sepirwa, Alfred 109, 111, 114, 116n.6 Shanghai Conference 2004 76 Sino-African trade 7–8; and economic zones 170 Six-Party Talks 37 social harmony 54 socio-cultural factors, Friendship Town project 113 soft power 29, 42, 68; analyses of 76; the China threat 69–72, 78, 80; myopia and fantasy 74–80 solidarity 104, 177 South Africa 35 see also Tembisa Friendship Town project South Korea 23 South–South co-operation 21–2, 23–33, 35–6, 38n.1, 50, 62n.5, 104 Southeast Asia, and China 28 sovereignty, China’s respect for 15, 34, 47, 55, 56, 104; and UNPKO/China 73, 77 special economic zones (SEZs) 52 state-owned enterprises (SOEs) 58 state-to-state relationships 157, 160, 176 strategic interest in Africa, Chinese 134–6 structural change, China 128–31 Sudan see also Dafur crisis; China’s changing policy to 78, 170; China’s development relations with 87–99; criticisms of China’s involvement 173; and NOCs 150–1, 159; and UNPKO 72, 155 supply security 8–9, 132 sustainability, Friendship Town project 113–14 sustainability, of Chinese growth 174 sustainable development capacity 168 Taiwan 70, 135, 155 Tanzania–Zambia railway 146 techno-industrial capability security 10–12 technocratic capacity 167, 169, 174 technologies, sharing of by China 150 Tembisa Friendship Town project 108–15, 116, 175 territorial integrity 15 Theron, Wynand 108, 110, 113, 114, 115, 116n.5 Third World, and China 80 Third World debt 10, 105, 133, 147 Third Worldism 49 three vectors of interaction 26

186

Index

tianxia 46 tied aid 104 trade; Africa’s share of Chinese 22; China–Africa 6, 25, 25–6, 146; China– Sudan 92; and China’s growth 130–1; EU–China in Africa 27 trade relations 166 trading partners, Africa 25 training, in aid projects 112 transnational corporations (TNCs), and government power 144 transparency, Chinese aid 57 triangulation 54–5 turn-key aid projects 24 UN Commission on Human Rights 153 UN framework 28 UN Security Council 154 UNCTAD commodity index 124, 126 United Nations Peacekeeping Operations (UNPKO) 69, 71–4 United Nations Security Council (UNSC) 23, 35

US, foreign policy 15 US hegemony 80 war, and commodity price 123, 127 Washington Consensus 13, 32, 36, 148 wealth extraction 52 Wen Jiabao 48 Western hegemony 80 Western primacy, threat to 70–2 White Paper on Africa, Chinese 21 workers, use of Chinese in Africa 158 World Health Organization (WHO) 147, 155 World Trade Organization (WTO) 22, 77, 154 Xiaokang concept 7, 172 Zhai Jun 96 Zhao Ziyang 105 Zhou Enlai 49, 62n.5