Chinese Investment in Africa

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  • Topic: Africa, African Union, Portuguese language
  • Pages : 9 (2912 words )
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  • Published : December 17, 2012
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CHINESE INVESTMENTS IN AFRICA

China’s growing involvement in Africa has raised concern from western countries for the past decade. China claims to have distinguished itself from western countries with regard to its Africa policy by a great financial involvement based on “political equality and mutual trust, economic win-win cooperation, and cultural exchange”[1]. Indeed, as Hu Jintao says, “China and Africa are good friends, good partners and brothers”[2]. Chinese “investment” in Africa involves political, economic and cultural exchange. Trade, investment and aid are the three main economic components of China’s Africa policy. In order to understand the full scope of Chinese investment in Africa, we first need to define the terms more precisely. Chinese investments in Africa don’t, for example, include Taiwanese investments in the continent even though China imposes the One-China policy. Then, even though Africa is not only a continent but also a full range of countries, we’ll tend to consider Africa as a whole entity (excepted Maghreb) because many of the African countries have similar political and economic characteristics. Trade, investment and aid are the three main components of China’s economic engagement in Africa. These terms are not always distinguished because they are tightly link together: concerning China trade is end to the investments made and aid is often a form of investments.” The West claims that China has had a bad influence in Africa; but Africa and China both stress the positive aspect of their collaboration. We can question, however, whether the current socio-economic reality in Africa reflects this optimistic opinion. Indeed, in the 90’s, African countries and China needed each other very much; but after more than a decade of trade, aid and investments, it seems that Chinese involvement in Africa is nothing more than a form of neo-colonization. Even though Chinese investments come with no political conditions attached, China’s massive involvement in Africa represents a negative political development.

I. BUILDING A RELATIONSHIP

A. A mutual need

A decade ago, China’s influence in Africa was rather limited. In the midst of the Cultural Revolution, Beijing could not afford an ambitious diplomatic policy in Africa (as opposed to Taiwan). However, strong economy growth and a new generation of leaders have put China on the international scene as a new economic power. As such, China needs more political allies; and African countries represent more than one third of the United Nations (UN). China also needs more raw materials and a new open market for its products in order to sustain its economic growth. China’s booming economy, which has averaged 9% growth per year for the past two decades, requires a huge amount of natural resources. It also requires an open market to facilitate the outflow of cheap “made-in-China” products; and in that respect, the African market is seen as one in which Chinese firms can test their goods before going on to market them in Western countries. On the other hand Africa needs Chinese investments, especially since they come with no political conditions, whereas Western investments are characterized by intensive monitoring. After de-colonization and the Cold war, most African countries lost their “ideological patrons” and, as a consequence, their financial handouts.[3] Their need for money became increasingly pressing, and international organizations such as the IFM offered loans, and developed countries offered investments under such conditions as good governance and transparency to ensure that the African countries in question used the money effectively. But in the 90’s, China had to secure its own energy resources; and in order to do so, Beijing locked in supplies from relatively low-cost African sources by offering loans, credit, aid and investments – without any of the above-named conditions.

B. Diplomatic and economic ties

To ensure good relations with...
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