Is Africa serving the same purpose China serves for the western markets?
As everyone knows, it takes money to make money and China has money. By investing in African mining and farming china can profit of Africa’s growth and fuel business back in china that requires minerals and food ,but in addition to serving as a source of natural resources, Africa has another resource, labor.
It might seem strange that China, the country that the world used for low cost manufacturing is looking for a labor source elsewhere, but that is exactly what it’s doing.
China is a victim of its own success. The economic development that is manufacturing industry broad, pushed a large segment of its population into the middle class which raised labor costs country wide. It is not bad news, China as a country has shifted from having a low scale to a medium scale work force as their education level has improved but for the lowest cost, lower scale manufacturing work, the country of china is no longer competitive, therefore Chinese manufacturing firms are setting up their own operations in Africa. one of the cheapest and lower scale markets in the world.
Around $86bn (£64bn) in loans were issued by China between 2000 and 2014 to finance over 3,000 infrastructure projects in Africa.
Infrastructure projects create jobs, provide an opportunity for skills development and the transfer of new technologies.
However, these firms come under the guise of partnership, but this rhetoric, combined with genuine short term benefits masks longer term problems. One of the main issues around the Chinese approach is the dangerously high levels of debt that it brings, which could prove unsustainable for growing economies.
There is also a risk that the continent becomes overly dependent on one country, which could allow it to hold an uncomfortably high level of influence. Mr Zuneid Yousuf, from MBI Group said: “China is seeking to present itself as the new face of globalisation, an image it will work hard to portray” The problem with this is that the current model of their ‘globalisation’ doesn’t so much encourage increased interaction between nations on a worldwide scale, as increased interaction with China on a worldwide scale.
The reality in Africa is a model of globalisation that works only in China’s interests. A far more effective model, one which would not lose the short-term benefits outlined above whilst simultaneously avoiding the pitfalls of unsustainable debt, would be to focus investment on partnerships with local businesses. This way there would be no need for vast government loans, and the job creation, skills development, and technology transfer would be ingrained at a local level and grow organically.
China and Africa have been partnering on investments for approximately the last seven years. In September 2018, delegates from both countries met at the seventh annual Forum on China-Africa Cooperation. The collaboration and cooperation makes Africa one of China’s greatest allies in the current global market environment. The level of China’s investment in the continent of Africa has been increasing at a steady rate. At the 2018 China-Africa Cooperation Forum, China announced it would be providing $60 billion in financial support to Africa.
China’s investments have the country well-positioned to profit from continuing economic development in Africa. Many Chinese firms investing in Africa are state-owned. This gives them a notable competitive edge when, for example, bidding procurement contracts in African countries, since the companies can obtain substantial subsidies from the Chinese government.
The stakes in Africa are high due to the continent’s rich abundance in raw materials. Africa is estimated to contain 90% of the entire world supply of platinum and cobalt, half of the world’s gold supply, two-thirds of world manganese and 35% of the world’s uranium. It also accounts for nearly 75% of the world’s coltan, an important mineral used in electronic devices, including cellphones. China has also been expanding its military presence into Africa and rivaling the United States on investment and military activity there. Investment in the continent has also been a topic of discussion for the United States and China in its ongoing trade negotiations and political deliberations.
It may seem as if the reason Chinese corporations are in Africa is to exploit the people and take their resources. The same thing European colonists did during mercantile times, except worse. The Chinese corporations are trying to turn Africa into another Chinese continent, squeezing Africa for everything it is worth.
Globalization managed to skip Africa by for years. There were several reasons for this. Africa was considered to have poor infrastructure, political instability, and low income. “The trade in oil, gas, gems, metals and rare earth minerals wreaks havoc in Africa. During the years when Brazil, India, China and the other “emerging markets” have transformed their economies, Africa’s resource states remained tethered to the bottom of the industrial supply chain,” writes Tom Burgis in TheLooting of Africa (New York: Perseus Books Group, 2015). While Africa accounts for about 30 per cent of the world’s reserves of hydrocarbons and minerals and 14 per cent of the world’s population, its share of global manufacturing stood in 2011 exactly where it stood in 2000: at 1 percent.
Everything changed when China came along. The country was desperate for raw materials and energy to power their growing manufacturing capacity. They put Africa on the globalization map. The continent was placed right next to Shanghai in terms of Beijing’s business priorities.
Africa was at the top of the Beijing economic agenda. It was an easy and convenient target. Chinese leaders sent business delegations to every capital in Africa year after year. These delegates secured infrastructure projects and proposed trade deals, converting Africa into a “second continent” for China. Metaphorically, that is.
Howard W. French describes the situation in the book China’s Second Continent (New York: Alfred A. Knopf, 2015), explaining; ““Sensing that Africa had been cast aside by the West in the wake of the Cold War, Beijing saw the continent as the perfect proving ground for some Chinese companies to cut their teeth in international business. It certainly did not hurt that Africa was also the repository of an immense share of global resources—raw materials that were vital both for China’s extraordinary ongoing industrial expansion and for its across-the-board push for national reconstruction.”
The long arm of globalization had touched Africa. Trade between China and the “second continent” of Africa reached close to $300 billion in 2015.
Not everyone feels that China is attempting to turn Africa into a Chinese colony though. One such person is Ching Kwan Lee, a professor at the University of California. Lee argued in the Specter of Global China: Politics, Labor, and Foreign Investment in Africa (University of Chicago Press, 2017) that the investments the Chinese state made in Africa weren’t made as “imperialists” or “colonialists”.
Nor were ones by private corporations. Chinese corporations aren’t being motivated by profits. They have a long-term horizon in mind, and they make for good local citizens. The Chinese people in Africa pay their fair share of taxes to the countries they do business with. Lee goes so far as to contend that Chinese corporations actually promote African independence and autonomy, rather than the usual dependence that is associated with colonialism. China is helping Africa to stand by themselves, rather than making Africa dependent on them.
Maybe it would be best to avoid sharing this opinion with the Pakistanis and Sri Lankans that are heavily indebted to China. These are the people that are most at-risk of becoming modern-day colonies for Beijing.
So is Africa becoming China’s China? When it comes to labor this might seem true, but the continuous exploitation of Africa’s natural resources might become a developing problem. Although, China has repeatedly rejected accusations that it is only interested in Africa for its mineral resources and said its no-strings-attached aid programs are widely welcomed.
A growing number of African countries are depleting their natural resources — or will shortly be doing so — faster than they can be replaced,” said WWF President, Chief Emeka Anyaoku, in presenting the findings to a Johannesburg conference.
The list is topped by countries such as Egypt, Libya or Algeria, whose people are living well beyond their ecological means. Further down the list, other nine countries (Morocco, Tunisia, Ethiopia, Kenya, Uganda, Senegal, Nigeria, South Africa and Zimbabwe) are using resources beyond their capacity. Despite these consumption needs, Africa’s overall ecological footprint should be 1.3 hectares of land and sea per capita, but is now at 1.1.