If the term "failed state" is used to define those states where government is unable to perform its basic duties, then Africa could be considered a "failed continent." Indeed, in the 2006 'Failed States Index' published by the US think-tank, The Fund for Peace, and by US magazine, Foreign Policy, 4 out of the top 5 failed states are located in Africa: 1. Sudan, 2. Democratic Republic of Congo, 3. Ivory Coast, 4. Iraq, 5. Zimbabwe.
Africa, however, is blessed with an impressive endowment of mineral wealth, which has not gone by unnoticed by the risk-loving Chinese. China is eager to snatch its share of Africa's near-global monopolies of platinum (89%) and diamonds (60%) and her significant proportion of the world's cobalt (53%), Zirconium (37%), and gold (28%) reserves (Jonah, 2005). Africa further boasts very sizeable reserves of coal, uranium, copper, nickel, natural gas, and most importantly, oil. While Africa currently accounts for 7% of the global total estimated proved oil reserves (EIA, 1999), the region has the potential to supply 25% of the U.S.'s oil imports by 2015 and already accounts for 30% of China’s imports of oil, according to Forbes. In fact, Angola has recently become China’s largest oil supplier, surpassing Saudi Arabia.
While Africa’s natural wealth is not a new phenomenon, China’s significant investments in the continent is. To highlight the stunning growth of trade between China and Africa, in 1999 the value of trade between the two was $2 billion, which grew to $29.6 billion in 2004 and is expected to reach $50 billion by the end of 2006 (IMF). In some countries, China has set up a near-monopoly in trade, importing 81% of Sudan’s global oil exports and 72.5% of Congo’s global exports in metals, while simultaneously accounting for 14.2% of Sudan’s total global imports and 9.1% of Ghana and Tanzania’s total imports (Kaplinsky, 2006).
The phenomenon of China’s trade in Africa presents the continent with a renewed opportunity to climb out of its current misery and forever shed the stigma of failure. What it also presents, however, is a perfect stage on which China can learn the ways of a global superpower. China is able to build her clout relatively quietly, while the old guard focuses their attention elsewhere. Not only is the Middle Kingdom securing crucial resources to sustain her incredible growth, she is also ‘playing the field’ politically. A similar pattern is emerging in Latin America; where China is slowly becoming a pain for the US, as Latin American countries that are fed up with the Americans for whatever reason now see China as the perfect alternative. Chavez’s open flirting with China is a good example of this. Given Chinese support to such rogue regimes as the Sudanese government and Mugabe in Zimbabwe, increased global Chinese influence is sure to rile the US further.
It is therefore imperative that the US takes note of China’s dealings in Africa, as it is sure to be merely the testing ground for further expansion. The US and the EU should engage with China in Africa, rather than compete directly, as it is impossible to beat the conditions given to African nations by the Chinese (China follows a policy of non-interference in other countries’ internal affairs and thus pays no mind to issues like corruption). China has already provided crucial infrastructure and real estate in exchange for trade deals and has provided loans and given debt relief to countries such as Angola, which was refused loans by the West unless it met certain governance requirements. Such conditions cannot be provided by the USA, EU or Japan, as it would mean a major loss of credibility, giving China a clear advantage. Only by engaging China in Africa can the US continue to exert influence and retain her credibility in the continent. The ultimate question is how to go about doing this. The US has little leverage in regard to China, seeing as the Chinese are supplying most of the credit to the US. The EU remains the largest investor in Africa, while the US is second and China third, suggesting that Europe should play a key role in engaging China.
One way to do this is by asking China to join the African Partnership Forum (a grouping of key African governments, Western development donors and African and international organizations), as suggested by Leni Wild and David Mepham of the IPPR. China should also be involved in other Western forums concerning Africa, while Europe and the US should ask to join existing Chinese forums discussing various issues with their African partners. The EU/China Co-operation Program should also put the issue on her agenda. It should be made clear to China that her image will be seriously tarnished unless corporate governance is incorporated into her dealings in the African continent. The African Union’s commitment to good governance should help in this respect.
In sum, China’s rising influence in Africa is a topic that consists of many branches (many more than have been touched upon above) and should prove to be of great significance in a global context. Other postings on the Weekend Economist will be sure to cover the issue from different angles.
Africa, however, is blessed with an impressive endowment of mineral wealth, which has not gone by unnoticed by the risk-loving Chinese. China is eager to snatch its share of Africa's near-global monopolies of platinum (89%) and diamonds (60%) and her significant proportion of the world's cobalt (53%), Zirconium (37%), and gold (28%) reserves (Jonah, 2005). Africa further boasts very sizeable reserves of coal, uranium, copper, nickel, natural gas, and most importantly, oil. While Africa currently accounts for 7% of the global total estimated proved oil reserves (EIA, 1999), the region has the potential to supply 25% of the U.S.'s oil imports by 2015 and already accounts for 30% of China’s imports of oil, according to Forbes. In fact, Angola has recently become China’s largest oil supplier, surpassing Saudi Arabia.
While Africa’s natural wealth is not a new phenomenon, China’s significant investments in the continent is. To highlight the stunning growth of trade between China and Africa, in 1999 the value of trade between the two was $2 billion, which grew to $29.6 billion in 2004 and is expected to reach $50 billion by the end of 2006 (IMF). In some countries, China has set up a near-monopoly in trade, importing 81% of Sudan’s global oil exports and 72.5% of Congo’s global exports in metals, while simultaneously accounting for 14.2% of Sudan’s total global imports and 9.1% of Ghana and Tanzania’s total imports (Kaplinsky, 2006).
The phenomenon of China’s trade in Africa presents the continent with a renewed opportunity to climb out of its current misery and forever shed the stigma of failure. What it also presents, however, is a perfect stage on which China can learn the ways of a global superpower. China is able to build her clout relatively quietly, while the old guard focuses their attention elsewhere. Not only is the Middle Kingdom securing crucial resources to sustain her incredible growth, she is also ‘playing the field’ politically. A similar pattern is emerging in Latin America; where China is slowly becoming a pain for the US, as Latin American countries that are fed up with the Americans for whatever reason now see China as the perfect alternative. Chavez’s open flirting with China is a good example of this. Given Chinese support to such rogue regimes as the Sudanese government and Mugabe in Zimbabwe, increased global Chinese influence is sure to rile the US further.
It is therefore imperative that the US takes note of China’s dealings in Africa, as it is sure to be merely the testing ground for further expansion. The US and the EU should engage with China in Africa, rather than compete directly, as it is impossible to beat the conditions given to African nations by the Chinese (China follows a policy of non-interference in other countries’ internal affairs and thus pays no mind to issues like corruption). China has already provided crucial infrastructure and real estate in exchange for trade deals and has provided loans and given debt relief to countries such as Angola, which was refused loans by the West unless it met certain governance requirements. Such conditions cannot be provided by the USA, EU or Japan, as it would mean a major loss of credibility, giving China a clear advantage. Only by engaging China in Africa can the US continue to exert influence and retain her credibility in the continent. The ultimate question is how to go about doing this. The US has little leverage in regard to China, seeing as the Chinese are supplying most of the credit to the US. The EU remains the largest investor in Africa, while the US is second and China third, suggesting that Europe should play a key role in engaging China.
One way to do this is by asking China to join the African Partnership Forum (a grouping of key African governments, Western development donors and African and international organizations), as suggested by Leni Wild and David Mepham of the IPPR. China should also be involved in other Western forums concerning Africa, while Europe and the US should ask to join existing Chinese forums discussing various issues with their African partners. The EU/China Co-operation Program should also put the issue on her agenda. It should be made clear to China that her image will be seriously tarnished unless corporate governance is incorporated into her dealings in the African continent. The African Union’s commitment to good governance should help in this respect.
In sum, China’s rising influence in Africa is a topic that consists of many branches (many more than have been touched upon above) and should prove to be of great significance in a global context. Other postings on the Weekend Economist will be sure to cover the issue from different angles.
References
EIA (1999) A snapshot of Oil and Gas in Africa Official Energy Statistics from the US Government, Energy Information Administration
Forbes (2006) http://www.forbes.com/business/energy/2006/10/06/energy-african-oil-biz-energy_cx_jc_1009beijing_energy06.html
IMF Direction of Trade Statistics
Jonah (2005) Presentation by Sam Jonah, former President of AngloGold Ashanti, University of South Africa, unpublished.
Kaplinsky R (2006) Winners and losers: China’s trade threats and opportunities for Africa, The New Sinosphere.
EIA (1999) A snapshot of Oil and Gas in Africa Official Energy Statistics from the US Government, Energy Information Administration
Forbes (2006) http://www.forbes.com/business/energy/2006/10/06/energy-african-oil-biz-energy_cx_jc_1009beijing_energy06.html
IMF Direction of Trade Statistics
Jonah (2005) Presentation by Sam Jonah, former President of AngloGold Ashanti, University of South Africa, unpublished.
Kaplinsky R (2006) Winners and losers: China’s trade threats and opportunities for Africa, The New Sinosphere.
4 comments:
I think the one country that needs the most consideration in current considerations is Sudan. Global opinion seems to think that we (We being the West) would be more proactive in stopping the genocide there if it weren't for China's heavy involvement there.
I certainly agree with you that Sudan is among the most pressing African crises today, along with Somalia and Zimbabwe. Due to China's heavy influence and therefore lack of Sudanese governmental interest in Western opinion, it is also the most evident case of China's increasing clout. It is therefore imperative that we (the West) engage with China and stress the importance of accountability, WITHOUT a preaching and superior tone.
China is slowly becoming a pain for the US, as Latin American countries that are fed up with the Americans for whatever reason now see China as the perfect alternative.
Only by engaging China in Africa can the US continue to exert influence and retain her credibility in the continent.
Give me a break. We love to talk about the power of the free market economy. And for good reason: it has brought enormous prosperity. But let's get used to the idea that there are emerging new players in the game that the U.S. has been playing virtually alone for decades. Don't call it politics or "engagement." Call it what it is: competition in a global free market.
Fred,
You are mixing up two issues: economics and morality.
I think it is a great thing for regions like Latin America and especially Africa that China is becoming a major player (as long as the nations in question play their cards right, that is). In this sense, yes, it is competition in a global free market, and I applaud it.
However, this does not mean that attrocities should be allowed to pass without comment. Nations should be held accountable when they cross certain broders (it is hard to argue that Sudan hasn't crossed this border). It is in this respect that I speak of engaging with China. Not to stop Chinese investment, but to make so that all parties in the world become more critical investors.
Undertand?
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