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Is Western Criticism of China-Africa Trade Fair?

South Africa's President Jacob Zuma (R) is introduced to the Chinese delegation by China's President Xi Jinping (C) during a working visit to South Africa, in Pretoria March 26, 2013. REUTERS/Siphiwe Sibeko (SOUTH AFRICA - Tags: POLITICS)
South Africa's President Jacob Zuma (R) is introduced to the Chinese delegation by China's President Xi Jinping (C) during a working visit to South Africa, in Pretoria March 26, 2013. REUTERS/Siphiwe Sibeko (SOUTH AFRICA - Tags: POLITICS)
China first visited Africa in the eighth century, but it was only about 30 years ago that the country began engaging the continent economically and politically in any significant way.

Since then, many Western critics have labeled Chinese commercial efforts in Africa “exploitative” and harmful to democracy and human rights. The Chinese say they simply buy African raw materials and provide infrastructure and other assistance with “no strings attached,” leaving Africans to manage their own affairs. But is Chinese investment in Africa really so different from Western, particularly American, investment?

This week the Brookings Institution, an American think-tank, brought American, Chinese, and African researchers together to discuss this question and debate how to promote the trilateral US-China-Africa trade relationship. What may surprise some is that American assistance to Africa is not much more than Chinese assistance to Africa. Quoting the Center for Global Development, another US think-tank, the Brookings researchers say U.S. assistance totaled $90 billion between 2000 and 2011. Over the same period, the Chinese were not far behind, providing $75 billion.

Much U.S. assistance goes to training, tries to encourage political change, or improves health through programs like PEPFAR (President’s Emergency Plan for AIDS Relief), which has provided tens of billions of dollars to mitigate AIDS and other major health problems on the continent. On the other hand, when most people think of Chinese assistance, they think about infrastructure projects, like roads and stadiums. But Yang Guang, director of the Institute of West Asian and African Studies at the Chinese Academy of Social Sciences, says Chinese assistance is more diverse than many realize.

“Nowadays,” he says, “China not only provides some project-related assistance to African countries, but also provides assistance in the form of foreign debt exemption, exemption of import duty, and human resources development assistance, and many other forms of assistance.”

As an example of "human resources development assistance," Mr. Yang highlights China’s plans to bring thirty thousand Africans every year to earn technical degrees in engineering and hard sciences at Chinese universities. Thousands more Africans will be offered scholarships to study in China. Currently, most Africans with graduate degrees obtained outside the continent earned their degrees in the United States.

Raw Materials
China is often criticized because virtually all of its imports from Africa consist of oil and minerals. South Africa’s representative to the U.S., Ambassador Ebrahim Rasool, says 80% of South African exports to China are raw materials. Quoting South African President Jacob Zuma’s conversation with Chinese President Xi Jinping at the BRICS summit in South Africa in March this year, Amb. Rasool said over the long term, such trade is “unsustainable.” However, he said, in the short term it is providing Africa with much needed capital.

“I think rather than bemoan simply the fact that there is an imbalance between what we send to China and what we receive from China in terms of raw materials and manufactured goods,” Amb. Rasool said, “we may have to utilize this as a transitional moment, as occasioning a transition, in which Africans use the proceeds, the liquidity, the windfall, that comes from what we earn at this moment from raw materials, and invest it in the industrialization capacity, the ability to acquire the technologies, the skills, and so forth, in order to let the next generation of exports—whether to China or anywhere else in the world—reflect the kind of situation that we’re speaking about.”

In contrast with exports to China that are dominated by raw materials, Amb. Rasool noted that 70% of South Africa’s exports to the United States are manufactured goods. However, U.S. trade with South Africa is exceptional. Taking the continent as a whole, the United States also imports more raw materials—mostly oil—than manufactured goods.

The Rise of Deindustrialization?
But while money flowing into Africa from the export of raw materials to China may be beneficial, what Africa imports from China may not be. Anthony Carrol, Vice President at Manchester Trade, an advisory and lobbying firm that does business across the continent, says low-price goods from China undercut African manufacturing.

“I think over the course of joining the WTO and opening of markets, what has unfortunately happened is the deindustrialization of Africa,” said Mr. Carrol. “Some of that has been China’s entry on to the scene offering low-cost consumer products and manufacturing, which the African consumers want, but unfortunately it’s been at the expense of the African textile industry. Some agro-processing, many consumer goods. And I don’t think it’s in China’s best interest, nor Africa’s interest, nor our [American] best interests to see Africa become deindustrialized.”

How can Africa ensure it comes out ahead in its trade relationships, particularly the one with China? Kenyan researcher and Africa Growth Initiative Director Mwangi Kimenyi says Africa should not blame China or the U.S., but take more control of its own resources. “So I think the issue is much more on what do our leaders and our people in Africa do to manage those natural resources to transform their own economies,” he said.

Amb. Rasool agrees, adding that countries should work with continental and regional organizations, like the African Union (AU) and the Southern Africa Development Community (SADC) to coordinate Chinese investment. “We yearn for a regionally integrated economy, we yearn for cross-border decisions on infrastructure, we yearn for infra-Africa trade,” he said, “and therefore we may exacerbate all of those negative problems if we were simply to engage China as South Africa-China, Mozambique-China, Zimbabwe-China, etc. We may end up with lots of rail, but nothing integrated.”

So now perhaps the next question for think tank researchers to answer is: can African leaders agree on a plan for integrated development?