In 2006 China widely publicized its Africa Policy. Although not new in substance, the document showed the world the importance that China attaches to its relations with the African continent.  This became even more apparent when 48 African heads of state and government gathered for the third conference of the Forum on China Africa Cooperation (FOCAC III) in Bejing later that year.

Since then, relationships between China and African countries went from one success story to another. Seven years later, Africa has secured a prominent position in China’s foreign policy approach - visible in both the ever increasing two-way trade, which has passed the $200 bn threshold in 2012, and the strong flows of Chinese investments into African countries. According to The Economist, “between 2007 and 2012 the value of China’s annual exports to the continent more than doubled, from US$37.3bn to US$85.3bn”. Its imports from African countries meanwhile rose even faster, surging from US$36.3bn in 2007 to US$113.2bn in 2012.

However, more and more business and government representatives across Africa are demanding a change in the approach towards China. For example, the CEO of South African mining giant Exxaro Resources, Sipho Nkosi stated that “If you allow the Chinese to come and rape you and take whatever they do because you’re just looking at the money they bring, and if you’re looking on a short-term basis, the country will suffer, there’s no two ways about it”. Equally, last Month Nigeria’s Central Bank governor Lamido Sanusi warned African countries „to shake off their romantic view of China and accept Beijing as a competitor as much as a partner“. Zimbabwean Finance Minister Tendai Biti emphasized at the Reuters Africa Investment Summit last week “The sad reality is that they [Chinese] are not comrades. Their companies are there to make profits like everyone else”. South Africa’s President Jacob Zuma voiced similar concerns at FOCAC IV in 2012, where he highlighted the unsustainability of trade patterns between China and Africa.

As we have argued earlier it is key for African governments to develop national China strategies that ensure that their cooperation with China is targeted towards the achievement of national developments goals. China has always taken a flexible and pragmatic approach regarding its engagement in Africa. Hence there is room for African countries to steer China’s engagement in line with their preferences. 

In order for African countries to respond in a strategic and long-term beneficial way to the multitude of opportunities that China offers, it is necessary for each country to create a cross-ministerial China desk that ensure coherence in China-relations. Some countries have already created China desks within different parts of their government. For example, Ethiopia seems to have China desks in the Ministry of Foreign Affairs (MOFA), the Ministry of Finance and Economic Development (MOFED) and the Prime Minister’s Bureau. According to an Ethiopian government official, these three entities harmonize their activity towards China through their China desks. MOFED leads the coordination on loans and infrastructure and MOFA on issues related to international affairs. Key issues in both areas receive direct support from the Bureau of the Prime Minister at the highest level, if necessary.

A cross-ministerial China desk would also be an important institutional arrangement for making effective use of various coordination mechanisms established under FOCAC as  well as for establishing follow-up mechanisms regarding commitments made in FOCAC action plans or other FOCAC outcome documents. While Li Anshan, He Wenping et al. praise the remarkable achievements that the Forum made over the last 12 years, they also acknowledge that only Ethiopia and South Africa have established a functioning follow-up mechanism regarding FOCAC commitments.

Any successful partnership requires mutual understanding. While China has built deep knowledge of African countries through its constant multi-level engagement in Africa over the last sixty years, African decision makers need to focus more on equipping their governments and businesses with knowledge on the language, culture, political and economic realities of their Asian partner. This is crucial for African countries and businesses to have the best bargaining position towards China and a prerequisite for a truly mutual-beneficial and sustainable partnership.

Cross-ministerial China desks could not only ensure policy coordination towards China, but also coordinate the build-up of China expertise within governments and support businesses on their strategic engagement with Chinese counterparts. 

On 20 February 2013 more than 200 China-Africa watchers participated in a lively podium discussion on „China – the much longed-for partner?!“ in Cologne, Germany. Four international experts, including the ChinaAfricaBlog, presented on various aspects of China-Africa relations and entered into an interesting debate with participants.

‘China’s success in Africa is based on political learning’

Ms. Doris Fischer, professor of Chinese Business and Economics at the University of Würzburg, Germany set the scene for the discussion with her compelling presentation on ‘China’s Africa policy and its current implications’. She emphasized the importance of looking at China-Africa relations as part of China’s engagement with developing countries. Professor Fischer said that China’s engagement follows four main objectives: access to resources; access to markets; sustainable development through outsourcing of „dirty industries“; and increasing influence on intergovernmental processes. She emphasized that access to markets is for China as important as access to resources and that a considerable increase of non-natural resource imports from Africa can be observed. As China’s engagement in Africa varies considerably from country to country, three categories of countries should be looked at separately: 1. resource rich countries; 2. resource poor countries with local industries; 3. resource poor countries without local industries.

Professor Fischer also emphasized the importance of putting China-Africa relations into perspective by considering Africa’s relations with other countries. For example, despite the difficulties in obtaining reliable data on Chinese Foreign Direct Investment (FDI) in Africa, she estimates that the US still outweighs China in terms of FDI to Africa. However, she said that it is remarkable how China is shaping the West’s approach to Africa in terms of Official Development Assistance (ODA) - the OECD is now considering lessons learned from successful Chinese projects in Africa for the revision of its ODA guidelines.

She described China’s will and ability to political learning as key component of China’s successful engagement in Africa. China has tried different approaches and constantly adapted its engagement based on feedback from partners and lessons learned from previous projects. She further noted that when comparing China’s development with Africa’s it is important to note that Africa is not perceived as one market, which will make it more difficult to attract a similar level of FDI.

China-Africa relations and migration

Mr. John Karugia and Ms. Yang Zhou looked at aspects of migration in the context of China-Africa relations by presenting on ‘Chinese Migration to Tanzania’ and ‘African migration to Guangzhou’ respectively.

During his PhD studies at the University of Leipzig, Mr. Karugia has conducted extensive research in Tanzania, including hundreds of in-person interviews and analysis of over 3,000 parliamentary debates. China’s largest infrastructure project in Africa in the 1960s – the Tanzania-Zambia-Railway – brought the first influx of Chinese immigrants to Tanzania. Today most immigrants arrive through existing family ties in Tanzania or other African countries and set up small or medium-sized businesses such as shops, trading, construction and transportation companies or work for larger Chinese enterprises. The majority of Chinese immigrants in Tanzania are from the Chinese South-East province of Fuzhou and live in Chinese communities within Tanzanian cities. While the Tanzanian governments actively promotes its friendship with the Chinese people, Tanzanians surveyed by Mr. Karugia said that they enter into economic, but seldom in personal relationships with Chinese immigrants. He emphasized that it is remarkable that both the number of Tanzanians speaking Chinese as well as the number of Chinese immigrants speaking Swahili is constantly increasing. Mr. Karugia remains engaged in research on China-Africa relations as part of a research project on the complexity of African-Asian interactions (AFRASO) at the University of Frankfurt.

Ms. Zhou presented interesting insights on African migration to China based on her work as PhD-candidate at the University of Cologne. Through in-person interviews and surveys conducted in Guangzhou, China, she found that most African immigrants come to China to establish trade relationships between Chinese producers and wholesaler and African counterparts. Immigrants generally tend to stay within their communities and only seldom enter into close relationships with their Chinese neighbors. However, Ms. Zhou also found that some African immigrants, such as the artist featured in the below video learn Chinese and integrate into Chinese culture.

With regard to the question on whether racial issues exist between Chinese and African peoples, the majority of Chinese respondents said that there were no such issues and that any hard-working person is respected in the same manner. 

Africa will benefit from the global relocation of labor intensive industries and increased international economic competition

As part of the expert panel, The ChinaAfricaBlog contributed to the event with a presentation on ‘The future of China-Africa relations’. We used this opportunity to give an optimistic outlook as we see it as the more likely scenario and also find it important to challenge existing stereotypes about Africa and China-Africa relations. After presenting expected major developments in China and Africa, we highlighted their implications for China-Africa relations. Looking at China we highlighted her aging population, overall political stability, economic growth based on upgrading of industries and innovation, in particular with regard to green technologies. Main developments in Africa will include a growing young workforce, rising purchasing power of an African middle class, technological leap-frogging and growing political and economic regional integration across the continent. 

The increasing costs of labor and land in China will lead to the relocation of supply chains and industries to other countries. Many African countries will benefit from this development given their availability of cheap labor and resources as well their preferential access to US and EU markets. While this tendency can already be observed, we predict that it will increase significantly within the next years. Whether the outsourced labor intensive, and mostly ‘dirty’ industries will cause the same damage to Africa as they have to China remains largely in the hands of African decision-makers. We argue that in comparison to the 1990s, we are now at a point at which environmental friendly technology is not only readily available at low costs, and comes mostly with high efficiency gains, but also at a time where international mechanisms are in place for providing developing countries, and in particular least developed countries, with financial support for sustainable development. Furthermore, there are valuable lesson learned from China with regard to rapid industrialization and its possible implications, which may be easier for African decision-makers to take in to account than advice from the West.

In addition, China’s increasingly active and successful engagement in African countries will lead to accelerated economic competition for African markets between governments, multinational companies and international investors. This will provide African decision-makers with the opportunity to strategically engage with different partners in different areas in order to reach their respective local and national development goals in the most efficient and effective manner.

We also projected an increase in China’s military presence for safeguarding her interest in the region — a development that has already caught international attention during the Arab Spring when Chinese military ships evacuated more than 30,000 Chinese workers from Libya as well as in connection with fighting piracy off the Somali coast. We further highlighted a growing engagement of Chinese media in Africa– CCTV now has an Africa channel and expanding cultural exchange through, for example, the rapidly growing number of Confucius Institutes and Classrooms on the continent – 26 in 19 African countries to date, out of which 18 were established after 2007.

Our thanks go to the participants for sharing with us their thoughts and insights and providing us with valuable feedback, to the organizers for pulling this event together, and to Nely&Nora for their lovely music. We look forward to further discussions on the now and then of China-Africa relations.  

Former Vice-Minister of Commerce Wei Jianguo said in an interview with the China Daily this week that he expects China’s trade with Africa to hit USD 220 billion in 2012 (up from USD 168 billion in 2011) and to surpass both China’s trade with the US (USD 446.7 billion) and the EU (USD 567.2 billion) over the next five years. „In the process of China’s ongoing strategic repositioning in the global market, increasing effort is being made to build economic ties with the continent“ Wei said. He estimates that China’s investment in Africa will grow by 30 to 40 percent this year and sees Africa’s development opportunities similar to Chinas’ in the 1970s and 1980s. He added that Chinese exporters should „quicken their pace in diversifying their target markets“ as „it is now the best time to invest in Africa.“

This certainly appears as a bold projection. However, if annual trade growth rates of previous years continue at around 25% and economic growth in the US and the EU remains slow, Africa will indeed become China’s largest trading partner in 2017.

As we have argued earlier, it is key that these developments are fully recognized and addressed by African policy makers in order to utilize this unprecedented chance to enter global markets.

Photo by AFP, The Nation

The Government of Ethiopia is a case in point. Last year, then Prime Minister Meles Zenawi lead an Ethiopian business delegation to China to conduct a targeted search for Chinese shoe and leather producing companies that can help build the Ethiopian shoe and leather industry. Only a few month later the Huajian Group, a conglomerate of Chinese shoe and consumer goods producers set-up shop at the outskirts of Addis Abeba. Before Prime Minister Meles‘ trip to China, “We had never thought about Ethiopia,” admits a Huajian Group representative. Now the Huajian Group is projecting sales worth USD 4 billion USD from its Ethiopian branch after a decade, hoping to create jobs for more than 100,000 workers. Although logistical costs remain high, the Ethiopian government’s desire to attract investors, its duty-free access to US and EU markets, local leather production, and low wages  have convinced the Huajian Group to invest.

Based on the Huajian Group’s case we argue that targeted outreach activities by African policymakers and businesses would bring much needed competitiveness to the rather monopolized match-making system under the China Council for the Promotion of International Trade (CCPIT). The CCPIT is the primary vehicle for promoting cooperation between Chinese and African businesses as part of the FOCAC framework. Chinese businesses that are not on CCPIT’s list may not have sufficient access to information on business opportunities in Africa. However, such companies may be valuable alternatives to CCPIT/government promoted candidates and should hence be considered by African actors when searching for Chinese business partners. While a number of useful communication channels between China and Africa are institutionalized in the FOCAC framework or exist bilaterally through African and Chinese embassies, it is important to broaden the involvement of businesses in order to fully leverage the potential of the private sector.

Once trade increases, issues such as governance and security become more important. In this context it is interesting to note that Chinese and African scholars met on Friday in Ethiopia to open the 2nd China-Africa Think Tanks Forum (CATTF II) to discuss issues of “common interest”, especially governance, peace and security. The CATTF II was held under the theme “Chinese and African Common Interests: Current Issues and Future Perspectives on Governance, Peace and Security” as a follow-up event to CATTF I, which emphasized the need to advance the security situation in Africa through strengthened China-Africa cooperation. Addressing the event, Lu Shaye, Director of the Department of African Affairs at China’s Ministry of Foreign Affairs, said that with closer coordination and collaboration, China and Africa have become important forces in safeguarding world peace and stability. Lu further noted that China firmly supports African countries in building democracy and legal systems and increases experience-sharing on governance with African countries on an equal footing.

The multi-faceted relations between China and Africa are expanding at all levels - let’s continue connecting the dots. 

‘Links We Like’ will regularly introduce you to interesting sources of information on China-Africa relations. While the focus of this series will be on academic and news websites, we will also feature governmental, non-governmental and private sector sources.

Suggestions are welcome via email to info@chinaafricablog.com

Centre For Chinese Studies at Stellenbosch University, South Africa

The Centre for Chinese Studies (CCS) is the leading African research institution in the field of China-Africa relations. The Centre conducts research on a broad range of topics, delivers lectures to academic and business audiences, organizes events and cooperates with key Chinese research institutions, such as the Chinese Academy of Social Sciences and the Shanghai Institute for International Studies.

CCS publishes The China Monitor, its flagship monthly publication, that looks at historic and current developments within China from an African perspective and highlights latest research on China-Africa relations. In addition CCS provides weekly news updates and regularly publishes excellent research reports, discussion papers and policy briefings. Recent publications include:

Research reports

• Sven Grimm et al.: Transparency of Chinese Aid: An analysis of the published information on Chinese external financial flows (August 2011)
• Sanne van der Lugt et al.: Assessing China’s Role in Foreign Direct Investment in Southern Africa (March 2011)

Discussion papers

• Anna Katharina Stahl: Trilateral development cooperation between the European Union, China and Africa: What prospects for South Africa? (August 2012)
• Christine Hackenesch: Competing for Development: The European Union and China in Ethiopia (November 2011)

Policy briefings

• Ross Anthony: China’s role in the East African oil and gas sector: a new model of engagement? (August 2012)
• Sven Grimm: FOCAC: Addressing joint environmental challenges? (May 2012)

For more on CCS visit http://www.ccs.org.za/

China will see a more diverse generation of political leadership whose primary task will be to ensure political stability through continued economic growth. China’s foreign policy will be guided by this objective.

Strong economic growth has been the foundation of political stability in China since the 1990s. In order to sustain economic growth post-2012 the new leadership will need to initiate China’s transition from a labor-intensive to an innovation-driven economy, increase domestic consumption, address the growing real estate bubble and demographic challenges, accelerate the reform of the hukou-system (household registration) in response to the growing social unrest of more than 300 million migrant workers and deal with complaints from a fast growing middle class on product and food safety, air quality, corruption and censorship.

Given the current economic situation in the US and the EU, China will aim to expand its export markets in other regions, such as Africa. Furthermore, China’s industrial upgrading process will result in the increased export of technology, in particular in the field of renewable energy technologies, communication products and infrastructure. 

The change in China’s leadership is an opportunity for African governments to broaden, refocus or develop their national China strategy for the next decade. While FOCAC V provided a number of positive signals, the further development of national objectives by African countries would facilitate effective cooperation on both the African and the Chinese side. African objectives should include infrastructure development, broadened access to Chinese markets, attraction of selected Chinese companies and transfer of technology, in particular renewable energy technologies.

• Infrastructure development is key for African countries to benefit from China’s industrial upgrading through the global relocation of labor-intensive industries. As logistical costs determine the location of labor-intensive industries almost as much as labor costs, Africa’s successful industrialization depends on its connection to the global markets. Particular importance should be given to the sustainability of infrastructure development by ensuring that projects are implemented jointly with Chinese partners and lead to transfer of knowledge and technology that makes local maintenance possible and supports the development of infrastructure industries in Africa.

• Broadened access to Chinese markets should be part of any future African China strategy. Diversification of African exports, in particular through processed agricultural products, could be enhanced by expanding existing free trade agreements.
  

• Attracting selected Chinese companies through tailored incentives, such as tax benefits and bureaucratic short-cuts, could allow African leaders to align China’s engagement better with their national industrialization processes and targets.
  

• Transfer of technology that contributes to an environmental friendly development path, in particular through the deployment of renewable energy technologies, will not only support to meet the continent’s growing energy needs, but also allow African governments to tab increasingly into financial resources provided by developed countries in the context of support to green growth, carbon markets and climate change finance.

The next months are a crucial opportunity for African leaders to define their national China strategies in order to arrive prepared at the negotiation table when high-level representatives of the new Chinese leadership will start touring African capitals in early 2013. African leaders may be well advised to enter into strategic partnerships with other African countries - for example through already existing regional cooperation mechanisms - in order to increase their bargaining power.

1. expand cooperation in investment and financing to support sustainable development in Africa;
2. continue to increase assistance to Africa to bring the benefits of development to the African people;
3. support the African integration process through a partnership on transnational and trans-regional infrastructure development and trade;
4. carry out “China-Africa people-to-people friendship action” to support and promote exchanges and cooperation between people’s organizations, women, youth, academia and the media of the two sides;
5. promote peace and stability in Africa by launching the “Initiative on China-Africa Cooperative Partnership for Peace and Security”, deepening cooperation with the AU and African countries in peace and security in Africa, provide financial support and training for AU peace-keeping missions.

FOCAC strengthened its focus on environmental issues by voicing „concerns on increased threats and challenges brought by climate change, environmental degradation and energy and resource security“. Hu addressed these concerns not only by setting sustainable development at the top of the list of priorities, but also by inviting FOCAC members to “step up consultation and coordination, accommodate each others concerns, and work together to meet global challenges on climate change, food security and sustainable development.”

China‘s 12th five year plan emphasizes China‘s commitment to sustainable economic growth and environmental standards at both the local level and the international level (in the context of China’s going global strategy). In particular climate change and energy are featured prominently for the first time in a five year plan.

Embarking on a more environmental friendly development path in Africa will not only help China to achieve her goal of becoming a leader in green technology, but also to improve her image on the continent.

This comes at a time and surely also in response to increasing environmental concerns from African Governments and citizens. Ethiopia’s ambitious ‘Climate-Resilient Green Economy Strategy’ provides a good examples with its aim of developing sustainable infrastructure and applying energy-efficient technologies in transport, industry and buildings.

WWF’s International Director General, Jim Leape also sees FOCAC as “an opportunity to establish a new model of cooperation between emerging economies and developing countries”. Earlier the WWF published an impressive briefing note to “competent authorities in  African countries and China” in the context of FOCAC (English version) (Chinese version) that includes 40 recommendations for China on how to create sustainable development. Leape continued that “after the failure of Rio+20 and other major international summits to agree on ambitious action for a healthy planet, we hope FOCAC will signal new leadership for the creation of green and sustainable economies.”

UN Secretary-General Ban Ki-moon’s presence at the opening of FOCAC V and his strong encouragement to Chinese and African business and financial leaders to work together towards a greener development supports WWF’s line of thought and also reflect the growing importance that FOCAC plays in international relations.

In the context of China-Africa relations towards sustainable development we also look curiously towards South Africa - the host of FOCAC VI in 2015. South Africa’s Minister of International Relations and Cooperation Maite Nkoana-Mashabane has committed herself to provide full support to the implementation of the Beijing Declaration and the Bejing Action Plan. It is noteworthy that Minister Nkoana-Mashabane in her function as the current COP President also plays a key role in the United Nations climate change process. Given the strong linkage between sustainable development and the climate change process, we may in future see FOCAC also taking a coordinating function in international climate change policy.