Chinese President Xi Jinping visited a few countries in Africa in December 2015. He promised $60 billion in new investments, grants, loans, and export credits.
Here’s an interesting piece about the president’s visit and highlights common misconceptions about China’s involvement in Africa:
The media often get it wrong when it comes to China-in-Africa coverage, says Prof. Deborah Brautigam, who leads the China Africa Research Initiative team at Johns Hopkins University, Xinhua reports in ECNS.
Much of the media’s China-in-Africa coverage should come with a warning label: Consume with a grain of salt, Brautigam wrote in a guest column in ForeignPolicy.
When the media dwell on what Brautigam calls “imaginary problems” like the ones listed below, it detracts from the very real problems that exist in China-in-Africa engagement, Brautigam said.
Some of these very real problems include resource transparency, sustainable timber certification, and the protection of endangered species, she said.
China-U.S. cooperation on Africa has moved too slowly on the basis of imaginary problems like the ones listed below, Brautigam said. Moving beyond the myths will help create a better informed basis for Western engagement with China.
The China Africa Research Initiative team at Johns Hopkins has attempted to map Chinese engagement and analyze its impact.
Brautigam draws on data from research conducted by the university to identify five of the most dangerous and persistent myths about China in Africa perpetuated by the media.
5. China has an insatiable appetite for African land
Some news stories have claimed that the Chinese were establishing rural villages across Africa. A widely circulated story on CBSNews alleged that China had bought half the farmland in the DRC. In 2012, the chief economist of the African Development Bank called China the “biggest land grabber” in Africa.
Brautigam and her research team examined 60 news stories about Chinese agricultural investments, including the one in the DRC. They conducted interviews in more than 12 countries to fact check, doing three years doing fieldwork.
She published their findings in a book, “Will Africa Feed China?”
The results? They found evidence that Chinese companies own less than 700,000 acres of African land out of almost 15 million acres reportedly acquired. The largest Chinese farms are rubber, sugar, and sisal plantations — none were growing food for export to China.
They found no villages of Chinese peasants.
Brautigam concluded that Chinese land grabbing in Africa is an imagined myth, however she also acknowledges that lack of transparency is a real problem in Chinese business transactions in Africa.
4. Chinese aid secures mining rights and oil concessions.
A Rand Corporation study suggested that China “gets an expanded supply of resource commodities expected as payback” for its aid. A 2009 U.S. Congressional Research Service report concluded that “China’s foreign aid is driven primarily by the need for natural resources.”
Earlier this year, researchers tracked Chinese aid commitments and reported that natural resource acquisition did not explain the pattern.
The Johns Hopkins database doesn’t provide a single case where Chinese aid was directly swapped for a mining or oil concession, Brautigam said, although just one well-known deal came close. In 2007, the DRC government formed a joint venture with two Chinese construction companies to restore a copper mine, negotiating with China’s Export-Import Bank for a $6 billion loan with repayment guaranteed from future profits from the mine. The loan was used to finance infrastructure built by the two Chinese companies. The Chinese companies’ main interest was not accessing mineral riches but finding a way to finance infrastructure projects in a country with bad credit, Brautigam said.
3. Chinese companies employ mainly Chinese in Africa
When President Barack Obama visited Ethiopia in July, he said “economic relationships can’t simply be about building countries’ infrastructure with foreign labor,” according to WhiteHouse.gov. Was this an accurate description of Chinese business practices? A few oil-rich countries including Algeria, Equatorial Guinea, and Angola allow Chinese construction firms to import their own workers from China. But elsewhere in Africa, research shows the vast majority of employees at Chinese firms are local hires.
Hong Kong-based researchers Barry Sautman and Yan Hairong polled 400 Chinese companies operating in more than 40 African countries, HKUST Institute reported. They found that while management and senior technical positions tended to be Chinese, more than 80 percent of workers were local. Some companies had as much as 99 percent local labor.
Johns Hopkins research in Ethiopia found that nearly 4,800 Ethiopians were employed by the Chinese firm that built Ethiopia’s urban light rail project, EqualTimes reported. Another 4,000 Ethiopians worked at Huajian, a Chinese shoe factory close to the capital of Addis Ababa. In both cases, some local workers were sent to China for management training.
In order to bring workers from China, Chinese companies would have to pay higher salaries, airfare, room, and board. It doesn’t make sense. There are tensions around many Chinese work sites in Africa, but they tend to stem from disputes about salaries and working conditions. That’s another story.
2. The extent of Chinese involvement on the continent
The scope of Chinese financing is often overstated when it comes to loans and aid pledged to Africa and other developing countries.
Granted, the Chinese are not exactly transparent about these financial
flows, Brautigam said. Members of the Organisation for Economic Co-operation and Development (OECD), — mainly developed countries — report loan and aid commitments. The Chinese do not. Beijing does, however, publish aggregate figures every few years and they are lower than some reporting would suggest. Official Chinese aid grew fast between 2010 and 2012, but it came to just $14.4 billion globally, Xinhuanet reported.
Compare this to a 2013 Rand Corporation study that tried to estimate Chinese aid by aggregating media reports. It came up with a figure of $189.3 billion for 2011 alone.
So what did they count? Brautigam mentions this example of what she calls flawed methodology: In 2010, the business publication Tendersinfo News reported that a group of Chinese businessmen signed 22 agreements worth $250 million at an Egyptian business forum. The idea that such agreements would qualify as Chinese aid commitments is absurd, she said. Only a tiny percentage of memorandums of understanding like this ever result in real projects.
Another example of commitment inflation was a 2013 story from a Hong Kong newspaper that China had pledged $1 trillion in finance for Africa by 2025, with up to 80 percent coming from China’s Export-Import Bank. That’s $83 billion per year. When the report appeared, the Chinese bank posted an online denial and even threatened legal action. The story continues to circulate.
The Johns Hopkins Chinese loan database shows that their total financial commitments in recent years have been roughly $10 billion annually. Even this has been difficult to disburse in countries worried about rising debt. In 2014, for example, Ghana cancelled half of a $3 billion loan signed three years earlier with the China Development Bank.
Unlike the Rand researchers, researchers at the Japan International Cooperation Agency Research Institute estimated Chinese development assistance based on official development assistance — grants and subsidized loans. Their estimate for Chinese aid in 2011 was $4.5 billion.
1. China is in Africa only to extract natural resources.
This is the most damaging myth because it doesn’t begin to tell the full story, Brautigam said. The continent’s vast natural resources are a big attraction for Chinese and Western firms alike — like Shell, ExxonMobil, and Glencore. In 2014 alone, Chinese companies signed over $70 billion in construction contracts in Africa that will yield vital infrastructure, provide jobs, and boost skills in the local workforce.
Tech companies have also accelerated local development. Huawei established its West African training school in the Nigerian capital of Abuja 10 years ago, honing skills of local engineers who rolled out cell phone networks for Africa’s telecommunications revolution, ThisDay reported.
The same applies in other industries. Johns Hopkins’ researchers report that Chinese factories in Nigeria are employing Nigerians and producing building materials, light bulbs, ceramics, and steel from salvaged ships.
“The Chinese are trying to get involved in every sector of our economy,” a Nigerian official told Brautigam in a 2009 interview.
By Dan Sanchez | Published in AFK Insider on December 7, 2015