BY: FEDERICA RUSSO
10,50,100 giants roll across the red soil, which doesn’t burn just because of the high temperatures, but also due to its insidious past that hasn’t let it rest. The grey concrete covers miles of surface, but this is not the typical scenario of the Western cities or the ones associated with the raising Asian metropolis. This is Angola, as it breaks ground on one of its many economic partnerships with an Asian giant.
The brief description above refers to Kilamba, a symbol to show the world the beginning of a different stage in the relationship between China and its African partners.
Last month, the 7th Forum on China-Africa Cooperation took place in Beijing, where a slew of leaders from Africa and China gathered raising curiosity, the doubts, and the admiration of the international audience. During the Forum, Chinese President Xi Jinping confirmed that China will provide $60 billion in aid and loans to Africa. The financial aid will be diversified into credit lines, interest free loans, grants and concessional loans as well as investments in infrastructure.
Africa is one of the main destinations of Chinese investments with $170 billion crossing borders in the last nine years. The huge investment flow raised fears associated to an eventual Chinese interference into the affairs and the relationships established on the global arena by African beneficiary countries. In this regard, Xi underlined how China doesn’t want to interfere in Africa’s internal affairs and does not want to impose its own will on other countries.
China, according to the local media, is committed to the construction of common advantages and in maintaining equal and objective relations with Africa. But of the many nations that China is vested in, the closeness of their ties are marred by their commitment to the European Union. Angola, Ethiopia, South Africa, and Nigeria are recipients of Chinese investments but the local government still maintains strong ties with the European Union. Uganda, on the other hand, gave French Total, a competitor of China National Offshore Corporation, rights to oil exploration and development in Lake Albert.
The African continent is one of the main dowels in the ambitious One Belt One Road Project and the latest infrastructure works confirm its relevance. The 470 km railway line project can define a new chapter for Kenya by connecting Nairobi to Mombasa, while the railway project that will connect Addis Abeba to Dijibouti will ensure that Ethiopia has fundamental access to the sea.
Dams, buildings, railway lines, cities, and $86 billion in supplies to Africa have come from the Chinese through forms of concessionary loans between 2000 and 2014. But the question remains should the Chinese presence in Africa be considered synonymous with development and employment opportunities or not?
On one hand, there is increasing skepticism surrounding the dynamics that are shaping the friendship between China and the African continent alleging neocolonialism. Experts point to the following factors as the root of the Chinese interest in Africa, which gives significant support to the argument of neocolonialism:
-Exploitation of Resources;
-Chinese policies of bringing their own nationals to work in African countries, hampering the development of the respective countries’ workforce and subsequent injection of cash into the economy;
-Expansion of its influence by extending credit and by assuring new allies in line with Beijing’s objectives. But consideration is also given to the risk of debt that beneficiary countries can incur. An example is the case of Sri Lanka, which demonstrated initial enthusiasm for Chinese aid and strongly endorsed by Mahinda Raiapaksa during his electoral campaign. But the eagerness was replaced by a climate of tension due to the inability to repay the debt. After long negotiations, China obtained the control over the Hambantota Port for 99 years.
In Africa, Dijibouti is one example of a cause for concern to the international community. This state has a strategic position near the Red Sea and the Indian Ocean where the Strait of Bab-El-Mandeb is crucial for the transit of oil, natural gas, and goods, which need to reach the Asian and the European markets. China has established its first permanent military base in Djibouti and a free trade zone with an investment that will reach $3.5bn. The diplomatic attention is on the debt trap: according to the International Monetary Fund, the foreign debt of Dijibouti is the 85% of its GDP.
There are also supporters of the Chinese foreign policies who argue that in Africa, the ideas of the Washington Consensus have failed. In particular, Irene Yuan Sun, author of “The Next Factory of the World” and an expert on Chinese economic engagement in Africa at McKinsey, collected the stories and experiences of many Chinese entrepreneurs working in Africa since 1970 creating a network of manufacturing companies without any politically and socially complex situation. The entrepreneurs, data shows, created a wide percentage of jobs. The analysis of 1000 Chinese firms that operate in the African countries revealed that 89% of the employees were locals. According to Sun, the economic development can happen everywhere when it is flexible, creative, humble, and able to adapt itself to contextual changes. This data can be supported by the application of the Flying Geese Theory, already studied by the economist Justin Yifu Lin on the basis of Japanese research. The theory wants to demonstrate how manufacturing firms can act like flying geese and be an engine of development by migrating from country to country. This can raise the hope for a different future for Africa, where countries can ride the wave of the economic transformation.
Federica Russo is an Italian student of Business Administration with a focus on Organization Design, Statistics, Corporate Management, and International Economy. With five years of experience in writing articles on world affairs, she is a contributor for the Asian section of “Il Caffè Geopolitico” where she covers articles on Chinese issues. At the moment she is working on her final dissertation analyzing the impact of the BOD composition in the multinational Oil Companies.
Please note that opinions expressed in this article are solely those of our contributors, not of Political Insights, which takes no institutional positions.