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Brief history of China and Africa
The early years
The People’s Republic of China is not new to Africa. Beijing has had a presence on the continent since the mid-fifties. At first, interest was ideological. Africa was a place for new socialist revolution.
The Cold War, as well as tension between China and the Soviet Union, also gave Beijing reason to turn to Africa for balance. In the 1960s and 1970s, China strengthened diplomatic ties to a number of African countries. During Chinas Cultural Revolution, the Sino-African relations halted and in many cases had setbacks, but Beijing gained a good reputation on the continent through various engagements, for example the build of the TanZam railway or the thousands of African students admitted to Chinese universities.
In 1971, the friendly relations to Africa paid off, as the People’s Republic of China entered the UN with the help from African countries, replacing the Taiwanese. A few years later though, in the mid-seventies, China lost a lot of prestige following the debacle in the Angolan civil war, ending up supporting the same side as the Americans and South Africans, which was frowned upon by large parts of Africa. Although relations were maintained with a number of countries, China’s momentum on the continent was lost.
Beijing’s focus shifted, from ideology to economics and a more pragmatic approach to Africa, following the start of Chinese reforms in 1978. Efforts were made to maintain a good relationship with the African countries, but by the mid-eighties, Africa had lost its’ importance to the Chinese, since the need for outside technology and expertise, could not be provided by African countries. Africa was simply not an asset to China’s economic development goals.
Tiananmen Square
When the West turned away from China, following the crackdown on protests at Tiananmen Square in June of 1989, China again started to open up to Africa. Most African countries did not condemn China’s actions and in the coming years a significant number of diplomatic visits between African countries and China took place. China was trying to gather political support and saw the potential in the old African friends.
Following the fall of the Soviet Union, China continued building and renewing relations. Partly due to a political agenda, partly an economical. The developing countries in Africa were important as a balance regarding the west. The timing was good, since western involvement in Africa had been declining.
The relation with Africa was to be built upon the understanding of respect and non-interference. An important aspect to the Chinese, in regards to Tiananmen as well as the Taiwan issue.
China pledged to support African economic development and expand trade. High-level Chinese diplomatic visits were conducted in the mid-nineties, and China started closing deals for resource extraction and refinement, for example with Sudan regarding oil and Côte d’Ivoire regarding cocoa.
Chinese interest today
A large economic transformation is taking place in China, requiring large amounts of natural resources. China is already the world’s single largest user of almost all metals and the second regarding oil and the need will increase. These needs cannot be met domestically, therefore China invests in overseas joint venture, as well as tries to secure long-term contracts at set price levels.
Beijing encourages Chinese companies to become multinational and Africa presents opportunities as a market where western competition has not settled everywhere. At the 2006 Beijing Summit, US$5 billion were pledged by China in preferential loans to Chinese firms investing in Africa. As China is quite new to the world market, it has but little choice than to involve itself where ever the opportunities arise.
When it comes to natural resources, Africa is a very rich continent, although much is still unexploited. For example, the continent is estimated to hold 53% of the world’s cobalt reserve, an important component in mobile phones. 85% of China’s cobalt comes from Africa. The continent holds only 7% of the world’s oil reserve, but due to its unexploited nature, allowing Chinese companies to get a market share, over a third of Chinese oil imports come from Africa and there are plans to increase the African share to 40% within the next five to ten years.
China’s insistence not to set political conditions for doing business, comes from the self-interests they have. If China were to interfere in African countries, it might legitimize for China’s adversaries to interfere in China regarding issues like Taiwan or Tibet. On that note, African countries are also important as allies in international organizations, such as the UN or in the WTO, where China often needs support on various issues.
China in Africa is not all about resource extraction. Financial and expertise aid, direct investment, market businesses and tourism from China are significant parts of the Sino-African relationship. Around 900 Chinese companies, near to 500 in co-operation with African partners, do business on the African continent. As of 2006 Chinese companies were active in 49 out of the 53 countries. This basically means that China is involved in African countries regardless of state form or if the country is experiencing conflict. It is estimated that at least 750,000 Chinese live or work in Africa for an extended period and smaller Chinese businesses are growing in numbers, such as stores and smaller producing industries. The number of Chinese pure work force in Africa is estimated to be around 82,000.
The FOCAC-years
In October 2000, African and Chinese representatives met in Beijing to discuss the direction for the long term relations between China and Africa. It was the first FOCAC - The Forum on China-Africa Cooperation, established to promote Sino-African relations and it has also held summits in 2003 and 2006. At the China-Africa Forum in Beijing 2006, 48 African states participated. At the forum Beijing among other things pledged to work towards the goal of bilateral trade reaching US$100 billion by 2010, and trade deals totaling US$1,9 billion were signed between Chinese and African companies, as well as to more than double the number of toll free items exported from the least developed countries in Africa. Trade between Africa and China has been developing rapidly since the mid-nineties and the goal for bilateral trade might be passed earlier than 2010. Apart from pure business, Beijing also committed itself to train 15,000 professionals from African countries until 2009, build 10 hospitals, 30 anti-malaria clinics and set up 100 rural schools.
In trade, oil accounts for 62% of Chinese imports from Africa, ore and metals for 17% and agricultural raw materials for 7%. African imports consist to 87% out of manufactured goods, such as machinery, textile, apparel and consumer products, often of a quality not accepted in China’s main export markets as the US, but welcomed in Africa due to affordability.
Looking into the future
The Sino-African relationship is bound to continue, but it holds a lot of challenges for all involved. The African nations need to demand more, as they are the ones holding the resource card, which is a very strong one, in respect to all who want it, be it China, the EU or other bidders.
Cheap manufactured products from China let Africans raise their standard of living, but can also stop the improvement of African industry – thereby halting the continents economic development.
Low wages and hard working conditions have ignited the dislike of people working for Chinese companies. Strikes have occurred for example in Zambia, strikes that in many cases have resulted in violence.
To promote a long-lasting stabile and conflict free relationship, Africa should set the standards for the companies operating on the continent, demand corporate social responsibility (CSR) and work towards transparency, through initiatives like EITI [POSSIBLE LINK TO http://eitransparency.org/??]. This will help to ensure that revenues from resource extraction will be used for national, long term development. It will make sure money from local taxes for example flow back into the community where the resources are extracted.
African governments have to make China, as well as other actors on the continent, embrace a set of workers rights, follow-up programs regarding infrastructure and construction and create a balance between what is bought and sold on the continent. As of today, most resources China imports from the developing countries in Africa are as raw material, depriving the continent of jobs, development of the manufacturing industry and the opportunity to build up expertise regarding the refinement of their natural resources.
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