Is China good or bad for Africa?
October 29th, 2012
05:14 PM ET

Is China good or bad for Africa?

By Peter Eigen, Special to CNN

Editor’s note: Peter Eigen is a member of the Africa Progress Panel, chaired by Kofi Annan. He is the founder and chair of the Advisory Council, Transparency International, and chairman of the Extractive Industries Transparency Initiative. The views expressed are the author’s own.

China’s growing presence in Africa is one of the region’s biggest stories, but even seasoned analysts cannot decide whether this booming relationship is good or bad for Africa.

Critics say Chinese strategy is entirely self-promotional, aimed at maintaining access to Africa’s precious mineral resources even when that means propping up odious governments. China’s supporters say the Asian superpower is strictly neutral and business-oriented, preferring to generate economic growth not a dangerous dependency on aid.

China has certainly been contributing to Africa’s economic growth, both in terms of trade and with building infrastructure. All over the continent, it has built roads, railways, ports, airports, and more, filling a critical gap that western donors have been shy to provide and unblocking major bottlenecks to growth.

The rehabilitated 840-mile Benguela railway line, for example, now connects Angola’s Atlantic coast with the Democratic Republic of Congo and Zambia. And Chinese-financed roads have cut journey times from Ethiopia’s hinterland to the strategic port of Djibouti, facilitating livestock exports.

Meanwhile, bilateral trade between Africa and China continues to grow at an extraordinary pace, reaching $160 billion in 2011 from just $ 9 billion in 2000.

More from CNN: Is West losing out to China in Africa?

But some 90 percent of Sino-African trade is still based around natural resources – oil, ores, and minerals. And exports of natural resources by themselves do not help Africa to develop as we can see from the examples of Nigeria and Angola, Sub-Saharan Africa’s two largest oil exporters.

First, oil and mining are not labor intensive industries. So while natural resources may create impressive headline growth figures, they do not necessarily translate into widespread job creation.

Second, as we saw in the Netherlands in the 1960s and Norway today, large oil and mineral reserves can distort the local currency, pushing up prices of other exports, such as agricultural products, and making them much harder to sell overseas.

Third, without careful management, oil and mineral revenues have often fuelled corruption which has a severely negative impact on a country’s development. It’s notable, for example, that China is not yet one of the supporting countries for the Extractive Industries Transparency Initiative (EITI), an initiative to promote transparency and accountability in the governance of natural resources.

Away from the oil and mining industries, critics of China say they don’t see much evidence of China advocating for Africa on global issues either.

Climate change and better access to overseas markets are two such issues. But at the Africa Progress Panel we see little evidence of China pushing hard for improved market access for African products in non-African markets. Indeed, South African and other manufacturers have frequently complained about the crushing competition from Chinese textiles. Nor do we see China pushing for any meaningful breakthroughs in climate negotiations that would favor African nations.

More heavily publicized, Chinese use of its veto in the U.N. Security Council to inhibit international action on Darfur has made a mockery of China’s supposedly “neutral” stance.

So what else could Africa and China do so that Africa benefits more from its growing relationship with China?

For a start, African countries could diversify their economies as much as possible away from supplying unprocessed natural resources to China. This will make them less dependent on the vagaries of both the Chinese economy and the ups and downs of global commodity prices. Trade with China may have helped insulate Africa from the full impact of the 2008 financial crisis, but Africa still looks vulnerable to China’s economic slowdown. Meanwhile, African nations should also prepare for the day when they no longer have natural resources to sell. At the Africa Progress Panel, we talk about transforming natural resource wealth into human capital, by investing revenues into health and education.

Second, African countries need to encourage Chinese investment into more labor intensive sectors. Africa’s population is growing faster than anywhere else in the world, and job creation is a top priority. If Africa cannot create jobs to keep up with the growth of its workforce, then we can expect to see a large and growing population of frustrated, jobless youth.

As China’s relationship with Africa shifts from being essentially government-to-government to business-to-business, some analysts see enormous potential in the manufacturing industry, especially for clothing and textiles. Rising Chinese wages in this sector may lead Chinese manufacturers to export jobs to African countries where labor prices are lower.

One example of how this might work is Zambia, where some 300 Chinese companies now employ around 25,000 people. Ethiopia’s shoemaking sector has also benefitted from Chinese investment that has created jobs and exports.

For the most part, however, and despite the scale of investment, linkages between Chinese investment and local economies remains weak.

Third, African countries could negotiate better terms with Chinese investors, including quality control and better linkages with local economies. African governments could urge China to improve market access for African goods overseas, for example in trade fora such as the World Trade Organization. The IMF estimates the average import tariff faced by low-income countries in Africa in the BRICS at 13 percent – around three times the level in the United States and the European Union (which also operate a range of non-tariff barriers).

On quality, observers describe shoddy workmanship in a range of Chinese investments from crumbling walls in a Chinese-built hospital in Angola, enormous potholes in Ghanaian and Zambian roads, and a leaking roof in the African Union’s new $ 200 million headquarters opened in January.

Fairly or unfairly, many in Africa complain that Chinese projects do not employ enough Africans or do enough to transfer skills and technology. The reality is that this will vary from project to project. When a country is emerging from a decade or two of civil war, its labor force may not have sufficient capacity to work on technical projects. But at the Africa Progress Panel we view job creation as a priority issue for Africa’s development. Skills development has a major role to play in this respect.

And when Africans are employed, working conditions are sometimes substandard. Human Rights Watch reports dangerous work conditions in Zambian mines. And pay disputes at a copper mine also in Zambia led to two Chinese managers shooting at miners in 2010, then the death of a Chinese manager this August.

Fifth, Africa could keep working to make itself as attractive a business environment as possible. At the Africa Progress Panel, we consider further regional economic integration to be a priority. Africa’s population will one day represent the world’s largest consumer market. If they can get increased market access by investing in a single country, Chinese businesses will want to invest much more.

Analysts see more Chinese businesses coming to Africa, meaning that the Africa-China relationship is diversifying away from simply government-to-government relationships. This makes it harder to characterize the relationship as either good or bad. However we view it, China’s growing presence in Africa is part of a rapidly changing reality that presents enormous opportunity.

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Topics: Africa • China

soundoff (331 Responses)
  1. Marco Hsiao

    [Africa must get apology and compensation from the dirty Europe]

    Every African country is 1000 times better on human right record than immoral European animal countries. Every African countries should get apology and compensation (US$ 20 – 35 trillion) from the immoral European countries. Besides every African American should get US$ 20,000 from the immoral European countries; their ancestor deserves the compensation of US$ 600,000.

    Africa should have patience, after 2050 the earth will emerge a 1000 years dominant justice power, its GDP and military will be double than the US; the world will have justice.

    (The comment is sent from Hong Kong on 30 October 2012 during my travel)

    October 30, 2012 at 8:03 am | Reply
  2. IFEANYI

    NO ONE NEED TO ASK,I LOVE CHINA.ALL AFRICA LOVE CHINA.GOD BLESS CHINA

    October 30, 2012 at 8:17 am | Reply
  3. aftabshah

    This write up is not complete as it does not say what did the others do when they took out all the minerals, gold and diamonds for hundreds of years, took away the people of Africa as slaves and what development did the leave behind.

    October 30, 2012 at 8:27 am | Reply
  4. jesus

    South Africa has recently revealed the exploitation by western corporates and western countries on the resources of a country eg Anglo American,BHP Billiton,Lonmin,DeBeers etc.... All American,British,Australian and European countries.
    They are all based in their respective countries and invest extremely little in the country they exploit. Instead they
    have bedded local union officials,unions and ex union leaders who have become billionaires overnight.

    The rest of the world needs to be extemely weary of western corporates that pervade the rest of the world's landscape.

    October 30, 2012 at 8:32 am | Reply
  5. Marco Hsiao

    Of course, China (Mainland + ROC Taiwan + Hong Kong + Macau) is good for Africa. ROC Taiwan also has assisted some African countries.

    The topic is strange, the content is detailed and abundant but distorted, and innocence of 300 years history of Africa.

    October 30, 2012 at 8:32 am | Reply
  6. ONYEKAONWU

    WE DONT NEED TOO MUCH STORY,GOD BLESS CHINA FOR AFRICA

    October 30, 2012 at 8:34 am | Reply
  7. emilrom

    I wrote some articles on China and Africa. Check them out if you´re interested in the subject. the adress is worldindebate * com

    October 30, 2012 at 9:10 am | Reply
  8. Hahahahahahahahaha

    It depends on how many chinese ships the pirates can get!!!!! Hahahahahahahahahahaha

    October 30, 2012 at 9:30 am | Reply
  9. callumgg

    Reblogged this on Political Deficit and commented:
    Peter Eigen is a member of the Africa Progress Panel, chaired by Kofi Annan. He is the founder and chair of the Advisory Council, Transparency International, and chairman of the Extractive Industries Transparency Initiative. Writing about China in Africa at CNN Global Public Square...

    October 30, 2012 at 10:53 am | Reply
  10. real rob

    I would say that any real development,regardless of the country which invests etc,, is good for Africa, with 3 proviso,s,1;do it right,2;keep it clean,3;be responsible,, this could be said of any country in the world at this time,, this aint!! the "OLD DAYS",..old school/old boy, just wont cut it anymore,,It is just plain good business to not! shoot yourself in the foot,,,the world is too connected to have divisions and squabbling over these things,,there is enough for all,, if!! we DO IT RIGHT!,..My main concern with China investments there at this time would be,quality, and ability to maintain long term commitments etc,,,when the chinese economy crashes[soon], it will all grind to a halt and once again the Africans will suffer for others "mistakes",..Any country in Africa should maintain 51% ownership of all! investment strategies so they! can move in and pick it up when outsiders fail,,,,also, while Chinese construction teams are extremely good at building railroads, they have far less experience and quality in roads and buildings,infrastructure,as we can see, no?..ditto technical area,s as well,,thats the problem with stealing technology, you! wind up without the expertise to grow the tech unless you steal it again and again,, eventually your victims get wise and slam the doors,, then what??..dont mistake, I do admire the Chinese, very much so,for the most part the average Chinese is just a person, much of a muchness as anyone else, but they have a lot of catching up to do and so far what we have seen is not all that encouraging,,time will tell I suppose, as always,..my advice to all Africans would be;"sell the eggs and milk, but do not!! sell the farm"...keep that 51% at all times,,hey, if an "investor" cant make it with 49%, then something is very wrong at the get go, and best to avoid them we says,..they! will take you! down with them,, and we dont want that, do we??..btw, all this finger pointing and blame game of the past in Africa is counter productive in the extreme!, that was then, this now,, not even close! to the same thing, at all,,,

    October 30, 2012 at 11:06 am | Reply
  11. John Smith

    What people say or write is always subjective (in other worlds, objectivity is not possible), so it's pointless arguing about such an open subject.

    It is to early to answer the question stated by the author of this article, only time will tell.

    October 30, 2012 at 1:36 pm | Reply
  12. thumbsihave2

    The question is who will the African nations turn to for help when the relationship is at last recognized as parasitic rather than symbiotic? Many nations and people will have to put aside real or perceived historical or present slights/wrongs in order to have a harmonious, functioning, united front versus the Chinese. Will it happen or fast enough?

    October 30, 2012 at 2:58 pm | Reply
  13. Luandaguy

    African countries are making progress, African people's standard of living is improving, despite all the obstacles. And China's involvement is good for Africa, and very much needed.

    October 30, 2012 at 3:27 pm | Reply
    • Johnnie

      I agree to your state of progress of present Africa, but the African virus of "willed ignorance" because of our unchangeable traditions towards progress makes it very attractive and easy to be exploited. Africa is still viewed as "dark continent" until we begin to believe in our capabilities and shun corruption at all levels. Africa needs to try and adopt other means of workable progress best suited for Africans.

      October 30, 2012 at 8:06 pm | Reply
  14. JC

    I'm a Chinese, not from the western world.
    There is an old saying in Chinese:
    You got betrayed, or sold out, by your partner, and you were still counting the money for the sale price for them.
    Let's see if this would happen in Africa.
    For those Africans praising the Chinese contribution to your home countries, I simply want to say, with my truly sincerity, GOOD LUCK.
    You or your sons may have a chance to see how the Chinese people rip you off, exploit all the resources you have, and leave nothing with you, in a different way than the western world had done to you before.
    God bless you all.

    October 30, 2012 at 3:59 pm | Reply
    • Richard

      JC是个傻逼洋五毛。

      November 13, 2012 at 3:39 pm | Reply
  15. Katie

    iwho else is even trying to do anything somewhat real in terms of progress in africa other than china? not the west. and certainly not africa itself. africans are not children. perhaps they should stand up and take charge of their own continent like asia did.

    October 30, 2012 at 4:02 pm | Reply
  16. John

    I have never understood why countries who sit on natural resources sell them so other countries can benefit, why the hell they dont create their own factories ???

    October 30, 2012 at 4:10 pm | Reply
    • AdayAday

      Like mining resources is as simple as collecting fruits.

      October 30, 2012 at 5:05 pm | Reply
    • Johnnie

      Slavery of the mind is the reason.

      October 30, 2012 at 7:48 pm | Reply
  17. Johnnie

    Africa has suddenly reminded me of this popular song "Survivor – Eye Of The Tiger" China's growing presence in Africa does not surprise me simply because Africa's history remarkably is been seen and still denied as Survivor and raw material supplier for the entire world. The history of slave trade is seen as a dependable and reliable human power of growth for the western world. The alternative to old form of slavery has been replaced by businesses outsourcing to poor countries for exploitation. This pattern of exploitations not new and the Chinese are back to take advantage of the long term neglect of Africa especially at a time Africa's oil exploration is at prime time. Africa sits on blessed enormous wealth but lacks the educational ability.

    October 30, 2012 at 7:39 pm | Reply
  18. Nancy

    The whole article tries to be in a neutral tone, but in fact using all efforts to black China. Ok, I am not surprised to see article like this in western media. Maybe someone is interested in checking Chinese media. I am always laughing at people who believe the "fact" from the media without a doubt.

    For this article. I only smell one thing: US is so envy China.

    October 30, 2012 at 10:30 pm | Reply
  19. hag

    "African Countries should negotiate better terms with Chinese investors", soundly good.

    October 31, 2012 at 1:46 am | Reply
  20. muzcleman

    Chinese people are okay. The goverment, the communist party, the ideology terrorize people even neighboring countries.

    October 31, 2012 at 5:19 am | Reply
  21. Drahkcor

    No No No No No.......Africa does not need China right now. The Chinese government is a communist dictatorship which thrives by enforcing restrictive macabre laws on the Chinese commoners, banishing religious freedoms, physically and emotionally abusing minority groups, having unreasonable territorial disputes with almost all its neighbors, terrorizing its poor prisoners with inhuman labor work, extremely polluting the earth and killing its own people. The relationship of China and Africa is not health because Africa is desperate and China is resource hungry. I am surprised that other Africans have still not learned from this phenomenon. The Europeans came to Africa partly because of our resources, now its happening with the Chinese and people are still blind. They don't pay the resources' worth but rather they wine and dine with the African dictatorship and flood it with guns to kill its own people. The African Western relationship is even better than a relationship with China because we share a long history with the west which is both good and bad. It would be unwise to start over another relationship again, its like going back to the thirteenth century.

    October 31, 2012 at 8:02 am | Reply
    • Toto

      C'mon, we are nice people, we can treat our friends the "right" way. How much do you need?

      November 4, 2012 at 1:48 am | Reply
  22. DuluthMN

    Chinese nationals, as businessmen in Africa, just take and take and give almost nothing in return. Everything is to their advantage as they have the economic leverage. That's only the beginning of the story. Don't be surprised when China establishes a naval & air base in West Africa to have a direct military presence in the Atlantic under the pretense of looking out for/protecting their economic interests in Africa in the face of so much local turmoil. Didn't see that one coming did you?

    October 31, 2012 at 10:35 am | Reply
    • Bnode

      Actually it's pretty obvious.

      March 8, 2013 at 3:21 pm | Reply
  23. ericinmozambique

    I live in Mozambique. The president's house is being built by the Chinese. Mozambique and many other African governments have no anti-corruption laws or enforcement, the Chinese government violates human rights dialy. If you think those two facts will result in long term benefit for average Africans, watch out! Just because China doesn't use guns or enslave people (neither does the west at the moment, btw), it doesn't mean they care about average Africans.

    October 31, 2012 at 6:11 pm | Reply
  24. Brit

    CNN It would be nice to read one day

    "What and How African Leaders are Navigating their Relationships with China" .

    There are lots of articles on what China is doing in Africa but half the equation is pertaining to how African Leaders are addessing and managing the relationship. What are their terms of agreements on any of their economy and business agreements? Remember it was weak governments that allowed the exploitation of Africa in the beginning until it was too late.

    November 1, 2012 at 1:05 am | Reply
  25. lweba

    I expected China if it really had good intentions in Africa then they would invest in industries which will process our raw materials rather than carrying away unprocessed raw materials home. If they do not invest in this then they are no different from Africa's former colonialists.

    November 1, 2012 at 10:22 am | Reply
    • Joseph

      China will not process the material in Africa. All China wants from mineral resource countries is to pull out the goods and keep all their worker ants busy.

      November 15, 2012 at 8:27 am | Reply
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