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

    "Angola's Chinese-built 'ghost city' "
    ---------------–

    CNN is declining on quality or morality? CNN needs to upgrade quality. That is not a ghost city but a nice city.

    The building could be enjoyed for 200 years, it needs 2-3 years to be bought (assisted by government) or managed; it is common on civil construction. CNN is too rush.

    November 1, 2012 at 10:50 pm | Reply
  2. Marco Hsiao

    The US uses violence to murder 100,000 innocent Iraqi and 10,000 innocent Libyan; thus the US as worst country on violating human right and violating morality on the earth in the 21st century. South Africa has blamed the US. The immoral US media also use lies to make rifts between Africa and other justice countries. The US must change behavior, the US is on the eve of big decline.

    November 1, 2012 at 11:00 pm | Reply
  3. the truth

    Why don't we ask the Africans who they want as their partners; the chinese or the west.

    So far the africans chose the chinese and kicked the west out. Should we then invade their country and force them to accept us?

    November 3, 2012 at 3:22 am | Reply
  4. jenny

    Which colonial power went into Africa with any other strategy and intent than self-promotion? Which one did not aim at access to Africa’s precious mineral resources even when that came at the expense of the people, their freedom and rights. We have suddenly become seized by virtue and caring, and a massive bout of amnesia, We set incredibly high standards for China in Africa that the 'civilized' West would never have considered reasonable when they feasted on the riches of the continent, but we expect China to 'prove its worthiness' and prove they are better?
    China can only fail as they too are imperfect, but the West will certainly gain another victory out of their failure. Another bit of self-promotion?

    November 3, 2012 at 3:19 pm | Reply
  5. musings

    Reblogged this on Musings.

    November 5, 2012 at 4:35 pm | Reply
  6. William

    The difference between the Western countries and China is that Westerners promised things like roads and infrastructure but exploited Africans without giving them any of that. The Chinese are exploiting them but are fulfilling their promises. Though the Chinese should not be respected in their exploitation of the African continent, we can at least give them credit for being a bit more clever and subtle with their motives.

    November 6, 2012 at 3:51 am | Reply
  7. EyesOnU

    To me, China-Chinese people should not invest so much money in Africa countries. Chinese are hard working people while African AREN"T. Also, African are NOT trust-able people.

    November 7, 2012 at 9:51 pm | Reply
    • unak78

      Wow. Great job with the grammar buddy. Perhaps you shouldn't have been so lazy in English class.

      November 15, 2012 at 1:48 am | Reply
  8. Great China

    Africa problem is the local people have no education. People like to cry out how western countries took advantage of Africans. This is true to extent. Even still today it is Africans who continue to take advantage of own people. During slave trades with the west, it was local conquering tribes who sold out the conquered tribesmen. Until Africa gets education, and leaders who do are not corrupt for themselves, Africa will have no hope.

    November 8, 2012 at 12:04 pm | Reply
  9. marc

    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.Yes China is good for Africa all these years the West never did any of those things and now that they see billions can be made and they can't get a cut they start coming up with things they see problems with.

    November 8, 2012 at 4:48 pm | Reply
  10. James

    As the article stated, there is the potential for the relationship between China and Africa as a whole to be mutually beneficial. However, it seems that currently African governments are getting a smaller slice of the pie. To me, this relationship resembles a number of characteristics of imperialism, including the unbalanced trade and lopsided distribution of profits. As the most populated country in the world, China is desperate for natural resources, and will do whatever necessary to obtain those resources. Trade has jumped from $9 billion in 2000 to $160 billion in 2011. While the numbers are impressive, African economies are not achieving the growth they should be seeing, especially in the labor force. With suspected corruption, this whole relationship seems to be a front for a China-centric arrangement. For years, Americans have complained about jobs being sent to China, and now the Chinese may have to worry about jobs being sent to Africa. This trade relationship increases China’s standing as an international force to be reckoned with, and indicates that China intends on growing its own economy. Another interesting note is the blind eye China turns towards human rights violations and the apparent lack of care shown towards the labor that is benefitting them so greatly.

    November 8, 2012 at 5:52 pm | Reply
  11. Isaacw

    China was not and will never be a colonizer as history can testify. What China wants is a stability. To govern the most populous country in the world is a serious business. There is a Chinese saying "wealth comes from harmony". What China is doing in Africa is bilateral benefit, something the West have failed to do for much of their colonizing year. Unlike the West, it is pure exploitation. Look at the Far East, ethnic Chinese in Indonesia, Malaysia, Philippines etc etc are only focusing in creating and distributing wealth and jobs in their host country. Did you hear of any undermining movement by China on its neighbor? None! Those country in the Far East are so near China, were they ever been colonized by the Chinese in the past? None! Now, let us ask ourselves this question,what have we done for the African countries and for the African people! None! Time to stop criticizing!

    November 13, 2012 at 4:08 am | Reply
  12. Abba

    Chine is not good for anybody especially the planet Earth.

    November 14, 2012 at 12:21 pm | Reply
  13. Skipper Sam

    How did whites building the US Transcontinental Railroad, work out for the Indians ?

    November 15, 2012 at 3:06 pm | Reply
    • Michael

      The Irish and the Chinese built the Transcontinental railroad

      December 10, 2012 at 3:24 pm | Reply
  14. jean-claude

    I think is good thing for africa because our continent need to get some boost. you have to start somewhere.
    Now is a time to try find another partners than europe of the us.

    November 16, 2012 at 11:12 pm | Reply
  15. Frida

    China is good for Africa. You can see the development which China brought to Africa. There is potential for both in a win-win situatiuon.

    November 17, 2012 at 1:19 am | Reply
  16. jeremiah

    China will never be good to Africa until its good to its own people its brings prisoners from its country to work as slaves when its building and always they will employ chinese than Africans. so china can't be good to Africa and its not needed in Africa

    November 17, 2012 at 7:12 pm | Reply
  17. Anti-Communist

    Of course China is not good for Africa. Ask how many people who believe in a higher being or more then 1 ended up being killed in China. China has no respect for people who happen to believe in a god. No one talks about how the Muslims who refuse to renounce being Muslim fought Mao and the west ignored those who resisted Mao. Besides alot of those countries who accepted help from China were Muslim countries and they ignore there fellow Muslims because China paid those Muslims countries off like Sudan to ignore the plight of fellow Muslims. Samething goes for the Christian countries in Africa samething being bought off by China. Of course China is not good for Africa. China admires Karl Marx and who was Karl Marx the founder of Marxism who hated all non westerns and had words to described about Africans and Arabs.

    November 18, 2012 at 2:06 pm | Reply
  18. Matthew Hall

    BAD

    November 18, 2012 at 9:40 pm | Reply
  19. SB1790

    In reading that story I thought it was a historical recap of Great Britain's stint in Africa. They Chinese are indeed more clever in that they just dispensed with all the religious pretense and decided not to send troops to protect business interests. If the United States were smart we'd have set up infrastructure, schools and sowed the seeds of a free market economy long ago instead of wasting trillions of dollars in the sand pit called the Middle East. At least the Africans are somewhat more open to a relationship. If we had trading partners and the non Islamic parts of Africa had strong economies we'd have MUCH more sway in peaceful negotiations in upper Mediterainean part of the continent. But nope. Didn't want to bother. Just a bunch of bush people and fly swatters. If the Chinese are raping them, I doubt it won't take long before they get tired of it and China decides it's not worth the hassle or sends in troops. Happened to the Brits and other European nations that tried to force them into something they didn't like.

    November 19, 2012 at 5:32 pm | Reply
  20. Nanson Hwa

    What China is doing in Africa as the writer commented in this article is that China has done more for African countries than any of the European powers or the United States has ever done to help develop any of the countries in Africa. Western interests have always been to exploit and oppress to harness the underdeveloped poverty stricken countries' natural resources and wild animal life for their own interests under the guise of aid, including human experimentation regarding research on the AIDS virus. China's growing relations with African countries will have a more positive impact than any of the Western colonial and imperialist countries of the West.

    November 20, 2012 at 12:10 am | Reply
  21. UnFred

    China is a plague in any market.

    November 21, 2012 at 2:52 pm | Reply
    • Wow

      You're a plague, go get rid of yourself before generalizing 1/6 of the world!

      December 8, 2012 at 4:18 pm | Reply
  22. Nija

    The West taught Africans how to hate each other and we still do till date. The Chinese are teaching Africans how to help our selves by investing infrastructues. African should understand that we can not eat our cake and have it. This is the moment the goverments in Africa should start invesing in Health care and Education and I can asure you Africa will grow exponentially: someday the Westerners will be applying for jobs in Africa.

    November 23, 2012 at 10:20 am | Reply
    • Tibet Ain't China

      AS A TIBETAN ... TRUST ME AFRICA!!!
      China is NOT good for Africa ..PERIOD! They promised Tibet so many things and look what they have done after 60 years. They killed 1.5 million Tibetans .. 1/6th of the entire population. They stole from Tibetan households, They built roads and rails to take minerals and out of Tibet and resettled so many HAN Chinese in Tibet. We Tibetans are already outnumbered in Tibet. There are more Chinese in Tibet than Tibetans. Time to be reincarnated on another planet. More than 81 Tibetans self immolated themselves sine 2009 .. GOOD LUCK AFRICA!

      November 26, 2012 at 10:11 pm | Reply
      • Wow

        ^ 2 words trolling idiot!

        December 8, 2012 at 4:17 pm |
      • yzu

        china is and will have been a strong and united china.Tibet is a part of china forever,forever,,,,,,,

        January 4, 2013 at 10:38 am |
      • Jack 2

        Good to hear from you.

        January 17, 2013 at 11:58 am |
    • Jack 3

      You haven't a clue as to what you're talking about, China is raping the country of Ivory and gold with no concern over the collateral damage to the jungles and animals.

      December 3, 2012 at 3:07 pm | Reply
      • Jack 2

        I went to Jack 2 from jack 3 but you're saying the same as i would post so i guess it doesn't matter.

        January 17, 2013 at 11:56 am |
  23. SOONJUSTCOME

    China is not good for Africa. They need to go back with their substandard products and the substandard infrastructure that tehy bulding all over the continent. They also foster corruption in the continent. They bribe the corrupt African leaders who in turn will turn a blind eye while the thieving Chinese rob the continent blind.

    November 27, 2012 at 2:16 pm | Reply
    • Hank Luke

      What China is doing is Africa is absolutely no different from what we (United States) are doing in the Middle East. Do we ever complain about the horrendous human rights record at Saudi Arabia? Do we ever complain about the corruptions at Saudi royal family ?(both US companies giving bribes to the royal family and the royal family embezzling Saudi internal funds) Do we complain about the massive income inequality in Saudi Arabia and the fact that our investments are not really benefiting the average Saudi citizen? Do we stop selling them weapons because of their terrible human rights record and them being in a highly volatile region?

      The answer is no for all of them. Every country will look out what's best for their interests, we are not different neither are the Chinese.

      November 27, 2012 at 3:04 pm | Reply
  24. ozeonblog

    Reblogged this on Our Voices and commented:
    The West pays no attention to Africa, But China Thinks that's a Mistake

    November 29, 2012 at 8:49 am | Reply
  25. Jack 3

    They are raping the country for Ivory and gold.

    December 3, 2012 at 3:04 pm | Reply
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