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.

Post by:
Topics: Africa • China

soundoff (331 Responses)
  1. Kenyan

    China is good for now as they are trying to out compete the trend the west had set for exploitation, so the Chinese are simply trying to be better than them, the Africans in return are only seeing this side of it. As soon as China collapses the western economies (which it already is doing), then China shall show us all its true intentions and colors (if you know what I mean).

    The Chinese themselves do not treat their own well, how will they treat Africans?, regarding the exchange for African resources, well this is done with an equal exchange of raw materials and off loading their own prisoners population. This has little to do with the west as they already took what they needed and are now more or less out of the picture.

    For those still complaining about the west, keep in mind that China + Russia+ Middle East shall work together in eliminating all western economies

    So China + Russia+ Middle East VS US + European allies.

    January 7, 2013 at 10:04 pm | Reply
  2. Tim

    China does not interfear in the domestic issues, which is very welcomed by the majority of African "rulers". Another question which I missed in this article is the quality. In a couple years most of this infrastructure projects has to be rebuild again, because it is a big lake of quality how they build roads and other infrastructure projects.

    January 8, 2013 at 10:33 am | Reply
  3. Okidoeki

    Let history be the judge of what Africa will gain or benefit from Chinese business and investiment. If the next ten years of economic growth in Asia is anything close to the last ten years, I am sure some of that wealth generated will benefit those with ties to Chinese investiment and if it doesn't, africa will atleast have a better infrustructure of roads, railways, shipping ports, hospitals, and the list does on... which they can obviously hire someone to manage for them if they decide to kick the Chinese out...

    January 11, 2013 at 8:50 pm | Reply
  4. Sam

    I think it's good and bad at the same time. We could see clearly from different african countries that China benifited many african countries whether by boosting their economy, improving their infrastructure for the most part (Algeria East West highway), without forgetting the financial aid China provides to these countries, and which unlike western aid, they come with no conditions. On the other hand, China's presence in Africa is also problematic because it creates dependency, xenophobia, new form of colonialism (neocolonialism), and in some cases corruption. But to answer this question, the presence of China is good for the development of African countries despite of its disadvantages because without China they won't be able to boost and improve their economy or meet the minimum of infrastructure development. Besides, in cases like Algeria (even though Chinese presence is increasing) it consists of less than 20 % of Algeria's FDI and the rest of it is mostly directed toward European countries, which healthy because it's diversified. Bref, as long as those countries don't deal only with China and diversify their investments, the Chinese presence will be healthy and good for Algeria.

    January 13, 2013 at 1:53 pm | Reply
  5. Alex12

    There are always critics when China is going for something from all over the world. Some useful, some completely junk. So, China do whatever you think is right just like United States. Time is precious, no time to argue about it.

    January 14, 2013 at 11:14 am | Reply
  6. Gul

    After reading the views of american and europian people, I am sure that China is not going to win instead CHINA Has won already.

    January 14, 2013 at 4:48 pm | Reply
  7. ElreyJones

    China is a miracle for Africa. African needs tens of millions of Chinese there. China can teach the africans much and the africans can learn so much from our beloved Chinese brothers and sisters. Africans need role models and there are no better role models on Earth than our Chinese brothers and sisters. What I believe the world would benefit from is to work in harmony to permit China men to marry african women. This will produce a tremendous african people that the Lord will surely bless. God bless you all.

    January 16, 2013 at 10:28 pm | Reply
  8. Jack 2

    I'll use Jack 2

    January 17, 2013 at 11:54 am | Reply
  9. Jack 2

    To you people who speak of slavery. Do you know that in Mauritania Afirca that 10 to 20 percent are in slavery. it was outlawed only in 2007 and only one case has been procecuted. This muslim nation still practices slavery.

    January 17, 2013 at 12:10 pm | Reply
  10. Jack 2

    Africa themselves had slaves way before a white man came and bought slaves from the black muslims. know your history before you post.

    January 17, 2013 at 12:46 pm | Reply
  11. Peggy Munro

    Bad, really bad.

    January 17, 2013 at 5:10 pm | Reply
  12. Anthony Maw

    China currently has the excess wealth to offer foreign aid to Africa. The western countries are all saddled with debt. In the hearts and minds of most educated Africans, the memory of the brutality of the Euro-American slave trade by the Portuguese, British, Dutch and "Americans" still echoes 400 years later, especially in countries like Ghana. The Chinese, who explored East Africa a century before the Portuguese, don't have such legacy to deal with.

    January 18, 2013 at 11:25 am | Reply
  13. ian

    remember according to the west everything china does is evil, they always have malicious motives and nothing they do can ever have a positive effect on anything...

    My question is how do people in America and the rest of the west know so much about China?

    Most can't speak a word of chinese
    Most don't know a thing about their history or culture
    And very few have visited

    So guys how do you know so damn much about the Chinese? Think about this for a second if someone from a foreign country tried to talk about your country the way you talk about china but couldn't speak your language, didn't know your history or culture and had never visited your country you would laugh them out of the room. but every day on the net we see this and no one says anything.

    well I for one am sick of it.

    Get a grip, stop china bashing.

    If your worried about a future where china controls the world (not very likely i might add and you might know this already if you actually knew what the hell you were talking about) if you really are worried about Sino supremacy in the future get up off your ass and DO something about it. Stop tearing other people down and build yourself up...

    Since when did we turn into such whiners and poor losers in the west??? It's embarrassing so please stop, and start by looking to yourself to change things. i would love to see someone with an ambitious plan to re industrialize the United States, that would be progress.

    January 21, 2013 at 7:01 am | Reply
  14. Rico

    Africa need the money from natural resources to kickstart their economy. China is the biggest buyer of commodities and can front the capital intensive infrastructure needed for extraction. They buy even more resources from Brazil, Australia, Argintina etc but western countries think that Africans are less educated and more currupt therefore Chinese will take advantage as they once did. They are envious/jealous and will always bad mouth China/Africa trade. Some of the fastest growing countries in the world are in Africa and all because of the China trade. Why we never hear of Africans stripping China of goods and services that they could never afford from the west.

    January 22, 2013 at 7:52 pm | Reply
  15. Karen

    More important is to raise the questions from the people there, who do they prefer working with?

    January 26, 2013 at 1:45 pm | Reply
  16. Joe

    It sounds like a chick teaching a duch how to swim.

    January 27, 2013 at 11:30 am | Reply
  17. top acting schools in los angeles

    You really make it appear so easy together with your presentation but I to find this matter to be really one thing that I believe I'd never understand. It kind of feels too complicated and extremely wide for me. I'm looking forward to your next post, I will attempt to get the grasp of it!

    January 30, 2013 at 2:02 am | Reply
  18. Claudia

    China (Chinese) is not good for Africa, not good for Western World. Chinese do not share the same culture, are dangerous, want the "aggressive-way". Africa should belong to Western Culture, not Asians.

    February 3, 2013 at 12:40 pm | Reply
  19. Jones

    I would prefer the Chinese to the Europeans and or Americans way more . Europe,the West have been in Africa for centuries.What have they helped us do? Pillaging,colonialism,destruction,shaming us on their national TV is the pay we get for being a stupid people–giving out our resources to France,Germany,the US,Russia at no cost and receiving insults in return. Le the Chines come and let them come in droves.i want them. At least thgey are building roads,hospitals,stadia,recreational centres,technology is exchanged,though not at a pace I would have loved to see.but something is happening-at least. Let the Chinese come.Recently,I think that was about 6 or 7 years ago,I read an article that was questioning the use of a mobile phone manufacturing factory in Rwanda by the Chinese.Imagine.think Africans–think.If white people can ask these questions,this only indicates their total wicked and their commitment to keeping us under as low as possible.They are building factories in Bangladesh,Paskistan-far more dangerous places than even the worst in Africa,but would question factories set up by the Chinese.These people called Europeans are vampires.I will never trust a European,American,not even Obama.They are all controlled by the black-hating devils whose head is the demon of the dungeon. China come,we need you.No Russia,no US,no Europe,no France.China pleae come.Come quickly China.

    February 4, 2013 at 11:43 am | Reply
  20. Jones

    Message was hurriedly posted and hardly checked for errors. Sorry about that.

    February 4, 2013 at 11:45 am | Reply
  21. Benedict

    China, as know from their history, became a enclosed subcontinent due to the actions of the European imperialist incursion on their native lands. However, after Mao Zedong had died and the Gang of Four's Red Revolution had been subdued, the succeeding generation of leaders opened up China to the rest of the world till we meet that country in it's present form.
    Their historical past as well as their cultural inclinations lead them to do what they do;that is, focus on them first and the rest of the world follows in her wake. They may spend the billions,but does it mean that they are any different from what other European and American industrialist have been doing for time immemorial?!!.

    February 8, 2013 at 8:21 am | Reply
  22. Inibokun

    The presence of forieigners such as the West and China in a country is not to be trusted. The only difference between the West and China is the mode of operation. In Nigeria, workers in Chinese-owned organisations are treated very unfairly The Chinese attempt to negotiate contracts in their language when they know noone understands them.
    We Africans must never trust outsiders. They are all scavengers.

    February 8, 2013 at 9:09 am | Reply
  23. Charles Ezugha

    As a Foreigner living is China for over a decade . They have strict laws which you must obey or life will become miserable for you here . The Chinese are welcome to African countries in the spirit of globalization. China needs countries in Africa just as countries in Africa needs China. The point is that they must play according to the rules put in place by such countries . On the part of these African countries, they should make laws to plug all loopholes in the hiring of workers , harnessing of naturals resources , impose taxes on imports and on incomes . In this way the cooperation of the Chinese and some African countries should be a win win affair . Remember that China is a country and Africa is a continent . So we have to make contributions based on country to country not based on China versus the whole of African continent.

    February 8, 2013 at 7:34 pm | Reply
  24. ShenShengbin

    from 1959 to 1960s,China was in extremely difficult period, but still poured all its aid to Africa. So In the help of the African countries, China successfully returned to the United Nations permanent member position in 1971. China have interests and needs in Africa,but also have a sincere friendship with African.

    February 16, 2013 at 11:14 pm | Reply
1 2 3 4 5 6 7 8

Post a comment


 

CNN welcomes a lively and courteous discussion as long as you follow the Rules of Conduct set forth in our Terms of Service. Comments are not pre-screened before they post. You agree that anything you post may be used, along with your name and profile picture, in accordance with our Privacy Policy and the license you have granted pursuant to our Terms of Service.