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 (333 Responses)
  1. please transelate and pass to the FBI, CIA AND those who care

    وردنا خبرا مؤكدا مفاده ما يلي :
    المجرم واثق البطاط يتواجد حاليا في مدينة الشعله – في بيت يقع في نهاية شارع (60) بداية منطقة الدوانم مع مجموعه من المجرمين من المليشيات التابعه لفيلق القدس الايراني وينطلق من مدينة الشعله لتنفيذ عمليات الاغتيال في مناطق الغزاليه والسيديه والعامريه وبدعم لوجستي من مكتب القائد العام للقوات المسلحه

    تعليقنا //
    اين مذكرة القاء القبض بحق هذا الارهابي يا مالكي وهو لايبعد عن مقرك في المنطقه الخضراء اكثر من 15 كيلومتر ومليشياتك وجيشك الاجرامي يحاصر احياء الاعظميه والعامريه والسيديه لكي يتحرك هذا المجرم وعصابات فيلق القدس لقتل الابرياء وتصفية المطالبين بحقوقهم المشروعه ,,,,,,,,,,,,,,,

    February 18, 2013 at 12:10 am | Reply
  2. A G

    China is bad for any nation. They are communist. Wealth mongers via oil, gold, rare earth metals worldwide. They will not stop until they have all the wealth of the worlds richest land

    February 20, 2013 at 5:13 am | Reply
  3. West SUCKS

    What has Western nations done for Africa? China will offer Africa an alternative, at least, and may be then the West will behave itself.

    February 20, 2013 at 2:40 pm | Reply
  4. daigawn

    There is nothing good to come from China being in Africa. Sure now they may be helping those Africans but give it twenty years and suddenly it will be Africans fighting for Chinese interests in northern Africa, threatening the security of western nations. The West may be bad but nothing compares to a China left to its own designs.

    February 20, 2013 at 7:39 pm | Reply
  5. concern

    good luck africa see for your self what chinese can do.

    February 20, 2013 at 11:03 pm | Reply
  6. Khakilu

    Those Chinese action to help African is indeed a very good thing. But I can not understand why they do not help their Chinese people first, there are still many Chinese people live in very poor condition. Rich people is only a part of their population. China this country is really very rich, but most of your people is actually very poor. Please do sth. beyond your means in order to be impressive.

    February 21, 2013 at 8:23 am | Reply
  7. Andrew

    BAD! BAD!! BAD!!! BAD!!!! Just ask anybody in the world, who matters. They support dictators, Aggressively uproot the local economy by dumping their inferior, cheap products made by slave labour. Damage the eco system. They have absolutely no ethics. Absolutely shameless!

    February 22, 2013 at 5:08 pm | Reply
  8. Mateus Mahumane

    When one reads Mr. Peter Eigen's article, one gets the impression that China is the only villain exploiting Africa. Mr. Eigen makes it sound as if the West has been doing an excellent job in Africa until the arrival of China. He does not bother to validate his criticism of China by comparing what the West has contributed in Africa in the last century and what China has contributed in the last two decades, he simply follows what has become fashionable – to advocate for Africa. For centuries the trade between Africa and the West has been about commodities, just like China, with the difference that China leaves behind visible improvements in terms of infrastructure. He mentions the leaky African Union hall, the crumbling hospital walls in Angola but does not mention the expensive but equally shoddy roads built by Western companies. Some of the new friends and advocates even suggest that China should not deal directly with Africa, instead should channel their development deals with Africa via joint ventures with the West because they know better how to deal with Africans.

    February 23, 2013 at 12:54 am | Reply
  9. Barry

    Like them or not, Chinese and their face are the passport to Africa. I couldn't think of anything else than Chinese model of economic development that could contribute to the prosperity and bright future of Africa. Europeans left poverty and stavation in Africa. Chinese share their wealth and wisdom with Africans. These are all the basic facts. Don't be afraid of truth. Be humane!

    February 23, 2013 at 7:05 pm | Reply
  10. Anti-invader

    Stop invade other countries China or you will get kick in the ass very hard

    February 24, 2013 at 1:10 am | Reply
  11. Anti-invader

    made in china are cheap but made in africa are cheaper...

    February 24, 2013 at 1:21 am | Reply
  12. Anti-invader

    China is going down soon....

    February 24, 2013 at 1:25 am | Reply
  13. habesha

    only westerners feel worried about huge Chinese investment in Africa : too late, westerners, you have lost your opportunity in Africa, hopefully we are now doing business with China.
    the West are scared year after year : Chines is to be the next super power, and billions dollars invested in Africa's infrastructures is the best thing done.
    where do the critics come from : the fallen, indebted West.

    February 24, 2013 at 9:05 pm | Reply
  14. Feco

    Please our good and corrupt African leaders should wake-up on China and watch them very closely before it's too late. We all know that china is one the most callous country on Earth. China never had any good intentions for Africa and will never have .Right now they are buying lands, taking, crabbing and stealing everything within their reach at the same time using Africa as dumping ground with substandard goods and chemicals. They buy lands cultivate and take all the produce back to China leaving the owners of the land in hunger. The media cannot see everything as they happen. But I know one day I know the new generation politician will turn against them .But we don’t need to wait till that time .

    February 24, 2013 at 10:38 pm | Reply
  15. tberts

    I'll just say that Africans should take full control of their lands, resources- both human and material. I just feel outsiders (both China and the West) are taking advantage of us and unfortunately, our leaders are too myopic to recognise this. For us to build our continent to the level we all aspire, it's going to take commitment, hardwork and selflessness. Foreigners cannot develop our continent so we shouldn't wait on them to do so for us. Africa, arise and do what is best for you. Your destiny is in your hands.

    March 4, 2013 at 11:30 am | Reply
  16. Rebecca

    No one noticed China's declaration that they will use Africa to grow food for their people and cut out the Africans altogether? They are busy trying to buy millions of acres across the globe, focus on Africa, Australia, other Asian countries. Australia asked for and received U.S. military to protect them from China, which declared it would take over these areas. Nope, don't think Africa will benefit.

    March 4, 2013 at 5:26 pm | Reply
  17. YTYCN

    While,As a Chinese,It is very interesting to find so many people from western world who know nothing about China talking about China and the Sino-Africa relationship.

    March 5, 2013 at 12:10 pm | Reply
  18. YTYCN

    The most ridiculous opinions in these comments are the following two:1.Workers from China to Africa are prisoners.2.Gov in China killed millions of people in Tibet.
    I almost have nothing to say for a short while because I can hardly believe such foolish words can be trusted by so many people...
    1.I graduated from Nankai University and some of my schoolmates are working in Africa.I want to ask those who said China had sent prisoners to Africa as workers (balabala...) a question,do you mean my schoolmates are criminals or NKU is a prison ?! In fact , China send workers , engineers , doctors , etc . to Africa every year . And prisoners in China are surely required to do some work , such as making shoe-pads , repairing machines , etc. These work won`t do harm to their body and they can learn some skills from it so that they can support themselves instead of continuing crime when they go back to society , the product will be sold in market and prisoners will get paid , though the pay is lower .
    But we won`t send prisoners to Africa because they are not able to do the complicated work . And if they crime again , that`s a great shame on the earth . We will never take this risk .
    2.These question is more ridiculous . Do you know the condition in Tibet 60 years ago ? Killed MILLIONS of Tibetans ? At that time . How many people were there altogether ? ALL of my Tibetan friends believe CCP is a good party because it is CCP who gave them lands and freedom . While , of course , it is surely a fact that some people hate CCP`s guts , they were slave owners but they have no lands ,no slaves , no privileges , they have nothing now . There are no such people in my Tibetan friends so they love CCP and the GOV . If you trust Dalai Lama , you are standing together with slave owners . Maybe that`s you western world`s position , just like what you were to Arican friends ?
    To who still believe these two opinions above , you are really a " 傻逼 " . In English I can`t find any words to translate these two characters entirely and appropriately .

    March 5, 2013 at 1:11 pm | Reply
  19. Paul

    I find it interesting the kinds of stories Fareed covers on Africa. They are either irrelevant or negative. There are success stories in Africa and it would be good for such a self proclaimed global forum to seize the old stereotypes. Has anyone heard about the small west African country called Ghana? Did you know they have carried out successful democratic governance for 2 decades? Did you know they are one of the fastest economies?

    March 5, 2013 at 2:10 pm | Reply
    • YTYCN

      As I know ,Africa is a land of war famine and massacre in many people`s brain . But in fact , there are many countries developing quite well in Africa , including Ghana . This country is becoming richer and richer by its agriculture . Cocoa from Ghana is famous all over the world . Keeping the momentum , Ghana should be a star in Africa . But an advice from China is : developing INDUSTRY is very important . There is one day , you will find you had cut down all the woods , digged out all the gold and other resources from the land , what will you do at that time ? So the industry is necessary . While I think the democracy is just a goal but not a way . Do not have blind faith in it (Look at Greece when dreaming to be another USA by western democracy ). And western democracy is not equal to democracy too . Come on Ghana ! We Chinese wish you become better and better and Africa become better and better . PS : Do not be satisfied with your achievement in 2 decades and keep growing . 20 years is just a blink of eye in history !

      March 6, 2013 at 12:21 am | Reply
  20. Herewe Goagain

    As long as Africa remains "stuck on stupid" everyone will be bad for them.

    March 6, 2013 at 3:39 pm | Reply
  21. bibleverse1

    We foolishly allowed China to exploit Africa when the US could do it better.

    March 6, 2013 at 3:56 pm | Reply
    • YTYCN

      US ? Exploit Africa ? INCREDIBLE ! I am from China , Maybe China is not the best choice to Africa , but the western world is certainly the worst ! Don`t forget the selling of the Africans as slaves...

      March 6, 2013 at 9:49 pm | Reply
  22. Rick Wadley

    The poor African people have been oppressed by most European countries at some stage of their history.
    The Chinese are no different but have large numbers to feed.
    Chinese will eventually attempt to take over African resources.
    I do hope they are able to defend their own country and birthright.
    I do feel for the oppressed peoples.

    March 7, 2013 at 5:40 am | Reply
  23. Ferdinand

    Dear follow African
    If we don't understand the world policy is mean we can't understand why china invade Africa .westerncountry who let china come in,because of they bad policy,they see that better to pass the hand to china.
    You can see how the row material like cotton be sale to china,
    China can't buy cotton buy cotton directly to the farmer they have to pass through Paris or London .

    March 8, 2013 at 1:42 am | Reply
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