Towards a New Paradigm: Some thoughts on the Chinese African Relationship

Last week the 5^th Ministerial Conference of the Forum of China-Africa Cooperation was concluded in Beijing. The summit was attended by all the major players on the African continent such as South Africa, Nigeria, Ghana and Senegal. The major headline of the summit is that China plans to lend to various countries on the African continent a total of US$20 billion. The money will be used to invest in major infrastructure projects and new economic initiatives. The summit has put into focus the issue of the nature of the Chinese-African relationship. As a result I have decided to publish an essay that I wrote earlier this year for a foreign policy magazine:

The rising influence of China on the international stage has raised a lot of questions from policy analysts and the media in relation to its role in challenging the dominance of the traditional western powers and in particular the United States. This is most pronounced in relation to China’s involvement on the African continent. China’s development aims have meant that they have become heavily involved in resource rich areas of the continent with huge investments across the continent and in particular the Southern African region. With China’s economic involvement in the continent has come a significant degree of political influence, the African Unions (AU) new headquarters in Addis Ababa is a gift from the Chinese and a symbol of the growing political and economic cooperation between China and Africa.

The rise of China’s influence has led to US Secretary State Hillary Clinton stating “we don’t want to see a new colonialism in Africa” as a warning to African countries in her official five day tour of the continent last year. The majority of commentary on China has focused on the changing geo-politics and security of the African continent but China is also changing the politics of development on the African continent. A quasi-cold war is taking place on the continent in which the western neo-liberal development agenda is running counter to China’s state led capitalism, a situation which has increased with the collapse of the American and European financial system.

The South African government is leading the charge in relation to implementing a development agenda based on the Chinese development model.  The South African Minister of Public Enterprises Malusi Gigaba in a piece he wrote for the South African newspaper Business Day states:

The global financial crisis has legitimised state involvement in the economy and has shifted the focus to how this should happen. Part of this debate is how the state should leverage enterprise ownership in the developmental process. SOEs (State Owned Enterprises) have played a critical role in developing an industrial base in highly developed and emerging economies. Experience suggests that private and public companies have performed both well and badly in achieving key national developmental goals. There have been patriotic, efficient private companies that have made long-term investments to achieve national objectives. There have also been corrupt, inefficient and rent-seeking SOEs that have been captured to serve narrow interests and have undermined economic development. (07/02/2012)

The global financial crisis and the emergence of China and Brazil as major economic players in the international system have challenged what was once a political red herring, the role of the state in the economy. The accepted political paradigm since the Washington Consensus in the 1980s was that the state should play no role in a market economy and has dictated the policies and politics of development and aid on the African continent. African states placed primary emphasis on selling state owned enterprises to the private sector and sought to attract international financial capital in response to the policy power of the IMF and the World Bank. The subprime mortgage crisis and the consistent economic growth of China and Brazil have created the political space for politicians on the continent to begin reasserting the role of the state in the development of the economy.

There is an emerging intellectual consensus among the policy elite on the African continent that are actively challenging the economic and political foundations of western influence on the continent. Dambisa Moyo has been the most celebrated of the emerging thinking taking place on the continent in her book Dead Aid: Why Aid is Not Working and How there is a Better Way for Africa argues that what the continent needs is a reliable trading partner and that China can be both a commercial partner and serve as an example of a country that has pulled itself out of poverty. Singapore used to be the poster child of the Washington consensus and a means for the western donor nations to scold African governments for their lack of economic growth and development. The resulting rise of China on the continent is leading to a weakening of the kinds of soft power often utilised by the US and other western donor nations to gain international solidarity and influence domestic policy.

China is actively involved as a commercial partner and investor in Zambia, Sudan, South Africa, Namibia, Zimbabwe, Nigeria, Tanzania, Ethiopia, Congo, Guinea and Algeria. In addition the China Development Bank estimates that it has lent $7 billion to over 30 African countries since the development of the China-Africa Development Fund. The presence of the fund as an active investor on the continent in bilateral state led infrastructure projects is leading to the re-emergence of the state as a key driver of economic development in African nation states.

The inability of western donor nations to match the investment and funding drive of the Chinese will see a long term decline in the ability of the west to act as the sole policeman on the African continent. The waning of western influence in the long term will open up the opportunities for the rise and development of the African Union (AU) to act as a stabilising force on the continent. The rise of China will provide the political space for African countries to determine their economic and social policy mixes, long held back by seeking to follow the strict orthodoxy of neo-liberal economic policies. It is a phenomenon that policy makers will have analyse more closely in the coming years.