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The Rise of China and India in Africa
Challenges, Opportunities and Critical Interventions
By Fantu Cheru, Cyril Obi
Zed Books LtdCopyright © 2010 Fantu Cheru and Cyril Obi
All rights reserved.
China, India and (South) Africa: what international relations in the second decade of the twenty-first century?
Timothy M. Shaw
African international relations are in flux as a result of the impact of the 'emerging economies' of Brazil, Russia, India and China (BRIC) on the continent's few 'developmental' economies and many 'fragile states'. North–South relations are being superseded by South-East (Martin 2008), even Africa–East, alliances, with profound implications for the Group of Eight (G8) and the Group of 20 (G20) relations (Beeson and Bell 2009; Cooper and Antkiewicz 2008; Masters 2008). Thus the 'new' 'African' international relations (Cornelissen et al. 2010) may no longer be just non-state/informal/illegal cross-border relations but also formal economic, strategic and other relations, with China and India in particular.
The post-Washington (Beijing or Delhi) Consensus may present state and non-state Africans with policy options they had hardly anticipated. And the range of contemporary issues stretches from energy and mineral demand to the price of drugs, the proliferation of small arms and competition over access to land and water. South Africa is pivotal in these emerging equations as it holds an important position within IBSA (the India, Brazil, South Africa Dialogue) and other emerging economic formations, such as BRIC and the Next Eleven (N-11). This chapter seeks to go beyond the burgeoning but somewhat generic debate about China and India (Denoon 2007) and to identify specific states, sectors, companies and civil societies central to the intercontinental relationship(s). It tries to identify who the catalysts and drivers are in the emerging intercontinental relationship, and assess their implications for Africa's development. Might the second decade of the twenty-first century finally herald Africa's belated renaissance?
China–India and Africa: the historical context
Halfway through the first decade of the new century, and after years of neglect, scholarly research on the growing role of China and India in Africa has been put centre stage in the relatively short time frame of five years (Goldstein et al. 2006; Alden 2007; Mills 2008). In retrospect, it is clear that China never really left Africa (Taylor 2006), but its own 'economic' transitions are arguably more dramatic than the set of political and economic liberalizations that have taken place in Africa over the past twenty-five years. China once again aspires to being a great power globally as well as regionally (Fenby 2008). The 'cold war' era when China built the Tazara Railway and provided support for some liberation movements is but a quarter-century away (Brautigam 1998). Then, Chinese support was a function of ideology; now its interest is motivated by geo-economics, especially in terms of resources.
En passant, unlike much established Sino-African literature, all sides of the governance 'triangle', local to global – state, corporate and civil society – matter more in the current context even if China's own economic relationship is led by state-owned enterprises (SOEs). By contrast, in the case of the two democratic countries – Brazil and India – and their relationship with Africa, the focus on corporate–state relations over the last two decades is the primary explanation for their respective successes as 'developmental states' (Pedersen 2008).
This chapter has four overlapping, interrelated themes. First, it seeks to go beyond uncritical descriptions of Africa-China economic exchanges, which overlook myriad differences and ignore human development/rights/security dimensions (Carey et al. 2007; Le Pere 2006; Lee et al. 2007; Mohan and Power 2008). The analysis offers second- or third-wave reconsideration/revisionism: beyond 'bilateral' macro analysis, which states, sectors, companies and communities are involved or ignored, positively or negatively? Is there an imminent revolution in North-South and South-East relations (Campbell 2008; Martin 2008; Shaw et al. 2007)?
Second, 'China' may constitute a challenge to the burgeoning debate about whether 'African' international relations (IR) are different (Cornelissen et al. 2009) because they are less interstate and formal than elsewhere; that is, cross-border relations on the continent have been largely non-state and informal, sometimes illegal (Dunn and Shaw 2001). By contrast, expanding economic relations with China at the turn of the century are largely state led and formal, especially on the Chinese side. So aside from description and analysis of the 'bilateral' relationship, in terms of comparative theory and explanation, I reflect on whether there are 'two' Africas or African IRs: the established, traditional, informal and the recent, novel, exclusive formal exchange with China.
Third, in terms of differences among and within (Cooper et al. 2007) BRIC (Armijo 2007), this chapter seeks in part to juxtapose literatures/discourses on African IR with those on BRIC, especially China, given its existential centrality and its state-centrism involving exclusion of non-state organizations. As Brazil and India (Broadman 2007) are both established, democratic federations with significant non-state corporate (Pedersen 2008) and civil society sectors, should one expect their relations with the continent to be different from those of undemocratic state-driven political economies like those of China and Russia?
Fourth, as indicated in the final section and based on the previous trio of concerns, this chapter may contribute unanticipated insights into IR (Alden 2007; Kitissou 2007; Mepham and Wild 2006), international political economy/ IPE (Le Pere and Shelton 2007; Mohan and Power 2008), development studies (Breslin 2007; Lee et al. 2007), regionalisms (Cai 2008; Denoon 2007) and business studies (Enderwick 2007) globally, which go beyond the debates at the start of the new century.
Africa and China: convergent or divergent national and regional interests?
The current context is one of global growth and shocks, especially shrinking demand and supply and increased prices for energy, minerals and food. The present historical conjuncture is not just the US-specific sub-prime crisis. Rather, the world economy is being buoyed by BRIC. In turn BRIC, especially China and India, presents more choices for African states, local entrepreneurs and civil societies, symbolized by the notion of a post-Washington 'Beijing Consensus' (Ramo 2004). As Martin has rightly observed:
The explosive rise of China and India as leaders of the 'Global South' has been widely noted. What few have paused to consider, however, is the long-term implication for Africa, namely the demise of centuries-long dominion of the USA and Europe over the continent. Indeed, the prospect is even more radical in my view: the replacement of the North-South polarity by an East-South relationship. (Martin 2008: 349)
China accounted for 40 per cent of the growth of global demand for oil in the last four years of the middle of the decade as its own exports came to a halt. By 2003, it had already become the biggest consumer of oil after the USA. Chinese oil and gas companies now compete with those from the USA and the EU in West Africa (Campbell 2008; Klare and Volman 2006). There are already some eight hundred Chinese SOEs in Africa, many with interlocking directorships with the Chinese Communist Party, including China National Petroleum Corporation (CNPC) and China National Offshore Oil Corporation (CNOOC) (BCG 2006; Goldstein 2007: 35). In the space of a few years, China has become Africa's second-largest trading partner after the USA, ahead of France and Britain, with annual flows of some US$50 billion. By 2010 these may exceed US$100 billion per annum (Liang 2008; Mepham and Wild 2006; Sautman 2006; Sidiropolous 2006; Taylor 2006).
The tone of orthodox analysis and projection surrounding BRIC, especially China–India, is largely uncritical and triumphalist (Goldstein 2007; van Agtmael 2007; www2.goldmansachs.com). It is important, however, to balance economic, financial and technological performance and promise with recognition of environmental costs and social tensions, as several contributors in this volume have done successfully (see chapters in this volume by Obi, Axelsson and Sylvanus).
Africa and BRIC: from emerging economies to private capital and civil society
In the first decade of the new century, national development on the continent may be attributed to two, possibly antagonistic, factors: oil and mineral exports (for example, Botswana, Equatorial Guinea and Angola) or good governance (for example, Mozambique, Rwanda and Uganda) (Humphrey and Messner 2006; Kaplinsky and Messner 2008; Tull 2006; Vines 2007). Growing competition between Asian rather than European states over dominance on the continent has been symbolized by a series of African summits. Symbolic of its increasing presence, China organized a continent-wide gathering in Beijing in 2006, followed by the historic May 2007 annual meeting of the African Development Bank in Shanghai. Not to be overshadowed, as part of BRIC and IBSA, India organized its first selective African Summit with the Africa Union (AU) in New Delhi in April 2008 (Sidiropolous and Vines 2007). Japan, the only G8 member in Asia, also organized the Fourth Tokyo International Conference on African Development (TICAD V) in May 2008 in Yokohama (www.ticad.net).
China takes over 60 per cent of Sudan's oil exports of over 500,000 barrels per day – now 10 per cent of China's oil imports – and some 35 per cent of the flow from Angola. It owns 40 per cent of the Sudanese oil sector and one of its SOEs built a 1,600-kilometre oil pipeline to the coast in less than twelve months. Sudan's oil industry is located primarily in the disaffected south, and is therefore inseparable from conflict. When Canada's oil firm Talisman withdrew in 2002/03, all the owners of Greater Nile Petroleum Operating Company were state oil corporations – Chinese, Indian and Malaysian as well as Sudanese operating with minimal accountability or transparency. China's energy demand has transformed sleepy tropical islands like Equatorial Guinea and Sao Tomé into centres of production, accumulation and corruption, even transnational coup attempts (Frynas 2004; Frynas and Paulo 2007; Klare and Volman 2006; Shaxson 2007; Taylor 2007; Zweig and Jianhai 2005).
Chinese official development assistance (ODA) is especially welcomed as it is free from familiar, ubiquitous Western donor conditionalities. Thus it gives African regimes alternatives to OECD terms advanced in the so-called Washington Consensus. This is especially so given the bilateral competition between China and the USA for African resources (Campbell 2008; Xu 2008). Such choice or space has led to the notion in a post-Washington Consensus era of a Beijing Consensus, characterized by more South-South content and empathy (Campbell 2008; Le Pere and Shelton 2007; Martin 2008; Vines and Sidiropolous 2008).
The growing engagement of Asia (China in particular) in Africa has raised a lot of questions. As African social movements and activists have pointed out, the downside of the new Asian-African relationship is that China has proved no friend of social movements in Africa or Asia, supporting repressive regimes from the Sudan to Equatorial Guinea to Zimbabwe (Martin 2008: 351). China has been willing to export arms in exchange for imports of raw materials. Unlike India, it is not a central player in the Kimberley Process, which seeks to outlaw the trading of guns for informal, alluvial diamonds. There is a parallel with the notorious 'conflict diamonds', which were traded for weapons for non-state agencies (Frynas 2004; Shaxson 2007).
By contrast, India's trade and investment connections with the continent may be rather limited compared to those of China, but there is one area in which India has an advantage: Indian diasporas in Africa. These are not uncontroversial (as in Idi Amin's expulsion of one of these in Uganda in the early 1970s), and for decades the Indian state ignored them. But at the century's turn, as India liberalized its economy, it came to welcome investment from established communities and remittances from recent migrant workers to the Gulf, among other places. The role of returning post-war Indian diasporas with business and engineering degrees is central to India's rise. And the networks of Indian nongovernmental organizations (NGOs) and multinational companies are crucial to its expansion, from Global Organization for People of Indian Origin (GOPIO) to private companies such as Reliance, Tata and Wipro (BCG 2006; Goldstein 2007; Goldstein et al. 2006; van Agtmael 2007).
Traditionally, Indian communities could be found where the British Empire or Raj had sent them, mainly to anglophone East and southern Africa. By contrast, contemporary informal Chinese migration is to high-growth countries, such as Nigeria, South Africa, Sudan and Zimbabwe (Sautman 2006: 28). There are also possibilities of collaboration within BRIC when mutual interests can be advanced (Cooper et al. 2007), as in the case of joint ventures in oil production in southern Sudan. Thus Arcelor Mittal, the world's largest steel producer, has had talks with Angang, China's second-largest steel company, about a strategic alliance.
Which countries, companies, sectors and civil society groups gain or lose in Africa, China or India? For example, Angola is now the biggest single oil supplier to China; Industrial and Commercial Bank of China (ICBC), the world's largest, bought 20 per cent of Standard Bank of South Africa for US$5.56 billion, and in mid-2008 its president, Yang Kaisheng, became deputy chair of Standard Bank Group in South Africa; China Development Bank (CDB) bought a major stake in United Bank for Africa (UBA) in Nigeria; and China Investment Corporation, a sovereign wealth fund (SWF), has US$90 billion to invest overseas. Chinese mining companies in Zambia are not uncontroversial, however, and SWFs are increasingly controversial, as well as ubiquitous in the global economy (www.sw finstitute.org), especially when they are connected to distinctive states, whether Islamic (such as Dubai or Kuwait) or state socialist (such as China or Russia).
Africa and BRIC: compatible or competitive?
Africa's relationships with BRIC are quite heterogeneous and divergent. Historically, as an aspect of the nationalist and liberation movements, its links were closest with Russia and China. The continent's spurt in the first half of the first decade of the new millennium led The Economist (2008b) to revise its end-of-century negative analysis.
After four decades of political and economic stagnation that kept most people in poverty and gloom, the continent's forty-eight sub-Saharan countries have been growing for the past five years at a perky overall rate of 5 per cent or so ... Once described by this newspaper, perhaps with undue harshness, as 'the hopeless continent', it could yet confound its legion of gloomsters and show that its oft-heralded renaissance is not just another false dawn prompted by the passing windfall of booming commodity prices, but the start of something solid and sustainable.
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