Monday 11 January 2010

The Dragon's Gift: The Real Story of China in Africa

The idea that China is only involved in Africa to seek raw materials - oil in particular - is just one of the many common myths circulating in the West which are shattered in The Dragon's Gift, a fascinating and comprehensive guide by Deborah Brautigam to China's growing influence in Africa. 

As a Nigerian diplomat told the author: "The Chinese are trying to get involved in every sector of our economy. If you look at the West, it's oil, oil, oil and nothing else." 

And, as Brautigam points out, Chinese investment in African manufacturing industry has outstripped investment in mining for the past five years. 

Whereas the West - both via private investment and aid projects - has been pulling out of African manufacturing over recent decades, China believes that developing industrial capacity is crucial to overcoming the poverty trap resulting from reliance on the import of expensive industrial goods and export of cheaper raw materials. 

China's own experience since 1979 would seem to confirm this point, but China has always been reluctant to push its own development model onto other countries. 

Indeed, part of the Chinese experience of poverty reduction has been the need to adapt plans and models to the local situation. For this reason, Chinese aid to Africa has always been based on the principle that the needs are identified by the host country, not by China, whose role is then to negotiate with the host how exactly those needs can be met. 

Not that China's involvement in Africa is solely altruistic, of course. Indeed, ever since Zhou Enlai's groundbreaking trip to the continent in 1964, "mutual benefit" has been explicitly outlined as one of the key principles of Chinese aid. As a developing country, whose per capita income was still barely higher than that of Mozambique some 20 years later, there seems little reason this should be otherwise. "We are poor brothers helping one another," as one Chinese diplomat put it. 

Mutual benefit today means that, in exchange for building African industrial and social infrastructure, China is gaining markets for heavy machinery and pharmaceutical products - amongst others - and contracts for its construction companies. 

Frequently, Chinese building firms stay on in Africa after completion of a Chinese-funded aid project and win other private contracts. These are often contracts for projects funded by other aid donors as well. 

Another myth that frequently abounds about China's role in Africa is that its no-strings attached policy, in contrast to the West's conditional aid, facilitates corruption and human rights abuses. 

But, as Brautigam points out, the way China actually delivers aid or commercial investment projects actually helps to limit corruption because unlike the World Bank and other donors, Chinese grants and loans rarely get into the hands of recipient governments. 

A project is negotiated and agreed and the money then usually gets paid directly from the Chinese bank to the Chinese construction company in charge of delivering the project, thus limiting the opportunities for government officials to take cuts along the line. 

In this way, says Brautigam, Africa's resources might actually begin to pay for infrastructure and development, rather than simply being used as cash cows for the private enrichment of people like Congo's Mobutu or Nigeria's Abacha. 

The £4 billion loan recently made to the Congo, for example, will not be paid in cash, but in the form of power plants, a repaired water supply, 32 hospitals, 145 health centres, two hydroelectric dams, two large universities, two vocational training centres, thousands of cheap houses and thousands of kilometres of railway. It will be paid back in copper and cobalt way down the line. 

Yet reading some Western press reports, one would imagine it was the other way round, with an angelic West busy trying to bring human rights and transparent governance to Africa while a recalcitrant China has been just as busily undermining all its hallowed efforts. 

Beijing's no-strings-attached policy does mean that they will do business with pretty much anyone, but they are hardly the first to have done business with dictators. 

Despite all the uproar over China's engagement with Sudan and Zimbabwe, Brautigam points out that the biggest customer of Sudanese oil in 2006 was Japan, not China, and that Western companies such as Barclays and Anglo-American have continued to operate in Zimbabwe throughout its difficulties. 

And the no-strings policy has been crucial in providing African governments with a source of finance which does not insist on neoliberal policies with a proven track record of failure. 

The IMF and World Bank's insistence on slashing social spending and opening markets has been disastrous for Africa, and any alternative is surely welcome. 

Brautigam is no naively gung-ho Sinophile and she does point out possible dangers that lie ahead in China's relationship with Africa, especially in areas such as agriculture. 

For this reason and by employing meticulous research - the footnotes stretch to 65 pages - she is already legions ahead of most Western commentators on the subject. 

You are unlikely to find a more thorough, comprehensive and open-minded account of the subject.


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