China’s Challenge in Africa: Avoid Blame of Neo-Colonialism

TORONTO: Talking about “South-South cooperation,” making plans, is easier than doing it – especially in an increasingly integrated and competitive world economy. China is learning this while navigating the growing testiness in its relations with leading economies in Africa.  China’s supersized presence in the continent offers new opportunities, but also new risks, especially to the manufacturing sectors.

The tensions came to the surface in March 2013 when Lamido Sanusi, Nigeria’s central bank governor, declared in The Financial Times, that China “is a significant contributor to Africa’s deindustrialisation and underdevelopment,” and “capable of the same forms of exploitation as the West.” He added that China is “no longer a fellow under-developed economy,” that “China – like the US, Russia, Britain and the rest – is in Africa not for African interests but its own.” He warned that “African nations will not develop by selling commodities to Europe, America and China…. in the short term, with the right infrastructure, we have a huge domestic market.  Here we must see China for what it is: a competitor.”

The same Sanusi garnered the attention of the business media and other central bankers when he announced in September 2011 that Nigeria planned to hold 10 percent of its foreign exchange reserves in China’s renminbi “as soon as possible.” Bloomberg also reported that Sanusi said that the renminbi would “inevitably” become a reserve currency and that Nigeria may accept the currency for China’s oil purchases.  Charges of China as a “neocolonial” actor soon followed, then a swing back when six months later the deputy central bank governor announced that Nigeria would move more of its $43 billion in official reserves into renminbi from dollars, increasing the renminbi share to 7 percent from 2 percent.  The criticisms caused concern in Beijing.

If only it were Nigeria alone. Beijing is seeing growing assertiveness from political leaders across the continent. South Africa’s post-apartheid leaders were the first to raise the specter of “neocolonialism” in remarks about China’s growing presence.  In July 2012, Jacob Zuma, who is much more enthusiastic than his predecessor about building closer ties with the so-called BRICS nations, stepped up on behalf of African political leaders, and said to Hu Jintao, then Chinese president, that he hoped China would work with African countries to address the pattern of trade relations that were “unsustainable in the long term.”

Showing deft diplomacy, the South African president continued, “Africa’s past experience with Europe dictates a need to be cautious when entering into partnerships with other economies… We are certainly convinced that China’s intention is different to that of Europe, which to date continues to attempt to influence African countries for their sole benefit.”  He highlighted that the African leaders are “particularly pleased” that their relationship with China is one of “equals,” that agreements are for “mutual gain.” The implicit criticism concern could not be missed.

The tensions challenge China’s self-identified membership in the global south and self-defined role of standing up for South-South.  The premise of “South-South cooperation” is at the core of Chinese policy on its relations with Africa. As stated in the recently issued White Paper on China-Africa Economic and Trade Cooperation in August 2013, “China-Africa economic and trade development has improved people’s livelihoods and diversified development in African countries… and contributed to promoting South-South cooperation and balanced world economic development.”  On his first state visit to Africa as president in March 2013, Xi Jinping, followed the familiar refrain, with modifications, saying that he appreciated the traditional friendship with Africa, but was also looking to “inject fresh meaning” into the relationship given new circumstances. In Tanzania, Xi outlined China’s Africa policy for the new times as based on “sincerity,” “real results,” “affinity” and “good faith.”

Despite the positive feedback that Chinese officials have received from African leaders about China’s contributions to Africa’s development – and compliments from the United Nations – the pushback on Beijing is bringing home the realization that enhanced relations with Africa bring new foreign policy challenges.   

The tensions have caused China, first, to rethink the correlation between intentions and outcomes, when aiming for South-South cooperation, to take account of the intervening variable of intensifying competition; and second, to adjust the normative guideposts, the sense of purpose, in the narrative of “South-South,” to account for the international competitiveness pressures.

One important adjustment was delivered by China’s special representative on African affairs, Zhong Jianhua, who responded to the Nigerian central bank governor’s charges in an interview with Africa Research Institute,  and suggested another  way to interpret the comments – that “Africa is strong enough to fight economically, but for the first time we are hearing that it is willing to do so. I welcome this kind of attitude.”  Furthermore, Ambassador Zhong added, “China’s job, our responsibility, is to try to help Africa to compete with us.”

China’s lead diplomat on Africa acknowledges that frustrations about the slow pace of change in Africa are understandable, given that “familiar trade patterns” remain: “the export of African raw materials to the outside world, including China, and the sale of manufactured goods from China and other countries to Africa.” Nonetheless, he reminds that sustained developmental gains take time to materialize, and that attention in Africa, as China’s own experience has shown, should stay focused on promoting growth. Zhong also remarked: “Every country needs a starting point…. If African countries want to compete, the revenues need to be managed and invested well.  No country can industrialize simply by selling raw materials.”

In a keynote address at the 2012 China and Canada in Africa conference in Ottawa, Ambassador Zhong responded indirectly to criticism of China’s large-scale imports of natural resources from Africa by emphasizing that the contributions of the “buyer” in natural resources trade should not be underestimated: “The financial value of the resources is only realized when there is a buyer. And that the existence of multiple and strong buyers help to drive up the value of those resources, which is of benefit to the exporter.” 

Underneath the traditional narrative on “South-South cooperation,” the Chinese are giving new emphasis to realism in China-Africa relations, suggesting that national interests and competition between national economies are unavoidable in the globalized world economy. In brief, Zhong emphasizes that the political designs for China-Africa South-South cooperation “need to account for the fact that China is also a competitor with Africa, and that China’s role is to help Africa to compete in the globalized economy, including with China.”

While in Ottawa, he addressed the difficulties of political and diplomatic efforts to mitigate and manage the competition between textiles producers and exporters in South Africa and China.  The difficult reality is that serious breakthroughs in South-South cooperation between China and Africa require grappling with zero sum competition dynamics and crafting concessions amid the competition to allow for some degree of “win-win.”

Securing meaningful South-South cooperation between China and the leading African countries is now at the stage where some of the more vexing sacrifices on each side are required, though unwanted by domestic regions or sectors that perceive a loss. If the benefits of “China helping Africa to compete globally, including with China,” are to be achieved, some sacrifices are needed.  At the same time, follow-through on commitments from both sides is required – including the less developed side.  Such are the true tests of South-South cooperation in China-Africa relations.