Monday, February 15, 2010

Chinese Involvement In African Markets

The Economist magazine is currently hosting an online debate over China's increasing involvement in the African economy and whether or not it will be benefitial or detrimental to African nations. Compelling arguements are made for both sides of the arguement, here are just a few of the points made by each side.

Pro

  • China's rising demand for Africa's natural resources helped to re-establish Africa as a source of valuable commodities for the global market. But it also helped to focus Africa's political attention on why, despite its vast resources, the continent still remains poor. This has recently been captured by Malawi's president, Bingu wa Mutharika, who recently told the African Union, "Africa is not a poor continent; but the people of Africa are poor."
  • China's economic rapid economic growth also offers specific lessons that Africa is learning from. For example, China has in recent decades made massive investments in infrastructure as a foundation for economic renewal. Africa is benefiting from this in two ways. First, it is learning from China about the importance of infrastructure. Second, China is providing infrastructure support to Africa.
  • China has not only increased its admission of African students in its universities, but it is also focused on strengthening the continent's scientific infrastructure. More recently, China launched a postdoctoral programme for Africans. The candidates will understudy China's science parks, but each will also return home with scientific equipment worth $22,000. No other country in the world has offered such support to African scientists and engineers.
Con
  • "There is mounting objection to China's deepening forays into Africa" said News Africa (March 2007). The former president of South Africa, Thabo Mbeki, warned against allowing China's push for raw materials to become a "new form of neo-colonialist adventure" with African raw materials exchanged for shoddy manufactured imports and little attention to developing an impoverished continent.
  • Most alarming, the deals are opaque and on barter terms dictated by China. For example, in exchange for oil exploration slots, China will rebuild Nigeria's dilapidated railway system. But China will supply nearly all the equipment and technical personnel at prices determined by itself. There is no protection against overcharging or cost overruns. As with other projects in Africa, China will supply most of the workers. The potential for exploitation and plunder of Africa's resources is enormous in such contracts, leading irate African commentators to denounce what they see as "chopsticks mercantilism". With chopsticks dexterity, China can pick off mineral dumplings with relish in Africa, all to its advantage.
  • The claim that China's intentions in Africa are noble is fatuous. Its real intentions are well known: to elbow out all foreign companies and gain access to Africa's resources at cheap prices; canvas for African votes at the UN in its quest for global hegemony; isolate Taiwan; and seek new markets for Chinese manufactures as European markets become saturated with Chinese goods. Less well known is its quest for African land to dump its surplus population. As a condition for Chinese aid, African states must accept large numbers of Chinese experts and workers as part of their investment packages. Chinese communes are springing up across Africa. In Namibia, the number of Chinese expatriates has reached 40,000, with 100,000 in Zambia and 120,000 in Nigeria. China even has a secret plan, called the ChongqingExperiment, to resettle 12m of its farmers in Africa.

What are your own positions on this issue? Do you agree or disagree with any of the arguements made by either side?

To see the whole debate go to http://www.economist.com/debate/days/view/465.

3 comments:

  1. I can see both sides of this issue. I think that in the short run all the aid that China is providng Africa will bring about a lot of hope and immediate results. But, what happens when China decides that its time for Arica to return the favor? I think that in the long run there are defintiely some potential problems that could arise. I don't really have a clear opnion on the whole matter, however, I think that I would recommend that Africa be cautious and understand what they may be getting themselves into.

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  2. Although I agree that key towards stabilizing and improving African economies is a rise in infrastructure and education, I think that we need to go cautiously into judging foreign investment. Naturally no country is going to invest in something that has no benefit for their people. Looking at where our own country has decided to meddle, in South America, Panama, or the Middle East, it is easy to see that there self interest drives the investment. I am hesitant to misjudge China, but it does appear fishy that they are making such a big push in such poor nations. I don't feel as an American that I can criticize them that much, as that would be hypocritical, however I do think that African nations need to gauge the importance of foreign investment over national sovereignty. We have seen time and time again, that when a country's economy is controlled by someone else, the government in effect is reliant on that foreign money and loses control over its own policy.
    T, E

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  3. The quote about Africa not being a poor continent, yet having its people be poor really struck me. It's true. Africa is a very resource-rich land with access to the ocean and therefore trade anywhere they'd like. I believe that the "cons" points, especially the last one in this article, sounds more than a little paranoid and extremely anti-Chinese. We know that this article is biased. Hoever, the main point that worries me wiht the cons is the fact that there IS no one to regulate overcharging. China has all the power and advantage and is making all the rules, presumably in their favor. This isn't right and should be given more attention. For the "pros", the idea of education and research tools is great! This IS what Africa needs: education and technology. Chinese involvement in Africa could be good depending on the limits and regulations enforced for equality.
    A

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