March 25, 2013

Just days after completing his ascent by adding the state presidency to his posts as Communist Party general secretary and Central Military Commission chairman, Xi Jinping has embarked on his first trip overseas as China’s top leader, a journey that includes a week in Africa, with stops in Tanzania, South Africa, and the Republic of the Congo.

This prominent focus given to Africa in Chinese foreign relations should come as no surprise. Xi inherits from his immediate predecessors a relationship with Africa that has changed dramatically over the last two decades. Under Jiang Zemin, China launched a national strategy of “going out” (zouchuqu zhanlue) to secure access to stable supplies of raw materials and natural resources needed to sustain the country’s rapid economic development—and forestall any social instability. Chinese firms were actively encouraged to explore investment opportunities abroad and open up new markets by establishing either joint ventures or wholly Chinese-owned subsidiaries in various countries. This policy was reaffirmed by Hu Jintao whose administration, in the midst of the global economic downturn in 2009, used its vast foreign exchange reserves, the largest in the world, to accelerate overseas expansion by Chinese companies, especially in Africa. 

While resources have been a big factor in Chinese engagement of and investments in Africa, the focus has shifted in response to changes in Africa’s economic landscape. In fact, of the estimated $9.3 billion worth of Chinese foreign direct investment (FDI) in Africa in 2010, 42.3 percent went to services and another 22 percent went to manufacturing, with only 29.2 percent going to the extractive industries.

Trade is booming between African countries and China, with some 12.5 percent of all African exports going to China. In 2009, China overtook the United States as the continent’s biggest trade partner. Last year total annual trade between China and Africa surpassed the $200 billion mark. Beijing’s diplomats paved the way for this expansion signing trade agreements with forty-five African countries, bilateral agreements regarding the promotion and protection of investment with thirty-three, and accords to avoid double taxation with eleven. 

The government has also set up the China-Africa Development Fund, a stock equity fund that gives special support to Chinese enterprises when they invest in Africa. Since its establishment in 2007, the fund has invested in everything from agricultural development to machinery manufacturing to electric power generation to building materials to industrial parks and port logistics. Another recent trend is the establishment of industrial parks as well as special economic and trade cooperation zones in key African countries—including Egypt, Ethiopia, Mauritius, Nigeria, and Zambia—with the goal of improving infrastructure so as to facilitate the opening of manufacturing operations by Chinese firms which then can benefit from favorable tax and regulatory regimes. 

China has also not failed to recognize the opportunities for itself, both diplomatically and commercially, in the significant infrastructure build out that is underway throughout Africa in the transportation, communications, power, water, healthcare, and other sectors. A 2010 State Council report on “China-Africa Economic and Trade Cooperation” noted: “In order to help African countries to improve their infrastructure, the Chinese government has offered many preferential loans, and supports its financial institutions to expand the amount of commercial loans to Africa. China has constantly intensified its efforts in financing for Africa since the establishment of the Forum on China-Africa Cooperation. From 2007 to 2009, China provided $5 billion of preferential loans and preferential export buyer’s credit to Africa. It has also promised to provide $10 billion of preferential loans to Africa from 2010 to 2012.” These government credits have helped to finance major infrastructure projects across Africa involving Chinese enterprises, including everything from the new terminal at the Sir Seewoosagur Ramgoolam International Airport in Mauritius to the 400-megawatt Bui Dam in Ghana to the even larger 1,250-megawatt Merowe High Dam in Sudan, the largest hydropower project on the continent thus far. 

Government encouragement and facilitation has also helped paved the way into African markets for telecommunications equipment manufacturers Huawei Technologies and ZTE which, between them, are active in some fifty countries on the continent. The pair have established more than forty third-generation telecom networks in more than thirty African countries and built national fiber-optic communications networks and e-government networks for more than twenty African countries. All told, an estimated 300 million Africans use communications services from one or the either firm daily.

Chinese participation in infrastructure development is the cause of some controversy in Africa, as Chinese firms are widely perceived to be bringing their own workers. Moreover, increased trade with China is, in some ways, a double-edged sword for African countries when it comes to imports. On the one hand, it makes relatively affordable goods available, which clearly benefits African consumers. On the other hand, Chinese manufacturers tend not to establish many links with local firms, preferring instead to turn to reliable and cost-competitive established suppliers back in China. Moreover, as Lamido Sanusi, governor of the Central Bank of Nigeria, complained in a recent Financial Times op-ed, “China takes our primary goods and sells us manufactured ones… It is a significant contributor to Africa’s deindustrialization and underdevelopment.”

Paralleling China’s growing investment in Africa are its expanding political and security interests. If Africa’s abundant natural resources are critical for maintaining China’s “peaceful rise” (heping jueqi) in the world, then certainly African states, which together constitute the largest regional bloc in many international organizations, are just as integral to Beijing’s long-term grand strategy of promoting its version of “democracy in international relations” (guoji guanzi minzhuhua)—that is, a more multipolar political and economic global order. 

China currently has diplomatic relations with fifty of Africa’s fifty-four states—the sole exceptions being Burkina Faso, The Gambia, São Tomé and Príncipe, and Swaziland, all of whom continue to have diplomatic relations with Taiwan. The issue of Taiwan aside, Beijing has a consistent policy of not imposing explicit political conditionalities on its aid recipients. This non-interference in the internal affairs of other nations fits well with the policy preferences of many African heads of state or government, some of whom bristle at the democratization and good governance agenda promoted by traditional aid donors in the West. Senior Chinese leaders have also gone to great lengths to engage their African counterparts on the latter’s home turf; while the current tour is Xi’s first trip to Africa as China’s state president, it is his sixth visit to the continent. The new twenty-story African Union Conference Center and Office Complex in Addis Ababa, inaugurated last year after it was built by China at the cost of some $200 million, is iconic of the close ties which Beijing has carefully cultivated with Africa’s governing institutions and elites.

A relatively new area of Chinese engagement in Africa has been in the security sector where China’s involvement has been hitherto limited to arms sales to various governments, some quite questionable. After having long taken a dim view of international peacekeeping missions, China has become increasingly involved in international peacekeeping to the point that the number of People’s Liberation Army (PLA) personnel currently participating in UN stability and security operations is roughly equal to the combined total of the other four permanent members of the Security Council. Beijing currently has some 1,868 military and civilian personnel deployed on nine UN missions, with more than four-fifths of them—1,520 individuals—assigned to six African missions: the UN Mission for the Referendum in Western Sahara (MINURSO), the UN Mission Organization Stabilization Mission in the Democratic Republic of the Congo (MONUSCO), the African Union/UN Hybrid Operation in Darfur (UNAMID), the UN Mission in Liberia (UNMIL), the UN Mission in South Sudan (UNMISS), and the UN Mission in Côte d’Ivoire (UNOCI). Whatever else in accomplished by these engagements, it remains that the PLA has accrued significant tactical, operational, and strategic advantages from the deployment of its personnel across Africa.

Moreover, since January 2009, vessels of China’s People’s Liberation Army Navy (PLAN) have been operating almost continuously in the Gulf of Aden and other waters off Somalia as part of a worldwide naval deployment to counter Somali piracy. While, by all accounts, the PLAN has cooperated with other coalition forces in anti-piracy operations, including the United States-led Combined Task Force 151 and the European Union Naval Force (EU NAVFOR) Somalia’s Operation Atalanta, it is also true that the continuous deployment—currently, the fourteenth Chinese task force is on station—has the double advantage of advancing a number of wider Chinese interests off the East African littoral. 

The extensive network of economic, political, and military ties across Africa which Xi Jinping will be inspecting this week testify not only to the Beijing’s emergence as one of the leading actors on the continent as well as a major force in its politics and security, but also to Africa’s buoyant economic prospects and its growing geopolitical importance. The challenge for the United States and Africa’s other traditional partners is give the continent the attention it deserves (in contrast to his Chinese counterpart’s weeklong African foray just days into his presidency, President Obama has spent less than twenty-four hours in Sub-Saharan Africa since taking office more than four years ago) and, when they do so, to move beyond mere humanitarian sentiments and old habits about aid and to truly develop a comprehensive, proactive strategy that engages the new realities of an increasingly significant and dynamic region. 

J. Peter Pham is director of the Atlantic Council’s Africa Center.

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