Introduction

An international discourse of China-in-Africa has emerged, particularly in Western countries with dense links to Africa: the US, UK and France.  While China’s presence in Africa should be critically examined, interest in it in the West is skewed by elite perceptions of China as a rival for resources and influence in Africa and as a rising power, with the tone of the discourse far more negative than that accorded the Western presence in Africa.

The discourse is partly about how China’s presence is a "bad influence" on governance in Africa.1 A concomitant idea is that China’s activities obstruct Africa’s development, a contention that fits in a right to development framework.2 A New York Times editorial exemplifies how the discourse plays out in Western media; its title, "Patron of African Misgovernment," refers to China.3 It states that if African countries put natural resources in hock to the PRC, China will write them big checks, without questions about corruption or authoritarianism. China is said to engage in "callous yuan diplomacy," enjoy "an ugly partnership" with the "genocidal" Sudan government, and have Zimbabwe president Robert Mugabe as its "favorite," contributing to Zimbabweans’ lack of free elections and "sane economic policies." The Times avers that China is pushing the poorest African workers deeper into poverty by flooding Africa with cheap goods and lending to African states without insisting on standards that Western states purportedly promote through the Extractive Industries Transparency Initiative (EITI).  The Times also expressed outrage at a PRC company’s exploitation of Zambian miners.

The essence of the discourse then is to cast PRC policies in Africa as promoting human rights violations or "colonialism,"4 while implicitly comparing them invidiously with high minded US and Western practices. Some PRC activities in Africa do violate the human rights of Africans — not in ways that Western elites claim, but in much the same manner that Western policies do, through disadvantageous terms of trade, the extraction of natural resources, oppressive labor regimes, and support for authoritarian rulers, all common features of the modern world system.  These are practices that China’s elites used to denounce, but now come close to extolling as dynamic capitalism.  For example, in 2007, a PRC international publication ran an article by Jian Junbo, a scholar from Shanghai’s top-ranked Fudan University on charges of "Chinese colonialism" in Africa.  He recognized that "more and more companies from China are entering Africa, but they simply focus on profits regardless of their harmful influences on African society, such as environmental pollution, excessive development and exploitation of local labor." Jian nevertheless argued that the path taken by China is "consistent with the logic of market capitalism-liberal trade" and makes China not a colonialist, but "a successful capitalist in Africa."5

The discourse should not be inverted by arguing that China’s presence in Africa is positive and the West’s negative or that problematic Chinese activities in Africa are justified because abuses are shared with the West. The analysis of China-Africa should invoke neither a "win-win" nor dystopic representations; rather, the trees of China’s behavior should be seen as part of a world system forest and the discourse examined using comparative analysis.  Our arguments are threefold: 1) given the world system, it is difficult to assess the pluses and minuses of China-in-Africa as a single phenomenon; 2) as a player in the world system, China in Africa has more in common with the West than is usually acknowledged; 3) there are nevertheless notable differences between Western and Chinese presences in Africa; many derive from China’s experience as a semi-colony, its socialist legacy, and its developing country status, features which together make PRC policies presumptively less injurious to African sensibilities about rights than those of  Western states.6 In what follows, we focus on PRC activities in Africa often denounced as harming African interests, particularly trade and investment. We also examine why the China-in-Africa discourse has emerged as it has and African responses to its main tenets.

Africa’s Development and China’s Imports

China-Africa trade is rising sharply. Only US$3 billion (b) in 1995, it was $55b in 2006, balanced slightly in Africa’s favor. In 2006, China’s trade with Africa was merely 3% of its US$1.76 trillion foreign trade.  By 2008, China’s trade with Africa totaled $107b, now distinctly in Africa’s favor, but China’s foreign trade had reached $2.56 trillion, making trade with Africa still only 4% of its total trade.7 In 2006, China had been in third place, behind the US and France, among Africa’s trade partners, while by 2008 China had leapfrogged over France, but still behind trailed the US, with $140b of trade.  China asserts that its trade is responsible for 20% of Africa’s economic growth.8

The discourse concerns both China’s imports from and exports to Africa. On imports, it focuses on oil and charges that China fosters Africa’s dependence on earnings from raw materials. A Canadian scholar has noted the frequent assertion that "Beijing’s demand for African oil and other raw materials has inevitably helped to perpetuate Africa’s reliance on oil exports and, in so doing, further prevent the growth of more labor-intensive industries, such as agro-business and manufacturing."9 As we will discuss below, the US now relies more heavily on African oil than oil from any other region.

Ten percent of Sub-Saharan African exports went to China in 2005, by 2007, the figure was 13.4%. Five oil and mineral exporting countries accounted for 85% of PRC imports from Africa. In 2004, oil and gas were 62% of Africa’s exports to China, ores and metals 17%, agricultural raw materials 7%.  In 2009, oil, gas and minerals accounted for 86% of such exports.10 This profile is not unusual: apart from South Africa, the continent’s manufacturing is largely confined to textiles and clothing, which China also produces in abundance.  In fact, oil accounted for 80% of 2005 US imports from Sub-Saharan Africa; apparel was less than 3%, with minerals most of the remainder. Petroleum products accounted for 92% of the value of goods imported under the US’s preferential African Growth & Opportunity Act (AGOA) in 2005.  The figure was still 92% in 2008, when 88% of overall US-Africa trade (AGOA and non-AGOA) was in petroleum products .11

About 47% of the oil China consumed in 2006 and 50% in 2008 was imported.  PRC imports in 2006 were 6.8% of the world oil trade and supplied 12% of all energy China consumed, coal, hydropower and nuclear power being major sources of Chinese energy consumption.12 China’s 2005 oil imports from Africa provided 4% of China’s energy needs.  Of the 31% of PRC oil imports from Africa, Angola’s share was 14%, Sudan’s 5%, Congo (B)’s 4%, and Equatorial Guinea’s 3%.13 African oil supplied 14.5% in 2006 and 16% in 2008 of all the oil China consumed, not much different from US imports from Africa of 13.2% of all oil it consumed in 2006?, imports that provided 5.2% of US energy needs.14 China imports oil largely to fuel its production: 70% of its demand is for industrial uses, while 70% of US demand is for motor vehicles.15 In 2009, China’s special envoy on African affairs put these figures in perspective when he noted that China receives 8.7% of Africa’s oil exports, while the European Union and the US each take 33%.  China’s premier also stated that China’s investment in Africa’s oil and gas industries amounted to one-sixteenth of the total global investment in these industries.16 China thus hardly dominates Africa’s oil markets. The China-in-Africa discourse however presents the PRC as aspiring to be the chief taker of African resources and interested in Africa only on that account.17

China does participate in an exploitative business: historically, the price of oil and other globally-traded primary products, relative to that of industrial commodities, have been significantly determined by asymmetries in political power.18 Apart from "unequal and disparate exchange" that affects oil and primary products generally,19 oil is capital intensive, creates few jobs, is environmentally damaging and corrupts producing states.  People in oil-rich regions, such as southern Sudan and Nigeria’s Niger Delta, receive so few benefits from their patrimony that violent conflict has ensued.20

China is in Africa for oil because 80% of the world’s proven conventional (non-tar sands, non-shale) oil reserves are state-owned and account for two-thirds of oil production. Most remaining reserves are sown up by Western oil firms.21 China takes oil in Africa differently than Western states: it often packages oil deals with infrastructure project loans.22 From the 1970s, developed states and international financial institutions (IFIs) largely abandoned African infrastructure projects, which also receive little private and almost no public-private financing.23 International investment in infrastructure in Africa amounted to 4% of all such investment outside North America from 1992-2003, even though lack of infrastructure is blocking Africa’s development.24

China has worked on African infrastructure for four decades and is becoming its pre-eminent infrastructure builder. The World Bank (WB) estimated that as of mid-2006, China’s Export-Import Bank infrastructure loans to Africa were over $12.5b.  In 2007, this bank pledged $20b in infrastructure and trade finance loans related to Africa over the next three years (typically tied to the participation of Chinese contractors), on top of the $5b China-Africa Development Fund, announced in 2006 at the third Forum on China-Africa Cooperation, to encourage PRC investment in Africa.25 While G8 finance ministers have criticized China’s loans, on the ground that a "lend and forgive cycle" should be avoided, NGOs point out that only $2.3b of the additional $25b in aid pledged to Africa by rich countries in 2005 has been delivered.26

China’s approach to acquiring oil in Africa is exemplified in the China-in-Africa discourse by a 2004 agreement with Angola. The discourse fixes on it because the deal involved infrastructure loans to the corrupt Angolan government, unaccompanied by a requirement to report how funds are spent.  The initial loan of US$2b was to be used for railroad repair, road building, office construction, etc.  It was to be repaid with oil from a former Shell Oil block that generates 10,000 bpd.  The block had been sought by the largest Indian oil firm, but secured by China because of its infrastructure loan, which was set at 1.5% interest, to be recouped over 17 years, including a 5-year interest-free period.  It reserved for Angolans 30% of the value of infrastructure contracts paid for with its funds; the remaining 70% was open for bids, although most contracts have likely gone to PRC firms.27 The interest rate was later lowered to 0.25%.  By 2007, China had lent Angola at least $6b for infrastructure projects.28

The Angolan and other PRC loans elicited from WB head Paul Wolfowitz, the UK government, and the IMF comments that PRC activities threaten to plunge Africa into deep debt. The US Treasury termed China a "rogue creditor."29 Africa remains, however, in a Western-created "debt trap," owing more than $300b and paying significant interest.30 Yet, as US Africanist Deborah Brautigam has noted, China "regularly cancel[s] the loans of African countries, loans that were usually granted at zero interest [and] without the long dance of negotiations and questionable conditions required by the World Bank and IMF."31 For example, a highway opened in 2006 between Ghana’s two major cities, Accra and Kumasi, was built with a PRC no-interest loan.32

OECD researchers have concluded moreover that increased PRC activities in Africa have not deepened corruption among African governments.33 China’s leaders know corrupt officials will siphon off part of their infrastructure loans, but its packaged loans are less likely than Western aid to being drained by corruption. As a Hong Kong journalist has noted, because China’s loans and aid are tied to infrastructure projects, that is, a large portion of the funds are allocated directly to contractors, "corrupt rulers cannot somehow use it to buy Mercedes Benzes."34 A close US observer of PRC activities in Africa has argued that China’s aid is more effective than Western aid because much is used for "hydroelectric power dams, railroads, roads and fiber-optic cables, which have the potential to benefit ordinary people, no matter how corrupt the regime under which they live."35

Despite promoting a rhetoric of transparency regarding African oil-producers, Western states have not bound their citizens and corporations.  Bids for oil blocks in Africa typically feature "signature bonuses," paid to governments, which often run into the hundreds of millions of dollars. Foreign oil firms know host governments skim off large shares of what the companies pay.  In a rare instance of disclosure, Western oil firms told the IMF that they paid $400m in 2001 for an Angolan oil tract, but the Angolan government claimed it received only $285m.36 Presumably the difference went into the pockets of government officials.

Angola’s state oil company and president’s office control oil earnings. Investigators have traced hundreds of millions of dollars in bonuses and bribes paid by Western multinationals to Angolan officials’ private offshore accounts.  Most multinationals refuse to publish what they pay to secure oil rights. Western governments do not compel oil firms that are their own citizens to make disclosures, but "ask the tiger for its skin" (yu hou mo pi), as the Chinese say, by demanding corrupt governments publicize their own corruption.37

Western policy interventions have not actually diminished the resource curse.38 A group of African scholars have argued that transparency is insufficient as a means to end oil-related corruption, which cannot be dented as long as African officials and the (mainly Western) oil executives who corrupt them tolerate such criminality. Their actions can hardly be policed through the UK government’s Extractive Industries Transparency Initiative  (EITI), because it is voluntary and puts the onus of disclosure on African governments.39 The NGO-promoted campaign to require firms to Publish What You Pay (PWYP) is aimed at mandatory disclosure by publicly-traded natural resource companies, but not non-traded or state-owned firms.  PWYP has been successfully resisted by most Western oil companies, especially US firms.40

Western media often cite the WB-Chad agreement to ameliorate the resource curse and spur poverty alleviation as a successful external policy intervention to curb oil-based corruption.  In exchange for a modicum of WB financing to build the Chad-Cameroon Pipeline — the largest private sector investment in Sub-Saharan Africa — Chad has since 2003 deposited in a London bank most royalties from Exxon-Mobil and other pipeline operators.   Foreign overseers monitor the account and disperse funds to Chad, mainly for poverty alleviation programs. When the pipeline was built, the oil prices were low and multinationals unwilling to risk building it without WB backing.  A study has found that the WB-Chad pact is "a unique one-off event determined by a particular set of historical circumstances that no longer hold." With high prices and tight supplies, oil firms no longer need WB approval for projects.  The WB-Chad pact is also judged to be very limited in geographical scope and duration and unlikely to do much to alleviate poverty.41

The China-in-Africa discourse will likely continue to focus overwhelmingly on oil in discussing PRC imports from the continent. American analysts particularly see the US as strategically competing with China for African oil.42 By 2007, Africa was supplying 24% of US daily oil imports, ahead of the Middle East’s 18.6% and in 2009, Africa was still supplying 24% of US oil imports, more than was the Middle East.43 The US government estimates African oil production will grow 91% in 2002-2025, while global production will grow 53%.  Armed forces in a newly established US Africa Command will have as a main task protecting US access to oil.44

US prominence in taking African oil is accompanied by its backing authoritarian rulers in almost all oil producing states.45 Sudan is a partial exception: the US cooperates with and protects Sudan’s military and intelligence leaders, but opposes its Islamist politicians.46 US elites use that partial exception and PRC involvement in Sudan’s oil industry to keep the discourse focused on China’s supposed "scramble for oil," even though China is still far from capable of competing with Western firms for control of African oil47 and much oil that China takes from Africa, including Sudan, is not brought to China, but traded on the open market.48

Africa’s Development and China’s Exports

China’s exports to Africa have also been sharply criticized — portrayed as low quality goods which poorly serve consumers and foster the decline of African manufacturing.49

In much of Africa, many basic consumer items are expensive imports from developed countries, yet because poor infrastructure and corruption in Africa create high production costs, these are often cheaper than locally-made goods.50 Chinese goods are cheaper than both and thus appeal to grassroots Africans.  PRC goods in Madagascar are 2-3 times cheaper than local or imported goods.51 As more Chinese invest and trade in Africa and compete with each other, prices fall. In the Congo capital, Kinshasa, PRC merchants first sold shoes at US$12 a pair; as more Chinese arrived, the price fell to $6.52 In Ghana, as more PRC bikes were imported, the price fell from $67 to $25 in two years.53

If the affordability of PRC imports benefits grassroots African consumers,54 there are in any case only seven countries that receive a significant share (5-14%) of their imports from China.55 Basic consumer goods do not predominate among PRC exports, but rather "machinery, electronic equipment and high- and new-tech products."56 A UK government study found that in only one African country, Uganda, are basic consumer goods more than a fifth of the value of all goods imported from China and that PRC imports into Africa mainly displace imports from elsewhere and have little effect on local production.57 The PRC government recognizes that some exports are of poor quality.  Many Chinese goods are brought to Africa by private Chinese or African entrepreneurs whom the PRC government does not control.  It nevertheless has "in place stringent measures to ensure that its goods meet all the minimum quality standards for exports [and] a ministry to ensure low quality goods are not exported."58

While most Chinese exports to Africa do not displace existing local producers, PRC exports to the world also have not had the commonly asserted crushing effect on African exports.59 The Export Similarity Index, a measure of overlap between the value of products countries export, is only 4% for China and the whole of Africa and almost exclusively involves textiles and clothing (T&C).60 The China-in-Africa discourse features a constant stream of charges that China is gutting African T&C production.61

China’s T&C exports to Africa began to rise sharply around 2003, but in many African countries, the T&C industry had long been in decline. In Ghana, T&C employed 25,000 people in 1977, but only 5,000 in the year 2000.62 In Zambia, 25,000 people worked in T&C in the 1980s, but only 10,000 in 2002.  During the 1960s and 1970s, many African countries practiced import substituting industrialization, raising T&C employment to 20-30% of formal sector jobs. By the 1980s and 1990s however, when most African countries had lost their ability to service their debt, the IFIs insisted that they open up to foreign goods, de-industrializing some countries, particularly with regard to T&C.63

WB/IMF-mandated structural adjustment programs (SAPs) were the actual gravediggers of African T&C production.  The influx of second-hand clothing from developed countries particularly reduced domestic markets for African T&C producers.64 Kenya in the 1990s, for example, opened up the textile sector to second-hand (mitumba) and new garments from the US and EU, whose increased subsidization of their cotton farmers also shrunk the Kenyan cotton industry, reducing supplies to Kenyan T&C producers.  Neo-liberal reforms in Kenya raised the cost of electricity and other inputs, making it still more difficult for T&C firms to produce at low prices. While mitumba distribution came to involve 500,000 Kenyans, the country’s T&C industry, which in the early 1980s employed 200,000, nearly collapsed.  Up to 70,000 factory and mill jobs alone were lost.65 By 2004, even with the effect of the US’s African Growth and Opportunity Act (AGOA), less than 35,000 people worked in the export-oriented Kenyan clothing sector.66

Meanwhile, by 2001, a vast growth in Chinese T&C exporters began.67 Despite strong competition, PRC-based firms’ share of world T&C exports grew from 9% in 1990 to 24% in 2005.68 T&C exports accounted for 70% of China’s 2006 $177b global trade surplus.69 From 1974, the Multifibre Arrangement (MFA) restricted China’s T&C exports to developed countries.  The 1994 WTO Agreement on Textiles and Clothing (ATC) kept MFA quotas until January 1, 2005, after which African T&C exports to the US initially fell 20%.  In several countries, T&C employment dropped sharply in 2005-2006,70 predictably due to "relatively high utility and transportation costs and long shipping times to the US . . . lower productivity and less skilled labor than Asia, and . . . fewer sources of cotton yarn and higher-priced fabrics than China and India."71

Lesotho, Madagascar, Morocco, and South Africa have featured in the China-in-Africa discourse as especially hard-hit by Chinese competition. Yet except for South Africa their industries were already in extremis by 2000. Their eventual outcomes are also at odds with the discourse of the PRC as gravedigger of Africa’s T&C industry.  In Lesotho, almost all T&C bosses have been foreign (mainly from Taiwan and Hong Kong) and employ most of the country’s formal sector workers. In 2006, they re-branded themselves producers of "ethical clothing" for the US market, allowing almost full employment recovery.72 In Madagascar, which lost 5,000 of 100,000 T&C jobs in 2005, the industry found a niche in higher-end T&C, held its own in 2006, and was expected to grow in 2007-2008.  Madagascar’s T&C exports in fact grew by 3% in 2005-2007 and again employed 100,000 workers by 2009.  Its output actually accounted for 25% of all non-petroleum AGOA imports into the US from Africa.73 Moroccan textile exports began to recover as producers moved up the value chain and

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