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“Why China Is in Africa” (12/16/21) is a question Trevor Noah took up last month for Comedy Central‘s Daily Show. As with many of the topics taken up by the Daily Show, the issue is no joke: China has a large and growing economic presence in many African countries. The China/Africa deals cry out for analysis: Are they different from the deals on offer from Western countries like the US, Britain or France?
Post-independence Africa’s economic relationship with the West has been mediated through the International Monetary Fund and the World Bank. Funding for projects comes with a range of conditionalities; when Western loans come due, the IMF demands painful cuts to health and education programs as the price of refinancing. In the past, the IMF has taken outright control of African governments. At other times, the US has sponsored coups, assassinated leaders and fomented civil wars on the continent.
China, meanwhile, does not attach political strings to its loans. China is known as a “patient” investor, making deals that take decades to pay off. When the Chinese loans come due, China reschedules or restructures debt payments. Ex-Minister for Public Works for Liberia, Gyude Moore, cited 87 cases of restructuring or rescheduling of such loans between 2000–19.
Which of these two approaches sounds like neocolonialism, and which like economic development?
China offers Africa terms that the West isn’t interested in matching.
Instead of improving its own offers, the West presents scary tales to try to infantilize Africans and frighten them away from doing business with China. Examples of these scare stories abound, from Mike Pence (USA Today, 11/17/18) and John Bolton (Guardian, 12/13/18) to Foreign Policy (4/25/19) and Al Jazeera (5/17/17).
But even in the Wall Street Journal (5/2/19), readers can learn that “the real political purpose” of China’s deals “isn’t a debt trap but building goodwill and high-level relationships.” The New York Times (4/26/19) published an opinion in 2019 that “the idea that the Chinese government is doling out debt strategically, for its benefit, isn’t supported by the facts.”
The format of the Daily Show and comparable shows (e.g., Last Week Tonight With John Oliver) makes it possible to deliver political commentary and news with plausible deniability about political viewpoints (“it’s only comedy”). Noah, a New York-based comedian who grew up in South Africa, did his best to spin Chinese investment in Africa into neo-colonialism—regardless of the underlying reality.
‘With the stroke of a pen’
“Back in the day,” Noah begins,
when one country wanted to take over another country, they had to beat them in a war…. But now it looks like a country might have found a way to take over another country with the stroke of a pen.
Noah presents a clip from BBC World News (11/30/21), in turn quoting the London Times (11/30/21): “China has recently been accused of trying to take over Uganda’s sole international airport if the East African country fails to pay a $200 million loan for the expansion of the site.”
Debunked in Asia Times (12/8/21), the “Uganda airport takeover” story was based on a tendentious reading of a 2015 loan agreement between the government of Uganda and the Exim Bank of China. The grace period for the loan ends in December 2022, at the end of which, if 87 previous examples over the past 20 years are indicative, China and Uganda will presumably renegotiate the terms.
Noah quotes the Chinese embassy’s statement: “Not a single project in Africa has ever been ‘confiscated’ by China because of failing to pay Chinese loans.” But Noah does not find this reassuring, saying: “‘We have never confiscated an airport’ is very different from ‘we are never going to confiscate an airport.’”
In fact, past behavior is a pretty good indicator of future behavior. The Western record in Africa—an indicator of future behavior there—is appalling.
The simplest Western strategy of all is to withhold investment until African countries are ready to accept terrible conditions—including demands to privatize national industries that amount to across-the-board confiscation by Western corporations. The strategy has worked in the past because, as Noah says, Africa needs financing:
Ever since the age of colonialism ended, Africa has been working hard to modernize its economies and catch up with the rest of the world. But to do that it needs lots of new infrastructure: roads, railways, ports, dams…. You name it, Africa needs to build it. The problem is, that stuff all costs money. Money that most African countries don’t have. But in recent years, many African countries have found themselves a new sugar daddy: China.
How China/Africa deals work
But what went wrong with Africa’s old “sugar daddy”? How did China end up financing projects in Africa, once a Western monopoly? In Rhys Owen Jenkins’ 2018 book, How China Is Reshaping the Global Economy: Development Impacts in Africa and Latin America, the author tells an illustrative story. Oil-rich Angola, whose infrastructure was devastated after surviving a (US-sponsored) civil war, approached the IMF in 2001. But the IMF demanded cuts to public spending as a condition of giving Angola any money—and a shaky regime coming fresh off of a brutal civil war can ill-afford to alienate the people with an austerity program.
So Angola approached China in 2002, and the relationship has expanded since. Angola and China trade directly in oil. While most oil deals in the global economy are transacted in US dollars, China often makes “infrastructure for resources” deals, circumventing the US dollar altogether.
Fantu Cheru and Cyril Obi present other examples in their 2010 book The Rise of China and India in Africa. In the DR Congo, Zhongxing Telecommunication Equipment Corporation (ZTE) built a mobile phone network and sold phones in hopes of “capturing a market niche primarily focused on the millions of African poor who now constitute the largest potential consumers.” In Kenya, Tianpu Xianxing partnered with Electrogen Technologies to establish a solar panel factory, seeing an opportunity in Kenya’s policy of using solar power to extend electrification.
But it isn’t all happy win/win deals. Elsewhere in the book, the authors present Zambia as a case where Chinese investors entered an economy already devastated by IMF-imposed structural adjustment, such that workers in all sectors—including those with heavy Chinese investment—are indeed exploited. China didn’t create those conditions, but nonetheless benefits from exploitation. How should that be addressed? A complex analysis is called for, comprehending the overall impact of Chinese and Western investment and the competition between them, the pre-investment condition of a given African economy and its bargaining power.
But summarizing it all as a form of Chinese colonialism is misleading. Read more.
