Misleading allegations can't damage China-Africa relations

By Ding Heng

Bizarre again in the way some U.S. politicians and analysts look at China's ties with Africa, a recent example being an address to an American economic club by Secretary of State Mike Pompeo.

The top U.S. diplomat suggested that China's investment in Africa isn't about commerce and markets, but rather about ultimately calling the note when it's time to exert political influence. He called on U.S. businesses to put in place what he called the building blocks, such as the rule of law and property rights, in Africa so that its growth will occur with a model that looks more like the West than China.

Pompeo's comment is filled with jealousy of China's growing popularity with Africa.  

Workers prepare pineapple boxes in Soyo on September 29, 2017. [File Photo: VCG]

According to data compiled by a research project called "China Africa Research Initiative" at the John Hopkins University, China's annual foreign direct investment (FDI) in Africa surpassed that of the U.S. in 2014 and has been overshadowing the U.S. FDI since then. In 2015, for example, China invested $3 billion in Africa, whereas the U.S. only invested $300 million. Since 2016, there has been a trend of U.S. withdrawing capitals from Africa, and of China continuing to invest.

China-Africa trade has also been climbing steadily. China overtook the U.S. to become Africa's largest trading partner in 2009. A report released by Standard & Poor's in 2015 noted that China contributed to 23% of exports of the 18 largest economies in Sub-Saharan Africa in 2013, up from 4.6 % in 2000.  

China's close trade and investment ties with Africa are a fruit of its own economic power, as well as many years of partnership building. Since the 1990s, generations of Chinese Foreign Ministers have been keeping a practice of visiting Africa each January. The Forum on China-Africa Cooperation, which provides a major platform for officials and business leaders from the two sides to meet and sign deals, has been held every three years since 2000. President Xi Jinping visited three African countries as part of his first overseas tour after he took office in 2013.

The U.S., by contrast, is putting Africa at the least important position in its diplomatic spectrum. A year and a half into Donald Trump's presidency, former Secretary of State Rex Tillerson was the only top U.S. official to have visited Africa. Ironically, Tillerson was sacked by Trump in a surprising move when he was still in his Africa tour.

On the trade front, the mighty U.S. is even bullying Africa. Threats from the Trump administration have forced four eastern African countries to back away from a planned hike in import duties on US second-hand clothes, despite a fear that cheap imports will severely damage their own garment industry.

To some U.S. politicians and analysts, China's close ties with Africa are generating nothing but anxiety and jealousy. Instead of thinking about how their country could better engage with Africa so as to bring prosperity to the continent along with China, they are sparing no efforts to discredit what China is doing.

One way of doing so is accusing China of employing neo-colonialism tactics in Africa in the form of predatory loans and exploitation of natural resources.

Data from John Hopkins University's research program show that the mining sector accounted for 26% of China's investment stock in Africa as of 2016, compared to 66% for U.S. investment. Hence, the U.S. appears a more likely suspect than China when it comes to the alleged exploitation of natural resources.

As a matter of fact, Chinese businesses that operate in Africa pay lots of attention to diversifying their investment so as to help Africa develop a sustainable, balanced economic model. Apart from investment in mining, more than 28% of their money has gone to the construction industry, nearly 13% to manufacturing, over 11% to the financial sector, and over 4% to technological services.

Chinese investors in Africa also attach importance to job creation. Locals account for at least 75% of the employees working for Chinese-backed projects in Africa. In 2008, raw materials and oil made up 80% of China's imports from Africa. This ratio has now dropped to 53% as China imports more manufactured goods. Amid rising labor cost in China, Chinese companies are moving part of their productions to Africa. It is no secret that pays offered by Chinese factories are usually attractive to locals.

Is political influence, as Mike Pompeo has suggested, really the ultimate goal of China's investment in Africa?

The civil war in Libya led to an estimated loss of $4 billion for Chinese investors. Chinese oil giant CNPC also lost some oil field equities due to the separation of South Sudan from the Republic of Sudan and the subsequent political instability in the newly independent country. Nonetheless, China has never interfered or taken sides in African politics in the name of protecting its interests. China does send troops to Africa, but they are mostly part of UN peace keeping missions. China does have a military logistics base in Djibouti, but it is used to facilitate China's naval operation in an international anti-piracy mission in the Gulf of Aden. There is no evidence suggesting that China is using the base for other purposes.

It is not surprising that China, which has developed from an extremely poor country to a socially stable economic powerhouse in a few decades, looks attractive to some African nations struggling to lift their people out of poverty. This is why more than 60,000 African students are currently receiving education in China.

However, it is necessary to distinguish between imparting knowhow to Africa and imposing a so-called "China model" on Africans. There are no signs that China wants to export its ideology or political system to Africa. Loans and aids that China offers to Africa have long been known for attaching no political preconditions.

Instead, China has been constantly encouraging Africans to seek models that best fit their own situations. This was made clear in 2013 by Xi Jinping to Nkosazana Dlamini-Zuma, the then chairperson of the African Union Commission, in one of Xi's earliest meetings with African officials as China's top leader. In the 1980s when China was at the early stage of its reform and opening-up, the Chinese government sent hundreds of thousands of students to American universities. As it turned out, China learned many useful skills covering many different sectors from Americans. However, China never directly copied a U.S. model for its own development, knowing copy and paste would not work. This is a principle China is encouraging Africa to stick to.

A debt trap? According to John Hopkins University's project, China extended around $114.4 billion worth of loans to African governments and state-owned companies from 2000 to 2016. On the other front, calculations based on data from the World Bank show that Africa owed $6.01 trillion to external creditors as of 2016. Therefore, Chinese loans accounted for less than 2% of Africa's debts. Can you believe such a small percentage could pose a debt trap?

In comparison to other lenders, China has handed out a much larger portion of its loans to help Africa develop infrastructure. In 2015, for example, the transportation sector received more than 38% of the Chinese loans, while over 37% of the loans went to the power generation and transmission sector. McKinsey & Company once reported that by 2015, China's investment stock in African infrastructure had exceeded the combined capitals from the African Development Bank, the European Investment Bank, the G7, and the World Bank.

Poor infrastructure is a main drag on Africa's economy. More than 600 million Africans are living with an electricity shortage, and around half of the roads on the continent are not paved, according to estimates by the African Development Bank. Therefore, we have reasons to believe that China's loans could even help cut down Africa's debts over the long term as long as roads, ports, railways and power grids built with Chinese money can be put into good use to help boost economic growth.

President Xi Jinping is currently visiting Africa. In September, the summit of the Forum on China-Africa Cooperation will once again be held in Beijing. On both occasions, the two sides will further cement their ties, and their mutual trust can hardly be shaken by a few eye-catching rumors. Facts and figures are telling us that China is sincere in offering a helping hand to Africa. At a time when the top leader of the United States is calling Africa a "shithole", China sees the continent as a land of the future.