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Multimillionaire investments of China in Africa change the South-South Cooperation scenario

China, with 1,385 million inhabitants, has been one of the emerging powers which has successfully configured its economy in a manner in which its power in the world scenario is undeniable.

Amid the “trade war” with the United States and the Trump administration, the Chinese government has turned its attention towards Africa.

A result of this process, for instance, is the additional support for the Forum on China-Africa Cooperation (FOCAC) whose geostrategic interests go beyond a policy of joint development proposed in 2008, under the South-South cooperation agreement and shown as an alternative for western influence over Africa. This cooperation is the result of geopolitical interests in which the win-win balance tends to fall to one side: China.

The purpose of the meeting of 53 African leaders with the General Secretary of the Communist Party Xi Jinping was to consolidate the agreements over sovereignty, safety, an economic development of the region.

This meeting was held during the FOCAC Summit this past September and where they also agreed to boost the Belt and Road Initiative which proposes transnational investment in infrastructures supported by China with investments in all the countries of the world, representing close to 55% of the global GDP, 70% of the world population and 75% of the known energy resources.

The FOCAC Summit also was a place to talk about the exchange of governance experiences on the possibility of making the sub-Saharan economies emergent for the year 2030.

One of the most controversial actions for human rights organizations was the participation of authoritarian governments in the summit and the continuation of infrastructure projects, exploration and energy exploitation is countries such as Equatorial Guinea, Sudan, Zimbabwe, Democratic Republic of Congo and Chad.

They also came to agreements to strengthen the capacities of the African states in the fight against terrorism and keep the peace as a necessary element to preserve sovereignty, which in this case is linked to maintaining regimes that have not followed democratic practices.

A diplomatic instrument to secure geopolitical interests

Product of the non-interference policy of China in African governments, their investment has helped maintain authoritarian regimes which have impacted the social development of their communities and turned their economic relationships into political legitimation.

An example of this is Sudan, whose conflict between Islamists and Christians has produced great human displacement and violation of human rights. However, this has been ignored due to the large oil reserves, which explains its strong links with China.

In regards to infrastructure, China has also built oil pipelines which transport oil between the oil fields of the southeast of the country to Port Sudan and the Melut basin with Khartoum and has invested close to US$750 million to upgrade the international airport.

One of the most controversial projects is the Merowe dam project due to the enormous environmental and social impacts over the region, causing the displacement of approximately 65,000 people in the towns close to the Nile River which lived from agriculture and fishing.

In Zimbabwe –another authoritarian regime– China invested in an air route with two flights a week between Harare and Beijing, and also made Mandarin the second language in the Zimbabwean school system. However, many workers of the region claim the insurmountable competition of products imported directly from China, leading to unemployment and lack of occupational rights of these Chinese companies installed in the country. All these protests have been hushed and persecuted by the regime.

An extreme case is Liberia, as during the civil war, Dictator Charles McArthur Ghankay Taylor sold wood to the Chinese in exchange for weapons in order to remain in power.

The preceding examples show that although China advocates for non-interference in the political matters of its partners, the investments are an indicator that there is evidently an implicit soft-power which determines the path of countries towards maintaining the Chinese emerging market, where the authoritarian governments are a key part to disguise foreign economic interference as “development.”

Excuse to strengthening Chinese reserves

The diplomacy of hydrocarbons and minerals is one of the strategies which is rewarding in politically unstable regimes and with scarce western presence. The governments of Sudan and Zimbabwe are the most benefitted from these investments, but Chad, Libya and Central African Republic are not far behind with Chinese multimillionaire investments in support of oil extraction and minerals which are later exported to China.

The logging ban over China since 1998 has produced the need to take their wood industries to Africa; therefore Gabon, Cameroon, Equatorial Guinea and Mozambique have wood production programs which are impacting the environment, but have been legitimized by corrupt-based flexible legislations.

Copper is also a strategic commodity for China, and the greatest producer of steel in the world, but whose economic development demands importing this metal. For this reason it funds projects in Zambia which have provoked miner protests and conflicts due to the conditions in which they have to work.

This vision of Africa as a supplier of raw materials for China is also the idea that China sees Africa as a region to market their products and in this sense it is working to locate some of its companies in the black continent, so it can reduce wage expenses.

Final thoughts

As FOCAC is focused on economic cooperation, human rights practically are ignored as they consider that investing in projects produces benefits to the inhabitants and therefore reduced poverty in absolute terms as shown in an Ernst & Young report of 2018.

The figures of this report are staggering: Chinese-African trade passed from US$ 765 million in 1978 to US$ 170, billion in 2017. During the first five months of 2018, trade increased 17.7% with respect to the same period of the preceding year, reaching close to US$82 billion. In this manner China is now the greatest contributor of Foreign Direct Investment (FDI) to the region. These investments have helped create more than 130,750 jobs as of 2005 to date.

Furthermore, 3,100 Chinese companies are currently working in transportation, power, telecommunications, industrial parks, agricultural technology centers, water supply, and schools.

However, according to the World Bank report on extreme poverty in the world entitled; “Poverty and Shared Prosperity 2018: Piecing Together the Poverty Puzzle,” states that although poverty has somewhat diminished, the conditions to obtain the goal of decreasing extreme poverty levels under 3% for 2030 are not given. This is especially true for the countries south of the Sahara, where the conflicts, the economic issues and authoritarian systems produced poverty levels above 10% and which will be maintained in 2030.

Also most of the projects funded by China are carried out by themselves and although they have produced more than 100,000 jobs, this does not compensate the amount of unemployed population in regards to the investment projects provided by China.

Additionally, many of the projects benefit the political elite, allowing authoritarian governments to secure power and have the economic power to legitimize their actions, thus creating more social inequality.

Therefore, thinking that FOCAC is a win-win cooperation scenario is a reductionist view which does not allow seeing the true interests of China in Africa which frequently appear in a veiled manner in the figures of investments in megaprojects for foreign benefit. Precisely this cooperation forum is one of the cases where institutional power achieves what it needs: resources to sustain its economic empire.


Consejo Editorial