(This is the
second of two posts about The Wrongologist’s visit to South Africa)
What’s Wrong Today:
In August, Secretary
of State Hillary Clinton took an 11-day trip across sub-Saharan Africa. In her
“Remarks on Building Sustainable
Partnerships in Africa,” delivered in Senegal, Clinton said:
“The days of having
outsiders come and extract the wealth of Africa for themselves leaving nothing
or very little behind should be over in the 21st century.”
China took these
comments as a direct criticism of its African policies. Xinhua news agency stated:
“Ironically, it was
the Western colonial powers that were exactly the so-called outsiders, which,
in Clinton’s words, came and extracted the wealth of Africa for themselves,
leaving nothing or very little behind.”
China
has emerged as a major US competitor in Africa’s trade, investment and aid. This has led
many to question the nature of its involvement. Critics say that China is only interested in resources and its
exports to Africa, like shoes and clothing, threaten local industries which are
labor-based.
So, What
is the Big Picture?
We are in
a shadow war with China for access to African natural resources. In 2009, China
became Africa’s single largest trading
partner,
surpassing the United States. And China’s foreign
direct investment
in Africa has grown from $100 million in 2003 to more than $12 billion in 2011.
In
2011, Africa-China bilateral trade reached $166 billion, an increase
of 300% over 2006, while China’s direct investments in Africa are now nearly
$15 billion.
Starting from a low level, China’s
share of Africa’s exports has increased from a mere 1% to about 15% in just 10
years.
The Government of
China maintains over 150 commercial attachés and associated staff at its
embassies in 48 African countries, while according to a report by the Brooking
Institution’s Africa Growth Initiative, there are currently just five U.S.
Commerce Department Foreign Commercial Service Officers in Africa.
Furthermore, Chinese President Hu
Jintao has made seven trips to Africa, five as head of state and has visited 17
African countries.
SA President Zuma with Hu Jintao
In 2011, about 62% of African exports to
China consisted of crude oil, with over $24.7 billion coming from Angola,
now the source of over 9% of China’s oil imports.
And the US? Over the past decade, oil accounted for roughly
89% of US imports from Africa. Nigeria is the fifth largest source of oil imports to the US and Angola, the eighth.
So, in the shadow war
between Beijing and Washington, DC is
behind and falling further behind:
Beijing announced on July 20, $20
billion in assistance to the continent, double the amount it pledged in
2009; and an “African Talents Program” to train 30,000 people in various
sectors and set up vocational training centers, 18,000 government scholarships
and the dispatch of 1,500 additional Chinese medical personnel to Africa.
So, What’s Wrong?
China is securing access to African natural
resources and agricultural land by whatever economic means at its disposal. For
example, China’s
three state-owned oil companies have become the biggest investors in Africa.
Despite
the good investment news, China’s colonial instincts are evident: Chinese state-owned firms in
Africa are facing criticism for using
imported Chinese labor to build government-financed projects like roads and
hospitals, while pumping out natural resources and leaving little in
the local economies.
Meanwhile, native Chinese
have migrated to Africa, hired by an estimated 900 local Chinese companies. Today
there are approximately 1 million Chinese in Africa,
with about 40% located in South Africa.
South African President
Jacob Zuma has also spoken out recently about the “unsustainable”
nature of Africa’s trade with China, in
which South Africa transfers low-value commodities to China while high
value-added manufactured products are imported, costing jobs.
The University of
East Anglia
concluded that from 2001-2010, competition from China has caused the loss of
77,000 South African low-end factory jobs. The study shows that China now has a 46% share of the South
African footwear market and supplies about a third of South Africa’s electronic
goods. South African factory owners have had little choice but to shift
to more capital-intensive, technology-driven means of production and phase out
labor-intensive product lines, at the
expense of employment levels. South African unemployment
today is about 25%, and 48%
among youths aged 15-24.
During
the Wrongologist’s visit to Swaziland, he saw direct evidence of China’s long range strategy:
Swaziland is a very poor country where
all land is owned by the King. It is rich in iron ore. China stepped in,
built and equipped a state of the art hospital in Mbabane, Swaziland’s capital.
They staffed it with Chinese doctors.
In
exchange, China received control of a national iron mine.
Mbabane Government Hospital
In
South Africa, the Wrongologist heard about direct attempts by the Chinese to
influence policy:
The Dalai
Lama, Tibet’s exiled spiritual leader, was denied a visa to visit South
Africa in October
2011. He was to attend the 80th birthday of fellow Nobel Laureate, Desmond
M. Tutu of South Africa.
Critics
viewed the visa denial as a capitulation to China, a strong opponent of the
Dalai Lama, whom the Chinese authorities consider subversive.
Archbishop Tutu lashed out at his
government, calling its conduct disgraceful and discourteous toward the Dalai
Lama, criticized President Jacob Zuma, saying:
“Mr. Zuma, you and
your government don’t represent me,” he told reporters. “You represent your own
interests.”
The visa denial
coincided with a visit to China by South Africa’s vice president, Kgalema
Motlanthe, who signed multiple trade
and development agreements with the Chinese government.
More in South Africa: The Pretoria High
Court issued a landmark ruling this week classifying
Chinese South Africans as black, making them eligible for benefits for
those discriminated against by the former apartheid regime. There is a
sub-group of Chinese who have been in South Africa since the early 1900’s. The Chinese
Association of South Africa (CASA) argued that these Chinese citizens continue to be
marginalized under the country’s black economic empowerment and affirmative
action legislation. Both laws benefit the country’s black, Indian and
mixed-race communities, but excluded
South African born Chinese.
Patrick
Chong, CASA leader, described the
ruling as a victory:
“Under the
apartheid rule we were classified as colored — a term used to describe a
mixture of black and white race…After the democratic government came into
power, our status was no longer recognized as colored, so we were in
between.”
Does
this also reflect a wink and a nod to South Africa’s relationship with China?
It seems a stretch to say that the decision is entirely based on the inequity of the current laws of South Africa.
Finally,
consider Zambia:
Its capital, Lusaka, has just become
the first African city to offer Chinese currency banking services for domestic
transactions.
It is
China’s objective to become an alternative
reserve currency to the US dollar in Africa. Lusaka’s Bank of China
branch, with government approval, now handles deposits and withdrawals in Yuan.
The Bank explained that the service in Yuan (also known as renminbi) was aimed at
Chinese investors working in Zambia, but
also at Zambians importing goods from China.
Also, there is concern that China is
bankrolling its favorite in the Zambian presidential election. In the run-up to the
polls questions are being asked about just how far China’s influence in Zambia
spreads and if Chinese money is bankrolling the incumbent presidential
candidate Rupiah Banda and his party, the Movement for Multiparty Democracy
(MMD). Banda is very much in the Chinese camp as compared to his opposition,
the Patriotic Front, which is anti-Chinese.
China has no plans to leave Africa, or to modify
their colonial instincts. The British may have come first with their bibles and
ultimately, owned the land.
The
Chinese have come with a new religion, loans and investment.
Ultimately, like the British, they also expect
to own the land.
