Análisis lingüístico

Introduction

So far we have discussed three instruments for China ’s presence in Africa in de- tail (aid, investments and trade policies) and dealt with two case studies (Zam- bia and Sudan). However, most African countries have experienced an increased Chinese presence and China is active in very different sectors. We cannot analyze in this book each and every African country and all the different sectors in which China is active separately. For that reason we will bring together in this chapter the experiences in a few other African countries where China is present and pro- vide some details for typical sectors in which Chinese investors are active. The cases of Angola , Congo , Ethiopia , Tanzania and Zimbabwe will be discussed. The Chinese experiences in agriculture, textiles, the financial, the construction and the mining sector will be analyzed.

How will the development of these African countries be affected by the rapid growth of China ’s exports and investments? China takes over markets in African countries more easily than it manages to break into European or American mar- kets. Does that mean these African countries will never be able to compete with China in sectors like the production of shoes or textiles? At the moment, produc- tion factors like labor, capital, raw materials and entrepreneurship are still impor- tant but “knowledge” will be a key factor in China’s continued industrial growth. China is really investing in research and development and seems to be aware that it cannot continue as a cheap labor producer in the global economy (Van Dijk, 2007). The flow of Foreign Direct Investments (FDI ) to Africa and the figures on total trade provide insight into the dynamics of the different regions. They show that African industries are usually not “competing with”, but in the best cases “complementary to” Chinese industrial exports and investments in the country concerned (Kragelund 2007, summarized in Chapter 1).

 Meine Pieter van Dijk

Angola

In Angola , the government was about to reach an agreement with the Interna- tional Monetary Fund (IMF ), when China came along. Th e IMF promised to lend a few hundred million dollars for the development of the economy, but the Chinese immediately let it be known that they would invest about one billion US$ in Angola. Hence the fi rst bid was rejected and with it the conditions to stimulate sound macro-economic policies and the promotion of good governance. However, Wissenbach (2008) notes about the case of Angola that it is disapproving

earlier Western speculation of a take-over by the Chinese. Angola used oil diplomacy to extract concessions from China while rejecting an IMF loan, then it dealt China’s eff orts a blow by cancelling the contract for the build- ing of the Lobito refi nery and joining OPEC, while not cutting its ties with the US, IMF, World Bank despite their outrage over the earlier failure of the structural programme negotiations.

The country receives a lot of Chinese aid and China is not only active in the oil sector. It is also involved in repairing the railroads and constructing roads, using lots of Chinese workers. Chaponnière remarks in Chapter 3 that the Chinese are being criticized in Angola and are falling behind on some of the large projects they are carrying out and Wissenbach remarks that the country refuses to do things that would please China. This suggests that African countries do not have to bow to the pressure of the Chinese government if they really have something to offer to China and if a country does not put all its eggs in one (Chinese) basket.

Congo

Congo is another example of a country which had second thoughts concerning China ’s aid and investment proposals. In 2008, China’s intentions to invest on a large scale in Congo surprised the world (Financial Times, 10 May, 2008). Box 8.1 gives a summary of the “$9 billion China deal”, also called the “deal of the century”.

It is estimated that five billion US$ out of the 9.25 billion US$ will be available to build roads, railways, hospitals and universities. This is infrastructure that can be built in the short run and that would allow President Kabila to show that he did fulfil his election promises. These are the kinds of things politicians like and help them to get re-elected! However, the Financial Times (10 May, 2008) adds that the deal comes at an uncertain cost to Congo , because the country was at a delicate stage in negotiations to secure a write-off of around eight billion US$ of

 The impact of the Chinese in other African countries

Box 8.1 “Congo outlines $9 billion China deal”

“The government of the Democratic Republic of Congo has unveiled details of a

controversial $9.25 billion agreement that pledges millions of tonnes of copper and cobalt to China in exchange for roads, railways and other infrastructure. The general opinion is that Congo goes for a quick deal, instead of waiting for years for World Bank formulated projects, which then need to be approved and tendered.”

Source: Financial Times (10 May, 2008)

external debt when the news broke last year of its plans to enter a barter agree- ment with Beijing . It is feared that the deal could scupper the debt write-off.

Marysse and Geenen (2009) carried out a critical study of the deal of the centu- ry and concluded that it is defi nitely not a win-win situation, but rather an example of unequal exchange. Th ey make clear that the investments have to be repaid with a guaranteed access to mineral resources and that the terms of reimbursement are not concessional at all: “in contrast to the Chinese discourse, this proves that the Chinese government is only pursuing its commercial and strategic interest”.

No wonder that in early 2009 Congo announced that it wanted to get rid of the contract (Volkskrant, 7 February, 2009). The Financial Times (10 February, 2009) reports that the biggest investment deal in Africa is faltering as: “Western donors put pressure on the Democratic Republic of Congo to renegotiate a min- erals-for-infrastructure contract”. In the NRC (7 February, 2009) it is explained that the current price for copper and cobalt is so low that Congo would have to pay China instead of the other way around. That would be the reason for Congo to try to renegotiate the deal. Already Marysse and Geenen (2009) had calculated that Congo would miss a lot of tax revenues, because China had negotiated tax holidays for the lifetime of the project. The conclusion can be drawn that it is dif- ficult for an African country to negotiate a fair deal with a big country like China, when there are no transparent procedures and there is no competitive bidding, which would allow Congo to select the most attractive bid. In that sense it was a gamble to go for the Chinese deal instead of organizing competition.

The end of the story is even more surprising. The Financial Times had an article (20 February, 2009) with the heading “Chinese copper entrepreneurs flee”. It broke the news that more than 40 Chinese-run copper smelters are standing idle in Congo after their owners fled the country without paying taxes or com- pensating staff at the end of the commodity boom, according to the governor of Katanga province, the province where most of Congo’s minerals can be found. The Financial Times adds that the Chinese entrepreneurs who came were part of their country’s small-scale, private sector-led engagement with Africa.

 Meine Pieter van Dijk

The newspaper adds that the abrupt downturn has released resentment over the conduct of some Chinese businessmen in Africa, “where hard bargaining and lack of warmth towards local people won them few friends”. The governor himself said, when asked if the Chinese private entrepreneurs would be welcomed back when the price of copper rebounded: “No, no, no. Not as long as I am governor. Katanga is not a jungle. They worked as if it was a jungle.” The Chinese ambassa- dor in Congo stressed that the policy is that Chinese entrepreneurs must respect the laws and regulation of the countries where they work.