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China in East Africa: Win-Win?

In East Africa, China seems to be praised and criticised in equal measure.
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Chinese expatriates with locals on a beach in Tanzania. Photo by Wayan Vota.

Arusha, Tanzania:

“Look, they work really hard, really fast, they are a fantastic example and inspiration to us, and at last we have what we need – a road!” proclaimed Nairobi hotel owner Emelda Nzungu, referring to the Chinese-built bypass just outside the city. And she is not alone in her enthusiasm for China’s role in the region.

East Africa needs infrastructure and trade. But while it has cheap labour as well as rich supplies of gold, copper, diamonds and coltan (the key component in computer chips and mobile phones), it also has a poor investment climate.

The IMF, for example, highlights its “burdensome licensing procedures, reflected in high start-up costs, insufficient access to credit, restrictive labour regulations, difficulties in registering property and poor property rights, and very poor infrastructure”.

Meanwhile, in the World Bank’s 2011 Doing Business report, none of the countries in the East African Community, apart from Rwanda, makes it into the top 100 countries in terms of ease of doing business and few even come close.

Chinese investment

In this context, China stands out as an investor in that it is prepared to take risks on large projects. The Chinese government, for example, recently signed an agreement with Tanzania for a $1.06 billion loan to construct a natural gas pipeline connecting the south of the country to its commercial capital Dar es Salaam. Chinese companies are involved in the extensive port developments at Lamu and Tanga, and China National Offshore Oil Corporation (CNOOC) has a presence in Sudan, Kenya, Uganda, Mozambique, Somaliland, Chad, DRC, Congo and Angola.

Bernard Muthara, a Tanzanian construction manager says, “look at the massive affordable house building plans afoot in Arusha (to the tune of $7.2 million), the Pan-Africa Kenya-Tanzania highway (Chinese built), and the new Zanzibar airport (rumoured to cost $17 million)”.

On a grander stage, large-scale structural projects, often accompanied by loans are frequently proposed to mineral-rich African countries. This often results in natural resources going to China in return, or in deals that take the form of loans in exchange for future mineral or drilling rights.

Some have suggested that this might be exploitative, but John Kihera, a taxi driver in Nairobi, remarks, “look, the bottom line is service delivery. With our new government, we have been impressed with the house-building, the bridges, and frankly, the Chinese do the job better and more efficiently than our people. At least we trust the job will be done, and the money won’t disappear into someone’s pocket!”

Chinese investors are also quick to defend their presence. David Quiang, a Chinese expat who has lived in East Africa for several years, explained: “In China, we have embraced capitalism. We are in a capitalist world, if America and Europe are constantly drawing attention to our poor human rights record, it’s because they are losing the race. We are cheaper, more efficient. We get the job done! This is a competitive process, remember.”

Historical and cultural bonds

There are other cultural and historic reasons why Chinese do well in East Africa. For a start, China has a long history on the continent. There are traces of Chinese activity in Africa dating back to the Tang Dynasty. Chinese porcelain has been found along the coasts of Egypt in North Africa and Chinese coins from the 9th century have been discovered in Kenya, Zanzibar, and Somalia.

In 1955, the Bandung Conference inspired African countries out of the Cold War antagonisms leading to the formation of the Non-Aligned Movement (NAM). China shared a ‘victim background’ with the NAM countries – China at the hands of imperialist Japan and Europe, and Africa at the hands of Europe and America.

Deborah Brautigam argues that China’s approach centres on offering Africa an olive branch for development in some sense. China uses the experience it has gained from being an underdeveloped and economically struggling nation in its interactions with African states, except this time from the other side of the negotiating table.

This often creates partnerships that are beneficial to both parties – Africa gets prospects for development through knowledge transfer, Economic Protection Zones and large-scale Chinese investments, while China gains access to new markets, natural resources, and increased political currency on the continent.

Non-governmental cooperation

Whilst co-operation exists at a government-to-government and business-to-business level, however, there are also many more micro-interactions with Chinese people in Africa running small business, hospitals, restaurants, and other enterprises. The Tanzania-Zambia (TANZAM) railroad completed in 1976 employed over 50,000 Chinese, many of whom stayed on and many more have flocked to the continent over the past decade or so to seek economic opportunities. Since the end of colonialism, Chinese doctors, engineers and teachers have also played a strong role in supporting East African countries – particularly in Tanzania and Uganda. Chinese tourists to East Africa are also on the rise. And Sino-African marriages are common, apparently often successful.

On the academic front, China has several well-established and respected African departments in its large universities and Beijing has offered a number of generous bursaries to African students.

One thing driving Chinese businesspeople to look to Africa has been Beijing’s encouragement to ‘go out’ (zou chuqu), a call that has been answered by increasing numbers. “When I left China in the 1980s, it was a new thing. My family thought I was mad and brave” recalls construction site manager Mr Li.

Mr Jie, another construction manager echoes similar sentiments and explains why he thinks integration is often successful: “We have a common history. Our parents too were peasants. We understand what it is to be poor. We do not approach Africans as servants, but as people who, like us, want to better themselves, who understand hardship.”

This tacit reference to colonialism belies a much stronger truth: there is little paternal about the Chinese approach to business. Mr Jie adds “Yes, there is corruption, yes there is inefficiency doing business here, but the bottom line is we factor this into the costing, and we work round that”.

Fair competition or undercutting?

These days, East African citizens enjoy low-cost Chinese goods – from generators to motorbikes to umbrellas. China currently has the ability to make a lot of products much more cheaply than any African manufacturers can sometimes squeezing indigenous firms out of business.

Local road builders also face dangers of being out-bid. “I am not sure how they (the Chinese) do it: they consistently undercut our bids, they bring in all their own JCBs, gravel, tools, everything from China, which cost a quarter of what our heavy machinery costs. We just can’t compete”, road-builder Jasper Mrosso laments.

In fact, the sense that China’s investment is to the benefit of Chinese and not Africans is sometimes widely felt. A letter in the local newspaper The East African, for example, read: “Oh – they are building a port in Lamu, bigger than Mombasa. They will use all local labour and companies…but sometimes they bring with them everyone and everything they need – even the cement.”

Other, sometimes legitimate, criticisms of Chinese involvement in Africa include poor business practices, corrupt bosses, kickbacks, low regulation, and poor wage standards.

Xiao Yuhua, an academic and commentator on Afro-Chinese relations believes that China takes all criticisms very seriously.

The way forward, he argues, is greater co-operation and dialogue between civil society organisations in China and Africa.

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Comments

It seems like everyone that we Africans come into contact with seeks to exploit us . why cant the Chinese do business that is of mutual benefit to them and us...i hope Africa dosen't become the 'yellow mans burden'