The China-Africa Guanxi

– Thuthukile Mbanjwa

The Chinese involvement on the African continent has become a topic of discussion around the globe. China has become Africa’s number one trading partner with trade volume between them increasing exponentially over the past few years, from about US$10 billion in 2000 to more US$220 billion in 2015 (Sikuka, 2015). In light of this, the Chinese government is determined to expand its investment portfolio across Africa.images (1)

… the relationship between China and Africa is certainly not a new phenomenon…

 

We have all heachina_africard (I hope…) of The Second Summit of the Forum on China-Africa Cooperation (FOCAC).  In the African Union Commission [AUC] opinion, the summit was said to provide a unique platform upon which the world’s biggest economy, China, and the emerging continental giant of Africa would be able to advance China-Africa relations to a new level. It could therefore be viewed as a catalyst for development on the continent as it is said to have given Africa the opportunity to regain its power and determine its destination.

The relationship between China and Africa is not a new phenomenon. China and Africa may be said to have a deeply rooted friendship which may be traced back to the Zhenghe’s voyages to Africa in the early 1400’s. With that being said, after six months of living in China my mind automatically marinades itself in the concept of *GUANXI…

*GUANXI (noun): a network of social connections based on mutual trust and the balancing of debts by returning favors so that the relationship’s benifits are shared by all.

Of course however, when attempting to understand the relationship between China and Africa from an economical perspective, I think it is important to bear in mind that China is at the stage of economic structure transformation and needs to source financial markets to invest superfluous capitals as well as commodities markets to export industrial product and raw materials. On the other hand, Africa needs investment and technology to promote local economic growth and establish infrastructure for high-tech products. Which leads me to start thinking:

Does this then imply that the two somewhat almost urgently need each other?

And if so, is it a bad thing?

These are just two of the infinite questions I had after moving to China.

Before living in China I had not really consciously had to think about China’s presence in Africa.

Before living in China, I did not really think about Chinese investments in Africa and how African’s and the rest of the world had perceived this. I had honestly never really taken time to think about the China-Africa relationship and the impact it would have on my life and the generations after me. So, I recently undertook a very exciting investigation which I would have not otherwise undertaken. My investigation involved a brief, to-the-point, online survey designed to obtain authentic African, Chinese and global perspectives on the China-Africa Cooperation phenomenon, as well as to evoke commentary.

A total of 82 participants completed the survey. These consisted of; 46 (56 %) respondents from Africa, 19 (23 %) respondents from China and 17 (21 %) from the global world at large. The demographics of the participants that were outside of China and Africa have been illustrated below.

*please click to enlarge.

gr1

A five point Likert scale was used to obtain an indication of the level to which the participants agreed or disagreed with the statements provided in the survey. The responses were colour coded and may be interpreted as follows:

g2

A summary of the responses from the African respondents (Left) and Chinese respondents (right) is provided

below.

*please click to enlarge.

g3 g4

The results of the survey showed that Chinese respondents showed a much more positive outlook on the prospects of the China-Africa relationship. Contrary to this, results from the survey suggest that there remains a slowly growing skepticism among Africans and the global world at large.

The last and only open-ended comment on the survey read:

“China’s remarkable expansion and modernization as well as its “economic plateauing”, its needs to source financial markets and raw materials, combined with Africa’s desperation for growth and infrastructure investment necessitate the need for the two to cooperate. Africa is ultimately China’s optimal investment destination”

Below are some comments from the African respondents, in response to the above:

#1

“China’s interest in Africa have been no different to those of the explorative west, the only difference is China disguises it’s subjective interests with “investments and development”. The Chinese footprint in Africa has been too strategically mapped out – targeting hotspots that serve and fuel (literally) a greater agenda – an agenda that Africa itself is not privy too.”

#2

i don’t think it’s a win win situation…china is using its economic power to overpower African countries..Africans are not afforded the same opportunities as Chinese people in Africa”

#3

“Africa and China are on different paradigm when it comes to politics and governance, taking this assumption it will be almost impossible for Africa to set itself in an upward trajectory like China did 3 decades ago.”

#4

“This may be true. The relations between China and Africa are however more nuanced than resource rich continent bring covertly taken advantage of by rapidly growing economy. It is important to capture these nuances. Looking at china’s share of investment in specific industries vs. the nature of investment by Western partners also interesting. In any case mutual benefit does not mean equal benefit, in any political dynamic and political engagement by one country with another will always be driven by self interest first and any other motivations later (helping another state etc.) this is not unique in the China – Africa exchange.”

#5

It appears to a win win situation for all parties, however from past experience we cannot rule out a possibility of a apolitical agenda.”

#6

Africa is an emerging market full of raw potential. It’s essentially a gold mine for investors, and given any political stability it’s likely to be a space where global investors can benefit greatly. It’s highly underdeveloped, has all plenty of natural resources that I feel are under utilized. It’s definitely in China’s best interest to get first movers advantage in terms of setting up shop ahead of other global players if they are to benefit from this growth.

#7

Because Africa has no sound political, economic or any foundation of its own for that matter, it is more vulnerable to manipulation that long term constructive investment.”

#8

Its all just a way for capitalists to exploit a rich underdeveloped world under the veil of social welfare whilst in actual fact they are furthering their own Agenda. China does not care for African lives, they just want to surpass America. Not yet Uhuru”

#9

Nope China is only here to exploit Africa. Yes African countries will benefit from the infrastructure but the majority of the economic benefit as a whole is solely China. Thus there is not a mutual relationship”

#10

Africa will undoubtedly learn a lot from China. The relationships formed should benefit all the involved parties and should ensure that Africa is left a better place than before.Africa should NOT be colonised in any way or form and strict laws®ulations should be put in place to ensure that Africa is not exploited.”

Further, some of the commentary received from the other international participants, which were neither from China or Africa, was as follows:

#1

“In principle, I think this is a good concept. In practice, we must be careful, first, not to paint all of “Africa” with one brush. Not all African countries have adequate governance structures in place that will protect the people and environment from material exploitation, sometimes even land grabbing (by foreign and domestic forces), and the hollowing out of work opportunities that comes with chinese “partnership”. China has a strong state, strong and effective government apparatus, down to SOEs. Many African countries face huge challenges of effective governance and rule of law, and because of these things, Chinese “partnership” can easily become Chinese exploitation. That being said, these opportunities can be viewed as growing pains for China in learning that state to state relations are more than just economic relations, but also present a question of respecting values and human rights of those nations. Such SS cooperation opportunities in the future can be great spaces to have these dialogues, and to truly be of mutual benefit. I think China’s intentions could be genuine, but the pace and scale of its growth can potentially hurt or intimidate partners, which is why taking things a little more slowly and coupling economic activities with genuine dialogue about principles and values will be ideal. Furthermore, Africa’s nations (governments and people) must also do a lot of soul to determine peacefully and collectively what those values are, and be prepared to live up to them.”

#2

All fair. Although my spin on it is more that it was pretty much inevitable that with a colossal trade surplus, a relative lack of certain raw materials, no difficult history in the region and no qualms about what they sell (eg. some pretty powerful weapons to both the South and North Sudanese governments), China would start doing serious business in Africa. I don’t believe for one second that they’re doing it out of the goodness of their hearts – they’re a rising superpower and African countries are the easiest places in which to start building up international influence for the reasons you list.”

#3

I believe that China has a major inclination in self benefiting itself by investing more in the resource rich Africa now and in the future.”

#4

While Africa is a good investment destination for China, and while I hope and believe Chinese investment in Africa will keep increasing, I wouldn’t call it optimal destination, because doing business in many countries in Africa is still difficult. See the Doing Business report. But mostly I disagree with this statement because while some African countries are a good investment, others are definitely not. “Africa” is too general”

#5

I think there is a huge change Africa will come to follow China’s economic growth. However, much will hinge on the quality and the efficiency of infrastructure projects and the effectiveness of governments. Moreover, there are lots of differences within Africa so having a closer regional partnership may foster mutual development and more political leverage in dealing with China.”

 

In my opinion, the negative views African’s may have towards China may be attributed to several factors such as a lack of transparency from both African local Governments and the Chinese in the past. Furthermore, the Wests perceptions on China and China’s presence in Africa are generally ones which do not reflect much encouraging thinking. This could also be assumed to have influenced many Africans views as western influence is easily absorbed by the African continent through media and social media platforms.

In conclusion,

…Africa needs to take responsibility to find viable sustainable ways to nurture its own growth…

There are many positive outcomes that serve as evidence that the China’s engagement in Africa has been beneficial to the continent; from the financial assistance to easing access to potable water and revitalizing trade in goods and services for countries sharing the Indian Ocean and Pacific Rim through the 21st century maritime Silk Road project. Nonetheless, it may be argued that China’s remarkable expansion and modernization as well as its almost economic plateauing, and needs to source financial markets and raw materials combined with Africa’s desperation for infrastructure investment and technology to aid economic growth necessitates the need and opportunity for the two to cooperate. Irrespective of this, Africa needs to take responsibility to find viable sustainable ways to nurture its own growth. In conclusion, cooperation cannot exist without a level of personal interest and personal interest drives cooperation. Needless to say, it is important to note that personal interest may not always be a negative factor, especially in the context of Africa and China who seemingly require each other’s assistance to move forward.

I really think that:

  1. In order for China to regain its image among African citizens, it may consider the idea of employing more models which entail China exporting capital goods to Africa and allow for local enterprises to produce the final goods and trade with other countries.
  2. China and Africa should continue to create platforms that allow for opportunities to engage and cultural exchanges between the two so as to better understand each other and how they will be able to benefit from each other’s intentions through mutually beneficial solutions.
  3. To a large extent, Africa is responsible for ensuring that they mutually benefit from their relations with China. Africa should ensure that they have well established institutions that are able to comprehend the Chinese and the manner in which they conduct their business as well as agree to unbiased terms of engagement.
  4. Both parties should exercise transparency and accountability to gain the public’s confidence as it has not only been influenced by China’s trade history in Africa but also the lack of transparency from African governments who have not extended the benefits of foreign investment to their citizens.
  5. A means to quantify the gains on both sides should be sought, if Africa and China are going to irradiate the existing perceptions relating to in-equivalent gains.

References

Sikuka, K. 2015. Historic Johannesburg Summit toAddvance China-Africa Cooperation, Available at: <http://www.sardc.net/en/southern-african-news-features/historic-johannesburg-summit-to-advance-china-africa-cooperation/&gt; [28 December 2016]

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2 responses to “The China-Africa Guanxi

  1. Very interesting Thuthu. I’m glad you’re exploring this important issue. I see distrust and anxiety from the African side which is to be expected, especially when the African politician deal makers have, historically, brokered deals for personal benefit.

    I would add that as an engineer who works for an international company, China has policies which virtually prohibit our involvement in developing their infrastructure. The reverse is not so true. In short, unless China is dictating the prices of materials and goods, the resources only flow one way between China and the rest of world (with the exception of high end goods).

    Keep up the great work. I’ll buy you beer next time you’re back in Cape Town.

    Like

    • Thanks Ptak!

      China’s policies and institutions have certainly not been designed to favor outsiders. I say this because I recently traveled to Guangzuo (famous for being China’s export industry region) with Sihle to basically investigate and experience the cultural dynamics of doing business in China as African foreigners… It was really interesting to see even the migrant entrepreneurs were not entirely independent as they had some sort of ‘Chinese’ affiliation in the form of a business partner or spouse… Perhaps my next post should be about doing business in China…

      In other news, I will definitely take you up on that offer! Please say hello to Wrenna and Pickles:)

      Like

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