Winning in Africa Might Not Be Worth the Cost to China

Nowhere is China’s growing reach more obvious than in Africa. President Xi Jinping just returned from a trip during which he promised African officials $60 billion in new investment. Beijing also has grown more active culturally, educationally, and even militarily.

The PRC’s increasing role has created unease in Washington. But China has run into many of the same sort of problems which faced America in the past.

The U.S. obviously fears losing business: African trade with China surpassed that with America in 2009. Beijing undermines Western pressure to improve democracy and human rights.

Yet the ultimate results of President Xi’s visit remain to be seen. The photo ops were impressive, but both the pictures and promises may fade over time.

Dealing with the continent remains a challenge. Many African nations remain in crisis. The November terrorist attack in Mali killed three Chinese citizens.

The PRC appears willing to ignore some risks which deter Western countries and companies. However, no money put into Zimbabwe—a large destination of Chinese investment—is likely to turn out well.

Osadebe Osakwe, managing director of North China Construction Nigeria, argued that “Unless the West changes its risk assessment, the Chinese will beat them to the African market.” But the market is not worth dominating at any price. Observed the New York Times:  “Nigeria is a particularly shaky bet for China.”

African countries also have discovered that Beijing desires what the U.S. demanded in the past: political loyalty, resource control, investment return. For instance, most of the $60 billion will be concessional loans. Assuming the money is forthcoming. Observed Claire Provost and Rich Harris in the Guardian, many past projects announced with great fanfare “never make it past the ceremonial pledges.”

Moreover, Africa long has been awash in “aid” from multilateral development banks, but much of that has been stolen or wasted. Beijing’s experience so far is no different.

For instance, more than a $1 billion essentially vanished, noted the Economist magazine, after being invested in a palm oil plantation in a region where “there were no roads, the river was barely navigable and villagers were hostile.” Because of the lack of conditionality, observed Brad Parks of the research lab AidData, “African officials know that they have more leeway with Beijng’s money, and they use it.”

Even cheap loans may become a significant burden to repay. Observed the Times: “Infrastructure projects in Nigeria have been fueled by the same manic lending that has also created mountains of debt for China’s economy at home.”

The PRC also often demands concessions for land, minerals, or other commodities in return. Moreover, Beijing often requires use of Chinese firms, even bringing laborers from the PRC. This is seen as a new version of neocolonialism.

In fact, the “Ugly Chinese” looks a lot like the “Ugly American” before. Explained a recent Rand Corporation report: “Labor unions, civil society groups, and other segments of African society criticize Chinese enterprises for their poor labor conditions, unsustainable environmental practices, and job displacement.”

Both sides must worry about declining growth rates. As China’s economy has slowed, demand for African commodities—food, minerals, and energy, in particular—has weakened. Another problem is that Chinese products have gained a reputation for being shoddy and counterfeit.

Thus, Western fears of Chinese domination in Africa appear overblown. Although Beijing has attempted to adapt to criticism, “African perceptions of China include a mix of approval, apathy, and contempt,” reported the Rand Corporation.

While America’s role has shrunk, I argue on China-US Focus that “the U.S. remains the largest, most productive, and most attractive economic partner for African nations. American enterprises also have a reputation for offering better working conditions, purchasing local products, and transferring more technologies.”

The U.S. has lost economic primacy in Africa, as in Asia, to China. But America likely will do just fine as long as they compete rather than whine about a changing world.