China-Africa Cooperation to Break "Products-for-resources" Doctrine
UPDATED: 10:47, January 06, 2007
China-Africa Cooperation to Break "Products-for-resources" Doctrine
In his office in Harare, Frank Wu oversees a team of local administrative staff that run his company, Shomet Industry Development -- one of the largest Chinese companies in Zimbabwe.
Wu was sent to Zimbabwe in 1999 as an employee of a state-owned Chinese enterprise. Two years later, he left the company to start up his own business in the country.
At that time, when some farmers that had benefited from the Zimbabwean land reforms wanted to increase production, Wu found that agricultural machines were badly needed. He bought up some used machines and materials, and managed to re-equip and design them all by himself. Orders started to flood in and along with it, loans from local banks, helping to grow his business.
After its initial success, Wu's company then entered into the local construction, engineering, transportation and furniture sectors. Now all of Wu's businesses have been thriving. Every month he pays wages to nearly 400 local employees, each from 100 to 500 U.S. dollars, compared with the country's annual GDP of no more than 300 U.S. dollars per capita.
Wu lives with his family in Zimbabwe, so he has only been back to China once since they moved. "When I had just started up my business, I could not afford the air tickets, but now I do not have time to go back", said Wu.
However, Frank Wu is not alone -- over 5,300 Chinese-born citizens currently reside in Zimbabwe, helping him to find an outlet with which to disperse his nostalgic mood.
Looking at the bigger picture, Chinese businessmen are now spreading across the African continent - from Somalia on the banks of the Red Sea, to Morocco bordering on the Atlantic Ocean. There is barely an African nation that has been ignored by them.
They build up huge manufacturing plants, providing products ranging from daily necessities and home appliances to motorcycles. They also set up Chinese markets to sell their cheap goods labeling them as 'Made in China'.
The Chinese entrepreneurs have constructed huge infrastructure networks to service the areas surrounding their factories -- ranging from railway networks and houses to hospitals and schools.
In some oil-producing countries like Sudan and Angola, Chinese companies have helped to establish oil refining facilities.
Along with the industrialists, Chinese leaders are not far behind. Chinese President Hu Jintao visited Nigeria, Morocco and Kenya in April this year, and Premier Wen Jiabao swept through seven African countries in June.
In November 2006, Beijing hosted the inaugural Sino-African summit, giving a lavish welcome to leaders of 48 African countries in the hope of forging 'new strategic partnerships'. This paid dividends for both sides, resulting in bigger contracts for Chinese businesses, more aid for Africa and cancellation of debts for the most underdeveloped African nations.
High-level exchanges help to promote international economic relations. Chinese companies, albeit mostly sate-owned, are heading for Africa with more and more employees, technology and investment -- an aggregate 6.3 billion U.S. dollars at present. On top of this, the trade volume between China and Africa has quadrupled since 2000, and is expected to exceed 100 billion U.S. dollars by 2010.
However, the present nature of Sino-African trade -- largely products in return for resources -- has raised concerns that relations between China and Africa has the potential to become akin to that of the old European colonial empires.
Wang Yingying, a researcher with a leading think-tank -- the China Institute of International Studies -- disagrees with this notion, "China's approach to Africa is totally different from that of the old European colonists," she said.
Wang added that, "Controls in politics and sovereignty of a country always accompany colonialism, however, China never intervenes with African countries' domestic affairs, and does not have the intention to do it either."
History has witnessed the violence that European colonists committed in Africa -- as some experts have said, they came for trade at first, and came later with army flags, or, more accurately, the army flags went first, and trade followed. Resources were plundered and people were slaughtered, whilst poverty remained.
Nowadays, some African nations, such as Sudan and Zimbabwe, are undergoing sanctions from the United States and EU Economies declined, people lost jobs, and hyperinflation arose -- inflation in Zimbabwe is expected to exceed 4,000 percent in 2007.
"China's aid to us comes with empressement and without political preconditions", said Prime Minister of Guinea-Bissau Aristides Gomes, "we have no worries in cooperating with China".
Political terms do not exist, let alone interventions. This is in spite of vociferous opposition from the United States and EU, particularly when it comes to Sudan and Zimbabwe.
"Sanctions cannot solve problems, it impoverishes local people. China's approach supports Africa's industrialization, and benefits the people too", said Wang Yingying.
In the face of U.S. and EU pressure, Chinese firms have helped Sudan to establish its own oil industry, resulting in an 8 percent growth in Sudan's economy last year.
Along with the whole Chinese business community, Frank Wu is helping to implement sanction-torn Zimbabwe's economic revival program. He is expected to hire as many as 800 local employees in 2007 when his new real estate project is launched.
Professor Yang Guang, director-general of the Institute of West Asia and Africa Studies, said he believes that, "We cannot mix colonialism with exploiting resources, if we view exploiting resources as colonial behaviour, we will find that the whole world is now conducting colonial actions."
According to Yang, the reason behind the warming of Sino-African relations lies in the different benefits and comparative advantages to their economies. While China has a vast wealth of capital, more advanced technology and administrative experience, Africa has an abundance of unexploited natural resources.
Yang believes that China is on the same road of development as Africa -- albeit a few miles ahead. Compared to economically more developed countries, China only has a cheap labour force and a huge domestic market to offer to potential investors. As China's commerce minister pointed out -- in order to buy an Airbus, Chinese workers have to produce 800 million shirts.
Foreign investment in China has intensified ever since reforms were introduced to open up its domestic market to the outside world. Foreign businesses gained a foothold in China's domestic market and recorded healthy profits, assisted by China's cheap labour costs. However, the benefits of this investment are undoubted. As a result of the swathes of foreign investment in China, the speed of industrialization has accelerated, whilst raising the standard of living.
At the same time, China's exports have been upgraded. Manufactured goods such as machinery, electronic products and textiles have replaced primary products such as grain, minerals and timber.
"Not only should African countries learn from developed countries like Japan, but also some developing countries such as China and India", Namibia's President Pohamba said, "At present, we should peg our eyes to China, for its experience is more valuable for our reference."
Despite the fanfare made by increased Sino-African relations, Wang Yingying admitted that imbalances did exist within the relationship. China's foreign direct investment in Africa, which is more important to development than trade, still cannot match the scale of the bilateral trade.
These problems are being addressed. At the recent Sino-African summit, China set aside a development fund of 5 billion U.S. dollars, which will be primarily used to encourage Chinese companies to invest in Africa.
Some development-oriented methods have also been adopted, such as sending agricultural experts to Africa, and widening the practice of training African staff.
A Chinese idiom says that it's better to teach someone how to fish for themselves rather than to constantly supply them with fish -- where would they be if you could no longer supply it for them!
When Chinese construction companies went to Somalia after its civil war, they could hardly find a brick mason.
Nowadays, various training centers have been set up -- ZTE Corporation, a Chinese telecommunication equipment producer, has now established 15 training centers across the continent, training over 4,500 local employees each year.
ZTE's Vice President Zhang Weimin said that, "Chinese businesses in Africa are not just selling and buying, but helping the local area to enhance its capacity for development."
However, obstacles still exist. Professor Yang pointed out that, "Low investment in Africa is not only a problem for China, but also for the whole world."
Situation became worse as some African nations have a comparatively poorer environment from which to encourage investment -- ranging from unsteady political regimes, corruption, violence and flawed legal systems.
Yang added that, "As China sticks to a non-interference policy with regards to Africa, African countries have to try and solve these problems by themselves."
Encouragingly, the situation across the African continent is gradually improving. As many wars and violence have ended, Africa is now on the way to development -- the continent's economy grew by 5.5 percent in 2005 and is expected to be higher this year.
Referring to the new era of Sino-African relations, Chinese foreign ministry spokesman Qin Gang proclaimed that, "Times have changed, and so has the direction of development in Africa."
This new era in Sino-African relations is heralding a new style of bilateral relations that goes beyond the age-old doctrine of products in return for resources.
Along with many state-owned and private businesses, more and more Chinese entrepreneurs like Frank Wu will head for Africa in search of their fortune while also bringing prosperity to the locals.
Source: Xinhua
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