Economic Growth and Soft Power: China’s Africa Strategy

The UN Security Council’s mid-November meeting in Nigeria highlighted China’s growing interest in Africa since the end of the cold war. The talks on November 18-19 were aimed at resolving the conflicts in Sudan by advancing the peace process between Khartoum and rebels in the South, and apply greater pressure on the government to stop the violence in Darfur. China’s effort to dilute a September UN resolution against Sudan not only demonstrated Beijing’s potentially more active role in the Security Council but also revealed its emerging interest in trade and energy in Africa. An increasingly influential player in Africa, China needs to be considered if the U.S. wants to achieve its goals of bringing democracy and economic development to the continent. Likewise, China has an opportunity to fulfill its aspirations as a “responsible power” through cooperating with the international community to help promote security and stability in the region.

China’s Interests in African Cooperation

Chinese presence in Africa is illustrative of Beijing’s efforts to create a paradigm of globalization that favors China. Beijing has long sought to portray itself as the leader of the Third World, and remains an attractive strategic partner to many African countries. By cultivating relations with African nations, providing aid, technical expertise and diplomatic support in multilateral institutions, China has attempted to better position itself in a multi-polar, post-cold war environment. Its history as a former colony of the European powers allows China to promote itself as sensitive to the dignity of Third World countries, in the hopes that African people will favorably relate to this invocation of a shared colonial past. Furthermore, China’s professed respect for sovereignty and non-interference in internal affairs is appealing to many African leaders, some of whom face internal rebellions and ethnic unrest similar to China.

But China’s interests in Africa have shifted over the past fifty years from a desire to be the leader of the Third World during the cold war to expanding its spheres of influence and ensuring access to energy and raw materials through diplomacy, investment, and trade.

Diplomacy, Aid and Trade

The Chinese government has invested heavily in Africa over the past four years to encourage trade relations, sponsoring the China-Africa Cooperation Forum to provide opportunities for governments and businesses to strengthen economic cooperation. The first China-Africa Cooperation Forum took place in Beijing in 2000. It established a mechanism for promoting diplomatic relations, trade and investment between China and African countries. That same year, two-way trade between China and Africa surpassed US$10 billion for the first time in history, reaching US$10.6 billion – this number increased to US$18.545 billion in 2003. By 2004, 674 Chinese companies were operating in Africa. A forum held in Addis Ababa in December 2003, and attended by Chinese Premier Wen Jiabao, UN Secretary General Kofi Annan, 250 businessmen from Africa and 150 from China, indicates the significant support that Beijing provides African businesses with interests in China. The most recent forum was held in Beijing in October 2004.

This cooperation between Chinese and African businesses is part of a long history of China providing aid to African countries, and thereby building goodwill and political support. Chinese assistance to African countries includes grants as well as low and no-interest loans. China is also very effective at leveraging loans a second time, forgiving debt for the poorest countries at the high-profile China-Africa Cooperation Forums. China’s aid and debt forgiveness earns it significant political capital among African countries, ensuring their support in the UN and other multilateral forums.

Moreover, Chinese technical aid to Africa is becoming increasingly important in building China’s influence in the region. Medical, agricultural and engineering teams have provided technical aid to African countries for decades to support everything from building projects to treating AIDS patients. Since 1963, some 15,000 Chinese doctors have worked in 47 African states treating nearly 180 million cases of HIV/AIDS. At the end of 2003, 940 Chinese doctors were still working throughout the continent. Beijing prefers technical support over financial aid to African countries for obvious reasons. Financial aid stretches resources and diverts capital from significant needs at home, therefore investments in trade and projects that have a chance at providing returns are more popular than direct aid and loan programs.

Finally, the Chinese government has also actively promoted their own brand of economic development and reform model to African countries, encouraging government counterparts in several countries to visit China and learn from their experience. China’s efforts to encourage African governments to fashion their economic systems after their own is an important indication of the soft power that China hopes to ultimately project in Africa.

China’s soft power gambit can also be seen in its heavy investments in Africa’s educational systems, both by sending teachers to Africa and providing scholarships to African students from across the continent to study in Chinese universities. Between the start of the educational exchanges in the mid-1950s and 2000, 5,582 African students had enrolled in Chinese universities. These students typically spend two years learning Chinese, then study technical subjects, particularly engineering disciplines. Currently, about half of African students are pursuing advanced degrees. This support for education improves China’s image in many countries, builds grassroots support in local communities and a better understanding of China among the educated elite. But more than just increasing goodwill towards Beijing, these educational programs help to provide China with the kind of workforce it requires to expand its own high tech industries. As China’s space program expands and matures, it is seeking to improve its space tracking capabilities in the southern hemisphere. China operates a space tracking station in Namibia, and utilizes South African ports of call to support space-tracking ships.

China’s investments in Africa pay an added dividend in the diplomatic effort to deny Taiwan international space through recognition by individual countries and their resulting support in multilateral forums, such as the UN. For example, China’s deployment of 90 peacekeepers to Liberia in December of 2003 occurred two months after Liberia switched its diplomatic recognition from Taiwan to China, illustrating the strategic importance that African nations hold in the on-going diplomatic struggle between Taiwan and the Mainland. Seven countries in Africa currently recognize Taiwan, making up one quarter of the total. However, several African countries have played China and Taiwan against one another, seeking massive aid packages and switching recognition. In order to compete with China’s dominating presence on the continent and support in international forums, Taiwan must offer substantial aid packages to its African allies. Taipei is able to concentrate its greater financial resources on the small number of countries that recognize it, while methodically approaching other countries that might consider switching recognition to them. Beijing, with fewer resources and more countries to support, must carefully consider its investments in countries that are likely to provide them with a stable return.

Beijing’s Investment in Sudan Paying Off

China’s rapidly growing demand for imported oil and other raw materials surprised world commodity and financial markets and revealed the extent to which China has invested in extractives industries in Africa in order to “lock up barrels” at their source. China, through the China National Petroleum Corporation (CNPC), is the most visible and significant investor in Sudanese oil exploration, transportation and production infrastructure. These investments enabled Sudan to begin exporting oil in 1999 and eventually become a net oil exporter. Though Sudan’s current production capacity of 310,000 barrels per day (bpd) is relatively insignificant compared to the global production of approximately 82 bpd, its product is of a high quality. Such so-called “light-sweet crude” is in short supply in global markets, and sells at a premium over Middle Eastern crude which has a higher sulfur content. China’s investment in Sudanese oil production capacity has resulted in Sudan’s output now amounting to five percent of China’s total imports. Significantly, China is Sudan’s single largest customer of oil, taking over half of Sudan’s exports in 2003. This relationship with Sudan provides Beijing with significant diplomatic leverage over Khartoum, and puts China in a strong position to encourage Sudan to take measures to stop the violence in Darfur and even invest in social programs to promote domestic security and stability.

China’s experience in promoting trade and investment relations with Sudan illustrates its broader interests in Africa, as well as some of the competitive advantages Beijing enjoys when operating in difficult environments. African countries represent a significant market for cheap Chinese-made products, which helps China maintain a favorable global balance of trade and creates jobs in China. Several African countries also present Chinese firms with an investment environment where they can compete effectively against Western multinational corporations that enjoy greater access to international capital and technology. Chinese companies have been very active investors in African infrastructure (including hydropower plants, pipelines, factories and hospitals) and are particularly competitive in countries where unreliable political situations, sanctions or other potential liabilities keep large multinationals from committing themselves. Chinese firms are not hindered at home by legal challenges from non-governmental organizations or concerned about corporate-image liabilities when investing in high-risk markets with unsavory regimes or where severe human rights abuses take place. In fact, Chinese companies are attracted to the potential for large profits in markets with less competition from multinational firms.

Conclusion

China’s interests in Africa represent an opportunity for the United States and the international community. China maintains friendly relations with most African nations, particularly nations that the U.S. has limited contact or diplomatic leverage over, such as Libya and Sudan. If President Bush seeks to address U.S. national security interests around the world, promoting social, political and economic development in Africa will have to become a significant priority for the administration. China can potentially be a strong ally in this effort.

But, as the U.S. and China seek to further their interests in Africa, whether they work together or at cross-purposes remains an open question. The U.S. could see China as a competitor, and become increasingly concerned about its growing spheres of influence, while China could see U.S. efforts to promote stability and democracy in Africa as an effort to cut off their access to raw materials and further contain China’s professed “peaceful rise.” Of course, China is always cautious of U.S. intentions, which might lead to suspicion of any overtures made to them to cooperate on issues, particularly involving other nations’ internal affairs. China is likely to be initially reluctant to work with the U.S. on any efforts to coerce African countries to conform to a Western-centric global strategy. Concerns about the subjugation of their own interests, as well as any precedent such cooperation would set regarding a code of conduct for nations that China enjoys close relationships with, are sure to dominate Beijing’s thinking on these issues. The Chinese remain wary that their cooperation on the North Korean nuclear issue might encourage Washington to seek to use their leverage on Sudan, Libya, Syria and Iran, without tangible benefits on the table for Beijing. U.S. assertions that China’s effort to defuse the North Korean crisis is in their best interest might not translate as easily to problems in Africa.