China's development finance for Africa

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China's development finance for Africa follows an independent development strategy , which in part differs significantly from development cooperation in the " Western World ". On the one hand, there is classic development aid in the form of discounted loans and free services. On the other hand, it is typically a matter of barter deals, through which African raw materials are exchanged cheaply for infrastructure projects created by Chinese companies . The third component of the cooperation is mutual trade , which is to be promoted in the direction of China through the abolition of tariffs on more than 400 products, but mainly consists of low-quality Chinese articles delivered in the opposite direction.

The Chinese commitment is suspected of unilaterally serving to secure the supply of raw materials and, under the heading of land grabbing, to use agricultural land for the food supply of the Chinese population.

From the outset, criticism was expressed of the political neutrality and the accompanying support of questionable regimes by China. In parallel to this criticism, which believes it recognizes neo-colonialism , there is meanwhile a great deal of respect for the Chinese contribution to economic development and infrastructure building in Africa against the background of the modest effectiveness of Western development aid. This is why the Chinese approach is assigned to development cooperation in a broader sense and is a counter-model to Western development policy .

Africa's development needs

Africa has often been cited as the "forgotten" continent that the "western" countries had chronically neglected, if not given up, for years. According to many experts, if Africa wants to leave its existence as a continent of poverty behind it, it must break away from the position of supplier of raw materials and unprocessed food, expand added value , build an industrial base and become interesting for foreign and domestic investments.

Unfortunately, investments in the infrastructure sector would have been neglected for a long time, as the “traditional” donors have concentrated on social infrastructure in recent years .

Despite the improvement in the business climate and falling trade costs, the growth opportunities for industrial companies are limited due to corruption , government regulation, security problems and the risk of political crises and civil wars.

Western approach to development

Western governments pride themselves on the fact that they largely separate development cooperation from promoting their own corporate interests. However, this may be one of the reasons that Africa's agriculture and processing industries have made little progress over several decades.

The long-term success of Western development policy is also hampered by the fact that donor states today often demand short-term results. It has not yet been possible to develop a uniform European policy on Africa and to clarify the division of labor between the EU and its member states.

African voices judge that Western development aid has not been very successful in recent decades and has brought countries into long-term dependency. The comparison with the successes of the Chinese commitment to Africa helped to expose “the whole fiasco of Western development aid”.

From 1965 to 2004, for example, per capita economic output in the African countries south of the Sahara fell from 17.1% of the world average to 9.7%, “despite or perhaps because of development aid payments of almost $ 600 billion. Dollar since 1960 ”.

China's approach to development

Although still a recipient of development aid , China under Mao Zedong had been distributing aid to Africa since the 1950s. The Chinese government sees its aid as cooperation between developing countries from which both sides benefit. There is more emphasis on trade and direct investment than on traditional aid projects. China benefits from its experience with large infrastructure projects and its own development from a developing country to an emerging country . It draws on this experience, as China made great strides with Japan's economic aid in the 1950s .

With the reforms under Deng Xiaoping from the end of the 1970s and, above all, with increasing liberalization from 1995, the Chinese leadership increasingly moved economic considerations into the focus of “South-South cooperation”.

The "going global" strategy, with which Chinese direct investments outside of China were called for, was decisive for the rapid expansion of relations with Africa since 2000. As a result, the volume of goods exchanged between 2000 and 2015 increased more than twenty-fold from just under ten billion dollars to over 200 billion.

While many American and European investors withdrew money from the African continent after the outbreak of the financial crisis in 2007 or no longer kept their investment promises, Chinese state and private companies took advantage of the falling prices.

The projects are often carried out using the so-called "Angola model". Chinese companies build hospitals, roads, ports, etc. and, in return, supply raw materials at reduced prices or grant mining licenses. The projects are often linked to the condition that the work is carried out entirely or largely by Chinese companies.

According to the Chinese government, you not only direct money to Africa, but also ensure that it does not seep away there. There are now more than a million Chinese people in Africa.

Large state-owned companies are mainly involved in infrastructure projects and resource extraction . As a result, Chinese private entrepreneurs come into the country who, unlike state-owned companies, also employ local workers. This has created many new jobs in Africa. Joint ventures have also been set up in some countries . In Kenya and Mozambique , for example, cars are made in a Chinese-African co-production. The Chinese produce shoes in Ethiopia and dresses for the US market in Lesotho .

The fact that China does not interfere in the "internal affairs" of the supported countries is a guideline of government development policy, which enables Chinese companies to be present in practically every country in Africa. In contrast to this, Western companies concentrate on good governance in the regions.

In order to promote mutual trade, China has canceled its customs duties on imports of African supplies for 440 products. However, African states complain that the majority of African exports to China still consist of raw materials and not of finished goods. Conversely, China delivers everyday items to Africa that are not very valued because of their poor quality but are still bought.

In 2011, the People's Republic of China ousted the United States as the African continent's largest trading partner. Overall, the group of emerging economies buys more African exports than the developed countries.

One China Policy

In addition to access to resources, the non-recognition of Taiwan is a major goal of Chinese politics, and China attaches great importance to this in its treaties with African states. In doing so, China is making an “exception” to the principle of non-interference in internal affairs. There are now only three countries in Africa, namely Burkina Faso , Swaziland and Sao Tomé and Príncipe , which recognize Taiwan as an independent country.

The closer the economic ties become over the years, the more China is pushing to improve the investment climate. With all the rhetoric to the contrary, China is increasingly becoming a supportive and demanding partner for Africa.

Forum for China-Africa Cooperation

The most important body for China's relations with Africa is the Forum for China-Africa Cooperation (FOCAC), founded in 2000 and held every three years.

Through this conference, China tries to make the perceived underrepresentation of African states in UN bodies, international trade conditions and reforms of the international financial system a topic of international politics.

Economic dimension

According to estimates, China provided development aid in the strict sense to the tune of 75 billion dollars to Africa (as of 2013). In comparison, the German budget for development cooperation amounts to 7.4 billion euros for 2016. In 2013, the EU provided a total of 56 billion euros in development aid, of which 15 billion euros came from the EU budget. Approx. Africa accounts for 20 billion euros per year. The World Bank's loans total approximately $ 4.5 billion annually.

On a different scale, China issues multi-year loans that are secured by resources - mainly through the state export-import bank . So have Angola 14.5 billion, Ghana 13 billion, Nigeria 8.4 billion, the Democratic Republic of Congo 6.5 billion and Ethiopia $ 3 billion infrastructure projects borrowed, performed by Chinese construction companies.

Compared to the financial means deployed by China, "the West" lacks the financial means for a comparable commitment.

China's share of overall African trade grew from three to almost 20 percent in 2014 within ten years. With a trade volume of over 200 billion US dollars per year, China has become Africa's largest trading partner.

Foreign direct investment has also risen sharply; China has overtaken the West in terms of the inflow of direct investment. By mid-2012, China had placed more than $ 45 billion in direct investment in Africa.

There are voices who speak more of handouts than real aid in view of the volume and impact of "Western development cooperation".

Infrastructure projects

  • Angola : Three railway lines destroyed in the civil war have been rehabilitated.
  • Ethiopia : Some railway lines have been built.
  • Ghana : In 2010, the governments of China and Ghana signed an agreement to promote energy infrastructure, education, sanitation and agricultural development for 6 billion US dollars. In return, 13,000 barrels of crude oil will be delivered to China every day for 15 years. There is also an agreement for a further US $ 4 billion loan from China for the construction of a north-south transport link
  • Kenya : A $ 5 billion rail project is set to connect Kenya, Rwanda , Uganda , Burundi and the Republic of South Sudan .
  • DR Congo : A $ 3 billion deal was agreed in mid-2007. Chinese companies are expected to build infrastructure projects on a large scale. The following are planned:
    • 3,200 kilometers of railway lines
    • 3,400 kilometers of motorways
    • 3,500 kilometers of smaller roads
    • 31 hospitals and 145 health stations;
    • 2 universities
    • 5,000 social housing
  • Cameroon : A deep sea port was financed.
  • Nigeria : A railway line is to be built over 1,400 kilometers along the Nigerian Atlantic coast from Lagos to Calabar for 13 billion dollars.
  • Sudan : In 2007, the People's Republic of China agreed with the government of Sudan export credits amounting to 1 billion US dollars for the two-lane expansion of the railway line from Khartoum to the Sudanese port city of Port Sudan (787 km). The construction was completed in 2012.

Industrial cores

According to official information, around 2,500 private-sector companies from China are active in more than 50 African countries, the majority of which are small and medium-sized enterprises (SMEs). According to the Chinese government, the actual number is likely to be many times larger.

The engagement of Chinese SMEs usually follows a three-stage scheme. The interest in investing in Africa is aroused by trade relations , in the second step investments are made in local production and in the third step the construction of own industrial parks takes place .

The growth effects from direct investments also arise because China is removing bottlenecks in infrastructure and energy supply.

After the first Special Economic Zones (SEZ) failed, Chinese companies took the construction and operation into their own hands. In close cooperation with other, often Chinese, companies, production is to be carried out effectively in a small space and economic clusters are to be created.

In 2011 it was announced that 59 of these zones would be set up in Africa. In the Congo , 21,000 jobs are expected to be created in the Brazzaville Special Economic Zone alone by 2020 .

The key to the success of the SEZ from an African point of view will be to integrate local companies into the economic activities of the SEZ in order to achieve the desired spill-over effects.

Location for low wage industries

By 2050, the population of Africa will double to 2 billion people. Africa will then have a higher workforce than China in 2016.

China itself wants to outsource its labor-intensive industry to countries with low wages and thus reduce costs. This could create jobs in Africa and initiate a transformation from agricultural to industrial nations.

China's traditional focus on securing Africa's raw material sources is giving way to an exploration of Africa's potential as a location for standardized industrial production.

State guarantees

One of the reasons that lead to the success of private investments in Africa is the state banks, which organize large volumes of money on favorable terms, without which Chinese investors would often fail.

In addition to the banks, the state insures against all risks such as currency fluctuations, currency restrictions, nationalization , expropriations and war. This gives Chinese companies a competitive advantage over Western companies.

Military engagement

There are joint naval maneuvers with Tanzania . The Nigerian Navy is supported in expanding its fleet.

The establishment of a military crisis force for the African Union is supported.

China had been Zimbabwe's most important arms supplier since 2000 , and until 2008 the government imported armaments worth at least 300 million US dollars.

In 2017, the first Chinese military base abroad was opened in Djibouti .

Criticism of the Chinese development approach

So far, China has not contributed anything to the industrialization of the African continent. “China takes our natural resources and sells us finished products. The colonialists once did exactly the same, ”complained the former Nigerian central bank chief Lamido Sanusi in 2015. Bartholomäus Grill also saw this observation in 2020. Well over a million Chinese now lived in Africa. But they would often only operate import-export companies, retail stores or restaurants, which would hardly create jobs.

In addition, China supplies the African market with cheap goods from its own production, which damages the local economy. China imports a relatively small range of unprocessed raw materials and, in return, brings a wide range of finished products to the African markets and displaces local producers from domestic markets, for example in the textile industry in Kenya , South Africa and Zambia . In doing so, it largely destroyed the African textile industry. Cheap Chinese competition has already led to massive job losses in some countries, for example in the textile industry in South Africa, Lesotho and Nigeria or in the leather industry in Ethiopia and Senegal .

Internationally, China has come under fire mainly for refusing to comply with the guidelines of the OECD Development Assistance Committee (DAC). Chinese development aid for Africa flows more often than average to the home regions of leading African politicians. China also supplies weapons to controversial countries.

The mining of African raw materials does not run smoothly. The accusation that China is exploiting Africa's raw materials and thereby violating fundamental labor rights is increasingly being heard. There have been multiple revolts by mine workers in Chinese-run copper mines in Zambia . They protested against poor working conditions, inadequate protective clothing and extremely low wages. There were sometimes violent riots during the protests. In 2010, Chinese security officials opened fire on demonstrating workers during protests, injuring several people. In 2012, a Chinese guard was killed during protests.

China's trade balance with the African continent, which was roughly balanced until 2012, is around 40 billion dollars a year surplus for China due to low raw material prices. Due to the extensive supplies of raw materials to China, many countries are heavily dependent on China and on raw material prices.

Reassessment of the Chinese development approach

Since the OECD showed in 2007 that there was hardly any evidence of new borrowing due to Chinese loans, earlier complaints from the World Bank and the International Monetary Fund (IMF) have not been heard. In the meantime, a more sober assessment of China's actions in Africa has taken hold.

For the western donor countries, a sideways glance at the Chinese approach could be useful in matters such as market observation, market introduction, financing and risk protection. Western donors could learn from China about the strengths of Chinese development cooperation - quickly, cheaply, and clearly.

Fifteen years of Chinese involvement in Africa would have left much clearer marks than half a century of Western development aid.

The European auditing company KPMG describes the intensified cooperation between China and Africa as one of the central motors for the growth spurt to be observed. According to Zambian- born US economist Dambisa Moyo , China's resource purchases in Africa have boosted trade, investment and rapid growth.

For decades, China has emphasized mutual benefit as the basic principle of its aid. This is seen as more sincere than the assurances of many Western donors who advocate humanitarian and development-oriented goals as the sole award criteria and yet pursue their own economic and political interests.

Beijing would make a significant contribution to Africa's economic rise. Without China, the continent would not have been producing growth rates averaging around five percent for more than ten years.

The Chinese way of cooperating economically with African countries would be more successful than the western way of doing things that has been practiced for many decades.

While the requirements of Western countries in developing countries would only have led to sustainable growth in a few cases, China would show that its policies can lead to success.

China is relying on gradual reform. This concept would have proven to be much more successful than the therapy recommended by Western counselors.

The projects in which the Chinese government is involved as lender or Chinese companies as contractor would mostly fit well into the strategies of the African countries.

The Chinese arrival can only be seen as a positive impulse for Africa.

A survey of African managers by the Ethics Institute of South Africa found that Africans are happy with Chinese investments. However, the Chinese should be more aware of their economic, social and environmental responsibilities.

In a study, the Bern Center for Development and Environment (CDE) at the University of Bern investigated whether western or eastern development aid is better received in Africa: the Chinese approach is the clear favorite with Africans.

It is still too early to make a final assessment of whether China's increased commitment will have a positive effect on the economy and, above all, on the living conditions of Africans. What remains to be said, however, is that - unlike in Mao's time - there is no longer a uniform Africa policy that is centrally coordinated by the Chinese leadership. It would rather show that Chinese presence and investments in Africa are determined by partially competing actors from the party, government and military, provinces, state and private companies as well as by individual actors who pursue their own, mostly commercial interests. Accordingly, it would be wrong to continue to understand China's policy in Africa as that of a monolithic actor whose role can be clearly assessed.

See also

annotation

  1. ↑ The traditional donor countries are organized in the Development Assistance Committee (DAC) and essentially consist of the EU, the USA and Japan.

Individual evidence

  1. ↑ The Federal Government's Africa Policy Guidelines , Die Bundesregierung, May 21, 2014
  2. ↑ The criticism of China's development aid is exaggerated , by Axel Berger, Die Zeit, August 16, 2011
  3. ↑ China's Engagement in Africa , by Helmut Asche (University of Leipzig) and Margot Schüller (GIGA Institute), Ed .: GTZ, September 2008
  4. ↑ a b c Africa wants Chinese investors , By Johannes Dieterich, Frankfurter Rundschau, December 5, 2015
  5. ↑ a b c d e f g Africa - Winner or Loser? , by J. Taylor, Friday June 16, 2014
  6. ↑ a b Keep it up, Africa !, There is Hope for Africa's Economy , by Robert Kappel, Internationale Politik und Gesellschaft (IPG), July 28, 2014
  7. ↑ "On the Zero Point", Germany needs a new Africa policy. Five proposals for a coordinated strategy , by Robert Kappel, Internationale Politik und Gesellschaft (IPG), September 18, 2015
  8. ↑ Investing in Africa, What Lures Foreign Companies to Africa ( Memento August 8, 2016 in the Internet Archive ), 3Sat, September 25, 2015
  9. ↑ a b c d e f g h i j k l m n o p q r partnership at eye level? The role of China in Africa ( Memento from June 14, 2016 in the Internet Archive ), by Friedel Hütz-Adams, David Hummel and Irene Knoke, Südwind Institute for Economics and Ecumenism, November 2014
  10. ↑ a b c d e f g h i j k China and the growth continent Africa , by Sergio Grassi, Friedrich-Ebert Foundation (FES), 6/2013
  11. ↑ BRICS as new actors in development policy ( Memento from June 13, 2016 in the Internet Archive ), by Pedro Morazán and Franziska Müller, Südwind Institute for Economics and Ecumenism, May 2014, p. 17
  12. ↑ Hurdles for Industrialization in Africa , by Melike Döver, Robert Kappel, Leibniz Institute for Global and Regional Studies (GIGA), November 2015
  13. ↑ a b c d What can Chinese cooperation with Africa teach us? , Helmut Asche, University of Leipzig, June 9, 2008
  14. ↑ a b Why we are hurt by African growth problems , by Jürg Steiner, Berner Zeitung, October 20, 2013
  15. ↑ The EU-Africa partnership: over-diversified and apolitical? , by Erik Lundsgaarde, Svea Koch and Julia Leininger, column of the German Development Institute (DIE), euractiv.de, April 1, 2014
  16. ↑ China's Investments in the Extractive Sector - Blessing or Curse for Africa? , by Heribert Dieter, Science and Politics Foundation (SWP), December 2008, p. 6
  17. ↑ a b c d Unfounded fear of China's development aid , by A. Dreher and A. Fuchs, NZZ, December 23, 2011
  18. ↑ BRICS as new actors in development policy ( Memento from June 13, 2016 in the Internet Archive ), by Pedro Morazán and Franziska Müller, Südwind Institute for Economics and Ecumenism, May 2014, p. 22
  19. ↑ a b China's development aid - a challenge for the West? ( Memento from June 14, 2016 in the Internet Archive ), by Marina Rudyak, Confucius Institute, Heidelberg University, July 2, 2014
  20. ↑ a b c d Setting a new course in China's Africa policy , by Hans Spross and Cui Mu, Deutsche Welle, December 4, 2015
  21. ^ A b c Changing the Narrative, Chinas Mediale Offensive in Afrika , Sergio Grassi, Friedrich-Ebert Stiftung (FES), February 2014
  22. ↑ a b c Sabine Balk: China's role in Africa . In: D + C Development and Cooperation , January 6, 2015, issue 1/2015, p. 4.
  23. ↑ a b c d e f g h i j Africa's greedy helpers , by Johannes Dieterich, Frankfurter Rundschau, January 4, 2015
  24. ↑ Trade between China and the countries of Africa is flourishing , Bonner Generalanzeiger, August 5, 2012
  25. ↑ a b International Study: Chinese Development Aid in Africa , Development Policy Online (EPO), December 19, 2014
  26. ↑ Why China is investing in Africa , by Tobias Straumann , Der Tagesanzeiger, December 2, 2015
  27. ↑ China in Africa, New Alternative or Old Mistake? , Diploma thesis by Martin H. Englert, University of Vienna, 2013, p. 73
  28. ↑ China's Investments in the Extractive Sector - Blessing or Curse for Africa? , by Heribert Dieter, Science and Politics Foundation (SWP), December 2008, p. 14
  29. ↑ China in Africa, New Alternative or Old Mistake? , Diploma thesis by Martin H. Englert, University of Vienna, 2013, p. 67
  30. ↑ a b c How China's realignment will affect Africa's growth , by Robert Kappel, Birte Pfeiffer and Helmut Reisen, Oekonomenstimme.org, May 23, 2016
  31. ↑ How China's realignment will affect Africa's growth , by Helmut Reisen, May 23, 2016
  32. ^ The strategies of development cooperation in comparison, China and Switzerland on the African continent , by Rahel Sara Habegger, IFF Working Paper Online No 10, September 2015,
  33. ↑ China in Africa, New Alternative or Old Mistake? , Diploma thesis by Martin H. Englert, University of Vienna, 2013, p. 42
  34. ↑ China and Africa: The New Normal , by Sven Grimm and Christine Hackenesch are political scientists at the German Development Institute (DIE), euractiv.de, November 30, 2015
  35. ↑ a b China and Africa: The New Normality , by Grimm, Sven and Christine Hackenesch, German Development Institute (DIE), November 30, 2015
  36. ↑ Chinese development finance in Africa is almost as high as that in the USA , Heidelberg University, May 15, 2013
  37. ↑ Federal government decides to increase the record , euractiv.de, March 18, 2015
  38. ↑ Development and Cooperation , European Union
  39. ↑ International Cooperation and Development , European Commission, November 2014
  40. ↑ More development aid only calms the conscience , Uschi Eid in conversation with Jochen Spengler, Deutschlandfunk, November 12, 2015
  41. ↑ Interview: Clearly formulating your own offer to Africa with politicians , by Stefan Enders, IHK, June 30, 2014
  42. ^ Niebel for Cooperation with China in Africa , Die Zeit, February 4, 2013
  43. ↑ China plans to support Africa with $ 60 billion , The Guardian December 28, 2015
  44. ↑ a b China's dragon over Africa - help with joy? ( Memento from June 14, 2016 in the Internet Archive ), explicit.net, The Catholic portal for the German-speaking area, March 8, 2013
  45. ↑ a b Infrastructure projects in the SADC region: the role of China , by Scholvin, Sören and Strüver, Georg, GIGA Focus Africa, Leibniz Institute for Global and Regional Studies (GIGA), 2013
  46. ↑ 2016, Year of Special Economic Zones , Der Welt-Leuchter, January 17, 2016
  47. ↑ Africa Policy, position paper of the CDU / CSU parliamentary group in the German Bundestag , March 15, 2016
  48. ↑ The Militarization of China's Africa Policy , by Peter Dörrie, Officers.ch, February 4, 2015
  49. ↑ a b Commitment to development aid, New Strategy - Beijing doesn't just want to import raw materials from Africa and export products there , by Wolfgang Kaufmann, Preussische Allgemeine Zeitung, December 22, 2015
  50. ^ Diamonds for weapons and new buildings ( Memento from June 14, 2016 in the Internet Archive ), from Itai Mushekwe, South Africa, 5/2015
  51. ↑ China opens first military base abroad. In: Hannoversche Allgemeine. July 21, 2017. Retrieved December 28, 2018 .
  52. ↑ Vanessa Steinmetz: First military base abroad: What China is up to in Djibouti . In: Spiegel Online . July 21, 2017 ( spiegel.de [accessed December 28, 2018]).
  53. ↑ Bartholomäus Grill, DER SPIEGEL: SPIEGEL correspondent looks back on 40 years: Adieu, my Africa - DER SPIEGEL - politics. Retrieved June 7, 2020 .
  54. ↑ China's Influence in Africa, Infrastructure versus Raw Materials , 3Sat, September 22, 2015
  55. ↑ Red Star over Africa , by Dominic Johnson, taz, December 6, 2015
  56. ↑ A continent becomes Shanghai: Why you meet Chinese in so many African countries , fluter, June 15, 2016
  57. ↑ China's Investments in the Extractive Sector - Blessing or Curse for Africa? , by Heribert Dieter, Science and Politics Foundation (SWP), December 2008, p. 7
  58. ↑ China's Investments in the Extractive Sector - Blessing or Curse for Africa? , by Heribert Dieter, Science and Politics Foundation (SWP), December 2008, p. 8
  59. ↑ Pragmatism shapes the survey: Despite great reservations, African managers find investments from the Middle Kingdom advantageous , by Georges Hallermayer AG Friedensforschung, April 7, 2014