China has been making a special focus on Africa, and this has drawn a lot of attention not only in Africa itself, but in the U.S., Europe and Japan. It worries the other imperialist powers that China is making such headway in the exploitation of a continent which they haven’t paid much attention to themselves.[1] If you use Google to search for “China’s investments in Africa” you will find literally thousands of recent articles on the topic, and enormous numbers of briefer references.
One surprising thing is that not that large a fraction of China’s huge and rapidly expanding foreign investment is actually going to Africa![2] According to China’s official reckoning, only 2.2% of “outward foreign direct investment” (OFDI) from China, including both private and state-led investment, currently goes to Africa.[3]
However, several things must be kept in mind here. First, even just 2.2% of a vast amount is still a pretty large sum. Second, Africa has been so undeveloped for so long a time that even relatively small amounts of investment can have a huge impact. Investing the equivalent of tens or hundreds of millions of dollars in an African country can have a larger impact than investing billions might in major European countries. Seven of the fastest growing (though still quite small) economies in the world at present are in Africa, and Chinese FDI there is a major reason for this.[4]
And third, China is considerably underreporting its levels of foreign investment, especially in Africa. It appears to be doing this because the Chinese penetration into Africa has become such a touchy subject. (See figure 17.1 below.)
In April 2013 the Financial Times in London published information which showed even more clearly that not only the number of Chinese projects in Africa is being grossly understated, but so is the dollar amounts of the FDI involved. Their study showed that a majority of the Chinese projects in Africa, and a rapidly expanding majority of the value involved in them, are “unofficial” (which presumably means they are being done by private Chinese corporations) and hence are not included in official Chinese government statistics about the outward FDI to Africa.[5]
Figure 17.1: Number of Chinese Investments in 6 African Countries
(as reported by China and by the Host countries themselves)[6]
[Data as of the end of 2011.]
China, in the Maoist era, had a long record of genuinely supporting economic development in Africa, and made a lot of friends there. There were some famous infrastructure projects built by China in Africa for the benefit of the people there, such as the major Tanzania-Zambia railroad project.[7] After capitalism was restored in China, the new ruling bourgeoisie, as is typical of that class, sought to “capitalize” on the good feelings that had developed in Africa toward China during the socialist era.
And China, even as the capitalist-imperialist country it is today, has mounted a significant media operation to portray its investments in Africa as being for the purpose of benefiting the people there. Moreover, China has paid much more attention to presenting the appearance of equality and friendship toward African regimes, rather than the typical arrogance of the U.S. and most European imperialist countries. China has the advantage of not having had a history of imperialist conquest and colonial rule in Africa (as is the case with Britain, France, Portugal, Belgium, Italy, etc.), and—so far—of having had only limited military interference in Africa.[8] And finally, China has not deigned to denounce undemocratic regimes in Africa and elsewhere (partly no doubt because it does not even have bourgeois democratic institutions itself!), nor to complain about the common violations of human rights in Africa (except in a few cases where these have fallen on Chinese citizens). As one South African businessman put it, China is the first big foreign power to come to Africa without acting “as though they are some kind of patron or teacher or conqueror.”[9]
All this is used, not only by China, but also by many foreign observers who are rather easily fooled by such surface decorations, to portray the present Chinese capitalist economic penetration into Africa in a prettier light, and even to suggest that it is something qualitatively “different” than imperialism. It is sometimes claimed that China refuses to engage in the same “arrogant imperialist economic domination” of Africa as other countries have done in the past, or that it is some sort of “softer power”. And it is even claimed that China, despite its actual rapidly growing economic domination in many parts of Africa, does not reflect any hegemonic ambitions on the part of China. (If economic penetration and developing economic domination does not mean establishing hegemony, then what does it mean?!)
The argument seems to be that robbery is not really robbery if one of your cohorts (the U.S., Britain or France, at present, or else some local politician in your pay) is actually holding the gun for you while you help yourself to the victim’s valuables; that robbery is not really robbery if it is done without as many gratuitous arrogant threats and insults as robbers typically spread about; that robbery is not really robbery if you are slightly more generous to your inside partners (local politicians) in the country you are looting; and that robbery is not really robbery if you are new to the business and your father and grandfather were not also robbers! We find this sort of apologetics for rapidly rising Chinese imperialist economic robbery in Africa, and elsewhere, quite deceptive and disingenuous!
South African President Jacob Zuma recently gave this advice to the old-line imperialists: “I’ve said it to the private sector from the western countries, ‘Look, you have got to change the way you do business with Africa if you want to regain Africa. If you want to treat Africa as a former colony, then people will go to new partners.’”[10] Of course China is especially the sort of “new partner” Zuma had in mind.
And it is true that China has a more effective way of “doing business” in Africa than the older imperialist powers. But this in no way means that China is itself not an imperialist country exploiting Africa; rather, it only means that China is a smarter, less arrogant “partner” to the local comprador ruling classes in African countries, and thus the foreign capitalist-imperialist country that is now outcompeting with the other imperialist countries in the new contest for Africa.
Trade between Africa and China increased by 700% during the 1990s,[11] and since 2010 China has been Africa’s largest trading partner.[12] It was estimated in August 2007 that there were more than 750,000 Chinese nationals working in various African countries,[13] and by 2013 more than one million Chinese citizens were residing in Africa.[14] (That’s in addition to a Chinese diaspora in Africa totaling around half a million permanent residents.[15])
By the beginning of 2008 there were an estimated 800 Chinese corporations operating in Africa,[16] though the figure is undoubtedly higher by now.
Figure 17.2[17]
Figure 17.2 above shows just a few of the more important proposed Chinese investments in Africa for the short period of 2010 through part of 2012. This shows the countries and regions of Africa which have been given the most attention by China recently.
Figure 17.3: African Countries whereChina now has Oil or Mineral Rights[18]
Although about half of China’s imports of oil come from the Middle East, about one-third comes from African countries (Angola and at least 10 more countries).[19] Another one of these countries is the Sudan, where China continued pumping oil while the military equipment it provided to the Sudan government was used in its genocidal war against the people of Dafur.[20] Until 1993 China was self-sufficient in oil, or even a net exporter, but then it became an importer. In September 2013, China surpassed the U.S. and became the world’s largest importer of oil.[21]
It is well to keep in mind that it has been the effort to grab and hold onto the world’s oil supplies that has been the single most important impetus to the development of the endless wars of U.S. imperialism in recent decades. Can anyone seriously doubt that China will act any differently if it begins to fall to the Chinese military to defend China’s imperialist access to foreign oil, rather than mainly the U.S. military?
The map in Figure 17.3 above shows how pervasive China’s oil and mineral rights in Africa have now become.
In addition to oil, Africa is very rich in minerals.[22] And China is now the world’s largest importer of many important minerals. The Chinese economic penetration of Africa extends far beyond just oil and minerals, but they remain an extremely important reason why China is so rapidly expanding its presence in Africa.
In 2006 a journalist from the Guardian (U.K.) already wrote that:
“China is driven by the same needs and compulsions that brought the Belgians to Congo, the British and the Dutch to South Africa, the Germans to Tanzania, the French to parts of the Sahara, and the Portuguese to Angola and Mozambique. The west had it once; now it is China’s turn.”[23]
Many other journalists and analysts now appropriately characterize China’s activities in Africa in terms such as “voracious neocolonial pillaging”.[24]
Some of the Chinese economic operations and practices in African countries have really been quite outrageous, even by prevailing imperialist standards. Many Chinese companies, and even tens of thousands of private Chinese citizens, are now pouring into Africa in something like a gold rush frenzy, and sometimes quite literally that!
In early June 2013 Ghana said it would expel 166 Chinese citizens who were detained over the past week in the country’s gold-producing regions. Many of them lacked permits and were engaged in illegal mining and also prostitution. “If you have gold, then Chinese want to go there to mine it – it’s like the American gold rush,” He Wenping, the director of the African Research Section at the Chinese Academy of Social Sciences, said from Beijing. “Many times they are not clear about Ghana’s laws since there are middlemen who bring them over and help them sign a contract.” Illegal mining by Chinese has angered farming communities in Ghana because drinking water is being widely polluted. There is also resentment from the independent Ghanaian miners who can only afford to use shovels and pickaxes whereas the Chinese mines frequently employ high end industrial machinery and excavators.[25]
A couple years ago in Zambia the Chinese managers of a coal mine shot two Zambian employees who were protesting their low pay, which caused tremendous anger across the country.[26] In February 2013, the Zambian government revoked the mining license for a Chinese-owned coal mine after workers there rioted the previous November and killed a Chinese manager. The Zambian government said the mine had failed to comply with at least 15 laws.[27]
The governor of Nigeria’s central bank, Lamido Sanusi, in an article in the Financial Times (London), recently noted that “China is no longer a fellow underdeveloped economy—it is the world’s second-biggest, capable of the same forms of exploitation as the West. It is a significant contributor to Africa’s de-industrialization and underdevelopment”, because of its flood of cheap manufactured goods now rushing into Africa.[28] There is a “whiff of colonialism” about China’s approach to Africa, he said.[29]
In Sudan and Ethiopia rebel groups have killed Chinese workers because they view them as being closely connected with the local government.[30]
This growing disgruntlement about the activities of many Chinese companies in Africa have led the Chinese government to try to “improve its image on the continent” through “foreign aid” and in various other ways, including “by financing the rapid expansion of Chinese media outlets across the continent to counter negative images of China and Africa with upbeat stories.”[31]
Chinese “foreign aid” to Africa is substantial (perhaps as much as $3 billion this past year), and in 2009 45.7% of the Chinese aid budget went to Africa. In fact, there is in China some considerable public feeling that it should not be aiding other countries so much when it has so many poor people itself![32] (This is similar to right-wing ignorance and the typical sorts of complaints in this country about American “foreign aid” to the rest of the world.) These complaints assume that Chinese “foreign aid” actually constitutes strings-free gifts sent to foreign peoples, and fail completely to understand that this “aid” is actually for the purpose of promoting the Chinese economic exploitation of Africa.
Even if a portion of imperialist foreign “aid” ends up actually helping the people in the target country, overall it is really more like bribery on behalf of the corporations of the country sending that “aid”.[33] One large part of Chinese “foreign aid” to Africa goes to government leaders and officials directly, or to their children for university study in China.[34] This is in effect for the purchase and training of future compradors. Another large part of Chinese foreign “aid” to Africa is in the form of loans, which are most often at market rates.[35] (This, as we mentioned earlier, is itself simply another method of exporting capital.)
[1] “Africa, a continent that has been neglected by Americans, has been targeted by China as a land of opportunity because of its rich reserves of oil, iron ore, copper, gold, and other minerals.” —Susan L. Shirk, China: Fragile Superpower (Oxford Univ. Press, 2007), p. 134. [Shirk is a former Deputy Assistant Secretary of State responsible for U.S. relations with China.]
More recently, White House deputy national security advisor Ben Rhodes had this to say: “What we hear from our businesses is that they want to get in the game in Africa. There are other countries getting in the game in Africa—China, Brazil, Turkey. And if the US is not leading in Africa, we’re going to fall behind in a very important region of the world.” Quoted in Patrick Bond, “Obama in South Africa: Washington tells Pretoria how to ‘play the game’ in Africa”, June 30, 2013, posted on Frontlines of Revolutionary Struggle, at http://revolutionaryfrontlines.wordpress.com/2013/06/08/washington-in-africa-who-will-obama-whack-next/#more-26581
[2] Even more surprising is the claim in a recent New York Times article that Malaysia has actually invested $2 billion more in Africa than China has. [See “Group of Emerging Nations Plans to Form Development Bank”, March 26, 2013, online at: http://www.nytimes.com/2013/03/27/world/africa/brics-to-form-development-bank.html?_r=0&gwh=2F22632AC536A802E98BE22F3F756A6F ] However, that investment is probably mostly to the Arab countries in north Africa, and China’s impact on the continent as a whole, and to sub-Saharan Africa in particular, has been far greater than Malaysia’s has been. And, as noted in the text, China’s actual total economic penetration into Africa is much larger than it has been officially reported!
[3] Xiaofang Shen, “How the private sector is changing Chinese investment in Africa”, Columbia FDI Perspectives, #93, April 15, 2013, online at: http://www.vcc.columbia.edu/content/how-private-sector-changing-chinese-investment-africa This 2.2% figure for Chinese OFDI distribution to Africa is down from 4.1% in OFDI stock in Africa as of the end of 2010. (See Davies, K. (2013), cited earlier, p. 74.)
Besides the points mentioned in the text, there are also additional reasons to doubt that China’s percentage of its outward FDI invested in Africa is as small as they claim. The United Nations Economic Commission for Africa says that Africa is attracting huge amounts of FDI, even (they say) “more FDI than any other continent”, and that “By 2011, FDI projects in Africa grew by as much as 27%. In the first quarter of 2012 FDI inflows stood at USD80 billion and [are] projected to reach over USD150 billion in 2015.” [“Celebrating a continent”, May 27, 2013, available on the website http://www.uneca.org ] Given that China is now universally recognized as the leading source of FDI in Africa, if these UN figures are correct China’s outward FDI to Africa must be much bigger than they are claiming.
[4] “Celebrating a continent”, UN Economic Commission for Africa, op.cit.
[5] Rob Minto, “Chart of the Week: Tracking China’s Investments in Africa”, Financial Times, April 30, 2013, online at: http://blogs.ft.com/beyond-brics/2013/04/30/chart-of-the-week-tracking-chinas-investments-in-africa/#axzz2afOiELhz
[6] Xiaofang Shen, op. cit., originally calculated on the basis of data from the Chinese Ministry of Commerce as well as from data from each of the six examined host countries.
[7] The Tazara Railway (also known as the Uhuru Railway or Tanzam Railway) links the port of Dar es Salaam in Tanzania with the town of Kapiri Mposhi in Zambia’s Central Province. This massive $500 million project was completely financed and built by China in its Maoist revolutionary years as a gift to landlocked Zambia, to lessen its economic dependence on the white-minority colonial governments of Rhodesia (now Zimbabwe) and South Africa. (China also intended to open up crucial military supply lines to liberation movements in southern Africa, including the Pan-African Congress of Azania, FRELIMO in Mozambique and ZANU in Zimbabwe.) Construction began in 1970 and was completed in 1975, two years ahead of schedule. However, in later decades, when revolutionary solidarity no longer characterized capitalist China’s relationship to neocolonial Africa, the railroad has been allowed to fall into considerable disrepair, and it no longer has the great economic importance that it once did. Some information here is from the Wikipedia at: https://en.wikipedia.org/wiki/TAZARA_Railway
[8] However, China has already sent naval ships to the area off the coast of East Africa to combat Somali and other pirates. China also has military attachés in 14 African countries, and in 2004 dispatched about 1,500 soldiers in Liberia and the Democratic Republic of the Congo which operated under the auspices of the U.N. ["China's trade safari in Africa". Le Monde Diplomatique, May 11, 2005.] These have been the very eager (if still early and limited) attempts by China to demonstrate that it can also throw its military weight around. We will further discuss China’s military activity in Africa in the section of the essay on the Chinese military.
[9] Susan L. Shirk, op cit., p. 135. Original source: International Herald Tribune, Nov. 3, 2006.
[10] Quoted in Patrick Bond, “Obama in South Africa: Washington tells Pretoria how to ‘play the game’ in Africa”, June 30, 2013, cited earlier.
[11]China’s trade safari in Africa - Le Monde Diplomatique, May 2005.
[12]Peter Wonacott, “In Africa, U.S. Watches China’s Rise, Sept. 2, 2011, Wall Street Journal, online at:http://online.wsj.com/article/SB10001424053111903392904576510271838147248.html (accessed July 16, 2013).
[13]French, Howard W. and Polgreen, Lydia, “Entrepreneurs from China Flourish in Africa”, New York Times, Aug. 18, 2007, online at: http://www.nytimes.com/2007/08/18/world/africa/18malawi.html?em&ex=1187582400&en=7b8806ea0f69e210&ei=5087%0A&_r=1&&gwh=D992E60CC2D67ED0526C957807EF1164 (accessed July 16, 2013).
[14] “Africa and China: More than minerals”, The Economist, March 23, 2013, online at: http://www.economist.com/news/middle-east-and-africa/21574012-chinese-trade-africa-keeps-growing-fears-neocolonialism-are-overdone-more (accessed July 16, 2013).
[15] According to the Wikipedia entry on Africa-China economic relations, online at: http://en.wikipedia.org/wiki/Africa-China_economic_relations This article notes that the Chinese diaspora in Africa has served to help facilitate the marketing of Chinese goods in Africa, and the promotion of investment from China.
[16] “Africa-China Trade”, Financial Times, Jan. 24, 2008, online at: http://media.ft.com/cms/e13530f4-c9df-11dc-b5dc-000077b07658.pdf Since this article is focusing on trade, some of these 800 Chinese corporations “operating in Africa” may have only been engaged in trading there; but many others also have growing stocks of FDI in Africa.
[17] This map is taken from the Business Insider website at: http://www.businessinsider.com/map-chinese-investments-in-africa-2012-8
[18] “NGOs, weapons of ‘populist/humanitarian’ imperialism, now wielded by competing imperialists in the new scramble for Africa”, Frontlines of Revolutionary Struggle, April 28, 2013, online at: http://revolutionaryfrontlines.wordpress.com/2013/04/28/ngos-weapons-of-populisthumanitarian-imperialism-now-wielded-by-competing-imperialists-in-the-new-scramble-for-africa/
[19] Christopher Alessi & Stephanie Hanson, “Expanding China-Africa Oil Ties”, Council on Foreign Relations, Feb. 8, 2012, online at: http://www.cfr.org/china/expanding-china-africa-oil-ties/p9557
[20] Gregor Sahler, “China’s crusade for African oil on the example of Sudan”, document V181809, GRIN Verlag, 2010. See also, Robert I. Rotberg, ed., China Into Africa: Trade, Aid and Influence (Brookings Institute, 2008), for discussion of Chinese military aid to Sudan and China’s role in Sudan’s oil production.
[21] The Council of Foreign Relations article referred to in this paragraph, from only a year and a half ago, cited a prediction that China would surpass the U.S. in oil imports by 2020. However, that actually happened in Sept. 2013 when China imported 6.30 million barrels while the U.S. imported only 6.24 million. [According to the U.S. Energy Information Administration.] One of the reasons this occurred sooner than expected is that the U.S. is in the midst of a short-term oil production boom due to fracking. For now that means that U.S. oil imports are actually declining from year to year. But that will change again because fracked wells produce large quantities of oil for only a year or two. Within a decade or so the fracking boom will likely be over in the U.S. But even so, it is unlikely that the U.S. will ever catch up again to China in the amount of oil imported.
[22] “The African continent is home to around 30 percent of the world’s total mineral reserves. It holds 42 percent of the world’s bauxite, 38 percent of uranium, 42 percent of gold, 88 percent of diamonds, 44 percent of chromite, 82 percent of manganese, 95 percent of vanadium, 55 percent of cobalt and 73 percent of platinum.”
—“A Chinese investment view on mining in Africa”, Business Report (Zambia), June 9, 2013, online at: http://www.iol.co.za/business/opinion/columnists/a-chinese-investment-view-on-mining-in-africa-1.1529523#.UfmbfKxsjms
[23] Salil Tripathi, “The East India Company rides again: China’s attitude to Africa has many of the hallmarks of old-fashioned European imperialism”, Guardian, Nov. 15, 2006, online at: http://www.theguardian.com/business/2006/nov/15/businesscomment.india
[24] Elissa Jobson, “Chinese firm steps up investment in Ethiopia with ‘shoe city’”, Guardian (U.K.), April 30, 2013, online at: http://www.theguardian.com/global-development/2013/apr/30/chinese-investment-ethiopia-shoe-city The article claims that this particular massive Chinese shoe company investment seems to be something different than “voracious neocolonial pillaging”, however.
[25] “China’s role in Africa under scrutiny”, Bloomberg News report, in Business Report (Zambia), June 9, 2013, online at: http://www.iol.co.za/business/international/china-s-role-in-africa-under-scrutiny-1.1529528#.Ufmc9axsjms For another article on this particular situation in Ghana, which shows how the ordinary Chinese miners have themselves been victimized by the companies that hired or recruited them, see: “Chasing a Golden Dream, Chinese Miners Are on the Run in Ghana”, New York Times, June 10, 2013, online at: http://www.nytimes.com/2013/06/11/world/africa/ghana-cracks-down-on-chinese-gold-miners.html?pagewanted=all&_r=0
[26] Xan Rice, “China’s Economic Invasion of Africa”, The Guardian (U.K.), Feb. 6, 2011, online at: http://www.theguardian.com/world/2011/feb/06/chinas-economic-invasion-of-africa
[27] “China’s role in Africa under scrutiny”, Bloomberg report cited above.
[28] Lydia Polgreen, “Group of Emerging Nations Plans to Form Development Bank”, New York Times, March 26, 2013, online at: http://www.nytimes.com/2013/03/27/world/africa/brics-to-form-development-bank.html?_r=0
[29] David Smith, op. cit.
[30] Xan Rice, op. cit.
[31] Claire Provost and Rich Harris, “China commits billions in aid to Africa as part of charm offensive”, Guardian (U.K.), Spril 29, 2013, online at: http://www.theguardian.com/global-development/interactive/2013/apr/29/china-commits-billions-aid-africa-interactive
[32] Tania Branigan, “Domestic critics carp over extent of China’s munificence towards Africa”, Guardian (U.K.), April 29, 2013, online at: http://www.theguardian.com/global-development/2013/apr/29/china-critics-aid-package-africa
[33] China even admits this to some partial degree: “[S]ince the early 1980s, China has stressed that its aid strategy is about co-operation and mutual benefit rather than philanthropy.” From Tania Branigan, op. cit.
[34] Jonathan Kaiman, “Africa’s future leaders benefit from Beijing’s desire to win hearts and minds: China’s African aid programme aims to offer 18,000 government scholarships and train 30,000 Africans by 2015”, Guardian (U.K.), April 29, 2013, online at: http://www.guardian.co.uk/global-development/2013/apr/29/africa-future-leaders-china-aid-programme
[35] Tania Branigan, op. cit.