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GREAT insights Magazine

China-Africa: An Evolving Relationship but Invariable Principles

Thematic Focus: Emerging Economies and Africa

April 2014

Zheng, Q. 2014. China-Africa: An evolving relationship but invariable principles. GREAT Insights, Volume 3, Issue 4. April 2014.

The last decade has witnessed China upscaling its engagement with the African continent through deepening bilateral cooperation, promoting private sector investment, and diversifying partnerships with emerging countries and traditional donors. The relationship forged between China and Africa is evolving while still reflecting China’s basic principles as set out by Zhou Enlai in 1964.[1] It is critical to understand the China-Africa relationship and its implications for African development.

China’s evolving engagement in Africa

China has distinguished itself from colonial powers by claiming mutual benefit and non-interference as the basic principles of Chinese foreign policies. Beijing began its foreign assistance to Africa in the 1950s mainly for political reasons. Since 1978, with China’s economic reform toward “market socialist economy”, China adjusted its assistance models and instruments (including technical assistance, joint venture grants and debt relief) which are not so different from those applied by Western donors. In 2001, China’s “Going Global” policy promoted another major shift in Sino-African relations. To satisfy its need for raw materials and markets and to relieve the pressure from accumulated foreign exchange reserves [2], Beijing encouraged its state- owned enterprises, largely supported by the Exim Bank and China Development Bank, to invest in Africa. Foreign assistance is thus delivered in a mix of aid, trade and foreign investment.[3] Africa experienced an expanding presence of Chinese state-owned enterprises and the emergence of private companies, including both large multinationals such as Huawei and as many as 2000 small Chinese firms.[4] 

The creation of the Forum on China-Africa Cooperation (FOCAC) in 2000 and the following Ministerial Conferences ushered a new period for China and the African continent. FOCAC provided a platform to systematise bilateral cooperation in various fields. Another more prominent feature is China’s entry into the BRICS group on the international stage to express their shared economic concerns and vision for a multipolar world order. The initiation of the BRICS Development Bank at the Fifth BRICS Summit in Durban in 2013 is considered a major effort towards institutional cooperation, aimed at mobilising resources for infrastructure and industrialisation projects in emerging countries and particularly in Africa.

China’s deepening “Going Global” policy and its win-win promise 

China’s global economic policies reflect the Chinese internal transformation process and domestic policies. The domestic reform announced at the 18th National Congress of the Communist Party of China in 2012 states that market forces will play a decisive role in allocating resources, particularly capital, energy and land, while the role of the government will shift to basic functions of management, supervision and regulation.[5] China’s 12th Five-Year Plan (2011-2015) relating to the “Going Global” strategy says that “market orientation and self-willingness of enterprises” will characterise its overseas investment.

As the rapid growth and significant size of Chinese foreign investment[6] is grabbing attention and provoking debate, China is well aware that the investment should bring sustainable development for both itself and the recipient countries. At the conference in Durban, during his trip to Africa in March 2013, the Chinese President Xi remarked that “China will continue to encourage more domestic firms to consider investments in Africa; care would also be taken to ensure that these firms abide by the corporate social responsibilities”.[7]

In fact, China has been putting forward domestic legal framework to achieve that promise. The Ministry of Commerce (MOFCOM) and the National Development and Reform Commission, together with other central agencies, have published a wide range of documents and guidelines regulating outward FDI, such as the “Guide on Sustainable Overseas Forests Management and Utilization by Chinese Enterprises’’ (State Forest Administration & MOFCOM, 2009), China Banking Association’s Guidelines on Corporate Social Responsibility of Financial Institutions (China Banking Association, 2009), and the Guidelines for Environmental Protection in Foreign Investment and Cooperation (MOFCOM and Ministry of Environment, 2013)”.[8] Considering that these guidelines are not mandatory and that the enforcement of the policies is considered a responsibility of the host countries, there is still a big question as to what extent Chinese companies will respect these regulations and what the real impacts on local development in Africa will be. Here is a role for NGOs to play in engaging the host countries to apply the guidelines to Chinese companies. Application of the Guidelines could even be included in the bilateral investment treaties.[9]

Trilateral cooperation

In recent years, traditional donors have been seeking to engage China in developing cooperation in third countries with the aim to form new joint-venture programs and promote mutual understanding.   

In 2009, the China-DAC Study Group was formed by the International Poverty Reduction Centre of China and the OECD Development Assistance Committee to share knowledge and exchange experiences on promoting growth and poverty reduction in developing countries. Its current objective is to facilitate mutual learning between China and DAC members on how to deliver quality aid to support development and poverty reduction in a more effective way. In 2013, China Agriculture University and the UK Department for International Development (DFID), with the endorsement of the Chinese Ministry of Commerce, launched the China International Development Research Network (CIDRN) to strengthen the research capacity in China on international development and facilitate communication between China and the international development community. Currently, there are few observed meaningful trilateral arrangements other than academic exchange between China and traditional donors on African projects. Barriers are considered to be centred on different approaches and policy concepts. However, it shows at least the openness of Chinese actors vis-à-vis Western ones, whereas the latter would gain the opportunity to understand better the Chinese approach.[10][10] There is a lack of empirical evidence on whether this trilateral cooperation would function on the ground and to what extent it will overcome the barriers.

China’s invariable position

China published the White Paper on Foreign Aid in 2011 and the guidelines of the country’s (or region’s) plan on foreign investment and cooperation for 165 countries, including 48 African countries.[11] Despite this move towards aid transparency, there is still a lack of information such as the composition of aid to a country and how it is delivered, notably regarding the operational and financial aspects at country and project level. In addition, China, along with other BRICS members claimed “common goals and differential commitments” at the Busan High Level Forum on Aid Effectiveness in 2011. They highlighted their specific condition and their commitment to solidarity, friendship and voluntary basis. This is a position seemingly resilient to the Western push for transparency, accountability and other Northern norms. According to Besharati (2013), there is a lack of political interest in democratic accountability in China and limited information release.[12] Possible reasons have been discussed. Zhou[13] argues that China’s commitment to the “no strings attached” principle, limited capacity and operational challenges could present difficulties for Western donors to engage China in joint development cooperation. It is worth noting that a development cooperation agency does not exist in China[14] and the race for power among different ministries, or even between different divisions of the same department, influences policies.

Africa agency

Africa’s role (as played by government entities, regional bodies, individuals, elites and civil societies) in engaging China and even shaping the Sino-Africa relationship is not well recognised. Some empirical studies[15] showed that Africa should not be considered simply as a passive recipient. African actors actively influence and shape these relationships in a way to pursue their own interests at different levels, but such capacity is very uneven.[16] This, to some extent, echoes China’s emphasised principle “based on our own capacity and the needs-driven” for its foreign assistance policy. The question is whether and how African agency could be facilitated in a positive way by both the Chinese and African governments in order to realise the win-win outcomes of the standard rhetoric.

Qi Zheng is Assistant Campaign Officer at Oxfam Hong Kong. The views expressed in this article are those of the author only and should not be attributed to any other  institution.

The author would like to thank Richard Carrey and Jessica Gordon for their information and comments.

Footnotes

 

[1] On 15 January 1964 Premier Zhou Enlai set up eight principles of China’s foreign aid to guide Chinese economic and technical aid programs to friendly and fraternal countries. These principles were first used to guide Chinese economic aid to African nations. Since 1964, these eight principles have been the guidance of Chinese foreign aid toward many third and fourth world countries.

[2] Brack, D. 2014. Chinese Overseas Investment in Forestry and Industries with High Impacts on Forests. http://www.forest-trends.org/documents/files/doc_4203.pdf ; Canrong, J. 2011. The review of 10 years “Going Global ” strategy: Achievements and Challenges. Contemporary International Relations. http://www.cssn.cn/ddzg/ddzg_ldjs/wj/201203/P020131031386293340685.pdf

[3] See details refer to Qi Zheng “Le Système d’Aide au Développment de la Chine”, Gabas et Chaponnière《Le temps de la Chine en Afrique, Editions Karthala et Gemdev, 2012.

[4] Shen, X. 2013. Private Chinese Investment in Africa: Myths and Realities. World Bank.

[5] Decision of the Chinese Communist Party Central Committee on Several Major Questions About Deepening Reform), available in Chinese at http://news.xinhuanet.com/politics/2013-11/15/c_118164235.htm

[6] From 2002 to 2013, China’s outward investment grew from US$27 billion to over US$90 billion per year, according to official data from MOFCOM. http://fec.mofcom.gov.cn/article/xwdt/gn/201403/1802504_1.html and the Report on Development of China outward Investment and Economic Cooperation, MOFCOM, 2011-2012.

[7] China Daily, “China’s Africa role gets ringing endorsement”, 29/03/2013, http://africa.chinadaily.com.cn/weekly/2013-03/29/content_16356589.htm

[8] Bernascaoni-Osterwalder, N. et al. 2013. Chinese Outward Investment: An emerging Framework, A completion of primary sources. IISD & IIER.

[9] Brack, D. 2014. Chinese Overseas Investment in Forestry and Industries with High Impacts on Forests: Official Guidelines and Credit Policies for Chinese Enterprises Operating and Investing Abroad. Forest Trends Report Series.

[10] Crimm, S. 2011. Engaging with China in Africa-Trilateral Cooperation as an Option? Policy Brief, Center for Chinese Studies, Stellenbosch University.

[11] Guidelines of country or region plan on China outward investment and cooperation. 2013. Access at http://fec.mofcom.gov.cn/gbzn/gobiezhinan.shtml

[12] Besharati, N.A. 2013. Common Goals and Differential Commitments, The Role of Emerging Economy in Global Development, Discussion Paper.

[13] Taidong, Z. Engaging China in international Development Cooperation. August 2013. http://asiafoundation.org/in-asia/2013/08/21/engaging-china-in-international-development-cooperation/

[14] Schulz, N.S. 2013. Development Agencies in BRICS and Beyond- Experiences and Next steps, BRICS Policy Center.

[15] Mohan, G. and B. Lampert. 2013. Negotiating China: Reinserting African Agency into China-Africa Relations, Africa Affaires, 112/446,92-110. Scoones, I. et al. 2013. New Development Encounters: China and Brazil in African Agriculture, IDS bulletin Volume 44 Number 4. Corkin.L.2013. Uncovering African Agency: Angola’s Management of China’s Credit Lines. Ashgate.

[16] ibid.

(Photo by Feng Li – Pool/Getty Images)

This article was published in GREAT Insights Volume 3, Issue 4 (April 2014).

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Qi Zheng