China has more UN peacekeepers in Africa than any other country.
Turnover in 2010 of $35.8 billion was more than 1/3 of the total of $92.2 billion worldwide. Over 2600 Chinese enterprises are “qualified to conduct overseas contracted projects.” Source: China Statistical Yearbook, 2011.
Wildly different estimates. Take 2011 for example. Derek Scissors at AEI China Investment Tracker identified $6.8 billion in deals over $100 million in Africa. Fortune magazine said $16 billion in mining alone. Chinese official figures will probably be around $3 billion.
IFPRI study catalogued 25 large-scale Chinese “investments” stories featured in various media, and totaling 7.6 billion ha. We could only find 4 of these were actual projects launched over the past decade, and only two of these were large (projected to be 10,000 ha). The 25 projects also included 5 medium-sized state farms that were leased by Chinese companies during privatizations over a decade ago.
In most African countries, the percent of local workers in a Chinese project, mine, or factory is 80% or higher.
China and africa
CHINA AND AFRICA:THINK AGAIN Professor Deborah Brautigam School of Advanced International Studies, Johns Hopkins University Washington, DC
Tunisia Morocco Republic Algeria Libya Egypt Western SaharaCape Verde Senegal Mauritania Niger Mali Chad Eritrea Benin Sudan Djibouti Gambia Guinea Burkina FasoGuinea-Bissau Nigeria Ethiopia Somalia Sierra Leone Ghana Central Af. Republic Cameroon Liberia Togo Cote D’Ivoire Uganda Kenya D R Congo Sao Tome and Principe Congo Equatorial Guinea Seychelles Gabon Rwanda Burundi Tanzania Mauritius Angola Zambia CHINESE LEADERS Visits to Africa, 1995-2009 Namibia Zimbabwe Malawi Madagascar Premier Li Peng Mozambique Botswana 1995, 1997 President Jiang Zemin 1996, 1999, 2000, 2002 Premier Zhu Rongji South Africa Swaziland 2002 Premier Wen Jiabao Lesotho 2003, 2006 President Hu Jintao 2004, 2006, 2007, 2009
WHAT ARE THE DRIVERS OFCHINESE ENGAGEMENT INAFRICA TODAY?
Africa: Official Development Assistance (ODA) 2008 (US$ bn) China, 1.2 Japan, 1.6 USA, 7.2 UK, 2.6 Germany, 2.7 France, 3.4 EC, 6 World Bank, 4.1 In billion US$Source: OECD-DAC Statistics. *Chinese figure is author’s estimate.
Export Credits Compared: Major Export Credit Agencies, 2007 30 25 Guarantees 20 Buyers Credits l $ Bi 15 Export Credit Guarantees 10 Sellers Insurance Overseas Credits Investment Insurance 5 Loans Supplier Guarantees Credit Insurance Credits 0 China Exim US Exim JBIC EGCD
MYTH 2. “CHINA USES AID TOGET ACCESS TO NATURALRESOURCES”
What about China’s Huge Commodity-backed Infrastructure Credits?• Ghana, Angola, DRC• Widely misunderstood as “aid”• Market-rate line of tied export buyer’s credit• Secured by exports (Japanese model)• “Not subsidized and not concessional”
Angola: Two Oil-Backed Lines of Credit (2004) Amount Interest Maturity Grace rate PeriodChina $2.0 bil LIBOR 12 years Until endEximbank plus 1.5 of each projectStandard $2.35 bil LIBOR 5-7 years noneChartered plus 2.5Consortium
ContrastsThe West Believes: • Countries need aid, good governance to develop • Our aid is driven by altruism • Conditionality is good for governance • Africa needs to be saved. Not for businessThe Chinese Believe: • Countries need investment, infrastructure to develop • Aid is about diplomacy, soft power • Governance improves slowly, as economy develops • Africa is very interesting for business
ContrastsWhat shocks us: What shocksChina can build a them: Westernpresidential experts live in 5palace in Sudan star hotels & richand pay for it overseasfrom aid budget lifestyle, paid out of the aid budget
Typical foreign engineers & expertshousing in Africa Chinese Western
Why is China Different?• Foreign policy framework• Core ideas about development and govt.• Experience as a developing country• East Asian developmental stateBlog: chinaafricarealstory.com