China and africa

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  • 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

    1. 1. CHINA AND AFRICA:THINK AGAIN Professor Deborah Brautigam School of Advanced International Studies, Johns Hopkins University Washington, DC
    2. 2. A BIT ALARMING…
    3. 3. 1984: Liberia
    4. 4. 1984: Liberia
    5. 5. “…ONCE UPON A TIME…”
    6. 6. --- Financial Times
    7. 7. CHINA DOES PRESENT ACHALLENGE
    8. 8. MAJOR AFRICANCONCERNS:
    9. 9. BUT PERHAPS THE BIGGESTCHALLENGE:
    10. 10. Africa is rich.We haven’t figured out a way to linkAfrica’s riches to its development. TheChinese are actively trying to do just this.
    11. 11. CHINESEAMBASSADOR INNIGER:
    12. 12. THREE WAVES& FOUR MYTHS
    13. 13. CHINA AND AFRICA:THE FIRST WAVE
    14. 14. 1st Wave
    15. 15. CHINA AND AFRICA:THE SECOND WAVE
    16. 16. East Wind Blows in Africa: 1950s & 1960s
    17. 17. China vs. USSR vs. USA
    18. 18. CHINA AND AFRICA:THE THIRD WAVE
    19. 19. 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
    20. 20. WHAT ARE THE DRIVERS OFCHINESE ENGAGEMENT INAFRICA TODAY?
    21. 21. 1. STRATEGIC DIPLOMACY
    22. 22. China’s UN Peacekeepers
    23. 23. 2. BUSINESS
    24. 24. TRADE
    25. 25. Trade: Exports to Africa, China(US Bil $) 70 60 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
    26. 26. Trade: Exports to Africa, China vs. US(US Bil $) Bar: China Line: USA 70 60 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
    27. 27. Trade: Imports from Africa, China(US Bil $) 120 100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
    28. 28. Trade: Imports from Africa, China vs.US (US Bil $) Bar: China Line: USA120100 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
    29. 29. INFRASTRUCTURECONTRACTS
    30. 30. Chinese infrastructure contracts, Africa(Turnover: US bil $) 40 35 30 25 20 15 10 5 0 2003 2004 2005 2006 2007 2008 2009 2010
    31. 31. Who is Financing Chinese Contracts?• World Bank and African Development Bank• Bilateral Donors• African Governments• Private Businesses (Chinese and non- Chinese)• Chinese Government (20%)
    32. 32. Construction/Infrastructure
    33. 33. Construction/InfrastructureFiber-Optic Networks Wind Farms & Telecoms
    34. 34. FOREIGN DIRECTINVESTMENT (FDI)
    35. 35. Chinese Global FDI Outflows (US $ bn)8070605040302010 0 2003 2004 2005 2006 2007 2008 2009 2010 2011
    36. 36. How Muchto Africa?
    37. 37. Diversity of Investments
    38. 38. CHINA’S LARGESTINVESTMENT IN AFRICA?$5.4 billion for 20% of South Africa’s StandardBank (2008)
    39. 39. FOUR MYTHS OFCHINESE ENGAGEMENT
    40. 40. MYTH 1. “CHINESE AID IS HUGE”
    41. 41. Africa: Official Development Assistance (ODA) 2008 (US$ 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.
    42. 42. 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
    43. 43. MYTH 2. “CHINA USES AID TOGET ACCESS TO NATURALRESOURCES”
    44. 44. Chinese Aid Agreements 1960-2007 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Sudan* 1958 ◘ ◘ ● ◘ ● ● ◘ ● ◘ ● ◘ ◘ ◘ ● ● ◘ ● ◘ ● ● ● ◘ ● ●Guinea 1959 ◘ ● ◘ ● ● ◘ ● ◘ ◘ ◘ ● ● ● ● ● ● ● ● ● ● ● ◘ ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘ ●Ghana 1960 ◘ ● ● ● ◘ ● ● ● ● ● ● ● ● ● ◘ ◘ ◘ ● ◘ ◘ ◘ ●Mali 1960 ◘ ● ◘ ● ◘ ◘ ◘ ● ◘ ● ● ● ● ● ● ● ● ● ● ● ◘ ◘ ● ● ● ◘ ◘ ● ● ◘ ●Somalia 1960 ◘ ● ◘ ● ● ◘ ◘ ◘ ● ● ◘ ● ●Tanzania 1961 ◘ ◘ ◘ ◘ ◘ ● ● ● ● ● ◘ ◘ ● ● ◘ ◘ ◘ ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘ ● ◘ ●Uganda 1962 ◘ ● ◘ ● ◘ ◘ ◘ ● ◘ ◘ ● ◘ ● ● ◘ ◘ ●Kenya 1963 ◘ ◘ ◘ ● ● ◘ ● ◘ ● ● ◘ ◘ ● ◘ ◘ ◘ ◘ ◘ ◘ ●Benin 1964 ◘ ● ● ● ● ● ● ● ● ● ◘ ◘ ● ◘ ◘ ◘ ◘ ●Burundi 1964 ● ◘ ● ● ● ● ● ● ◘ ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘ ●C.Afr. Rep. 1964 ● ◘ ● ● ◘ ● ● ● ◘ ◘ ◘ ◘ ◘ ● ◘ ◘ ●Congo-B 1964 ◘ ◘ ◘ ● ◘ ◘ ● ◘ ● ● ◘ ● ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ●Zambia 1964 ◘ ◘ ● ◘ ● ● ● ● ● ● ◘ ● ◘ ● ● ◘ ● ◘ ● ◘ ● ◘ ◘ ◘ ● ● ◘Mauritania 1965 ◘ ● ◘ ● ◘ ◘ ● ◘ ● ● ● ● ● ● ◘ ◘ ◘ ● ● ◘ ●E. Guinea 1970 ◘ ◘ ● ◘ ● ● ● ● ● ◘ ● ● ● ◘ ● ◘ ●Ethiopia 1970 ◘ ◘ ● ◘ ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ● ● ◘ ◘ ◘ ◘ ● ◘ ● ●Cameroon 1971 ◘ ◘ ◘ ● ● ◘ ● ● ● ◘ ● ● ● ● ◘ ◘ ◘ ● ◘ ◘ ◘Nigeria 1971 ◘ ◘ ◘ ◘ ◘ ◘ ◘ ●Rwanda 1971 ◘ ◘ ◘ ● ● ● ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘Senegal 1971 ◘ ● ● ● ◘ ◘ ● ● ● ● ● ● ● ◘ ●Sierra Leone 1971 ◘ ● ● ◘ ◘ ◘ ● ● ◘ ◘ ● ◘ ◘ ◘ ◘ ◘ ◘ ● ◘ ●Chad 1972 ◘ ◘ ● ● ● ● ◘ ◘D. R Congo 1972 ◘ ● ● ● ● ● ● ◘ ◘ ◘ ● ◘ ◘ ◘ ◘ ● ●Madagascar 1972 ● ● ◘ ◘ ● ● ● ◘ ● ● ● ◘ ◘ ◘ ● ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ● ●Mauritius 1972 ◘ ● ◘ ● ● ◘ ◘ ● ● ● ◘ ● ● ◘ ◘ ◘ ◘Togo 1972 ◘ ◘ ● ● ● ● ● ● ● ● ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘ ●B. Faso 1973 ◘ ● ◘ ◘ ● ◘ ● ◘ ◘ ● ◘G.Bissau 1974 ◘ ◘ ● ● ● ◘ ◘ ◘ ◘ ● ● ◘ ●Gabon 1974 ◘ ◘ ◘ ● ● ● ◘ ● ● ◘ ● ● ◘ ● ● ◘ ● ◘Gambia 1974 ◘ ● ● ● ● ●Niger 1974 ● ◘ ● ◘ ● ● ◘ ● ◘ ● ◘ ◘ ◘ ◘ ● ◘ ● ◘ ◘Botswana 1975 ◘ ● ● ● ● ◘ ◘ ◘ ◘ ● ● ● ◘ ● ● ● ● ◘ ●Comoros 1975 ◘ ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘ ● ●Mozambique 1975 ◘ ◘ ● ◘ ● ● ◘ ◘ ◘ ● ◘ ◘ ◘ ◘ ◘ ◘ ● ●S.Tome/Pricp. 1975 ◘ ● ● ● ◘ ● ●Cape Verde 1976 ◘ ● ● ● ● ● ◘ ● ◘ ◘ ◘ ● ◘ ◘ ◘ ●Seychelles 1976 ● ◘ ◘ ● ◘ ◘ ● ◘ ● ● ◘ ◘ ◘ ● ● ●Liberia 1977 ◘ ◘ ● ◘ ● ● ◘ ● ◘ ◘ ●Djibouti 1979 ◘ ● ◘ ◘ ◘ ● ● ◘ ◘ ◘ ◘ ● ◘ ◘ ◘ ●Zimbabwe 1980 ◘ ◘ ◘ ◘ ◘ ● ◘ ◘ ● ● ◘ ◘ ● ◘ ◘ ◘ ●Angola 1983 ◘ ● ◘ ● ● ● ● ◘ ◘ ◘ ◘ ◘ ◘ ◘Cote dIvoire 1983 ● ● ● ● ● ◘ ◘ ● ◘ ◘ ● ● ●Lesotho 1983 ◘ ● ◘ ● ● ◘ ◘ ◘ ◘ ◘ ◘ ◘ ◘Namibia 1990 ◘ ◘ ◘ ● ◘ ● ● ◘ ● ●Eritrea 1993 ● ● ◘ ◘ ◘ ◘ ◘ ● ●S.Africa 1998 ● ◘ ◘Malawi 2008Swaziland
    45. 45. 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”
    46. 46. 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
    47. 47. Standard Chartered’s Loan Financed… ? ?
    48. 48. China Eximbank (2004-2007)• Ag. Machinery & • 6 polytechnical colleges equipment $22m • 5 secondary schools $26m• 4 Irrigation systems $93m • Kifangondo-Caxito road:• Rebuild Luanda’s $211m electrical grid: $45m • 86 ambulances• Water treatment system • 6 provincial health centers repair in 3 provincial • Rehabilitate 7 regional cities: $21m hospitals• 5 ag. training institutions • … etc. etc.
    49. 49. RISKS AND BENEFITS?
    50. 50. MYTH 3. “CHINA IS LEADING THEGREAT LAND GRAB IN AFRICA”
    51. 51. Outward FDI Flows by Industry ($ bn)16141210 Agriculture8 Mining6 Manufacturing420 2005 2006 2007 2008 2009 2010
    52. 52. MYTH 4: “CHINA, INC.”
    53. 53. 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
    54. 54. 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
    55. 55. Typical foreign engineers & expertshousing in Africa Chinese Western
    56. 56. Why is China Different?• Foreign policy framework• Core ideas about development and govt.• Experience as a developing country• East Asian developmental stateBlog: chinaafricarealstory.com

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