The scramble for Africa

A recent article questions whether China’s economic offensive in Africa amounts to neocolonialism. Does it? And what are China’s objectives? Simon Wilson investigates.

What’s happened?

A long piece of reportage in last weekend’s Financial Times magazine has attracted a good deal of global attention, and revived the nagging question of whether China’s economic offensive in Africa amounts to a form of neo-colonialism.

In the article, FT journalist Tom Burgis tracks the rise of a shadowy and super wealthy Chinese “middleman”, Sam Pa, who, says Burgis, was a prime mover in the forging of Chinese links with African governments and businesses – in Angola in particular – and who remains a vital kingpin for China in Africa.

According to Burgis’s article, Mr Pa, who goes by seven different aliases, has “risen from obscurity” over the past decade to “clinch deals across five continents worth tens of billions of dollars”.

So what?

First, China has always denied any link between the Chinese state and the activities of Pa’s network of companies, which are known (informally) as the Queensway Group and include China Sonangol and China International Fund.

In fact, says the FT, Pa and his associates are intimately connected to both Chinese intelligence and big state-owned firms, and have “played a pivotal role in advancing China’s African quest”.

Second, Beijing and its African allies have always “been at pains to portray their relationship as one of mutual uplift”: China-Africa trade has surged tenfold over the past decade to $200bn a year, to the benefit of both.

Massive direct investment in infrastructure and natural resources has been accompanied by the rise of a Chinese population in Africa that is now a million strong.

Yet the story of Pa and the Queensway Group “exposes another side of China’s dealings in Africa”, reckons Burgis – “one that heralds not a new dawn, but the risk of perpetuating past misrule”.

In what way, exactly?

By, for instance, colluding with the corrupt regimes and kleptocratic elites that have scarred African countries for decades.

In 2012, the Global Witness anti-corruption group published leaked Zimbabwean intelligence reports indicating that Pa had been allowed to export diamonds from the military-controlled Marange fields after supplying Mugabe’s secret police with 200 vehicles and $100m.

In April this year the US added each of Pa’s seven names to the list of those subject to sanctions for being active supporters of the Mugabe regime.

Meanwhile, some globally respected African voices, for example the reformist former head of Nigeria’s central bank, Lamido Sanusi (ousted by President Jonathan for warning against government corruption), have warned that “Africa is now willingly opening itself up to a new form of imperialism”.

China “takes our primary goods and sells us manufactured ones”, warns Sanusi. “This was also the essence of colonialism.”

What are China’s objectives?

Most comment on China’s push into Africa inevitably focuses on natural resources. And indeed (on 2011 figures), more than 80% of China’s imports from African countries were crude oil, raw materials, minerals and other resources.

But according to Howard French, an associate professor at Colombia and the author of China’s Second Continent, such an emphasis risks failing to understand the long-term nature of China’s strategy. Unlike Western powers, explained French in a recent piece for Businessweek, China “sees raw materials as only one of the three pillars of its Africa strategy”.

The second pillar involves using Africa as a springboard to allow Chinese businesses to emerge as global players. But the third pillar is perhaps the most important of all – China’s long-term punt on Africa’s “demographic dividend”.

What does that mean?

Africa currently accounts for about one billion of the world’s seven billion population. But its population is predicted by demographers to surge during the 21st century to perhaps four billion, while the rest of the world’s population remains more or less steady.

Already, Africa is the fastest-growing region of the world in economic terms, and it has a middle class of consumers that is already larger than India’s.

Moreover, as Africa becomes richer and more populous, the bulk of its population in coming decades will be in “the most productive, youthful and heavily consuming phase of life”. By fighting to establish themselves in that marketplace now, China’s big brands are doing serious spadework for the future.

In short, says French, China sees Africa broadly in the same way the West used to see China: as an “immense volume play” to be exploited. “The only difference is that the Chinese are increasingly in a position to make their dream come true.”

America plays catch-up – or does it?

Some five-and-a-half years after taking office, President Obama held his first US-Africa summit earlier this month, bringing nearly 50 African leaders to Washington DC for a conference aimed at boosting US-Africa trade and investment.

A surge is certainly needed, says The Economist: in 2012 Africa took just 1% of US foreign direct investment. But despite Obama’s Kenyan connections, many observers worry that “deep down, he sees Africa as Europe’s, not America’s, backyard”.

In the 20th century, US engagement helped transform the fortunes of postwar Europe and Asia. “It is not at all clear whether a more insular America will do the same for Africa this century – or if it has ambitions to try.”

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