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Friends and Interests: China's Distinctive Links with Africa
African Studies Review, Dec 2007 by Sautman, Barry, Hairong, Yan
Postcolonial Africa is often seen mostly in terms of its problems: as burdened by civil wars, epidemics, and venal regimes that aggravate endemic poverty. These perceptions led to a post-Cold War Afro-pessimism or even Afrophobia and to the downgrading of Africa as a site of interest for policymakers and investors from the developed world (Rieff 1998; Economist 1997; Andreasson 2005). This began to change somewhat in the 1990s, as Western leaders again began to pay attention to the continent, partly because of China's increased presence, which grew by 700 percent during the decade. While many Africans still believe that Africa remains in many respects invisible, especially to the United States (Jaffer 2004; Pan 2006), there is no doubt that China, Britain, France, and the U.S. see themselves as competitors in the second largest continent with the fastest growing population: with 900 million people in 2005, less than one-seventh of the world's people, Africa is projected to have nearly a quarter of the global population by 2050, and it has been estimated that Africa's economy may double in a generation {Ethiopian Herald 2005; Dyer 2007).
From 2001 to 2004, Africa's average annual intake from foreign direct investment (FDI) was only $15-18b, despite the continent's providing the world's highest FDI returns, averaging 29 percent in the 1990s and 40 percent by 2005. FDI flows in Africa in 2005 jumped to $29b (of $897b in global FDI flows), but China's FDI stock in Africa was still only $lb of Africa's $96b in FDI stock (two-thirds of it European-half British or French-and one-fifth North American). By late 2006, however, China's investments in Africa were pegged at almost $8b, as pledged investments were actualized. China will soon become one of Africa's top three FDI providers. Since the 2006 Forum on China-Africa Cooperation, that effort has been aided by a $5b China-Africa Development Fund to spur PRC investment. Trade with Africa was a tiny part of the PRC's 2006 $1.76 trillion in world trade, but had grown from $3b in 1995 to $10b in 2000, $40b in 2005, and $55b in 2006, balanced slightly in Africa's favor. There were more than eight hundred Chinese enterprises in Africa in 2006, one hundred of them medium and large state-owned firms {Xinhua 2007a). The PRC accounts for only a tiny part of Africa's FDI ($3.6b in 2004 and $6.9b in 2005), but its firms invested $135m and $280m, respectively, in those years. Still, while China is the third largest trader with Africa, after the U.S. and France, its trade was well behind the United States's $91b and represents only one-tenth of Africa's world trade, most of which remains with the E.U. and U.S.
Between the end of the last century and the beginning of this century, Africa's overall share of world trade and global FDI inflows actually declined: in the 1970s Africa received 5 percent of the former and 6 percent of the latter, but in 2005 the figures were 1.5 percent and 3 percent, respectively (AFP 2006a; Herald 2005; RTE 2005; UNCTAD 2006:40). Many PRC and African analysts contend, therefore, that increased PRC trade and investment ease Africa's dependence on the West and are mutually beneficial {Indian Express, 2006; Itano 2005; Li Yong 2003). The U.N. Development Program agrees and underwrites a China-Africa Business Council that promotes PRC investment in Africa (CABC 2006).
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