Is the West Right to Fear China’s Growing Investment in Africa?

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There’s some strong discourse coming out of “Western” powers – most notably the US – over China’s growing investment in African nations. There are various angles being thrown about too: the dangers of Chinese expansion across the world, the threat posed to democracy and a range of hidden agendas on the part of China.

High-profile publications like Fortune, The Telegraph, Foreign Affairs and many others have all put their spin on the dangers of Chinese influence on Africa. But what are Western powers really worried about and do they have good reason?

 

Western criticisms of China’s investment in Africa

There’s no shortage of arguments against China’s African investment over the last decade. So let’s start by having a look at some of the most popular criticisms coming out of the west.

 

China’s only interested in extracting natural resources

One of the most common complaints about China’s advance on Africa is its hunger for extracting natural resources. No doubt this is a big pull for the East Asian country – much like Western giants Shell, Total, ExxonMobil and Glencore, to name a few – but China has shown far more diversity than this argument gives credit for.

China devoted more than $70 billion to construction in Africa during 2014 and the country’s investment in technology industries has been significant also. In December last year, Chinese President Xi Jinping pledged another $60 billion in loans and development assistance for a range of sectors – including infrastructure and small-to-medium size business funding.

So, no matter how much interest China has in Africa’s natural resources, there are other interest at play here as well.

 

China is investing aggressively, at a worrying rate

Another hand dealt by western critics is that China is investing too aggressively in Africa, meaning something must be up. Studies from the US have published some astronomical figures to back these claims up as well. Rand put together a particularly impressive effort, based on little more than aggregated media reports, that said China devoted $189.3 billion to foreign aid in 2011 alone.

Unfortunately, many of the reports that calculation was based upon sourced memorandums of understanding (MoUs) where only a small fraction of agreements materialise. Essentially, those figures published were highly inflated.

When researchers at the Japan International Cooperation Agency Research Institute took a more scientific approach (PDF) to analysing China’s foreign aid, the figures came closer to $4.5 billion.

 

China lacks transparency and can’t be trusted

Transparency is a major concern for western powers as China continues to strengthen ties with the African continent. Some have gone as far to accuse China of becoming Africa’s new colonial overlord, touting yet more inflated investment figures in some sectors, while completely ignoring others.

Meanwhile, the Extractive Industries Transparency Initiative (PDF) – a global report standard for investment in natural resources – ranks China in the same bracket as other major investment powers, including the US.

Better yet, the US ranks first in new foreign direct investment (FDI) projects in Africa, while China sits at seventh. China isn’t even the biggest Asian holder of FDI projects in Africa – that title goes to Malaysia – and China could slip even further down the ranks as Brazil, Russia, India and other nations increase their portfolios.

 

China is using Africa to expand its military presence

Last November, China and Djibouti reached an agreement to establish China’s first overseas naval base in the African country. As The Daily Beast put it, China is “slowly, [but also] relentlessly” expanding its global military reach by building its first overseas naval base in the small Horn of Africa nation.

The same article also breezes over the fact Djibouti already houses French, German, Italian, Japanese and, of course, American bases. The notion that China has interest in expanding its military reach is one thing, but to talk as if China has overtaken Djibouti by being the sixth nation to build a naval base there is something else.

 

So what does China’s growing investment in Africa really mean?

 

One thing you can guarantee about China’s interest in Africa is that it gives leaders across the continent an alternative source of funding. The likes of Uganda’s Yoweri Museveni and Rwanda’s Paul Kagami were once pioneers of African democracy, during times when aid and investment from western, democratic nations were the only option.

However, funds from those traditional sources have always come with strings attached. African leaders are forced to adopt western, democratic ideals or face sanctions, embargos or other financial restrictions. China, on the other hand, doesn’t come with the same democratic baggage.

So, while the US and other western powers criticise African leaders for failing democracy, the money from China keeps rolling in. As the UN and ICC continue to pressure African leaders, China carries on investing. Which means the biggest concern for Washington and other western governments could be that China poses a threat to their influence over Africa.

African leaders, who want the freedom to rule how they see fit, may welcome this shift but what could this mean for the African people? Unfortunately, to answer that question you have to first ask various others, including: how important is democracy to Africa and how beneficial has the western influence been until now?

 

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