China and Africa: a new era of 'south-south cooperation'

About the authors
Chris Melville is a research analyst covering the West and Central African region, with a particular focus on the oil and conflict states of the Atlantic Rim. He is a graduate of Modern History from Balliol College, Oxford University, and holds an MA in African Studies from the School of Oriental and African Studies, where he focused on post-Cold War transitions and resource dependency in Angola.
Olly Owen is Africa analyst at the London-based research group Global Insight. He previously worked at the Centre for Democracy and Development as an election observer and researcher on democracy, governance and conflict in west Africa.

The world economy is being reshaped by new technologies, services, and trading relationships. Much of this dynamism is fuelled by ambitious developing-world nation-states like Brazil, India and South Africa. As governments, businesses and regional blocs in the global south expand their horizons, they increasingly bypass rich northern states. But is this “south-south cooperation” any more progressive or less selfish than the more familiar – and hegemonic – “north-south relationship”?

The idea of “south-south cooperation” started to influence the field of development studies in the late 1990s. It was fuelled by a growing realisation that poor nations might find appropriate, low-cost and sustainable solutions to their problems in other developing countries rather than in the rich north. It drew on clear examples of existing waste and alternative opportunity; for example, if African farmers need boreholes to access water, it surely makes more sense to access India’s huge pool of expertise than to send expensive European water engineers.

The concept quickly spread from the seminar room to the policy chamber. By 1997, Britain’s new department for international development (DfID) explicitly aimed – under its first minister, Clare Short – to withdraw from its aid programmes any requirement to use British service providers. The intention was to encourage recipient governments to spend the aid more effectively – especially on solutions sourced from other developing nations.

By the early 2000s, some forward-thinking developing nations themselves were incorporating this altruistic principle into their foreign policies. Luís Ignácio Lula da Silva’s Brazil is just beginning to make Africa part of its wider effort to build the country’s global profile; recently it granted fellow-Lusophone Mozambique a project to install and staff its own factory producing anti-retroviral HIV drugs, thus reducing its reliance on expensive imports.

China and Africa

An even more potent example of “south-south” cooperation is the People’s Republic of China. China’s presence in Africa goes back centuries: archaeologists digging in the ruins of Africa’s great medieval trading states at Timbuktu and Great Zimbabwe have found fine porcelain and other evidence of a trading network that spanned half the world. After the PRC was founded in 1949, the new state based its relations with the developing world on a defined doctrine, the “five principles of peaceful coexistence”; it also used its own legacy of colonial aggression and experience of liberation to forge links with the African nation-states emerging from colonial rule. China in the 1960s lacked the resources of the cold-war superpowers, but still invested significant energies in support of independent Africa. The PRC, driven by perceived ideological, anti-imperialist affinities, dispatched Chinese technicians to nominally leftist states to provide military training, modest economic aid and infrastructural monuments to socialist solidarity. The era of “liberation wars” in the 1970s saw China choose sides and patronise its favoured forces, as in Angola. This interest receded in the 1980s as Chinese development efforts were diverted inwards. But the post-Tiananmen period gave earlier ideological bonds a fresh twist: the hostility of many African leaders to democratic pressures and (especially) western, “hegemonic” conceptions of human rights chimed with China’s own preconceptions. Throughout the 1990s, China increased its aid to African governments and resumed its earlier rhetoric of “mutual respect” and “concern for diversity” – a discourse that resounded strongly in a continent highly attuned to the perceived neo-colonial reflexes of the former ruling powers. In return, Beijing received recognition of its sovereignty over Taiwan, indifference to its human-rights abuses, and support in international organisations. In 2000, a new China-Africa cooperation forum agreed a joint economic and social programme, one that lent a developmental and commercial slant to the “five principles”. China has subsequently been well in advance of the G8 by cancelling $10 billion of the debt it is owed by African states; at the second Sino-Africa business conference in December 2003, China offered further debt relief to thirty-one African countries, as well as opening the prospect of zero-tariff trade.

The tensions in what might be called China’s “developmental evangelism” in Africa are evident. The ideological underpinnings retain some potency and the principle of “non-interference” in domestic politics persists. But as Chinese commercial interests dominate the relationship, the strain of avoiding entanglement in ethically and politically complex questions increases. For China, insensitivity to human-rights abuses can be finessed as respecting “cultural diversity”, but this gets harder in a more open, regulated trading environment.

Rapid economic growth in China in the last decade, coupled with oil exploration and economic diversification in west-central Africa, has created new links. More than 60% of African timber exports are now destined for east Asia; 25% of China’s oil supplies are now sourced in the gulf of Guinea region.

China-Zimbabwe: a special relationship

But China is moving beyond merely securing essential inputs to acquiring stakes in potentially productive African enterprises. Zimbabwe is a prime example of the kind of place where China likes to do business. In return for bailing out Robert Mugabe’s regime with injections of cash, machinery, equipment and military supplies, Chinese state-owned enterprises have assembled a portfolio of shares in some of Zimbabwe’s prize assets.

In buying a 70% stake in the Zimbabwe’s only electricity generation facilities at Hwange and Kariba, and stakes in the national railway, the Chinese have stepped in where other developing nations (even Libya) have feared to tread. And on a micro-level, Chinese entrepreneurs are quickly supplanting small-scale retailers and local manufactures on Harare’s streets.

Zimbabwe’s deteriorating political situation and asset-hungry officials may deter most private investors, but the Chinese government can instruct managers of state enterprises to take the risk, rely on good intergovernmental relations to guarantee investment flow, and depend on state coffers to absorb any loss in the last resort.

China’s lack of domestic political criticism, meanwhile, frees its government and companies from “reputational risks” and pressures that can leave western-based companies exposed. Informed, responsible shareholders might be cautious about backing state-led projects in Sudan or Mauritania which rely on a brutally-enforced stability; such issues have little visibility to the Chinese public.

China’s new hard-nosed Africa policy gives it a strong incentive to circumvent the kind of multilateral aid and investment agendas promoted by Britain’s Tony Blair and Gordon Brown at the G8 summit, with their inconvenient governance concerns and transparency provisions. As China moves towards becoming the third-largest investor in Africa, its unilateralism will impact on the internal continental map.

The South African alternative

Amidst the dynamism of the east Asian economies, it is tempting to forget that the continent itself is generating an economic powerhouse. South Africa, freed of its apartheid-era isolationist shackles, has become an interested and aggressive explorer of the rest of the continent. The South African model is mixed: private companies led the charge into the new mobile telecommunications sphere, household names like Shoprite followed across the continent, while “para-statals” (state-owned enterprises) are also active.

Thabo Mbeki’s economically liberal instincts have been contained by the job-loss fears of his leftist coalition partners, and he has commercialised rather than fully privatised key state enterprises such as the power utility Eskom. This entity has reinforced Mbeki’s peace plan for the Democratic Republic of Congo by committing its own $500-million investment to the Inga dam, the 3,500-megawatt hydroelectric facility on the Congo river. This project would undoubtedly light up the DRC’s cities – but Eskom’s greatest benefit is probably tying the potentially huge electricity resource into a regional grid which would feed much-needed power supplies to South Africa’s industrial zones.

This project aptly sums up the dual nature of developing-world investment in Africa. Is such investment, as Mbeki would have it, good for all involved – or is it simply a new wave of economic colonisation which will leave most of Africa with as few benefits as in the past? As the developing nations themselves come to rival the investment presence of the G8 and former colonial powers in Africa, it is salutary to recall that “south-south cooperation” may be more efficient and less wasteful than the west’s grand gestures – but it is no less self-interested.