By Marco Jowell
Research Director, GLCSS

The FOCAC Beijing Conference concluded this week. Some 48 African heads of state assembled for the largest Sino-African conference to date, marking 50 years of diplomatic relations.

The Forum proposed a framework for future relations through dialogue and bi-lateral processes. The ethos of the Forum is based on pragmatic cooperation, equality and mutual benefit. According to Xinmin Wang, a political counselor at the Chinese embassy in Kigali, the Forum has adopted an eight point plan encompassing political, economic, international and social cooperation. Furthermore China will seek to invest $1.9 billion in the continent and increase exports with zero percent tariffs to the continent.

Beijing’s interest in Africa has increased dramatically in recent years. The Chinese economy continues to grow at nine percent a year, with a growing demand for oil and raw materials.

The Eight Point Plan:

·        Double assistance to $100Bn by 2010.
·        Approve $3Bn loans & $2Bn buyer’s credit – $5Bn in total.
·        Create an African development fund – to the tune of $5Bn in 3-5 years.
·        Build a conference center for the AU.
·        Cancel all debts with states with diplomatic relations to China.
·        Increase scholarships two-fold from Africa to China – 2000-4000 & promote Chinese tourism to Africa.
·        Build 100 rural primary schools and 30 hospitals.
·        Propose economic development zones to expose the African market to China and vice-versa. 

Chinese investment is still small by comparison to the West but is highly aggressive and seems to be trying to gain a foothold in Africa. In the aftermath of the forum $1.9 billion of investment in the form of 16 deals have been signed with 11 African states according to the London based newspaper the Financial Times.

The investments cover a range of sectors including telecoms, technological equipment, infrastructure, raw materials and banking and insurance.  The states involved are Egypt, Ethiopia, South Africa, Nigeria, Kenya, Ghana, Zambia, Uganda, the Seychelles, Lesotho and Cape Verde.

Aid to Africa was also on the agenda. The $5 billion proposed in the form of loans and credit is without strings unlike the conditional based aid from other donor nations. André Habimana, the Director of Planning at the Rwanda’s Ministry of Finance and Economic Planning welcomed such a strategy and said the benefits were two-fold.

First, he believes that the Chinese method of budget support was favorable to the needs of African economies. Second, by accepting Chinese aid, Rwanda is diversifying its approach which relaxes some of the pressure from conditional based donors. He also added that the Chinese model was “a breath of fresh air” for Africa where both parties could gain much from mutual cooperation.

Furthermore Beijing has proposed to cancel all debts to African states that have diplomatic ties with China. Such a strategy promotes the one-China policy, which many African governments have been quick to support. Great Lakes Centre for Strategic Studies (GLCSS) believes that the incentive of debt cancellation will garner further support in Beijing’s attempt to isolate Taiwan politically from the continent and increase support for a united China in various multi-national institutions such as the UN.

On the social front, Beijing will double African student scholarships to Chinese universities from 2,000 to 4,000 as well as designating some African states as official tourist destinations or Approved Destination Status (ADS) for Chinese tourists. According to Xinhua, a Chinese news agency, 9 countries have been given ADS for Chinese tourists since the weekend bringing the total to 26. Those states were Algeria, Cape Verde, Cameroon, Gabon, Rwanda, Mali, Mozambique, Benin and Nigeria.

In addition to tourism and education, the Chinese are investing in health. Wang told GLCSS that in addition to the 30 hospitals proposed China will provide $31.7 million for health and sanitation. Some 30 malaria centers will also be provided. Also included are 300 volunteers on top of the 10,000 Chinese doctors already working in the region.

A last point is the proposed economic trade zones between China and Africa. Beijing wants a zero percent tariff zone. The idea being that Africa will benefit from cheap Chinese goods and Beijing would be able to import goods from Africa at a similar level.

However, in some instances Chinese goods are stifling local business. In Ghana, 24,000 out of 25,000 clothing manufacturers have been sidelined by Chinese entrepreneurs. A macroeconomist at the Rwanda Ministry of Finance, Oscar Masabo, dismissed claims of Chinese dominance and called it competition. “Globalization means that domestic markets are increasingly open to foreign business, that’s just the way the world works,” he explained.

China’s Agenda

China has come under increasing suspicion from the West regarding the exploitation of African economies in the raw materials sector.  Access to raw materials is just one aspect of a plethora of areas discussed at the conference in Beijing and by no means is it the most important. The Chinese foreign minister, Li Zhaoxing said that China wouldn’t pursue an oil monopoly and will allow other third party interests.

However the figures suggest Beijing needs to secure oil imports and other raw materials. China will have a 60 percent increased demand for oil by 2010 according to a 2004 The New York Times study. According to the Institute for the Analysis of Global Security (IAGS), a Washington D.C.-based think tank, China will have 120 million cars by 2020, and Beijing’s need for oil is increasing by 10 percent per year.

The FOCAC is a “strategy of domestic development and foreign policy” said analyst Esther Pan. Professor Kang corroborates this and said there is “sophistication in China’s foreign policy”. The Chinese refute such skeptical assumptions about the Forum.

“It’s shallow and sour grapes” said Wang, and Habimana agreed by saying “it’s what the West has been doing all along”.

The forum seeks to promote a framework for future relations between China and Africa. Business is just one aspect.  Habimana believes that the Chinese economic model is best suited to African investment. He believes that the East Asia model which has produced great success in the last twenty years will be most beneficial to African economies. However rights groups continue to condemn China’s non-interference policy and cite Sudan and Zimbabwe as examples of Beijing’s indifference to rights abuses as long as favorable investments are secured.

Marco Jowell may be reached at GLCSS trains African journalists, offers an on-site internship to foreign African studies students, and manages an exchange program with journalists from the United Kingdom, the United States and Europe.

Be Sociable, Share!