Is China Doomed to Fail in Africa?

This is from Wilson VornDick, a commander in the U.S. Navy Reserve, writing in the National Interest: 

It is unclear whether China could handle the financial repercussions of a larger, more systemic default or debt-forgiveness program across the African continent. Seeking relief, debtors to China would likely overwhelm existing mechanisms, like international arbitration, or China-backed forums such as the Export-Import Bank of China , China Development Bank , and Asian Infrastructure Investment Bank . More importantly, debt restructuring, recoupment, and, in the more extreme case, seizure may not be viable, reasonable, or sustainable for Chinese interests or presence continent-wide. Just such a dire economic scenario might push China to use its nascent military force to protect or even seize its interests. Looking back at the previous period of Great Power Competition more than a century ago, leveraging military might to force repayment was commonplace. The U.S. military made multiple incursions into Caribbean and South American nations as did the Western powers in Africa and Asia.

It is reasonable to assume that China would have little or no experience in any dire economic contagion across Africa. The one primary example, the take-over of Hambantota Port, was an isolated incident during calmer times, before the financial uncertainty stoked by a slowing global economy or the current U.S.-China trade war. Moreover, the port takeover has now become a watershed moment in Chinese behavior that has attracted significant international scrutiny and ire.

More broadly, VornDick articulates the potential merits (from a U.S. standpoint) of a “Let China Fail in Africa” strategy as part of Washington’s Great Power global competition with Beijing. The whole argument is worth a read.

A glaring omission in VornDick’s analysis, however, is the interests and roles of Africans in this whole game (note that this is a gap in the “China-in-Africa” genre more generally).

chinafricaA key weakness that I see in the “Let China Fail in Africa” strategy is that it vastly underestimates the extent to which Africans will be willing to work hand in hand with China to make the Sino-African relationship work.

China’s forays in Africa is creating complex tapestries of personal and institutional relationships that will become ever harder to undo. For example, in both electoral democracies and autocracies in the region, citizens have come to expect political elites to provide public goods — many of them financed and built by China. Demands for more of the same will likely only get stronger. The desire to secure funding for more public goods will likely push African elites even closer to Beijing. Furthermore, at a time when the U.S. is working hard to signal that Africans are not welcome on its shores, tens of thousands of African students are earning degrees in Chinese universities. Many of these students will probably go back to their respective countries and maintain ties with Chinese business and academic contacts. These kinds of investments in soft power will matter in the long run.

Global diplomacy is not just about crass material interests. It is also about values and shared commitments to respectful mutual cooperation. If African elites become convinced that they are better off bandwagoning with China, they will do so.

And most importantly, having made that choice, they will make specific investments (whether deliberately or not) to make their nations ever more closely allied with China. They will adopt specific technologies. Establish specific market relationships. Acquire specific weapons systems. And yes, more of their students will learn Chinese and go on to earn degrees in China. The closer the military, economic and “soft” ties, the more African elites will be willing to make costly investments in order to ensure that their respective states’ relationships with China work.

A good lesson in this regard is francafrique. The relationship between France and its former colonies in Africa is not winning any awards soon. But for almost six decades African elites have remained committed to the relationship and worked to give the French military free rein in the region and French firms access to vast natural resources. The French state, in turn, has worked to prop up the same elites despite massive economic and political failings.

The point is: China’s failure in Africa (if it comes to pass) is not what will determine the future of Sino-African relations. What happens before any such failure will likely matter more.

Here’s why African states value their economic and political ties with China

This is from an excellent essay by  in Foreign Policy:

…. when former U.S. Secretary of State Rex Tillerson raised a cautionary alarm for Africans to be wary of Chinese predatory investments just a few months ago, his lecturing tone did not go over well. Many African leaders reacted negatively to the underlying assumption that they were not qualified to figure out profitable from predatory investments on their own.

Sierra Leonean President Julius Maada Bio rebuked the warning as misguided, saying, “We are not fools in Africa. … At difficult times, when we needed help most, China was there for us.”

The expansion of Confucius Institutes across Africa is another part of the push worth engaging with. With more than 50 Confucius Institutes teaching Chinese language, as well as the Communist Party’s version of Chinese history and culture, more and more Africans have the chance to study Chinese and travel to China on cultural scholarships. In 2015, approximately 50,000 African students attended Chinese universities, compared with 40,000 in the United States and the United Kingdom. Elementary and middle schools in several African countries are now offering Mandarin as a foreign language.

I highly recommend that you read the whole thing.

H/T Judd Devermont

What exactly is China up to in Africa?

Leading Afro-Chinese relations scholar Deborah Brautigam has a great piece over at the Washington Post:

On Chinese imported labor in Africa:

Surveys of employment on Chinese projects in Africa repeatedly find that three-quarters or more of the workers are, in fact, local. This makes business sense. In China, textile workers now earn about $500 a month — far more than workers in most African countries. Chinese investors flocking to set up factories in low-cost countries like Ethiopia are not thinking about importing Chinese workers. Like U.S. and European factory owners who moved their factories to China in past decades, Chinese firms are now outsourcing their own manufacturing to cheaper countries.

On Chinese loans to African states:

… In Africa, we found that China had lent at least $95.5 billion between 2000 and 2015. That’s a lot of debt. Yet by and large, the Chinese loans in our database were performing a useful service: financing Africa’s serious infrastructure gap. On a continent where over 600 million Africans have no access to electricity, 40 percent of the Chinese loans paid for power generation and transmission. Another 30 percent went to modernizing Africa’s crumbling transport infrastructure.

On alleged Chinese land grabs:

… the total amount of land actually acquired by Chinese firms was only about 240,000 hectares: 4 percent of the reported amount.

I like to remind my students of the qualitative difference of the “Chinese model” of resource exploitation in Africa.

Previously, Exxon, Elf and other Western resource sector firms would pay African leaders in cash, most of which wound up in Swiss banks, property in southern France, and various tax havens outside the Continent. This was, if you will, the “Western model” of resource exploitation in Africa.

afrobarometerEnter the Chinese. Their model is to pay for resources both in cash and in kind. African leaders still get cash that they can stash abroad. But they also get roads, railways, stadia, hospitals, water works, among other infrastructure investments. And more recently Chinese firms have begun to invest in actual factories — most notably in Ethiopia. It is no wonder that a majority of Africans have a favorable view of China (see image).

Some of these projects produced sub-standard structures (in the recent past the quality has gone up). And the level of indebtedness of African states as a result should concern every sane person. But this arrangement is orders of magnitude better than useless capacity building workshops and janus-faced democracy promotion on the back of rapacious pillaging with little public investments to show for it.

Finally, the inability of African states to negotiate reasonable deals with Beijing is on African political and economic elites. The Chinese have every right to rationally push for the best deals they can get. And if they are smart, they will also work to avoid future defaults by not overstepping their bounds.

To paraphrase a Mozambican diplomat at a recent event here on campus, Africans are too smart to allow themselves to be recolonized by the Chinese.

How is the world reacting to China’s rise?

China has experienced a spectacular economic growth in recent decades. Its economy grew more than 48 times from 1980 to 2013. How are the other countries reacting to China’s rise? Do they see it as an economic opportunity or a security threat? In this paper, we answer this question by analyzing online news reports about China published in Australia, France, Germany, Japan, Russia, South Korea, the UK and the US. More specifically, we first analyze the frequency with which China has appeared in news headlines, which is a measure of China’s influence in the world. Second, we build a Naive Bayes classifier to study the evolving nature of the news reports, i.e., whether they are economic or political. We then evaluate the friendliness of the news coverage based on sentiment analysis. Empirical results indicate that there has been increasing news coverage of China in all the countries under study. We also find that the emphasis of the reports is generally shifting towards China’s economy. Here Japan and South Korea are exceptions: they are reporting more on Chinese politics. In terms of global sentiment, the picture is quite gloomy. With the exception of Australia and, to some extent, France, all the other countries under examination are becoming less positive towards China.

That’s Yuan, Wang and Luo writing in a neat paper that analyzes news coverage of China in different countries.

More on this here (HT Jay Ulfelder).

On the Continent opinion survey data from a select set of countries show high favorability ratings for China — by about two thirds or more of survey respondents. The same countries have seen some decline in US favorability ratings over the last few years. As you’d expect, people’s reaction to China’s rise is based on perceptions of the potential material impact it will have on their lives. On average, the survey evidence suggests that most Africans view China’s rise as a good thing.

It is interesting that across the globe young people, on average, have a more positive view of China’s rise than older people. Younger people probably associate China more with glitzy gadgets in their pockets; and less with cultural revolutions and famine-inducing autocracy.

How does Chinese aid interact with level of democracy in poor countries?

It is a commonly accepted idea in IR theory that states have the habit of externalizing their domestic institutions [and accompanying economic and political systems] in their engagements within the international system (See Katzenstein, 1976 [pdf, gated]) – think democracy promotion, Reagan-Thatcherist free market evangelism, or Sino-Russian coziness with states that have an authoritarian bend. 

This phenomenon has non-trivial implications for development assistance. For instance, poor countries receiving capacity development assistance from say a Scandinavian liberal democracy often need to also adopt related practices beyond the narrow specific field (say tax reform) that is being addressed by the capacity development program. Many projects fail to produce the desired results because of this. Indeed past research has shown that “though aid [from wealthier, mostly Western democracies] does not affect quality of life in the aggregate, it is effective when combined with democracy, and ineffective (and possibly harmful) in autocracies.” [Kosack, 2003- pdf]

So does the effect of Chinese aid/finance to poorer countries follow this pattern? In other words, does the institutional incongruence effect also hold for autocratic donors? Image

The folks at Aid Data blog think it does: 

…… we estimate the relationship between Chinese development finance and human development in democratic and autocratic recipient countries. Our results show a negative relationship between Chinese development finance and human development in democratic countries. Interestingly, these results also suggest that Chinese development finance can successfully promote HDI growth for autocratic recipients. Kosack found the opposite pattern in his study of Western aid.

The findings are preliminary and may not withstand robustness checks, but all the same interesting.

More on this here.

Also, check out the Economist for a neat analysis of the potential impact of a Chinese economic slowdown on African economies.