CHINA-AFRICA ECONOMIC AND TRADE RELATIONS:NOTHING TO DO WITH“NEO-COLONIALISM”

MA HANZHI

The Graduate School of Chinese Academy of Social Sciences (CASS)

CHENG ENFU

The Chair Professor of University of Chinese Academy of Social Sciences,Director of Division of Marxism, CASS, and Director of Research Center of Economic and Social Development, CASS

The founding of Forum on China-Africa Cooperation in 2000 triggered a golden age for highspeed development of China-Africa relations. The year 2016 witnessed US$190 billion of trade volume between China and Africa, and China became Africa’s biggest trade partner as a result. However, the rapid development of China-Africa relations has been accused by western politicians and media as “neo-colonialism”. In March 2018 shortly before setting off on his official visit to Africa, the US Secretary of State Rex Tillerson criticized China by saying that China utilized corrupt deals and endangered Africa’s natural resources. He said that China’s investment had led to mounting debt while creating few jobs in Africa. Those noises accusing China for adoption of “neocolonialism” in Africa are blackening China’s image in Africa seriously. In particular, some overseas media make use of their advantage to exaggerate China’s importation of oil and other raw materials and linking it to “neo-colonialism”. Indeed China imports great amount of raw materials, mostly oil.However, it’s a very realistic question calling for earnest answers about how to differentiate China’s investment from neo-colonialism.

CHINA-AFRICA ECONOMIC AND TRADE COOPERATION IS BENEFICIAL TO BOTH SIDES:NOTHING TO DO WITH“NEO-COLONIALISM”

While importing oil from Africa,China has brought in huge amount of investment in Africa’s infrastructure and downstream equipment. Many western magnates including Exxon Mobil have huge amount of business in oil producers in Africa, yet very little downstream investment, resulting in quite backward refinery capability of Africa. While extracting crude oil,these oil magnates make generous profits by exporting large amount of product oil to African countries. That is typical neo-colonialist practice. In contrast, China’s import of oil from Africa helps to improve Africa’s ability of independent development. According chief economist for African Development Bank Mthuli Ncube,though most African countries export crude oil or raw material to China,larger share of China’s trade and investment brought about the development of mining industry and relevant infrastructure in Africa. Take China’s investment in oil and gas in Angola as an example. While western countries withdrew one after another from postcivil war Angola in 2002 when the country was faced with capital shortage, Chinese government lent a hand to Angola by providing a soft loan of 2 billion US dollars for post-war reconstruction. Both sides agreed that Angola would supply 10 thousand barrels of crude oil to China per day in the following 17 years (this number was later increased to 40 thousand barrels). This model of “resources for loan” created a new model of cooperation between China and Angola which is known as the “Angola model”. It is because of this cooperation that the enterprises from China and Angola formed a joint venture named SINOPEC-Angola International Oil Company, which invested 3 billion US dollars in building an oil refinery in Lobito that greatly improved Angola’s capacity of crude oil processing in a short time. China’s investment in Angola’s oil industry has successfully brought along the development of many sectors such as contract construction and building material. Meanwhile, with the help of China’s oil company, Angola has witnessed its oil industry developing from nothing into a complete system integrated upstream and downstream sectors.No single western company had ever offered this help. China’s investment in Africa’s infrastructure only in 2015 amounted 21 billion US dollars, which is greater than the total investment by Infrastructure Consortium for Africa.A good example is the investment of the Export-Import Bank of China in the standard railway linking Mombasa and Nairobi, which accounted for over 90%of the total investment of 3.8 billion US dollars. Accordingly, the prosperity of oil trade between China and Africa is paralleled with the improvement of Africa’s capability of independent development as well as the speeded process of Africa getting rid of the exploitation by western oil tycoons. It is nothing to do with “neo-colonialism”.

I. China’s import of crude oil and other energy resources from Africa has put African energy market at an advantageous position.

In June 2018, Kenya’s 10,000 Villages Digital Television Project was off i cially launched. The project is one of China-Africa cooperation initiatives in the fi eld of humanities proposed by the Johannesburg summit of the Forum on China-Africa cooperation in 2015, aiming at “enabling 10,000 villages in Africa to access satellite digital television signals”. The picture shows two employees of the Chinese enterprise StarTimes group installing satellite TV receiving equipment for local people of Likii village in the central Kenyan county of Laikipia on July 3, 2018.

China’s huge market desire plays an incalculable role in maintaining the stability of crude oil price in Africa.In 2012, Mr. Zhong Jianhua, the then Special Representative of the Chinese Government on African Affairs responded to the criticism of China importing large amount of natural resources from Africa. He stressed that the contributions made by buyers of natural resources should not be undervalued, since the economic value of the resources could only be realized in trade. The existence of powerful buyers facilitates the realization of the value of these resources, which benefits the exporters. As a result of the plummeting of international crude oil price controlled by western multinational corporations since 2014, many African oil-producing countries suffered from economic downturn and financial stress. It is China’s huge market that helped to safeguard Africa’s interest to some extent. Angola exported 596 million barrel oil in 2017, bringing about US$ 30.166 billion, an increase of 18.13% on year-on-year base. The oil export also generated US$ 9.69 billion of revenue income, up 23.47% YOY.Only in the first half of 2017, Angola’s oil export to China increased by 22%.It’s fair to say that China’s huge market demand not only helps to relieve the financial difficulty faced by many oil producing African countries, but also stabilizes international crude oil price at a certain level and prevents the further loss of oil producing African countries’ interest.

II. China-Africa trade has brought about real improvement of African people’s livelihood.

China and Africa are complementary in trade. While importing oil and other resources products from Africa,China is also supplying quality and low-price commodities that are made in China. Before China and Africa achieved active commodity trade, Africa often suffered from price assault,since most of the industrial products were from western developed countries where very expensive labors caused very high price of final products. Studies show that Africa’s rapid and continuous development in recent years can be attributed to the rapid development of China-Africa trade. Thanks to the acceleration of China-Africa trade, the years between 2000 and 2009 witness an average annual GDP growth rate of 3%. Africa’s average annual GDP growth reached 5.6% from 2003 to 2008.China’s high-quality and inexpensive commodities are bringing more and more convenience and benefit to African people. According to McKinsey’s 2017 report, Chinese enterprises in Africa totaled more than 10 thousand, half of which are supplying new products and services targeted at Africa. Some Chinese enterprises lowered prices of existing products and services by 40%through technical upgrading and scale effect.

On January 11, 2017, people in Mombasa, Kenya sang and danced beside the fi rst diesel locomotives on the Mombasa-Nairobi railway. Mombasa-Nairobi railway is the fi rst one built in Kenya's 100 years of independence. It was contracted by CCCC and built by CRBC. It was completed and opened to traff i c on May 31, 2017.

AFRICAN COUNTRIES DECLINE ARGUMENT OF CHINA ADOPTING“NEO-COLONIALISM”IN AFRICA

Quite a number of surveys show that the argument of China adopting “neocolonialism” in Africa finds no market in Africa. According to a survey, only 21.4% of those questioned agreed to the argument of China adopting “neocolonialism” in Africa. Those remained neutral or disagreed amounted to 64.9%. 13.8% of those questioned said they did not know. According to a result of the survey “how African people looked upon China’s investment and influence in Africa” issued by Afrobarometer in October 2016, nearly two thirds of 36 African countries believe that China’s influence was “a bit” or“very” positive, while only 15% of the Africans thought it was “a bit” or “very”negative. About 92% of the population in Mali, 84% in Niger and 81% in Liberia hold positive attitude toward China’s influence in Africa. Against western countries’ condemnation of China adopting “neo-colonialism” in Africa,former president of South Africa Jacob Zuma once emphasized that China is helping Africa in development instead of plundering resources or colonizing Africa. In China-Africa trade, China brings infrastructure which is needed by Africa and has helped to build connections among various economies in Africa. That is fundamentally different from what colonialists were doing in Africa, such as holding the economic lifeline of Africa and depriving African people’s right for development. We can see that African people are overwhelmingly opposed to the argument of China adopting “neo-colonialism” in Africa. As a matter of fact, most of the producers of this argument are either western media and scholars or African local English media under the western control.

Having experienced both colonialism and neo-colonialism and knowing very well about neo-colonialism, the African people are clear that China is not adopting “neo-colonialism” in Africa. As a successor of colonialism,neo-colonialism is featuring same with colonialism, namely exploitation and inequality. However, even those western scholars condemning that China adopts “neo-colonialism” have to admit that China-Africa trade is an equal one based on international rules. As a socialist country, China has never colonized any country. What China is doing in Africa is totally based on sovereign equality and full respect to each other’s will. The friendly cooperation between China and Africa began over half century ago. At that time, China helped to build the Tanzania-Zambia Railway in Africa and sent a large number of medical teams to Africa, without taking one single drop of oil or one single ton of ore from Africa. According to Mr. DeLorenzo, an American Enterprise Institute expert studying China’s investment and political influence in Africa, the African leaders do not agree to the argument of Beijing’s “neo-colonialism” in Africa.

The rapid development of China-Africa cooperation serves as a powerful refutation against the “neo-colonialism” argument. In recent years,western countries have decreased their attention to Africa due to their internal political disputes. In particular the US started to substantially reduce its aid to Africa since Trump took the power. According to its budget report of 2017/18 fiscal year, the US has reduced its budget for foreign aid by 30.8%. As a result, its aid to Ethiopia will be cut by US$ 132.1 million, Uganda by US$ 67.8 million, Rwanda and Tanzania US$50.7 million respectively, Kenya US$11.78 million, South Sudan US$ 10.6 million and Burundi US$ 9.4 million.Apart from substantial aid cut for Africa, the key position in charge of African affairs in the US government has been vacant since Trump came into office. What’s more unbelievable is that when Trump was talking about the immigration policy at the beginning of 2018, he openly claimed that the US could not provide asylum to Africa and other “shithole” countries, which was immediately rejected jointly by 54 African countries. On the one hand, the US takes an indifferent attitude toward Africa out of the consideration of “the US first”. On the other hand, it is anxious of losing Africa to China. As a result,framing China’s action in Africa has been its habitual practice. As a matter of fact, since the Johannesburg Summit of FOCAC in 2015, the ten cooperation plans have been implemented one after another, and China-Africa cooperation is supplying powerful driving force for building a community of shared future for mankind as well as advancing shared development of the world.

POLICIES FOR CHINA-AFRICA COOPERATION SHALL BE FURTHER IMPROVEDIN REBUTTING FALLACIES

“Neo-colonialism”, “neo-imperialism” and “creditor imperialism” are all China’s “international image” deliberately portrayed by US-led western countries by taking advantage of their technology, system, fund and human resources. For example, at the end of 2017, Indian scholar Brahma Chellaney wrote an article titled China’s Creditor Imperialism, blaming China for being“imperialist” as it makes other countries subordinated with credit debts.According to the article, China’s acquisition or investment in construction of sea ports such as Hambantota of Sri Lanka, Piraeus of Greece, Djibouti and Mambasa of Kenya has pushed many countries, including Argentina, Namibia and Laos, into debt trap. In order to refrain from breaking a debt agreement, these countries painfully chose to allow China to control their national resources an essentially an ambitious imperialist scheme in nature. The term“creditor imperialist China” is becoming a hot spot of international opinion.

Without doubt, the broad masses of the African people disagree to the argument that China adopts “neocolonialism” in Africa. African Union Commission Mr. Faki refuted Tillerson’s condemnation on China during his visit to five African countries in March 2018 by saying that he thought African countries are mature enough to establish partnership on their own will. The criticism of China’s “neo-colonialism” not only shows that Africa has become a new geopolitical focus, but also demonstrates the need to further develop and improve China-Africa relations. Although without any history or notorious record of colonialism,China still needs to strengthen the extensive and in-depth cooperation with African countries in non-oil and nonraw material investment, technology transfer and trade as well as in education, science and technology, culture and medical care, etc so as to benefit the ordinary people, entrepreneurs and politicians in Africa. China should in particular make active efforts to set up joint ventures in a number of fields including oil production and processing. With African governments as shareholders and Chinese state-owned enterprises as majority holders, these joint ventures will make profits with effective management by the Chinese side. The shareholding governments and people will benefit from the profits, and meanwhile the joint ventures help to train management talents for the African countries, and avoid corruption cases that are hard to eradicate in local enterprises. This model of joint ventures is essentially different from those with private enterprises in African countries, in which the profits only belong to capitalists instead of the people. China’s development concept with people as the focus and aiming at optimizing state-owned enterprises and capitals should also be implemented in international economic relations. That will help to form new ways and models for China-Africa economic cooperation. With a new look of a community of shared future for mankind as well as advantages of public ownership, China-Africa cooperation shows essentially different features from those of colonialism and neo-colonialism.