China’s African investments: Who benefits?
By Michael Gerson,
The skyline of this city — what little there is of it — is a Chinese creation. Chinese money built the Parliament building. A $100 million, Chinese-funded hotel and conference center is rising. The Chinese government is constructing a soccer stadium, a decidedly popular move.
It is difficult to argue that these shiny new buildings are more urgent development priorities than, say, fighting malaria or providing a daily meal to children in rural schools. But the Chinese don’t even pretend this is the case. These highly visible investments, increasingly unavoidable across Africa, are designed to buy influence with governments.
But why Malawi? This poor, rural, landlocked nation is hardly a strategic prize. Elsewhere, the Chinese are clearly after oil and other resources. Malawi does have some unexploited rare-earth metals and a mine producing uranium. But the aggressive Chinese outreach here seems more directly motivated by a plan to establish China as a power throughout the continent, even in its remotest corners.
This is sometimes called neo-imperialism. At closer range, it more closely resembles mercantilism. Unlike in Asia, where China pursues tinderbox land disputes, the objectives here are overwhelmingly economic — securing vital commodities while selling cheap manufactured goods.
Though China does not seek to plant military bases or ideological revolutions in Africa, the Chinese model of state-led development is increasingly viewed as an alternative to Western economic liberalism. Leaders such as South African President Jacob Zuma are impressed with the Chinese economic approach — which is naturally attractive to leaders inclined toward the expansion of government power.
But what is appealing to African leaders is not always good for African societies. China’s defining foreign policy principle is “mutual noninterference in domestic affairs,” which comes in handy for a nation that fears a focus on its own domestic oppression. In practice, this means that African governments have a rich friend with low standards. Some Chinese associates, such as Zimbabwe or Sudan, are international outlaws. Elsewhere, the influence is more subtle. Malawi, for example, is a multiparty democracy that is experiencing slow democratic regression. Recent legal changes have restricted press freedom and expanded discrimination based on sexual orientation (adding a prohibition against lesbianism to the existing colonial-era statute). Western donors have objected. But since China is indifferent, the pressure on the Malawian government is diluted.
The list of problems with China’s approach to development is long. The Chinese emphasis on resource extraction makes African economies more dependent on a few commodities, undermining diversification. China’s trade practices — boosting its own exports to Africa and elsewhere by keeping its currency undervalued — creates difficulties for developing economies. China’s preference for providing loans rather than grants imposes burdens that many African governments have only recently escaped through Western debt forgiveness.
There are welcome exceptions in this poor record. Some African debts to China have been forgiven. China has created an equity fund to foster broader African investment.
Yet China’s economic invasion of Africa is most conspicuously good for China, which is seeking control of global resources — intending to own the well during a drought. This strategy is also good for African governments that prefer their aid without annoying conditions. But if Africa’s most pressing challenges are economic reform and better governance, China’s approach is not particularly good for Africans.
Nowhere is the contrast of Chinese and American development strategies more evident. The U.S. government, of course, has its own checkered history of resource-seeking behavior, especially in the Middle East. But in Africa today, America consistently promotes economic liberalization and good governance while providing aid focused on human needs and structural reform. America’s innovative Millennium Challenge Corp. — which has approved a compact to improve the Malawian energy sector — makes funding contingent on meeting standards of transparency, human rights and the rule of law. At least America tries to nudge African nations in the right direction.
The unparalleled economic success of America demonstrates the value of open trade, limited government and liberal democracy, which are ultimately more productive than state planning and more appealing than a new soccer stadium. Our problem is that America — turned inward by economic fears and isolationist tendencies — is in the process of beggaring its foreign assistance programs and retreating from global engagement. Which leaves the field in Africa open to Team China.