Edward Bickham of Anglo American attributes China’s success to infrastructure and economic zones.
China's growing engagement in Africa has intensified the global rivalry for the continent's markets and resources. Investors from the West have perceived increased competition, and have been forced to adjust their African strategies, which in turn has increased tension between China and the West.
Following the EU and the US, China has become the 3rd largest trade partner with Africa. The China-Africa trade rose by 62% on a yearly basis to US$73.9 billion from January to August this year, according to China’s Ministry of Commerce.
It is often said that "when two sides contend, it's always the third party that benefits." Has Africa been aware of these possibilities and taken advantage of them to develop the continent further？
This issue was highlighted last Friday [21/11/2008] during a London conference entitled "Going for growth: can commodities transform development in Africa and China?"
The China phenomenon in Africa has continued to draw attention, especially as the globe experiences economic uncertainty; and China is foreseen to become the world's second-largest economy within two decades.
China can help increase Africa's leverage to get a better deal offered by different investors, said William M. Gumede, who authored the bestselling Thabo Mbeki and the battle for the Soul of the ANC. and was a deputy editor of The Sowetan in Johannesburg.
Gumede also saw China as a business partner for Africa, and help them negotiate for fairer global trade and financial systems. However, he pointed out that China should open wider its markets for the continent.
Africa should look at China's anti-poverty model instead of its political model, and give top priority to infrastructure construction and education to enable the continent to grow, especially in terms of jobs, he said.
China is celebrating its breathtaking achievements through three-decades reform and opening-up drive. As a result, China now shares 5% of the global GDP, up from 1% in 1978; and its destitute population has plummeted from 250 million to 15 million.
While China has alleviated poverty dramatically, the global trend has continued with the impoverished population rising by around 10 million per year since the turn of the century, according to the State Council Leading Group Office of Poverty Alleviation and Development.
The London meeting reached a consensus that foreign investors should not be expected to act as the agency for Africa's development and the continent needs to develop its own agenda.
“Africa does not need necessarily to follow the western development models,” said Graham Zebedee, Deputy Head of the African Department of the UK Foreign and Commonwealth Office. Meanwhile, he urged Chinese businesses in Africa to create a win-win rather than win-lose approach.
Edward Bickham, Group Head of Anglo American in External Relations, attributed China’s success in Africa to its model of opening up areas through infrastructure and building special economic zones. Anglo American is one of the world’s largest mining groups with a large foothold in countries such as South Africa, Zimbabwe, Botswana, Namibia and Tanzania.
By the end of 2007, China had directly invested US$4.46 billion in 48 nations across Africa. Over the next 10 years, Africa is estimated to need US$250 billion in investment for its infrastructure construction. This creates massive opportunities for overseas investors, especially Chinese companies.
However, Bickham underlined the downside of China’s involvement in Africa. He said that Western “conditionality” and leverage was much reduced, affecting the handling social and environmental challenges, in which China has less experience. In addition, Chinese companies are tied to the use of their own labour and facilities rather than local sources.
Bickham gave a detailed presentation on how China is leading to a growing demand in metal consumption, and the country’s expanded activities in seeking out natural resources in Africa. His speech painted China as a consumer devouring African resources and a powerful competitor for Western investors there.
However, Rouben Indjikian, Deputy Head of the Special Unit on Commodities with the United Nations Conference on Trade and Development (UNCTAD ), predicted that China’s efforts in improving energy and commodity efficiency will help slow down the global growth of consumption.
He also pointed out that the huge economic stimulus package China launched recently to speed up its infrastructure construction means increased business opportunities for Africa.
UNCTAD is working on an energy paper to help meet global energy needs, Indjikian said, adding that energy tapping and use, especially renewable sources, within Africa is of great significance for the continent to shake off its poverty. And China is expected to play a role in this regard.
The African continent makes up 13% of the world population but only 35% of the people have access to commercial energy produced from coal, gas, uranium and petroleum. Less than 10% have access to electricity, according to UNCTAD.
The China-Africa trade is expected to top US$100 billion this year. The figure comes three years ahead of China’s own projection. However, its sustained growth is uncertain, due to Africa’s limited capacity to cope with regional and international crises, said the report.
The report also suggested that China learn from Germany and Japan to target individual African nations with different business focuses, meanwhile further promote its favourable policies across the continent.
This opinion was shared by James Keeley, senior researcher with the UK International Institute for Environment and Development (IIED ), when he spoke of China’s involvement in African agriculture. “China needs to understand users’ needs, and to link its African operations to other initiatives, such as the Comprehensive Africa Agriculture Development Programme and the Alliance for a Green Revolution in Africa.
Days are gone when Africa had to accept whatever deals were on the table. Today, the changing economic reality has offered the continent the golden chance to make its own choice among offers from different countries.
It is time for Africans to formulate their own economic policies and set up their own development agenda; to make a sustainable choice and enable the continent to prosper.
Read other China-Africa articles:
China in Zambia: from comrades to capitalists?
China in Africa: a catalyst for change
Copyright Dongying Wang
For reproduction of the articles, please email: wdy21century@gmail.com
2 comments:
If china is going to become the worlds second largest economy,then how it is going to have an effect on worlds economy
China will then have a bigger impact upon global economy when it is rising to be an economic power just second to the US, in terms of resources consumption, supply chain, as well as the environment.
The country will face great opportunities but massive challenges, to build itself to be a good example in sustainable developmemnt for other rising economices like India and Brazil.
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