Africa pivoted to setting its own agenda

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.

Tapping African resources exponentially to fuel its economic growth, China also foresees business difficulties, as the US and EU are adjusting their African policies to secure sufficient energy supply from the continent, according to a recent report by the China Customs.

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

China seesaws between economy & environment

The highly globalized world is witnessing a spillover of the US financial crisis into Europe, Asia and elsewhere. The UK has been warned against a more severe and deeper economic downturn than expected; and Japan has also entered its first depression since 2001.

Job-cutting news is making headlines across the media, and a rising number of businesses are at the risk of collapse, painting a bleak picture.

China fails to escape the donimo effect. Its year-on-year GDP growth for the first three quarters of 2008 displays a falling tendency from 10.7% through 10.1% to 9%. With an 11.9% GDP rise in 2007, China needs its economy to grow by 8%, in order to guarantee jobs and avoid sliding into the depths of a recession, said economy expert Ye Hang.

Official figures show that south China's Guangdong Province saw more than 7,100 enterprises shut down between January and September this year. The majority of them operated in the Pearl River Delta, a key manufacturing base in China's export market. Price rises in raw materials, appreciation in the Chinese currency (RMB) and fund-raising difficulties are the top reasons behind the closure of many companies, local authorities have said.

It is forecast that 1/3 of export-oriented factories in Guangdong will meet the same fate in the next three years. This will result in restructuring the industrial mix locally, and even reshaping the global supply chain.

In response, adoption of economic stimulus measures becomes unavoidably the only remedy, though it is not a panacea for all problems.

Following US' $700 billion banking bailout in October, China recently launched its own economic stimulus package, in which it intends to spend 4 trillion yuan (US$586 billion dollars) over the next two years. Rural infrastructure, water and rubbish treatment are among the 10 major industries which China will invest in heavily. Concerns are growing over whether sustainable conceptions and practices will be incorporated in this large-scale industrial expansion.

The environmental consideration is often the first to be given up when an economy faces difficulties, said Wang Jinnan, Vice President of the Chinese Academy for Environmental Planning of the Ministry of Environmental Protection (MEP).

His concerns are also expressed by environmental groups. Hannah Griffiths, corporates campaigner at Friends of the Earth, said that her organisation had always argued that regulation was needed because when the crunch came, profits would come first. "We always felt that companies do not take CSR as seriously as they claim to and voluntary action does not work."

Wang added that the closure of businesses in Guangdong is helpful, in short term, for regional pollution control. However, he strongly suggested the government implement green practices in the vast national investment, to make the country achieve green GDP growth.

Shen Xiaoyue, Director of the Regulation Office of the Policy Research Centre for Environment and Economy of the MEP, said that there will be an urgent and heavy workload in the assessment of the environmental impact of new projects which are to be launched under the incentive plan.

Opinions are also split when it comes to the impact of the economic crisis upon China's companies involved in green industries.

The global crisis will present more opportunities than challenges for China's green industries, said Shen, which she believes will become a key strength for economic growth in China. She also highlighted that the middle and small-sized green companies should learn from overseas counterparts, and the government should grant them more favourable policies, especially in fund raising, to enable them to fly higher.

Companies, such as those involved in clean energy, wind power and solar photovoltaic industries will slow down as a result of the economic crisis, said Wen Yibo , Chairman of the Board of Beijing-based Sound Group, one of China's largest private green companies specialising in water and waste treatment.

Economic stimulus can only serve as a supplementary solution under such special circumstances, and it won't solve the fundamental problems. On top of funding, support of policies and the public is critical for green industries' development, Wen pointed out.

Over the five years up to 2011, China's investment in environmental protection is expect to reach 1.53 trillion yuan (US$225 billion), accounting for 1.36% of its GDP, a proportion believed to be amongst the highest in the developing world.

Copyright Dongying Wang

The Global impact on China’s environment

Is China being buried under the weight of environment concerns?


1. From economic threat to environmental threat

Today, when people talk about China, they often say, “this country will overtake the world” due to its fast economic growth. In fact, China has been described by much of the western media as an economic threat. Moreover, over the last few years, China has also been regarded as a threat to the global environment due to its swift industrial development.

China’s official figures indicate that the country is likely to overtake the United States by 2008 as the world's largest emitter of greenhouse gases.

In 2001, China's total greenhouse gas emissions were less than half (42 percent) of the U.S. level. But by 2006 the figure had risen to 97 percent.

It is clear that China faces a serious problem with pollution.

Here are just some statistics:

Of the 10 most polluted cities in the world, half are in China.

Seventy percent of rivers in China have been polluted at various levels.

At least 25% of the Chinese population have no access to clean drinking water.

One-third of the land in China is threatened by soil erosion

Less than 20% of rubbish in China is being treated with any consideration to the environment.

Every two days, a pollution accident happens in China.

China is perceived as ignoring environmental concerns in its effort to build its economy. Natural resources such as coal, oil, water and timber are being utilized at an alarmingly high rate to fuel China’s rapid development.

These raw materials are not only produced domestically. China also imports from many other countries.

Africa provides 30% of China’s oil imports and the continent as a whole accounted for more than $55 billion in bilateral trade last year. This has brought criticism and a sense of unease amongst many western nations. China is seen as over exploiting the natural resources of the African continent, while overlooking the environmental impact.

China is now under international and domestic pressure to transform its development model, to keep growing economically while reducing the impact on the environment.

Meanwhile, the country has started to recognize that continuing this unsustainable model of development is simply not viable.

2. China’s long march to go green.

So, what is the best solution to help China develop in the right direction? We first need to understand the country’s mindset, its history and culture. China has only recently entered the world stage, and so, for most westerners there is a lack of knowledge of both the country and its people.

It’s not all chopsticks, chow mein and Peking duck. The Chinese people are vastly different from province to province.

And there is not a common set of ideas that link them all. Ideas that the West takes for granted are as bizarre to the Chinese people as fish and chips.

Since 1978, China has been pursuing a policy with the focus set on economic growth. Similar to the Industrial Revolution 200 years ago in the West, China’s development gives priority to GDP growth rather than pollution control. The west took nearly 200 years to bring in laws to cut the pollution resulting from the Industrial Revolution.

In the UK, for example, the Clean Air Act was only introduced in 1956. In contrast, China has been quick to realize the need to tackle environmental issues.

Within thirty years of economic development China has implemented initiatives to protect the environment. One specific policy is the current Five Year Plan which aims to cut pollution by 10% by 2010.

It’s not so long ago that ‘pea-soupers’ covered London. Captured in films like Oliver Twist and A Tale of Two Cities, these images of dense fog are how Chinese people see London. But China is now beginning to suffer from the same problems faced by Britain less than half a century ago.

The West appears to have a short memory when it comes to criticizing others. There is also an element of hypocrisy when it comes to blaming China for polluting the world. Developed countries should also take responsibility for reducing their own emissions.

China must find solutions to the environmental problems it faces. But it cannot achieve this alone. Criticism of China’s environmental destruction MUST be countered by support and viable options to help China through this difficult period of development.

3. China faces many challenges as it makes its way along the green road.

a. Poor understanding of nature

In China there is a low public awareness with regards to environmental protection. For example, there is little concept of recycling within the minds of many Chinese. In China, when people dispose of their rubbish, few think about where it goes or about its environmental impact.

However, this is beginning to change, with cities like Shanghai rolling out massive recycling schemes. Segregated litterbins have been used increasingly in China to separate recyclable and non-recyclable rubbish.

There are differences in culture, education, and even the understanding of nature. Like all of us, people in China like to live in a clean environment, with clean air and water. But it will take time to motivate the people to become more green.

Poor environmental laws and inefficient administrative mechanisms fail to protect the environment and do not do enough to discourage polluters in the face of increases in GDP.

b. Restraints by limited resources

China accounts for more than one-fifth of the world’s population, but its GDP is 13% of the world total. The country’s further economic development is inevitable. But China’s shortage of resources is restraining its growth.

Here I’d like to focus on water and energy supply in China.

There is a shortage of both. But water supply and water pollution are of greatest concern.

a) Half of the water in China’s seven largest rivers is completely useless. About 400 out of 600 cities in China are short of water.

China is cooperating with bordering countries in developing joint hydro-electric projects. However disagreements persist between China and countries such as India and Kazakhstan over the exploitation of shared water resources.

b) Poor energy structure / Three Gorges Dam.

In 2006 China’s GDP rose by 10.7 percent, with energy consumption rising 9.3%.

China is the world’s largest coal producer and consumer. And coal accounts for 70% of the country’s energy consumption. The country is in dire need of improving its energy structure, but it may take a long time to achieve.

China has been encouraged to seek alternative energy sources to replace coal and to reduce coal’s share in the energy mix to 40% by 2030.

The country has set a target of increasing the use of renewable energy to 10% of energy consumption by 2010, and up to 15% by 2020, from 3 percent in 2003.

It is estimated that by 2050, solar energy will account for 10% of electricity generated in China.

Hydro-electricity will be a priority for a green China. So far, China has only developed one-third of its water resources for generating electricity, less than half the proportion of developed countries.

But these developments also draw strong criticism from the West. The Three Gorges Project, the world’s largest hydro-electric installation, has been heavily criticized by the western media for its ecological impact. Only recently, the Chinese press highlighted government concerns with the ecological impact the dam poses..

So the country is at the crossroads between balancing the demand for development and ecological protection.

4. Negative impacts of globalization.

Globalization is part of the reason for China’s worsening environment.

“Made-in-China” is now a commonplace. My British family members are always very excited whenever they come across an old product with the tag “Made-in-England”.

But whilst China is proud of being a world factory there is now increased concern that the “Made in China” label brings not only economic strength, but also damage to China’s ecology.

China has risen to the 3rd largest trading country in the world.

In 2006, China’s involvement in the processing of imported raw materials accounted for nearly half of China’s import and export total. This 2006 figure is more than 300 times the level in 1981.

Cheap labour and resources are often mentioned as factors in attracting overseas investment. But if China were to impose the same high standards of environmental protection, then many foreign companies might find that it was not cost effective to invest in China. In other words, Western countries are taking advantage of a lack of strict environmental laws.

Today, over 70% of overseas investment in China is involved in the manufacturing industry.

This year, about 100 overseas-funded companies have been blacklisted for their poor environment record. They include the big companies like Pepsi, Nestle, General Motors and Carlsberg.

Facts have shown that in areas where foreign companies are located -- cities like Shanghai, and especially Guangdong Province -- air and water pollution has significantly increased.

Former Chinese Foreign Minister Li Zhaoxing once said that pollution in China was partly due to international economic and trade divisions in the country. China remains one of the developing countries most affected by climate change.

Huguette Labelle, former president of the Canadian International Development Agency, once said that under the current international economic and trade system, China is not only the biggest user of resources but also the largest victim of self-inflicted pollution.

In order to reduce the number of companies using China as a dumping ground for pollution-creating industries, stricter policies are being considered, which would impose higher taxes and tariffs on exports of high-energy-consuming and pollution-causing items.

China imports a large amount of waste, including solid, electronic and medical waste. And the quantities increase annually. Processing these imports is creating a devastating effect on people’s health as well the environment as a whole.

China is only able to deal with 20% of its own waste, so for the country to take on the rest of the world’s garbage severely exacerbates the problem.

By 2020, China’s ‘fast-speed urbanization’ will increase its annual waste to more than 400 million tonnes.

China may soon be submerged by a mountain of its own rubbish.

Earlier this year, both British and Chinese media reported on UK rubbish exports to China. It shows a typical case of the environment-unfriendly side of world trade.

The UK produces more than 30 million tonnes of recyclable rubbish every year, 6% of which is shipped to China.

As such, China is rapidly becoming Britain's biggest rubbish dump.

Annually, China’s exports to the UK total £16 billion pounds.

In return, the UK ships 1.9 million tonnes of waste to China, up more than 160 times the figure of eight years ago.

The UK’s former Environment Minister Ben Bradshaw, has defended this “fair” trade, saying that it would be wasteful for ships bringing imports from China to return empty.

It is not good to our environment when we can only choose from imported products in our supermarkets. It is astonishing to see items shipped half way around the globe when they could be produced domestically.

UK-based New Economics Foundation Policy Director Andrew Simms told BBC last Friday (Oct. 5, 2007) that "Every time we hear a government minister talking about climate change, they seem to be drawn towards scapegoating China and its rising emissions."

He said: "But a big factor in that rise is that China has become the major factory for the western world, so their greenhouse gas emissions are largely driven by higher levels of consumption in the west."

Two years ago, US researchers calculated that 14% of China's CO2 emissions were accounted for by exports to the US.

So besides domestic will, a rational global economic and trade system should be formed to optimize the use of our natural resources and make it possible for global sustainable development.

5. Climate change is a global crisis, calling for a global solution.

Today, we should not doubt about global warming anymore. The evidence is clear that the global climate is changing. This year, we have seen millions of people in China, India and Bangladesh affected by floods. In Kenya we have seen major mudslides brought about by torrential rain.

We have also seen the worst summer for 30 years in France, devastating floods in the UK, a heat wave in the US (with temperatures soaring above 30 degrees Celsius), and typhoons sweeping Mexico and southeast Asia.

All these events have sent a signal that climate change is already at our doorstep. It is no longer something which may happen in the future, the effects of climate change are already being felt.

The tit-for-tat argument between developed and developing nations about who should take the lead to cut emissions has got to stop.

All countries, rich or poor, have to make their own changes towards a more sustainable society.

The West must lead by example to show the world how to tackle environmental issues.

UK Conservative leader David Cameron addressed the party's 2007 conference last week (Oct. 3) and said that those who say Britain should do nothing because of China’s shortcomings were wrong. He asked, “How will we be able to encourage China to act unless we act here at home?

The Chinese Government has maintained that all countries must take actions, with different but fair share of responsibilities to tackle global warming. Developing countries need to cut emissions and increase energy efficiency, while developed countries should try to decrease their per capita energy consumption and individual carbon footprint.

6. Conclusion:

The economic status among the population of China is changing rapidly. This has resulted in the increase of cars on China’s roads, rising consumption of consumer products and the surge of domestic flights. Meanwhile as China opens up to the world, it has led to a huge influx of tourists from all over the world.

We are not going to change people’s demand for cars, a wish to travel, and a desire to consume. And our living standards need not be lowered in order to be respectful to the earth.

However, it is the responsibility of governments, businesses and individuals to safeguard this planet.

Governments have the most important role to play in this regard, to change production methods and energy generation to more environmental-friendly solutions, and implement greener policies.

As individuals, we should be aware of our carbon footprints. We need to reduce our consumption, move towards a greener lifestyle and increase our responsibility towards our surroundings.


Copyright Dongying Wang 2007

For reproduction of this study, please email: wdy21century@gmail.com