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Untainted picture of China's Africa policy

By He Wenping (China Daily)
Updated: 2008-08-05 07:22

On July 11 the World Bank published a report titled Building bridges: China's growing role as infrastructure financier for sub-Saharan Africa.

Unlike other reports, books and articles about Sino-African relations produced by various international institutions and European or American think tanks of different stripes in recent years, the latest World Bank report is focused on two aspects: Africa's infrastructure sector, where China is playing an enormous role and, through in-depth analysis of the sector, reaching the objective and positive conclusion that it is a fact China has been serving Africa's economic growth as a proactive driving force.

Infrastructure is the foundation for national economic development and reflects the level and potential of a country's national economic development. More importantly, it also has a direct bearing on a country's attraction to foreign investment and key lever for the environment of investment.

It is widely known that underdeveloped infrastructure is a major bottleneck hindering Africa's economic development. The primitive state of the transportation industry and horrible road conditions not only keep the cost of trade between African nations and their domestic trade very high but also choke the flow of foreign investment on the continent.

Insufficient and unstable power supply is another common drawback for African nations and even South Africa - the continent's economic powerhouse that enjoyed full, cheap supply of electricity - has begun feeling the pain of power shortage in recent years.

"Build roads and profits will come rolling in." It is from its own success in reform, opening up and economic development that China has learned the importance, necessity and great business potential of investing in Africa's infrastructural development.

The World Bank report maintains that China has constructed many bridges, railways and roads in sub-Saharan Africa, where natural conditions are harsh to say the least. The total value of Chinese financial commitments to African infrastructure projects rose from less than US$1 billion per year in 2001-03 to around US$1.5 billion per year in 2004-05, reached at least US$7 billion in 2006 then trailed back to US$4.5 billion in 2007.

Among an array of infrastructure developments hydropower plants and railways are two key areas of China's investment. With a total investment of $3.3 billion already in place, the ten hydropower plants currently under construction can add 6,000 megawatts of electricity to the sub-Saharan region, raising its power supply capacity by 30 percent.

Meanwhile, the 1,350 km of existing railways China is renovating and 1,600 km of new tracks will be a significant addition to the 50,000 km railway network in Sub-Sahara.

Apart from China, the leading investor in African infrastructure, India and a few oil-rich Gulf countries are also providing funding for a number of large-scale infrastructure projects there. In terms of construction scale and total investment, these newly-arrived financiers have surpassed traditional investors such as members of the Organization of Economic Cooperation and Development, showing a new trend in continued growth of South-South cooperation.

These investments have greatly improved Africa's infrastructure as well as the overall investment environment and boosted economic development on the continent.

The WB report also holds that the strong inter-complementary nature of economic cooperation between China and Africa has made continuous development of the Sino-African relationship and South-South cooperation a reality.

As far as infrastructure is concerned, Africa is in urgent need of better facilities across the board but not financially capable as it stares at a funding gap of at least $20 billion a year. This condition on Africa's part suits perfectly China's "going overseas strategy" and its internationally competitive construction industry.

On the other hand, Africa has rich resources such as oil, while blistering economic development has left China with a growing appetite for energy resources like oil. Such increasing demands have in effect led to price hikes of unprocessed products such as oil, the export of which Africa relies on. This is considered a beneficial factor for Africa.

The report does not respond directly to accusations that "China is plundering Africa's natural resources," but it points out objectively that the Chinese oil company has arrived in Africa to explore and produce oil much later than many of its Western cross-national counterparts did and its investment in Africa's oil industry is less than 10 percent of what others have invested there.

Also, despite overzealous hyping by the Western media about China's cooperation model of "infrastructure in exchange for resources", only 7 percent of China's investment in African infrastructure is connected to the excavation of natural resources.

In fact, totally different from the brutal and bloody ways the Western colonists plundered African resources in the distant past, China's cooperation with Africa in resource development nowadays, exactly as described in the country's official white paper, China's African policy, follows the principles of "reciprocity, mutual benefit and joint development" and is aimed at "helping African countries turn their advantage in natural resources into competitiveness and pushing African countries and regions toward sustainable development".

One will see the stark difference simply by comparing China's energy cooperation with Sudan, which has been a hot topic among Western media outlets in recent years, with the oil production status of Nigeria, the top oil-producing country in Africa.

China began taking part in Sudan's energy development in the mid-1990s. By the end of 2003, the country invested a total of $2.7 billion in Sudan, laying 1,560 km of oil pipelines, building an oil refinery with an annual processing capacity of 2.5 million tons of crude oil and a number of gas stations.

These projects not only turned Sudan from an oil importer into an exporter but also gave Sudan an oil industry setup complete with prospecting, production, refining, transportation and sale operations. China also spent more than $20 million helping Sudan build domestic installations such as schools and hospitals.

As for Nigeria, the reality is that the largest oil-producing country in Africa is still an exporter of crude oil that relies on imported gasoline more than 50 years after Royal Shell started extracting oil there, because it has yet to possess a complete oil industry with both extracting and processing capabilities.

What makes the World Bank report even more remarkable is that, regarding enthusiastic debates among media entities as well as scholars whether China's format of trade and cooperation with Africa and ways to proceed are better than the West's or the other way around, it maintains "with new actors and new modalities, there is a learning process ahead for borrowers and financiers, both new and old".

Indeed. And this learning process should involve all parties concerned learning from one another, because it is aimed at helping Africa realize the UN Millennium Goals and benefit from globalization as a player who can hold his own.

The author is a researcher with Institute of West Asian and African Studies of Chinese Academy of Social Sciences

(China Daily 08/05/2008 page9)