Beware of China’s $$$

May 23, 2014 News

By Howard W. French

“The problem (though not limited to China) is relying on shady arrangements made at the very top of the political system, often in the president’s office itself. Contracts are greased with monetary bribes and other enticements like expense-paid shopping trips to China and scholarships there for elite children.”

(Taken from the New York Times) NAIROBI, Kenya — For nearly a decade, as China made a historic push for business opportunities and expanded influence in Africa, most of the continent’s leaders were so thrilled at having a deep-pocketed partner willing to make big investments and start huge new projects that they rarely paused to consider whether they were getting a sound deal.
China has peppered the continent with newly built stadiums, airports, hospitals, highways and dams, but as Africans are beginning to fully recognize, these projects have also left many countries saddled with heavy debts and other problems, from environmental conflict to labor strife. As a consequence, China’s relationship with the continent is entering a new and much more skeptical phase.
The doubts aren’t coming from any soured feelings from African leaders themselves, most of whom still welcome (and profit from) China’s embrace. The new skepticism has even less to do with the hectoring of Western governments, the traditional source of Africa’s foreign aid and investment (and interference). In a 2012 speech in Senegal, Hillary Rodham Clinton, then secretary of state, implicitly warned Africa about China. The continent needs “a model of sustainable partnership that adds value, rather than extracts it,” she said, adding that unlike other countries, “America will stand up for democracy and universal human rights even when it might be easier to look the other way and keep the resources flowing.”
Some Africans found Mrs. Clinton’s remarks patronizing. What’s most remarkable, however, is how passé this now seems, given skepticism about China from Africa’s own increasingly vibrant civil society, which is demanding to know what China’s billions of dollars in infrastructure building, mineral extraction and land acquisition mean for the daily lives and political rights of ordinary Africans.
This represents a tricky and unfamiliar challenge for China’s authoritarian system, whose foreign policy has always focused heavily on state-to-state relations. China’s leaders demonstrate little appreciation of the yawning gulfs that separate African people from their rulers, even in newly democratic countries. Beijing is constitutionally uneasy about dealing with independent actors like advocacy groups, labor unions and independent journalists.
After a decade of bland talk about “win-win” partnerships, China seems finally aware that it needs to improve both the style and substance of its push into Africa. Last week, at the start of a four-country African trip, Prime Minister Li Keqiang acknowledged “growing pains” in the relationship, and the need to “assure our African friends in all seriousness that China will never pursue a colonialist path like some countries did, or allow colonialism, which belongs to the past, to reappear in Africa.”
This language came in belated response to a sea change that arguably began with an op-ed essay last year in The Financial Times by Lamido Sanusi, who was recently suspended as Nigeria’s central bank governor. He wrote: “In much of Africa, they have set up huge mining operations. They have also built infrastructure. But, with exceptions, they have done so using equipment and labor imported from home, without transferring skills to local communities. So China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism.”
Mr. Sanusi’s commentary prompted critical assessments of China’s involvement in countries like Botswana and Namibia, over issues like the takeover of local construction industries, or the proper execution of building projects, working conditions, and the proliferation of Chinese newcomers — many of them illegal migrants — who have begun to dominate low-level commerce in a number of countries.
In Ghana, an estimated 50,000 new migrants, most of whom are said to have hailed from a single county in southern China, showed up recently to conduct environmentally devastating gold mining. This set off a popular outcry that forced the Ghanaian government to respond, resulting in arrests of miners, many of whom are being expelled to China.
In Tanzania, labor unions that have historically been close to the ruling party have strongly criticized the government for opening the floodgates to Chinese petty traders.
In Senegal, neighborhood associations blocked a giant property deal that would have handed over a prime section of downtown real estate to a Chinese developer with a scant track record.
Independent media have played an important role in demanding more scrutiny of government deals with Beijing. A recent op-ed article in one of Kenya’s leading newspapers, The Daily Nation, questioned whether a huge new Chinese investment in a railroad that would run from the coast all the way to landlocked Uganda and beyond was truly a good deal. The project’s first phase will increase Kenya’s external debt by a third.
The writer, David Ndii, noted that Kenya could have sought the financing for a project like this through the World Bank, which would have cost as little as a third of the Chinese commercial loan. But that would have required time-consuming processes, from competitive bidding to rigorous environmental and feasibility studies. Kenya’s Constitution insists on “intergenerational equity,” but also requires that “public money be used in a prudent and responsible manner.” Mr. Ndii asked whether the deal with the Chinese was consistent with either provision.
As someone who recently spent a year traveling widely in Africa to research a book about Beijing’s relations with the continent, I find Mr. Sanusi’s assessment too pessimistic. Yet a dose of caution for Africa, and of public scrutiny about the high-level deal-making underway, was clearly long overdue.
The booming, fast-changing China offers potentially extraordinary upsides to Africa. Without question, the continent is badly in need of more and better infrastructure. Competition among foreign investors holds the prospect of better returns for African states. Immigration, which is the central topic of my own reporting, has begun to create serious tensions between China and its new African partners, but even this is insufficiently recognized for its potential dividends. The spread of trading and business diasporas throughout history, including that of China, have a deep and proven track record for wealth creation, and properly managed, this could prove true for Africa as well.
But because China seems to be in such a hurry, and is so often seen to be looking out for itself, the potential downsides for many Africans have begun more and more to stand out: accelerated environmental destruction via mining and other activities; disregard for labor rights; the hollowing out of local industry; and even the stalling of the continent’s democratization.
This isn’t simply a matter of Beijing’s doing business with odious dictators, whether Omar al-Bashir of Sudan or Robert G. Mugabe of Zimbabwe. From Zaire to Equatorial Guinea to Rwanda, the West clearly has its own deep and insufficiently acknowledged history of doing much the same.
Rather, the problem (though not limited to China) is relying on shady arrangements made at the very top of the political system, often in the president’s office itself. Contracts are greased with monetary bribes and other enticements like expense-paid shopping trips to China and scholarships there for elite children. Adding to the opacity, China typically favors its state-owned companies for African projects and bypasses open, competitive bidding procedures.
The best way for the United States and other rich countries that have economic and political interests in Africa to respond is not by warning Africans about the advance of China — but rather, helping to strengthen African civil society and, thereby, governance. Washington should also encourage China and other up-and-coming players in the international economy, from Brazil to Turkey to Vietnam, to abide by higher transparency standards — and to rigorously abide by them, too.
In the end, though, what will minimize any downsides of China’s involvement in Africa is the deepening of African democracy. Grass-roots activism and vibrant independent media are, everywhere, the ultimate check on corrupt legislators and on foreigners who get lucrative but unsound deals by handing over bags of cash.

Howard W. French is an associate professor of journalism at Columbia University, a former correspondent for The New York Times and the author, most recently, of “China’s Second Continent: How a Million Migrants Are Building a New Empire in Africa.”