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William M. Gumede

South Africa

William M. Gumede is a former deputy editor of The Sowetan, Johannesburg. He is the author of the bestselling Thabo Mbeki and the Battle for the Soul of the ANC. His new book, The Democracy Gap: AfricaŹ¼s Wasted Years, will be released in the U.S. in May, 2009. Close.

William M. Gumede

South Africa

William M. Gumede is a former deputy editor of The Sowetan, Johannesburg. more »

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Don't Condemn Africa to Underdevelopment

Is China becoming Africa's new colonizer? In what is reminiscent of a new scramble for Africa, China has rushed to plant its flag on the continent, offering soft credit, bricks and mortar investment and promising non-interference in local politics.

But is this all too good to be true? In November, China hosted an Africa summit in Beijing attended by 50 African leaders, the biggest showcase of China's new foreign policy shift towards the developing world. China aims to expand its political reach on the continent and secure raw materials for its rapidly growing economy. At the conference, Beijing offered Africa US$3bn in preferential loans and US$2bn in export credits over the next three years. China envisaged annual trade with Africa to reach $100bn by 2010.

Whereas Western nations such as the U.S., France and UK have slashed development aid year after year, China has promised to double aid by 2009. Most of the Chinese aid to Africa is tied to business deals. Nevertheless, China has offered aid without insisting on the onerous conditions that Western donors do. This is sweet music to African nations, who for long now have protested the hypocritical insistence of Western countries calling for Africa to open their markets while heavily subsidizing their own agriculture sectors.

China earlier this year granted Nigeria a $2.5bn loan soft loan and the Angolan government $9bn without strings. But China has also offered many African despots, such as Zimbabwe's Robert Mugabe a lifeline. China has major investments in Sudan's oilfields and fiercely supports the Sudanese regime, which is responsible for an internal conflict that has seen millions killed or displaced. China worked tirelessly to water-down a United Nations resolution condemning Sudan for the bloodshed in Darfur. China accounts for 65% of all Sudanese oil exports and 35% of Angolan oil sold abroad. The argument can be made that many Western nations are also often quite happy to turn a blind-eye to allied undemocratic regimes, especially if there are Western oil interests to protect.

Currently, most African economies depend on one or more commodities. The Chinese dragon's big appetite for commodities has given some African economies a handy windfall. Yet very few Africans have used the extra cash to diversify their economies. To prosper, African nations need to diversify as soon as possible. Right now, most of the rich returns from commodity sales are pocketed by a handful of African ruling elites. China's strategy of making friendship by targeting leading members of African ruling parties has only encouraged this trend. The easy money China dangles in return for oil or other commodities, the more corruption rises.

On the other hand, China's interest in Africa has given African nations more options to negotiate better trade deals with Western competitors. In the past, African countries had to accept the poor deals Western countries forced on them. In terms of global politics, many Africans do see China is potential ally in a world where African interests are either ignored or dismissed by the big powers. As South African President Thabo Mbeki said, the continent has a "dire need for close friends, reliable partners and good brothers".

However, China's public, altruistic rhetoric masks its hard-nosed approach. Many Africans appear not to notice this. As a case in point, China, in spite of its stated aims to make the UN more representative, has opposed the initiatives to secure a permanent seat for Africa on the UN Security Council.

In Latin America, China similarly bestowed on Brazil "favorite nation" status but Brazil nevertheless discovered that despite this, their products faced huge tariff barriers in China. China promised to invest billions of dollars in infrastructure projects in Brazil, but this was very slow to materialize. Another sticking point was that China insisted on bringing Chinese nationals as work crews, instead of transferring skills to locals. This type of treatment already has caused sore points across Africa. Many African businesses complain Chinese companies dump cheap end-of-the-line stocks, often bypassing customs and import duties. Not only does this drive locals out of business, the cheap items are often of poor quality. The influx of cheap Chinese goods to Africa decimates the struggling local manufacturing industry.

In South Africa, official figures shows that cheap Chinese textiles have led to the loss of at least 67,000 jobs the past 4 years. South African unions have lobbied their government, who is busy negotiating a free trade deal with China to include clauses committing China to respect minimum labor, human rights and environmental standards. Most African countries, just like South Africa, export the capital-intensive commodities or raw materials that China hungers for, and import labor-intensive manufactured goods from China. So, the rise in exports to China typically generates few jobs, while imports from China take away jobs. If this continues, argues South African President Thabo Mbeki, the African continent could be "condemned to underdevelopment" and "recolonization". Africans should heed the warning.

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