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China-Africa cooperation: an assessment through the lens of China’s development experience
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China-Africa cooperation: an assessment through the lens of China’s development experience
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CHINA-AFRICA COOPERATION:
AN ASSESSMENT THROUGH THE LENS OF CHINA’S DEVELOPMENT EXPERIENCE
by
Xi Chen
__________________________________________________________________
A Dissertation Presented to the
FACULTY OF THE USC SOL PRICE SCHOOL OF PUBLIC POLICY
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF POLICY, PLANNING, AND DEVELOPMENT
August 2015
Copyright 2015 Xi Chen
ii
Table of Contents
List of Figures iv
Abstract v
Chapter One: Introduction 1
Overview 1
China-Africa in a Broader Context 3
Gaps in Existing Research 6
Methodology and Purpose of the Study 8
Structure of This Paper 8
Chapter Two: Evolution of Development Thinking 10
Post-war Recovery and the Marshall Plan 10
Modernization Theory 11
Dependency Theory 11
Marxism 13
Structure Adjustment Programs and Washington Consensus 14
Poverty Reduction Strategy Papers and Post Washington Consensus 16
Capacity Approach and People-centered Development Strategy 18
Development NGOs 20
Sustainable Development 23
Chapter Two Summary 25
Chapter Three: African Development Experience (1950s-Present) 27
Debt Crisis 27
Structure Adjustment Programs 29
Poverty Reduction Strategy Papers 31
Debt Relief 34
Aid, Corruption, and Governance 35
Resource Curse 36
Arab Spring 39
Chapter Three Summary 42
Chapter Four: China’s Development Experience (1840-Present) 44
A Century of Hardship (1840-1945) 44
Chinese Civil War (1946-1950) 47
Korean War (1950-1953) 47
Land Reform (1946-1953) and “Social Reconstruction” (1953-195) 49
Great Leap Forward (1958-1960) 50
Cultural Revolution (1966-1976) 51
Reform and Opening (1978-1999) 54
One-Child Policy (1978-2013) 65
iii
A Rising China (2000-Present) 68
Chapter Four Summary 78
Chapter Five: China-Africa Cooperation 80
An Ideology-based Beginning (1956-1978) 80
Concepts of “Co-development” and “Mutual Benefit” (1980s) 84
Solid Progress to Strengthen the Tie (1990s) 84
An All-around Strategic Partnership in a New Era (2000-present) 85
Good Influence or Bad Influence? 92
Chapter Five Summary 100
Chapter Six: Methodology 103
Overall Strategy 103
Data Collection and Analysis 103
Limitations 108
Chapter Seven: Discussion 110
China’s African Policy 111
Limited Employment Opportunities for Africans and Poor
workers’ rights 124
Challenges Associated with Chinese Development Assistance
to Africa 154
Emerging China-Africa Cooperation in Renewable Energy 162
Chapter Eight: Contribution to Practice 178
Hire More Africans and Improve Workers’ Rights 178
Development Good Chinese-African Working Relationships
at the Company Level 194
Improve Transparency and Program Evaluation of Chinese Aid 199
Boost China-Africa Cooperation on Wind and Solar Energy 213
Moving Forward: China’s Future Policy towards Africa 223
References 230
Appendices 301
Appendix A: Questions used in interviews 301
Appendix B: List of selected Chinese and African universities in
the “20+20 Cooperation Plan” 303
iv
List of Figures
Figure 1: China-Africa Trade Volume, 2000-2012 89
Figure 2: Cumulative Installed Solar Photovoltaics Capacity in
Leading Countries, 2000-2013 172
v
Abstract
This paper investigated three ongoing challenges and a new trend in the fast-growing
China-Africa cooperation: 1) the Chinese foreign policy principles of non-interference
and no-strings attached to aid, 2) limited employment opportunities for Africans and poor
workers’ rights in Chinese firms, 3) the lack of transparency of Chinese aid, and 4) the
emerging China-Africa cooperation in renewable energy. The paper examined the links
between China’s development experience and its behavior in Africa to provide a new
perspective for understanding China’s engagements with Africa. The major findings
include: 1) China’s African policy is deeply rooted in its own history and development
experience; 2) the cost-effectiveness of Chinese workers, the cutthroat Chinese-on-
Chinese competition, and the insufficient legal framework to protect workers’ rights in
China and Africa, have together contributed to the limited jobs for Africans and poor
workers’ rights in Chinese firms, 3) both China’s political culture and capacity barriers to
manage its sizable aid to Africa are largely responsible for the lack of transparency in
Chinese aid, and 4) China-Africa renewable energy cooperation is driven by Africa’s
growing interest and China’s strong investment capacity. The paper suggested that, to
develop long-term and win-win cooperation, China should make a greater commitment to
mediate conflict and facilitate peace in Africa, hire more Africans, and embrace a broad-
based collaboration to strengthen its capacity in aid management. To boost China-Africa
cooperation in wind and solar energy, both sides should work together to explore
business opportunities that utilize China’s strength and are suited to the African context.
Keywords: China-Africa cooperation, policy, jobs, aid, renewable energy
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 1
Chapter One: Introduction
Overview
The relations between China and the African continent have evolved dramatically
since the turn of this new century. From a mere $2 billion in 1999, China-Africa trade
reached $210.2 billion in 2013 (People’s Daily, 2014). China topped the US for the first
time in 2009 to become Africa’s largest trading partner (CNN, 2013). The amount of
China-Africa trade is more than twice the US-Africa trade of $85.2 billion in 2013
(United States Census Bureau, 2014). Oil and various minerals supplied the top five
exports from Africa to China in 2012, while textile materials, garments, shoes, steel and
furniture were the top five goods imported by Africa from China (Chinese Customs,
2013). This reflects the complementarity of China-Africa trade and China’s key
economic interests in Africa: energy, minerals, and markets. With a fast-growing and
energy-intense domestic economy, China came to Africa to secure national resources
desperately needed to sustain its rapid growth and to seek a market for Chinese goods.
The steeply rising China-Africa trade volume is accompanied by frequent state
visits, grand China-Africa summits, and attractive development assistance. During former
President Hu Jintao’s tenure from 2002 to 2012, he visited Africa six times (China News,
2009, People’s Daily 2012). Current Chinese President Xi Jinping selected Russia and
Africa as the destinations for his first visit as head of state (People’s Daily, 2013).
Leaders from 48 African countries gathered in Beijing for the 2012 China-Africa
Summit, among whom are 35 heads of states and the Chairman of the African Union
(Chinese Ministry of Foreign Affairs, 2014a). The summit yielded $1.9 billion of
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 2
bilateral deals between China and African countries (Washington Post, 2006). Chinese
aid, in the form of grants, interest-free loans and concessional loans, has reached more
than 50 African countries. Between 2010 and 2012, China provided $7.71 billion of aid
to Africa (The State Council of China, 2014a). Chinese aid has helped build
infrastructure, schools, and hospitals in Africa, as well as the state-of-the-art $200 million
African Union (AU) Headquarters building with furnishings as a free gift to the AU
(BBC News, 2012a). At the 2012 China-Africa summit, former President Hu Jingtao
pledged another $20 billion of concessional loans to Africa by 2015 to support
infrastructure, agriculture and the development of small business (BBC News, 2012b).
Beijing has so far kept a good record on delivering its aid pledges fully and on time. Aid
plays an important role in strengthening China-Africa ties and serving China’s interests in
Africa.
Besides trade, diplomatic visits and aid, the “all-around strategic partnership,” as
Beijing describes it in its Africa Policy Paper, involves a wide range of cooperation in
culture, academics, inter-political party relations, science and technology, military,
agriculture, health, environment, tourism, and media (People’s Daily, 2006). Here are
several examples. China and Africa have jointly established 29 institutions in 22 African
countries that offer programs to promote Chinese language and China-Africa cultural
exchanges. Partnerships between universities in China and African countries are growing,
and China has funded scholar visits in both directions and sponsored African students to
study in China (FOCAC, 2012). The Communist Party of China (CPC) has established
inter-party relations with political parties in African countries, such as the ruling African
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 3
National Congress in South Africa and the Ethiopian People's Revolutionary Democratic
Front (China Internet Information Center, 2012; Xinhua News, 2011). Since 2000, China
has dispatched several thousand policemen and troops to participate in the United Nations
(UN) Peacekeeping in the Democratic Republic of Congo, Liberia, and Sudan, and
participated in an African Union (AU) mission in Somalia and an AU-UN joint mission
in Darfur (Permanent Mission of China to the UN, 2009). China has developed bilateral
military cooperation with African countries in part to protect its vast investment and the
increasing number of Chinese personnel on the ground. The West has heavily criticized
China’s engagements with some Africa countries, such as Sudan.
China-Africa in a Broader Context
From the viewpoint of a rising China, the unprecedented engagements with Africa
are part of China’s “Go Global” economic and diplomatic strategies. Mainly relying on
its own efforts, China presents to the world a centrally planned economic success,
transforming from a starving giant to one of the world’s economic superpowers within
one generation. China reportedly became the largest trading nation in 2013 (Guardian
News, 2014a). Since President Xi took the office in November 2012, he has paid state
visits to all five continents to strengthen ties, expand trade, and promote China’s
international profile. Hosting the 2014 Asia Pacific Economic Cooperation (APEC)
Summit was another effort made by Beijing to boost trade. Examples of large deals made
during these top-level visits are: the record making Russia-China $400 billion natural gas
deal in May 2014 (Washington Post, 2014) and another large Russia-China gas deal
initialized later that year at the APEC summit (RT News, 2014), the establishment of a
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 4
$100 billion development bank named the BRICS Development Bank, by China, Russia,
Brazil, India and South Africa, with the Chinese commitment of $40.1 billion (Xinhua
News, 2014), the France-China 18 billion Euros ($22.1 billion) deal mainly to import
liquefied natural gas from the French energy giant Total and to expand cooperation in
nuclear power plants (Tengxun News, 2014a & b), the $20 billion Chinese investments in
India’s infrastructure (The Times of India, 2014), a $10 billion Chinese order for 70
Airbus planes (Tengxun News, 2014a), and the historical US-China agreement to cut
greenhouse emissions (CNN, 2014a). These deals indicate China’s efforts to diversify its
energy sources and trading partners, and its strong interest in clean energy to address
pressing pollution challenges at home. It is worth noting that, although growing at a
dramatic speed, China-Africa trade only accounted for approximately 5% of China’s total
imports and exports in 2012 (The State Council of China, 2013a).
China-Africa cooperation is part of a bigger picture in which emerging economies
are playing a more central role in African development. Tracing China’s lead, India and
Brazil, two other major players from the global south, have intensified their efforts to
forge close ties with Africa in recent years. India-Africa trade reached $70 billion in
2012, making India the fourth largest trading partner of Africa (The Times of India,
2013). The bilateral trade is expected to reach $90 billion by 2015 (World Trade
Organization [WTO] & Confederation of Indian Industry [CII], 2013a, p. 5). Africa
supplies 20% of India’s oil and raw material imports (WTO & CII, 2013, p. 15). Brazil
has long historical ties with Africa dating back to the time of the Portuguese empire.
From Portuguese speaking countries Angola and Mozambique to other parts of Africa,
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 5
Brazil is expanding its footprint in Africa and building ties, especially in the energy,
mining, agriculture and infrastructure sectors (New York Times, 2012a). Brazil-Africa
trade increased from $2 billion in 2000 to $26 billion in 2012 (BBC News, 2013a). Brazil
has increased its development assistance to Africa in recent years and wrote off $900
million of African debt in 2013. Oil- and gas-rich Congo-Brazzaville, Tanzania, and
Zambia are the main beneficiaries of this debt cancellation (BBC News, 2013a).
Africa is confronted by a historical opportunity to transfer the economic
momentum from other parts of the developing world to the continent through south-south
trade and investment. Development practice in the last 70 years, including the different
paths that Africa and China have each taken, presents a great deal of knowledge as to
what works and what does not, which can suggest advice for developing successful
China-Africa cooperation. The Western donor-imposed drastic market liberalization and
privatization in the ‘80s and ‘90s overall failed to bring about a broad-based growth in
Africa. Then, can south-south cooperation make a difference? With the recent surge of
foreign investments in Africa from emerging economies eyeing its rich natural resources
and consumer market, how can we preserve and promote the essential truth that
development must ultimately be about people and the improvement of human life? How
can China and Africa develop a win-win cooperation, through which China plays a
positive role in helping Africa to reduce poverty and achieve a broad-based development?
In this context of emerging economies on the rise and a new international order in the
making, the fast-growing China-Africa cooperation is an important subject that requires
continuing academic focus.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 6
Gaps in Existing Research
China’s continent-wide presence in Africa has generated extensive discussion and
debate about its African strategies and impact on the continent. Some acknowledge the
affordable goods, aid, technology, and business opportunities brought by Chinese
investments. Others, including many from the West, criticize China for implementing
neo-colonialism, supporting corrupt regimes, worsening human rights, abusing African
workers, and polluting the African environment. This paper aims to address three
ongoing concerns and investigate a new trend, which have not been adequately discussed
in existing studies on China-Africa cooperation.
First, China’s Africa policy has been a subject of debates and received much
criticism from the West. But the link between China’s domestic development and its
behavior in Africa, which is important for understanding China’s African policy and
generating constructive responses to the criticism, has not been adequately addressed in
existing studies. Through the lens of China’s own history and development experience,
this paper will present an in-depth discussion of the core principles that have guided
China’s African policy since the 1950s. In particular, the paper will address the principle
of non-interference, also known as “business is business,” which has received heavy
criticism from the West.
Second, there is a frequently expressed concern about Chinese projects in Africa
being done largely by Chinese workers, but so far few practical solutions have been
offered as to how to include African workers in Chinese projects given the well-
recognized cost-effectiveness of Chinese workers. To help fill the gap and develop
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 7
solutions, the paper will investigate the factors behind Chinese firms’ hiring preferences,
especially those associated with Chinese firms’ business model and the competitiveness
of Chinese workers in the African context. The paper will look into the labor practices of
Chinese firms domestically and in Africa, as well as the legal framework for protecting
workers’ rights on both sides. One follow-up question closely related to jobs for Africans
is how to develop a good working relationship between Chinese and Africans at the firm
level, which has rarely been discussed in existing studies. The paper aims to contribute an
insightful discussion of this question based on the author’s research in Egypt on two joint
ventures under the Chinese-Egyptian petroleum partnership.
Third, a main criticism towards the intensifying Chinese aid to Africa is the lack
of transparency. Existing studies largely seek a political explanation for the problem but
pay little attention to assessing China’s capacity in aid management. This paper aims to
identify major causes of the problem and develop practical solutions. Specifically, it will
explore the possibility of improving transparency and effectiveness of Chinese aid
through a broad-based partnership with the academia in China and African countries,
established donors in the West, and development NGOs in Africa.
Fourth, the paper will investigate the newly emerging China-Africa partnerships
in renewable energy, which have started to gain media attention but have not yet been
adequately discussed in existing studies. Given Beijing’s increasing commitment to clean
energy, and the fact that China is now leading the world in renewable energy investment,
this new phenomenon in China-Africa cooperation and its development potential are
worth more exposure. The paper will examine the market and regulatory incentives
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 8
implemented in developed countries that may be applicable to China-Africa cooperation,
and will suggest practical strategies, that utilize China’s strength and at the same time are
suited to Africa’s conditions, to boost China-Africa cooperation in renewable energy.
Methodology and Purpose of the Study
This study views China in Africa through the lens of China’s own history and
development experiences. It incorporates findings from existing research into the author’s
own research to advance a new way of understanding the China-Africa cooperation, and
to develop strategies in forging successful cooperation. It presents this cooperation in the
broader context of international development evolution, the different development paths
that China and Africa each have taken, and today’s new momentum of south-south
cooperation. It uses mixed methods to assess both the economic focus of the cooperation
and the working relationships between Chinese and Africans.
The contributions this study aims to make are two-fold: 1) to present a new
perspective for understanding China’s behavior in Africa through a deliberate
examination of China’s own history and development experiences; and 2) to develop
practical strategies that can be supported by business incentives and political feasibility to
shape win-win cooperation between China and Africa.
Structure of this Paper
This paper is divided into eight chapters. After this introduction, Chapter II
reviews the trends in the body of knowledge that guides development practice over the
last 70 years. In Chapter III, Africa’s development experience since its independence era
is reviewed, followed by the story of China’s development and transformation in Chapter
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 9
IV. Chapter V takes a close look at the development of China-Africa cooperation. Then,
the methodology for this study is addressed in Chapter VI. In the last two chapters,
findings from this study and recommendations for advancing the practice are presented.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 10
Chapter Two: Evolution of Development Thinking
Post-war Recovery and the Marshall Plan
The concept of “development” emerged in the aftermath of World War II. The
depression and World War II brought great attention of the West economists to address
the issue of underdevelopment through stimulating economic growth (Baber, 2001). In
preparation for rebuilding the post-war international economic system and based on the
ideas of U.S. Treasury Officer Harry White and British economist John Keynes, two
organizations that have made a profound influence in international development, which
are the International Monetary Fund and the International Bank for Reconstruction and
Development, were established in 1944 at the United Nations Monetary and Financial
Conference in Bretton Wood, New Hampshire (IMF, 2014a). The International Bank for
Reconstruction and Development later became the World Bank. Later in 1948 through
1951, the Marshall Plan, officially the European Recovery Program, was initiated by the
U.S. government and provided 13 billion U.S. dollars of economic aid to help rebuild the
war-devastated Europe and prevent the spreading of Soviet Communism. The Marshall
Plan’s economic and political impact on boosting agricultural and industrial productions,
and diminishing the strength of communism in West European were acknowledged by
many (Baber, 2001; DeLong & Eichengreen, 1991; Tarnoff, 1997). Baber (2001)
suggested that the success of the Marshall Plan provided economists with a strong dose of
confidence in the feasibility to re-develop battered economies and duplicate the West
European experiences elsewhere.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 11
Modernization Theory
Unlike the Marshall Plan being set forth to rebuild post-war Western Europe that
had already attained industrialization, modernization theory, which emerged in the 50s,
focused on understanding and explaining the entire development process from a
traditional agricultural society to a modern industrialized society (Aksamit, 2009).
Perhaps the most influential modernization theory model is Rostow’s (1960) five stages
of growth. Rostow believed that all societies would eventually experience the following
stages as they matured into industrialized developed countries: 1) traditional society, with
limited production function, bare understanding of science and technology and a
hierarchical social structure; 2) precondition for takeoff, including capital mobility,
private enterprises, commercial agriculture, modern technology, education, law and
political system, etc.; 3) take off, characterized by industrialization, urbanization and
dynamic self-sustained development; 4) dive to maturity, characterized by diversity of
industrial bases, advanced technology, modern production, investment for infrastructure,
etc.; 5) age of high mass-consumption, featuring leading sectors shifting to durable
consumer goods and services, increase of social welfare and security, advanced
technology, automobile use, etc. Rostow’s model was a one-size-fits-all linear growth
recipe. It was based on the belief that underdevelopment is due to deficiencies internal to
underdeveloped countries themselves (Namkoong, 1999).
Dependency Theory
After a decade of adopting the western capitalist economic policies, economic
conditions in Latin America countries were not changed, rather, had worsened. In this
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 12
context, the dependency theories emerged in 1960s as an alternative to understand
underdevelopment in third world countries (Namkoong, 1999). It rejected the view of
Eurocentric modernists that the western pattern of development suits for all. As
Namkoong (1999) summarized, the dependency theory views the world being divided
into parts: the “center” of affluent industrialized states and the “periphery” of
underdeveloped states. Based on this view, it explains the underdevelopment throughout
Latin America as the industrialized states at the “center” greatly benefit from the
resources flowing from the “periphery” poor nations under the unfair terms of
international trade (Kimakowitz, 2012). Santos (1970) explained “dependency” as the
economy of dependent nations is conditioned by the development of another economy so
that the dominant nations are capable of self-sustaining and expanding, while the
dependent nation can only do is to reflect that expansion (p. 231). Raul Prebisch, former
Secretary General of the United Nations Economic Commission for Latin America
(UNECLA), argued in his famous 1950 article The Economic Development of Latin
America and its Principal Problems that poor countries served as the suppliers of primary
goods for the rich countries and then the market for manufactured products from rich
countries. As Ferraro (2008) summarized, Prebisch argued that because the added value
of imported goods from rich countries was higher than the primary goods, poorer
countries would never be earning enough from their exports to pay for their imports.
Thus, the UNECLA suggested an inward-oriented development path, and advocated
protective trade measures and state subsidy to substitute foreign imports with domestic
production (O’Brien, 1975). There are disagreements among dependency theorists.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 13
Debates were among the Neo-liberalists like Prebisch, the Marxists such as Andre Frank
who viewed the underdevelopment as a consequence of imperialist exploitation, and the
world systems theorists like Wallerstein, who viewed poverty as a consequence of the
international political economy that evolved into a fairly rigid division of labor that
favored the rich and penalized the poor (Ferraro, 2008).
Namkoong (1999) acknowledged the contribution of dependency theory in
providing a new perspective to understand the underdevelopment in third world
countries, especially who is in control of development. Oversimplification of a highly
complex reality of underdevelopment and the victimization of the third world countries
are among the main criticisms of the dependency theory. For example, Smith (1979)
stated that the dependency theory overestimated the power of the international system
and failed to acknowledge adequately the internal factors in third world countries that
impaired development. Weisskopf (1977) added that it would be more appropriate to
view dependency as aggravating conditions of underdevelopment than a major cause of
underdevelopment.
Marxism
Pioneered by two German philosophers Karl Marx (1818-1883) and Friedrich
Engels (1820-1895), the Marxist theory presents a perspective as to how society works
and evolves, especially with regards to capitalism. As Little (2008) summarized, in
Marxist view, class exploitation is an intrinsic part of capitalism. Socialism is an ideal
order of society in which private property and exploitation are abolished and such order
can only be achieved through revolution. Marx (1875/2008) believed that the ultimate
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 14
destiny that the revolution fights for is a communist society “from each according to his
ability, to each according to his needs” (p. 27). In other words, each member of society
contributes at their best capacity, with more able members doing more, but the rewards
are distributed according to each individual’s needs rather than their output or
contribution (Trainer, 2010). In the Soviet Union and China, under the leadership of
revolutionary communists Vladimir Lenin (1870-1924), Joseph Stalin (1878-1953) and
Zedong Mao (1893-1976), Marxist political and economic ideology was interpreted and
developed, and consequently had a profound impact on these two countries. Little (2008)
stated, “Perhaps the most crucial flaw within twentieth century communist thought was
its authoritarianism: the ideal that a revolutionary state and its vanguards party can take
any means necessary in order to bring about communist outcomes” (p. 638). Indeed, the
Great Leap Forward (1958-1961) and the Cultural Revolution (1966-1976) in China cost
millions of lives and was arguably the darkest time in the history of the P.R. China since
its birth in1949. The dramatic economic failure and humanitarian disaster revealed that,
at least in part, Marxist theory provides little concrete guidance as to how to build a
“new” world after revolution and how to achieve a classless, perfect society that Marx
had dreamed for.
Structure Adjustment Programs (SAPs) and Washington Consensus (WC)
According to the World Health Organization (WHO) (2014a), the SAPs refers to
a set of market-oriented policies implemented in developing countries since early 1980s
under the guidance of the World Bank and the IMF, which included controlling inflation
and government deficits for macroeconomic stability, increasing free trade, privatizing
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 15
state-owned industries, deregulation, etc. The adoption of these policies was the
conditionality for countries to receive loans from the World Bank. Such policies are often
referred as the “Washington Consensus,” a term coined by John Williamson, because the
key promoters of the policies are based in Washington D.C., -- the World Bank, the IMF,
and the US Department of Treasury. Williamson (2003) listed the ten policies in the
Washington Consensus as the following: 1) fiscal discipline, 2) re-ordering public
expenditure priorities, 3) tax reform, 4) financial liberalization, 5) a competitive exchange
rates, 6) trade liberalization, 7) liberalization of inwards foreign direct investment, 8)
privatization, 9) deregulation, 10) property rights.
The emergence of Washington Consensus is considered a shift of the
development approach from state-led to market-led (Gore 2000). In 1980s, the doctrine
of neo-liberal market-led reform started becoming dominant. Gore (2000) suggested that
multiple factors helped shape the view that market can do better job than government,
and competition and individual incentive are the best way to allocate resources
efficiently. For example, poor economic performance in most parts of the developing
world in late 1970s and 1980s cast a doubt over the nationalism approach. The economic
success in East Asia that endorsed export and complimentary role of market weakened
the argument of inward orientation made by the dependency theorist. The collapse of the
Soviet Union and communism in East Europe served as a strong evidence against central
planning.
However, the poor poverty reduction records in 1990s showed that SAPs overall
did not bring broad-based and sustainable growth in developing countries (Handley,
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 16
Higgins, Sharma, Bird & Cammack, 2009). The SAPs and the Washington Consensus
remain controversial and have drawn wide criticism. The underdevelopment in Sub-
Saharan Africa today reflects the reality that SAPs had not made a substantial difference
in improving the livelihood of African people. The WHO (2014a) stated that the SAPs
led to public spending cuts in health and worsened health conditions of people in
countries where they were adopted. Williamson (2005) admitted that, after being in
compliance with the WC policies for 15 years, economic performances of most Latin
American countries were disappointing. But he argued that his original version of WC
was altered over time by the Bretton Wood institutions and some of the deviations had
contributed to the crisis in Asia in 1997 and Argentina in 2001. Altered or not, it is fair to
say that these liberalizing and market-based policies were donor-imposed reform
implemented in a substantial scale without taking into account the vulnerability of the
economy in recipient countries and the difference among them.
Poverty Reduction Strategy Papers (PRSP) and Post Washington Consensus
The lack of progress in poverty reduction in the 90s and the catalytic 1997 Asia
Crisis imposed a challenge to the credibility of the Washington Consensus. The 1997
crisis brought the attention back to a greater role of government than the single focus on
stabilizing price under the market fundamentalism. Wade (1998) called “the capital
account liberalization without a framework of regulation” as the “most irresponsible
action” in the Asia crisis (p.1545). Responding to criticisms towards the SAPs, the World
Bank and the IMF introduced a new program in 1999 – Poverty Reduction Strategy
Papers (PRSP). PRSP are documents required for countries to qualify for debt relief
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 17
under the Highly-Indebted Poor Countries (HIPC) initiative and to access the World
Bank and IMF loans (World Bank, 2014). Different from the previous top-down neo-
liberal reform approach, PRSP placed greater emphasis on country ownership and
participation including promoting the role of civil society (WHO, 2014b). PRSP added
non-monetary indicators, such as education and health, to access and monitor the poverty
reduction process (World Bank, 2014a). The impact of SAPs and PRSP on Africa will be
reviewed later.
Kimakowitz (2012) argued that the changes to adopt limited regulation and make
the Washington Consensus more human are nothing more than a modification from
market fundamentalism to market friendly as the development process is still based on
primacy of market. Williamson (2005) described the “new” agenda as to give
government and distribution more attention but, importantly, continue rather than reverse
the liberalizing reform of the Washington Consensus. Joseph Stiglitz, Chief Economist
of the World Bank (1997-2000) who had written extensively on the limitations of the
WC, called for a “post Washington Consensus,” which embraces broader objectives that
include not only GDP growth but also objectives such as education and health; which
understands the aim of development as improving living standards and transforming
towards a more democratic, equable and sustainable society (Stiglitz, 1998). In the same
article, Stiglitz stressed that changes cannot be imposed from the outside and,
participation and ownership of developing countries are crucial for successful
development.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 18
Capacity Approach and People-centered Development Strategy
Development practice in the 80s and 90s witnessed that 1) economic growth did
not automatically improve living standards and address inequality in distribution; 2)
overall, imposed market-oriented reforms by the North did not deliver successful results
in the South. These experiences called for a shift of development thinking from
excessively pursuing economic growth towards placing people at the center. The
capacity approach developed by Amartya Sen and the people-centered development
strategies proposed by David Korten in the 1980s are among the most influential
contributions on this new direction.
Sen’s work on the capacity approach was discussed in detail in his book
Development as Freedom published in 1999. Sen (1999) argued that poverty is
deprivation of capacity and development should be advancement of freedom. He defined
“capacities” of a person as “ the substantive freedoms he or she enjoys to lead the kind of
life he or she has reasons to value” (p.87). The five substantive freedoms are political
freedom, economic freedom, social opportunity, transparency guarantee and protective
security (p.10). From the view of the capacity approach, poverty should not be narrowly
explained as income scarcity but the deprivation of basic capacities. The end of
development, in turn, should be to advance these instrumental freedoms that enable
people to expand their capacities and live a flourishing life. Sen’s work presented an
inspiring perspective on means and end of development. He argued, “deprivation is
intrinsically important” while “income is instrumentally significant” (p. 87). Income by
itself is inadequate to explain poverty because the same absolute income may mean
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differently to a young healthy person and an elderly ill person. Nor can it capture the
disproportionate resource distribution among family members in a male-dominating
culture. Further, in wealthy countries, more income is often needed to purchase enough
commodities that provide the same quality of living (Sen, 1999). Stewart and Neneulin
(2002) acknowledged the capacity approach’s powerful critique to income maximization
and its validity to inform a broad development agenda on poverty, gender, democracy,
etc. But they argued that Sen’s view of the democratic consensus’ role in bringing needed
social changes is idealistic, because powerful interest groups, such as large corporations
and political parties, are in many contexts cable of filtering information and shaping
democratic consensus in favor of advancing global capitalism rather than “capacities” of
people that Sen defined (Stewart & Neneulin, 2002).
People-centered development strategy emphasizes putting people in charge of
their own development progress. Korten (1987) argued that a decentralized, democratic
approach that allows greater local initiative and accountability, and broadly distributed
control of political and economic assets, are essential to achieve equal and sustainable
development. The argument was based on lessons learned from development assistance
experiences in the past. For example, traditional strategy that placed emphasis on capital
flow from wealthy countries to poor countries had not done much to alleviate poverty but
contributed greatly to the debt crisis in the Third World. In many cases, foreign aid
channeled through national government ended up feeding corruption and patronage rather
than being invested for helping the poor. Therefore, people should be encouraged to
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manage local resources and participate fully in the development decision making with
government in an enabling role (Korten, 1987).
These approaches were officially endorsed by the UN in United Nations
Development Program’s (UNDP) first annual Human Development Report published in
1990. The Human Development Index (HDI) - a composite measure of health, education
and income, was first introduced in the 1990 report and later adapted by many countries
as an alternative to GDP growth for assessing development progress (UNDP, 2014).
The UNDP (1990) report stated in the Foreword:
We are rediscovering the essential truth that people must be at the center of all
development. The purpose of development is to offer people more options. One of their
options is access to income - not as an end in itself but as a means to acquiring human
wellbeing. But there are other options as well, including long life, knowledge, political
freedom, personal security, community participation and guaranteed human rights. (p.
iii).
Development NGOs
According to the UN (2014a), a Non-governmental Organization (NGO) is “a not-
for-profit group, principally independent from government, which is organized on a local,
national or international level to address issues in support of the public good.” Another
often quoted definition of a development NGO is from Vakil (1997) - “self-governing,
private, not-for-profit organizations that are geared to improving the quality of life for
disadvantaged people” (p. 2060). NGOs have become one of the major players in the
development field since 1990s (Lewis & Kanji, 2009). No reliable statistics are available
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so far as to how many development NGOs there are in the world. The numbers of NGO
in the US are approximately 1.5 million (US Department of State, 2012). Besides large in
numbers, NGOs channel significant development resources today. According to UNDP
(2013), the total revenue of the eight largest development NGOs, with the World Vision
International at the front, reached US$11.7 billion in 2011. In 2007, out of the US$ 15
billion humanitarian assistance record by the UNDP, US$ 4.9 billion were supplied by
NGOs.
As Lewis (2007), Lewis & Kanji (2009) and Korten (1987) had discussed,
dramatic proliferation of NGOs in the 1990s was a response to the poor development
records in the 80s and 90s under the traditional strategies that focused on growth and free
market, and the corruption and bureaucracy associated with government-to-government
international aid observed in developing countries. NGOs became an alternative to fill the
gaps by providing vital public service to people in need. Their comparative advantages to
government programs lie in their ability to provide service more direct, flexible, and cost
effective to local communities, and their grass-root participatory approach and
commitment to the poor. Robinson and White (1997) presented studies showing that
NGOs played a significant role in delivering health service in Zimbabwe, Zambia and
Ghana in the 90s when public spending in social services was drastically cut in these
African countries due to the adoption of SAPs (p. 12).
Korten (1987) suggested that three generation of NGO program strategy co-exist
but follow an underlying movement: 1) first generation of humanitarian relief and welfare
that emphasize direct action and immediate needs such as disaster relief assistance; 2)
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second generation of small-scale self-reliant local development initiatives such as
community health programs; 3) more recent sustainable system development in which
NGOs involve less at the village level and more in partnership with public and private
agencies to influence wider development policy context through advocacy. Among the
three major roles that NGOs play in development - service delivery, advocacy and
partnership, the latter two roles have risen significantly and demonstrated increasing
influence in government, donors and private sectors, and in turn, influence national and
international development policies (Lewis & Kanji, 2009, p. 91-104).
Accountability and sustainability are among the most discussed challenges faced
by development NGOs today. Highly published scandals involving wrongdoing of key
officers and concerns over high administrative cost, increasing commercial revenue and
failure to reach the poor have undermined NGO credibility (Gibelman & Gelman, 2001;
Ebrahim, 2003). Ebrahim (2003) argued that NGO accountability is multifaceted and
broader than the traditional Principal-Agent perspective. First of all, NGOs serve a dual
role of both principal and agent. For example, in a NGO-funder relationship, NGOs
primarily act as the agent to the principal, which could be government agencies or private
funders. NGOs can also play a principal role to hold the funders accountable by voicing
complaints and proposing improvement to reform the funders. Secondly, NGOs carry
both upward accountability to funders and board of directors, and downward
accountability to people and communities they serve. Different interests among multiple
principals and imbalance between the upward and downward accountabilities could
introduce competing project goals and lead to a situation that NGOs place more effort to
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satisfy the funders than serve the poor. Thirdly, evaluation mechanisms that demand
quick results and emphasize external oversight could further complicate the NGO
accountability.
Sustainability, especially the financial sustainability, is a salient NGO challenge.
On the one hand, increasing marketization within the non-profit sector has raised a
concern of the potential deterioration in NGOs distinctive contributions to civil society
(Eikenberry & Kluver, 2004). On the other hand, development NGOs, especially small
and local ones, are struggling between poverty reduction and institutional sustainability.
A case study of a Tunisian-based micro-finance NGO named Enda Inter-arab (Enda)
conducted by Kaki (2003a, b) is an example. Microfinance is known as a grassroots
development strategy to grant small loans to the poorest of the poor without requiring
collateral (Ruben, 2007). However, the case study showed that, facing the challenges of
low funding, high lending risk and unreceptive political environment, Enda had to adhere
to the principles of zero-tolerance to loan default and breakeven interest, namely an
interest rate high enough to offset the cost of borrowing, administrative fees and the risk
of loan default. These principles were necessary for institutional sustainability but no
doubt put a burden on the poor whose lives were already marginal and fragile (Kaki,
2003a, b). As these strategies are commonly adopted by the micro-finance industry
today, the debate goes on as to if and how much micro-finance has helped the poor.
Sustainable Development
The concept of sustainable development was coined by the United Nations World
Commission on Environment and Development (WCED) in its 1987 report Our Common
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 24
Future - “Sustainable Development is development that meets the needs of the present
without compromising the ability of future generations to meet their own needs” (WCED,
1987, p. 37). Economic growth in the last several decades had brought dramatic and
fundamental changes to the global environment. According to World Bank (2014b), each
year from 2000 to 2013 has been ranked among the warmest 15 years since the record
keeping began in 1780. The adverse effects of climate change and pollution have
imposed a serious threat to human lives as well as the fight against poverty. Thus,
sustainable development has gradually penetrated public policies and arisen as a global
development priority.
Although there is a consensus on a multi-stakeholder approach and global
partnership for sustainable development (Backstrand, 2006; Brown, 1991; Zhang & Wen,
2008), there are differences in aim, expectation and position as to what should be the
immediate priority and how to best move forward together. At the national level, for
example, the failure of the Green GDP Project– publishing environmentally adjusted
GDP, initiated in 2007 by China’s State Environmental Protection Administration
(SEPA), proved that favoring economic growth over environmental protection is deeply
rooted in China’s political culture (Li & Lang, 2010). At the international level, during
the 2012 UN Conference on Sustainable Development (Rio+20), when developed
countries, especially the EU led by Germany and France, pushed for green economy as
the top agenda, the developing countries were fighting for more resources on poverty
reduction (International Institute for Sustainable Development, 2012). When the Western
leaders criticized China and India for being big polluters, as President Obama did at his
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speech on climate change in May (Guardian News, 2014b), the World Bank’s most
recent data indicates that: in 2011, energy consumption per capita was 7,032 (kg of oil
equivalent per capita) in the US, 2,029 in China and 694 in India (World Bank, 2014c).
This is not to undermine the importance of green practice, or use large population as an
excuse for the impact of China and India’s pollution on their own people and the
international community. Rather, the purpose is to show the complexity of the problem
and promote authentic dialogue in building a successful partnership for sustainable
development. Taking into account the interests of less powerful parties, and the
conditions and reality in major responsible parties, such as China and India, are critical to
ensure their participation and commitment to move the sustainable development agenda
forward.
Summary
So far we have briefly reviewed the trends in the body of knowledge that guides
development practice in the last 70 years. These trends suggest an evolution of
development thinking from addressing development in a national framework, to a
dramatic push for liberalization and privatization, and to the re-discovery of the role of
government in economic planning and correcting market deficiency; from a narrow and
exclusive focus on growth measured by the Gross National Product (GNP), to broader
and more inclusive objectives such as education and health; from income to distribution
of income; from money to people, to human freedom and capacity, and then to human
and environmental sustainability. The trend of development thinking illustrates different
views of the North and the South to address underdevelopment, namely the one-size-fits-
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 26
all linear growth receipt and the donor imposed free market policy reform from the North
vs. the inward-oriented dependency view, the capacity approach, and the gradual and
strategic opening of the national economy observed in the East Asian miracle from the
South. The rising of NGOs in development and their increasing role of advocacy and
partnership reflect the changes in public management, such as putting citizens in charge,
the rising of the third sector, transparency, accountability, and collective governance.
As mentioned earlier, reviewing the evolution of development thinking is to
provide a context for the discussions on China-Africa cooperation later in the paper. The
review shows the development strategies that were applied and tested internationally, and
provides useful information as to what works and what does not, and in what context and
time. The discussions on the means and end of the development remind us that people
should be placed at the center in pursuing a successful development partnership. In the
following three sections, African and China’s development experience will be reviewed,
followed by a close look at the fast growing China-African cooperation since the turn of
the new century.
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Chapter Three: African Development Experience (1950s-Present)
In this section, major development schemes and events in Africa after the
independence era in the 50s and 60s were reviewed, which include debt crisis, Structural
Adjustment Programs (SAPs), Poverty Reduction Strategy Papers (PRSPs), Highly
Indebted Poor Countries (HIPC) Initiative, impact of foreign aid, resource curse, and
recent Arab Spring movement. The review seeks to answer these questions: what the
West has done in developing Africa, how much progress Africa had made by 2000 when
China’s unprecedented engagements with the continent started, and where African stands
today in terms of development. Several African countries were highlighted in the review,
such as Zambia, Nigeria, Egypt and Libya. These countries are among the major partners
of China in the China-African cooperation since early 2000s.
Debt Crisis
External debt burden is a salient development challenge faced by many African
countries. Africa’s external debt was around $300 billion in 2009, which cost the
continent 16% of its export earnings that year on debt service payments. In the 1990s
when the debt crisis was at its peak, Africa’s debt service and export ratio reached 40%
(UN, 2010). According to the United Nations Conference on Trade and Development
(UNCTAD, 2004), between 1970 and 2002, Africa received approximately $540 billion
US dollars in loans and paid back approximately $550 billion in principal and interest
while still carrying a debt stock of $295 billion at the end of 2002. This is a clear
reminder that aid is not free. In 2011, the outstanding debt of sub-Saharan Africa (SSA)
countries equaled 24.8% of the region’s total gross national income and 62.5 % of total
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 28
export earnings (World Bank, 2013, p.10). Although Africa’s external debt today is
significantly less than that in the 1990s, debt service is still a heavy burden in the Africa
context and diverts already scarce fiscal resources away from crucial public services,
such as health and education. Today the sub-Saharan Africa remains as the least
developed region with the highest number of malaria cases and deaths (WHO, 2014c) and
highest HIV-related death in the world (Joint United Nations Programme on HIV/AIDS
[UNAIDS], 2013, p. 49).
The origin of the debt crisis involved multiple factors. Below is a summary of the
findings from four studies (Babatunda, 2008; Geda 2003; Greene, 1989; Kurmm, 1985).
During the first oil price shock in 1973, the price of commodities that Africa produces,
such as cocoa, coffee, tea, sugar and groundnuts, rose sharply at first and then declined
steeply in 1974. Many African countries responded to the initial commodity price boom
by sharply increasing public spending including launching major infrastructure projects.
When the commodity prices fell substantially, government expenditures were not
tightened accordingly in hope for a rebound in the national price cycle. So new loans
were added to the previous borrowing in order to maintain the ongoing projects and high
spending level. The borrowing was encouraged by the oil dollars circulating in internal
financial markets after the shock. Later, as a result of industrial countries’ efforts to
contain the inflation due to the second oil price shock in 1978-79, major commodity
prices continuously declined, which led to more borrowing and further indebtedness of
affected African countries. Africa’s oil producers, like Nigeria, also became heavily
indebted mainly because of the rapid increase of public spending, especially in capital
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projects, borrowing at non-concessional interest rates, and the oil price collapse in 1986.
The rising interest rates during the 1980s cost African countries more to service debt and
pushed their debt stock upward. The SAPs implemented in Africa in the 1980s and 1990s
imposed the conditionality of trade liberalization, which further deteriorated barter terms
of trade for African countries and increased debt stock. Many African countries adopting
the SAPs were deeply indebted by the end of the 1990s.
Geda (2003) further argued that analysis should trace back to the pre-
independence period in order to adequately understand Africa’s debt issue. Before the
colonial era, most regions of Africa had a long history of autonomous economic activities
and traded a range of goods with Middle East and Indian Ocean economies. The
colonialism destroyed Africa’s autonomy and forced it to become a slave and primary
commodity supplier for the Western colonial powers. Many African countries then
heavily relied on the export of a few major commodities such as cocoa for Ghana and
copper for Zambia. Geda argued that the historical conditions established in pre-
independence time had put Africa economies in a vulnerable position at the first place
and helped explain the impact of commodity price shocks in the '70s and '80s as well as
Africa’s dependence on external finance.
Structural Adjustment Programs (SAPs)
As introduced in Chapter II, SAPs refer to a set of market-oriented policies that
were broadly implemented in developing countries since the 1980s. The core policies
featured trade liberalization, privatization, inflation control and deregulation. Adoption
of SAPs was the conditionality for countries to receive loans from the World Bank and
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IMF (WHO, 2014a). It is a broadly accepted view that SAPs did not bring broad-based
growth as hoped, nor did they make a substantial difference in improving living standards
of African people (Kimakowitz, 2012; Riddell, 1992; Stiglitz, 1998; UN, 2010). The
SAPs’ reversed impacts on social services due to drastic cut of public funding were well
documented, especially the impact on the health sector (Loewenson, 1993; Kirmani &
Munyakho, 1996; Simms, 2000; Cornia, Jolly & Stewart, 1987; WHO, 2014a).
A study on Zambia’s SAP experience by Situmbeko and Zulu (2004) presents an
example. Because of the significance of copper to Zambia’s export revenue, its economy
was heavily impacted by the copper price collapse in 1974 and the continual weak and
unstable prices through the '80s and '90s. As a result of external economic shock and poor
internal economic management, Zambia had no choice but to adopt the SAPs in order to
gain access to the World Bank and IMF loans. Situmbeko and Zulu found that trade
liberalization had a severe impact on Zambia’s manufacturing sector in general and the
textile business in particular. Lowering textile tariffs, especially removing all tariffs on
used clothes, opened the Zambia market to large, cheap, second-hand clothing imports
from the industrialized countries. Their study reported that the number of textile
manufacturers fell from over 140 in 1991 to only 8 in 2002 (p. 8). In the agriculture
sector, removal of subsidies on maize and fertilizer to meet the conditionality of the SAP
loans also drove many local farms out of business. Despite a large public protest in
Lusaka, Zambia was forced to privatize the Zambian State Utility Company (ZESCO)
and the State Bank (ZNBC) in return for debt relief under the HIPC Initiative (p.10).
During the time of SAPs implementation in Zambia, the GPD per capita (at current
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prices) declined from $738 US dollars in 1980 to $484 in 1990, and $318 in 1999 (UN
Statistics Division, 2014). Zambia’s poverty rate increased from 69.7% in 1991 to 72.9%
in 1998 (IMF & International Development Association [IDA], 2000, p.12).
Simms (2000) found that a key factor explaining the rise of under-five child
mortality and HIV epidemic in Zambia in the '80s and '90s was that the population did
not receive adequate health protection from the restructured health operations. The study
concluded that a drastic cut of public health spending, implementation of user charges,
failed attempts to decentralize and integrate healthcare, and withdrawal of food subsidies
under the SAP program were among the causes of inadequate health access for the
ordinary Zambian population.
Poverty Reduction Strategy Papers (PRSPs)
The World Bank and the IMF introduced the PSRPs in 1999 as a response to
criticisms towards the SAPs, mainly donor-imposed top-down neo-liberal reform, narrow
focus on growth, and the reverse impact on social services, especially the health sector. A
PRSP is a document prepared by a country government every three to five years, which
presents “a country’s macroeconomic, structural and social policies and programs to
promote growth and reduce poverty, as well as associated external financing needs”
(World Bank, 2014a). The PRSP is one of the preconditions for receiving loans from the
World Bank and the IMF, as well as the debt relief benefits under the HIPC Initiative
(World Bank, 2014a). The IMF (2014d) described the PRSPs as being country-driven,
partnership-oriented, results-oriented, and based on a long-term perspective of poverty
reduction. By June 2005, 49 countries had prepared PRSPs, the majority of which were
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sub-Saharan countries (World Bank, 2006). As of January 2014, 126 full and 59
preliminary PRSPs had been submitted to IMF (IMF, 2014d). The quick and wide
adoption of PRSPs was not a surprise due to the link between the PRSPs and the debt
relief and loans from the two institutions.
The question is whether the PRSP is an improvement of the previous SAP in
terms of poverty reduction. Compared to the single growth-focused SAP framework,
PRSPs adopt both monetary and non-monetary indicators, such as education and health,
in assessing the poverty reduction process. WHO researches indicated that PRSPs
acknowledge health investments as part of the overall development strategies and support
for the enhancement of primary health services, although a systematic evaluation of
specific local needs has not received enough attention in existing PRSPs (WHO, 2014b).
Kimakowitz (2012) argued the adjustments made by the Bank and IMF were nothing
more than a modification from market fundamentalism to market friendly as the
development process is still based on the primacy of the market. Liberalization and
privatization remain as the key reforms to which countries must be compliant in order to
be eligible for debt relief, which was reflected in the Zambia case discussed earlier. Craig
and Porter (2003) view the PRSPs as a refinement of the neoliberal approach. They
argued that the priority under the new framework is global economic integration first,
good governance second, and poverty reduction third, with limited safety nets and social
inclusion.
Another PRSP component that has drawn considerable discussion is the
participatory requirement, namely a partnership involving external donors, national
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governments and domestic stakeholders in drafting the PRSPs. On one hand, there are
some encouraging reports on participatory exercises taking place. Obwona and Guloba
(2009) reviewed studies showing the governments in Ghana and Malawi reached out to
meet with civil society and average citizen groups during the preparation of the PRSPs.
Huge and Hens (2009) reported the PRSPs in Benin integrated sustainable development
into the national development plan, and the PRSP-greening process created opportunities
for social learning by allowing multiple stakeholders to present their views on how to
achieve environmental sustainability.
On the other hand, criticism has pointed out that the participation requirement
serves as a conditionality of process to legitimatize and advance powerful stakeholders’
agenda. Fraser (2005) argued that, under the SAP structure, it was the international
financial institutions (IFIs) that called the shots. Then under the PRSP structure, it is
through the very participation process that IFIs, bilateral donors and northern NGOs work
together to ensure the supervision of African political and social community, and in turn
to secure liberal economic and political management. An equal status of southern civil
society to engage the PRSP dialogue with the northern actors is in doubt. McGee, Levene
and Hughes (2002) found that the participation process, in many PRSP cases, were
information sharing, workshops, or consultation rather than initiating debate. Oftentimes
government, on short notice, calls PRSP meetings with pre-cooked policy proposals, and
there are very short gaps between the time when materials are released and the deadline
for comments. A study done by Bull, Jerve and Sigvaldsen (2006) suggested that the
principle of country ownership was weakened due to the significant involvement of the
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IFIs and foreign consultants, and a lack of local input during the PRSP progress. Last but
not least, the IMF and World Bank’s final approval of PRSPs casts a shadow over the
entire process and reminds all actors to “self-censor” demands that might later cause the
delay or discontinuance of the loans or debt relief benefits, such as an inflation rate or
macro-economic policies that do not meet the neo-liberal standards suggested by the
Bank and IMF (Fraser, 2005, p. 326-327). It is yet to be seen if the PRSPs will be able to
bring broad-based growth and make a substantial difference in African people’s lives,
which the previous SAPs failed to do.
Debt Relief
Facing poor records of SAPs on poverty reduction and the pressure from
international anti-debt campaigns, the World Bank and IMF introduced the Highly
Indebted Poor Countries (HIPC) Initiative in 1996. In 1999, the Bank and IMF further
agreed to enhance the HIPC Initiative, which lowered the debt sustainability threshold
and allowed interim debt relief between the decision point and the completion point. As
Gunter (2002) summarized, to be considered for debt relief, meaning reaching the
decision point, a country must be highly indebted, namely a net present value (NPV)
debt-to export ratio of 150% or a NPV debt-to-fiscal revenue ratio of 250%. A country
also needs to have a Poverty Reduction Strategy Paper (PRSP) in place and show several
years of good record for being compliant with the police reforms endorsed by the World
Bank and IMF, which are the neo-liberal market-oriented policies reviewed earlier. Then
a country may be considered as reaching the completion point and start receiving the debt
reduction agreed to at the decision point. IMF (2014b) stated that 36 out of the 39 eligible
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HIPCs have received debt relief so far. The total cost to provide all these 39 countries
with committed relief was estimated at $74 billion in end-2002 net value. At the 2005
G8 Summit, the eight major industrial countries endorsed the Multilateral Debt Relief
Initiative (MDRI) for 100% cancellation of debt owed to the World Bank, the IMF and
the African Development Bank by countries that reached the completion point. As of
March 2014, IMF had delivered $3.4 billion MDRI relief (IMF, 2014c).
The UN (2010) reported several major challenges faced by the debt relief efforts.
First, despite the relief delivered so far, many African countries are still in debt distress or
at risk of accumulating more unsustainable debt based on the IMF and the Bank’s
evaluation. Second, current debt relief is mainly provided by large multilateral creditors
and the 20 Paris-club member countries. Smaller multilateral creditors, non-Paris Club
bilateral creditors and commercial creditors together own approximately a quarter of the
total HIPC debt but they have delivered only a small share of expected relief. Third,
vulture funds litigation, namely buying sovereign debts of HIPCs at a deep discount and
then attempt to settle with the debtor at a substantially higher price through legal actions,
remains a serious threat to debt relief efforts.
Aid, Corruption, and Governance
Distinguished from disaster relief and humanitarian aid, the criticism of aid
focuses on development aid, precisely aid from large multilateral development
institutions and the government-to-government aid. The main issue is the link between
aid and rampant corruption. Moyo (2009) argued that when a substantial portion of
African government budget comes from aid, there is little incentive for a government to
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 36
listen to its citizens and seek ways to generate tax revenue from domestic economic
growth. According to Szeftel (2000), large aid flow, along with the conditionality of
privatizing state assets and opening up trade, provided opportunities for corrupted
politicians to appropriate public resources for personal uses in African countries where
liberal democracy is not established. Brautigam and Knack’s study (2004) on 32 sub-
Saharan African countries during the period of 1982 through 1997 found that there was a
strong statistical relationship between higher aid levels and deterioration in governance as
well as lower tax share of GDP. Chabal (2002)
acknowledged that multiparty elections,
which have been held in the majority of African countries, allow greater freedom of
expression and public policy debate. But he pointed out that multiparty elections were not
demonstrating an ability to deliver good governance in Africa, a situation which remains
the case today.
In many cases, multiparty elections are required by the donors as political
conditionality for aid. In reality, multiparty elections often serve as a mechanism for
established African political elites to access foreign aid rather than develop a democratic
society for citizens (p. 462).
Resource Curse
This refers to the observation that countries with abundance of natural resources,
such as petroleum and minerals, tend nevertheless to grow more slowly than resource-
poor countries (Sachs & Warner, 2001). Perhaps one of the best-known cases is Nigeria.
According to a World Bank study, Nigeria’s oil-related fiscal revenue reached $390
billion (in 2000 dollars) over the period of 1971-2005 (Budina, Pang & Wijnbergen,
2007, p. 3). Nigeria’s poverty rate, however, increased from 53.5% in 1986, to 63.1% in
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 37
2004 and 68% in 2010, which translates to 108.6 million Nigerians living under $1.25 per
day in 2010 (World Bank, 2014d). Oil development did not bring broad-based growth
and significant improvement of lives as Nigerians had hoped. Rather, it has contributed
greatly to increased poverty, a deteriorated environment, rampant corruption, and
violence.
Studies showed that volatility of expenditures and corruptions, rather than the
Dutch disease, are major contributors to the poor economic records of Nigeria (Budina,
Pang & Wijnbergen, 2007; Sala-i-Martin & Subramanian, 2003). Dutch disease, from an
oil perspective, means an increase in oil revenues will lead to appreciation of the real
exchange rate of an oil-rich nation's currency, making exports more expensive and
imports cheaper. As a result, it weakens the competitiveness of the country’s other
export sectors such as agriculture and manufacturing (Ebrahim-zadeh, Christine, 2003).
Both the cited 2003 and 2007 studies found that the indication towards Dutch disease was
not clear, but there was a strong indication that sharp increases in public spending,
especially in capital projects, impeded Nigeria’s economic growth. This is consistent with
the analysis on external debt reviewed earlier. Budina et al. (2007) also found that
natural resources had a strong negative effort on growth by impairing institutional
quality. Besides bribery and rent seeking, Shaxson (2007) stated that government tax
revenue in an oil-dependent state mainly comes from oil companies rather than citizens,
so government has little incentive to build a strong democratic state (p. 1128).
Oil extraction and inequitable distribution of oil benefits have increased tensions
between the local ethnic-minority militants in the Niger delta and the state-oil
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 38
multinational alliance, and some of these tensions had turned to violence. Media reported
numerous incidents of local ethnic-minority militants kidnapping foreign oil workers
(CBC News, 2010; Wall Street Journal, 2010), sabotaging oil pipes and installation
(Daily Mail, 2014), and clashing with the Nigerian government troops (CNN, 2009). The
origin of these crimes and violence, however, was a saddened story of the delta
inhabitants’ long-term struggle for survival and their frustration with the government for
excluding them from the oil benefits and leaving them a with deteriorating living
environment (Obi, 2010). Despite the immense oil revenue, many local inhabitants live in
miles of slums and mud-walled shacks. Decades of oil spills and acid rain turned the once
bio-diversified wetlands and mangrove forests, on which local fishing communities had
depended for living, into one of the most impoverished places in Africa (O’Neill, 2007).
The severe environmental impact nurtured a growing resentment against the
multinational oil companies. According to the US Energy Information Administration
(USEIA, 2013), the major international companies in Nigeria's oil industry are Shell,
ExxonMobil, Chevron, Total, and Eni, which operate oil projects both onshore and in
shallow water in the Niger Delta region.
At the heart of the conflict is the inequitable distribution of oil profits by the
federal government. Obi (2010) reported that the federal government is dominated by
major ethnic groups - Huasa-Fluani, Yoruba, and Igbo, who are from the non-producing
part of the country. They control the oil wealth and dispossess the delta communities.
Feeling excluded and marginalized, various minority groups, networking with global
activists and organizations, mobilized large protests against the state-multinational
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 39
alliance and demanded the decentralization of oil benefits and more local autonomy.
After the government neglected peaceful efforts, armed attacks targeting pipe
installations and foreign oil workers started. The Nigeria government then responded
with military actions to crack down on the attacks in order to protect the investments of
multinationals and the ruling elite coalitions’ own share of oil wealth (Obi, 2010).
Unemployment, especially among the youth, contributed to the criminal and violent
incidents. In many cases, unemployed youth were recruited by armed groups during the
campaigns against the industry and the state, and were used by interest groups to commit
oil theft (Francis, LaPin & Rossiasco, 2011).
According to the USEIA (2013), attacks from local militias caused a significant
reduction of production between the mid-2000s and 2009. In late 2009, amnesty was
declared, and the militants agreed to hand over weapons for cash payment and
employment training. But the amnesty did not bring long-term peace in the delta.
Production disruptions continues due to civil unrest, pipeline damage and oil theft.
USEIA (2013) reported that security threats have led to Shell and Chevron’s recent
decisions to sell some of their onshore oil licenses in Nigeria.
Arab Spring
Starting in Tunisia, a revolutionary wave of demonstrations and protests swept the
Arab world in 2011. The movement is often referred as the Arab Spring or Arab
Uprising. The protests, taking the forms of strikes, demonstrations, marches and rallies,
involved thousands of ordinary citizens and resulted in the dramatic overthrow of three
long-standing regimes of Tunisia, Egypt and Libya (Salih, 2013). Salin concluded that
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 40
long-term economic deterioration, violent nature of ruling regimes, corruption, widely
spread poverty and unemployment, coupled with catalytic events, caused the popular
uprising that spread throughout the Arab region.
In Egypt, after having been in power for 30 years, President Hosni Mubarak
resigned in February 2011. The Muslin Brotherhood presidential candidate, Mohammed
Morsi, became Egypt’s first democratically elected President in June 2012 (BBC, 2014).
But Morsi’s presidency only lasted for one year. He was ousted after his government
failed to facilitate the making of a jointly supported constitution and stop the
deterioration of the economy. The removal of Morsi by the Egyptian military triggered a
large scale protest from both pro-Morsi and anti-Morsi sides. The country was further
divided. The Brotherhood claimed that approximately 2,200 died as the security forces
removed the protest camps in Cairo set up by the Morsi supporters (BBC, 2014). A state
emergency was once again declared. Finally, General Abdel Fattah el-Sisi, former
Commander-in-Chief of the powerful Egyptian military, took the oath of office after
winning the 2014 presidential election in a landslide (CNN, 2014d). Many supporters
believe Sisi is the man who can keep the country stable and restore the economy, which
took a tremendous hit since the political turmoil in 2011 (Reuters, 2014a).
The Libyan revolution turned into a civil war between Muammar Gaddafi’s
government forces and the rebels. Unlike the Egyptian revolution, which was mainly an
Egyptian movement, the Libyan revolution involved direct foreign intervention. In March
2011, the UN Security Council authorized a no-fly zone over Libya and air strikes to
protect civilians, which were commanded by the North Atlantic Treaty Organization
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 41
(NATO) (CNN, 2014b). Gaddafi was captured and killed by the rebels on October 20
th
,
2012. The civil war ended three days later when the National Transitional Council (NTC)
formed by the rebels declared the “liberation of Libya” (CNN, 2014b). Libya made
international headlines again on September 11
th
, 2012, for the Benghazi attack by Islamic
militants that led to the death of four US personnel including the US Ambassador
Christopher Stevens (CNN, 2012). In May 2014, Libyan authority launched airstrikes and
ground offensive against militant Islamist groups in Benghazi. The fighting later spread
to other parts of the country. Between July and August 2014, the UN pulled out its staff,
and US and Britain temporarily shut down their embassies in Tripoli as security
deteriorates (BBC, 2014b, c, d).
Pro-democracy protests and demonstrations also spread to sub-Saharan African
countries, such as Sudan, Burkina Faso, Angola, Swaziland and Senegal. Protesters
demanded political reforms, social justice and job opportunities, and some of them
demanded the ouster of incumbent leaders (UN, 2011).
Two elements in the Arab Spring movement have drawn great attention: use of
the Internet and social media, and a large proportion of youth participants. On one hand,
the role of the Internet and social media, such as Facebook and Twitter, in mobilizing the
protests and revolutions are undeniable. On the other hand, Aouragh and Alexander
(2011) argued that some respondents and online commenters overstated the role of the
Internet by calling the Egyptian revolution an “Internet revolution.” They argued that the
Internet did not cause the revolution but served as spaces of dissent and an effective
communication tool to reach and mobilize the users. On-the-ground strategies, such as
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 42
meetings in neighborhoods (Levinson & Coker, 2011) and during Friday prayer
gatherings (Aouragh & Alexander, 2011), also played an important part in organizing
mass demonstrations in Egypt.
A large youth population and high youth unemployment in the Middle East and
North Africa region, frustration over corruption and lack of political freedom in tightly
controlled states, and interests in technology and social media, all contributed to the
significant presence of youth in the Arab Spring movement (Hakimian, 2011; Joffe,
2011; Al-Momani, 2011). As the President of the African Development Bank, Donald
Kaberuka, commented, the Northern Africa revolution is an urgent reminder of the need
for inclusive growth, job creation, and opportunity for the youth (UN, 2011). At the
African Union (AU) Summit held in Malabo in June 2011, the contributions of youth
unemployment and their feeling of marginalization to the Arab Uprising were noted. Jean
Ping (2008-2012), Chair of the AU Commission, urged governments to take “concrete
measures” to meet the needs of African youth (UN, 2011).
Summary
This review has showed that both external and internal factors have contributed to
Africa’s underdevelopment. To provide an African context for China-African
cooperation, three questions were raised at the beginning of the section: what the West
has done in developing Africa, where Africa was in terms of development in 2000 when
China’s new engagements with the continent started, and where African stands today.
From the 1950s to the end of the last century, major development schemes in Africa were
led by the West through the World Bank and IMF, but these liberal market-oriented
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 43
strategies overall failed to bring broad-based growth. The SAPs experience deepened the
frustration of Africans over the long-term western domination. This helps explain why
China was able to spread its presence in Africa at a fast pace in the early 2000s. China,
as well as other emerging economies like India and Brazil, presented an attractive
alternative for which Africa countries had long been waiting, which we will discuss more
later.
The recent development trends show a changing Africa within a larger picture of
a changing world. The Arab Spring is a powerful demonstration of people’s legitimate
aspirations for democracy, human rights, more jobs, and greater social justice (UN,
2011). Although multiparty elections in Africa have not yet been implemented as in
democratic societies in the West, and there is skepticism about the participatory exercises
for PRSPs, these mechanisms have helped provide a framework for future democracy and
spread the concept of inclusive development. Technology advancement, in the form of
the fast scale-up of Internet and mobile phone usage, enables African people to advance
their economic opportunities and political demands. Lessons drawn from past
experiences as to what works and what does not will help both African countries and
China, a late comer to Africa, in shaping their development cooperation. In the next
section, China’s development will be reviewed. Then building on these two sections, we
will explore the fast-growing China-African cooperation.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 44
Chapter Four: China’s Development Experience (1840-Present)
A Century of Hardship (1840-1945)
Chinese call the modern period from 1840 to the 1940s a hundred years of
humiliation, struggle, and hardship. The break out of the first opium war between the
Qing Empire of China and the British Empire in 1840 is commonly regarded as the
beginning of China’s modern history (Deng, 2004; Liu, 1993). The Chinese government
in the late years of the Qing Dynasty (1644-1911) was deeply corrupted and adhered to a
policy called “Bi Guan Suo Guo,” which is to close the ports and run a closed economy.
At that time, Great Britain and other western powers had completed the industrial
revolution and were aggressively pursuing colonial expansion. Between 1800 and 1840,
in addition to the disastrous public health consequence, the British opium trade cost
China approximately 300 million silver dollars, equivalent to 200 million US dollars (Lu,
Fang & Wang, 2008). The Qing government responded by limiting opium trade and
tackling opium smuggling, which triggered the first opium war. Scholars pointed out that
Britain’s real aim for the two opium wars (1840-1843 & 1856-1860) was not only opium
but the inlets of British trade in general (Gallagher & Robinson, 1953; Liu, 1998).
Defeated by the superior British navy, the Qing government was forced to comply and
sign the Nanjing Treaty in 1842, the first unequal treaty in Chinese history. According to
the Nanjing Treaty and its supplementary treaty in 1843, China was forced to pay an
indemnity of 21 million Mexican silver dollars to Britain, cede Hong Kong to the British,
open five ports to British trade, allow the presence of the British fleet in Nanjing to
ensure compliance with the treaty, and grant Great British the right of extraterritoriality
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 45
such that British subjects in China were exempt from Chinese law and would be trialed
by British consuls under British law (Chambers Dictionary of World History, 2005;
Kasaba, 1993, p. 217). This marked the beginning of China’s semi-colonial history.
Other western powers followed the British to pressure the Qing government for
similar treaties, such as the Sino-American Treaties of Wangxia in 1844 and Tianjing in
1848, the Sino-French Treaty of Huangpu in 1844, the Sino-Japanese Treaty of
Shimonseki in 1895, and the Boxer Protocol in 1901, which is also known as the Peace
Agreement between China and the Great Powers, namely Austria-Hungary, Belgium,
France, Germany, Great Britain, Italy, Japan, Netherland, Russia, Spain, and United
States (Encyclopedia Britannica, 2014; University of Southern California US-China
Institute, 2014). Through these treaties, China lost much of its sovereignty to foreigners.
Wang’s study (2005) on China’s unequal treaties concluded that commonalty of these
treaties was the non-reciprocal terms favoring the foreign powers, such as fixed low
tariffs and more trade ports for foreign goods, extraterritoriality, foreigner settlements,
and leased territories (p.10). There is disagreement among Chinese scholars as to how
many unequal treaties, agreements or conventions were signed between China and
foreign powers since the first opium war. The numbers claimed were from 500 to over
1000 (Wang, 2005, p.3). China transformed from a feudal society to what Chinese
scholars referred to as a semi-colonial and semi-feudal society (Qin & Zhou, 2008). The
semi-feudal status ended in 1911 when the Qing Empire was overthrown during the
Xinhai Revolution. However, the semi-colonial status continued till the 1940s.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 46
During World War II (WWII) in China, also known as the Anti-Japanese War
(1937-1945), millions of Chinese were killed. Perhaps the most notorious Japanese war
crime in China was the Nanking Massacre, or the Rape of Nanking. Within only a six-
week period starting from December 13, 1937, between 200,000 and 300,000 Chinese
civilians and disarmed combatants in the City of Nanjing were brutally murdered by the
Imperial Japanese Amy, and many Chinese women were raped before being killed
(Chirot & Edwards, 2003; Gao, 1996; Liu, 2009; Sun, 2001; Vikman, 2005; Zhang,
2005). The International Military Tribunal of the Far East in 1948 estimated that there
were over 200,000 casualties in this ruthless mass murder and rape (Vikman, 2005),
while the commonly accepted estimate by Chinese scholars and the Chinese government
was approximately 300,000, including massive numbers of bodies reportedly gathered
and burned, or thrown into the Yangtze River (Sun, 2001). Japan surrendered on
September 2
nd
, 1945, which brought WWII to an end.
The reason for including this part of history into a study of China-Africa
cooperation is because it helps to understand China’s path for development, and Beijing’s
foreign policy towards African countries. Once one of the world’s most advanced and
brilliant ancient civilizations and a leading eastern kingdom in the Tang Dynasty (618-
907) and the Yuan Dynasty (1271-1368), China was reduced to a semi-colony after the
opium war. For a century, China was like a big pie of which imperialists who came each
enjoyed carving up a piece. The collective Chinese memory of this sharp contrast
between the self-reliant and proud past, and the recent century of humiliation and abuse
helps explain why China’s sovereignty and national dignity have been inarguably
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 47
important for Chinese, and provides a context for the development path of the “new”
China mainly relying on its own efforts rather than being led by foreign experts. As the
review will soon show, in pursuing economic development, the Chinese have tried to
hold their ground and insisted on a gradual and strategic opening of its economy. It also
helps explain, at least in part, China’s foreign policy principle of mutual respect for
sovereignty, “non-interference” and the strategy of “business-is-business” in Africa. This
strategy has drawn much criticism from the West and will be discussed later in this paper.
Chinese Civil War (1946-1950)
Soon after the Anti-Japanese war, China went into a civil war. The People’s
Liberal Army (PLA) led by Mao Zedong and the Communist Party of China (CPC),
defeated the Nationalist Army led by Chiang Kai-shek. On October 1
st
, 1949, Mao
declared the birth of the People’s Republic of China (P. R. China). The PLA completed
the “liberalization” in mainland China in 1950 and forced Chiang to retreat to the Taiwan
island of China. This was the origin of the long-term confrontation between the mainland
and the Taiwan island.
Korean War (1950-1953)
The Korean War is often considered as both a civil war and a proxy conflict of the
cold war (Flint, 2012, p. 151). The United Nations forces led by the US fought for South
Korea, and China fought for North Korea with help from the Soviet Union. It
undoubtedly caused enmity and mistrust in the US-China relationship. The question
worth asking is: why did China choose to involve itself in a direct military conflict with
the most powerful country in the world, when the communist regime was newly
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 48
established and the country suffered poverty and deep wounds from WWII and the civil
war? Whiting’s analysis (1960) supported the hypothesis that Chinese intervention was a
reluctant response to Russian directives, grounded on the importance of Russian military
and economic assistance to China at that time, and the considerable risks China had to
take to go into a war with the US. With the Soviet Union being the key reason, Whiting
listed contributing factors of Chinese intervention as communist ideology, security
concern, the intention to establish the status of a “new” China in Asia, etc.
The Chinese perspective is different, as discussed in the study by Hao and Zhai
(1990) cited below. In the Chinese Civil War, Washington provided $2 billion military
and economic aid to Chiang Kai-shek, intending to help him wipe out the communist
army, namely the People’s Liberal Army (PLA). After Chiang retreated to the island of
Taiwan, US re-intervened in the Chinese Civil War by deploying the 7
th
Fleet to the
Taiwan Strait, preventing the PLA from crossing the Strait. Then when the US intervened
in the Korean War, Mao and other top leaders of the Communist Party of China (CPC)
believed that a military conflict with the US was just a matter of time, and that US
intervention would go beyond the Korean Peninsula. Losing the war, Kim II-Sung sent a
telegram to Stalin and Mao on October 1
st
, 1950, requesting direct intervention on behalf
of North Korea (Hao & Zhai, 1990). Entering Korea was a tough decision for the new
CPC regime. The Chinese perspective is that, although the Soviet Union played a critical
role before and during the war, the determining factor for Chinese intervention was self-
defense rather than the Russian directives. CPC leaders aimed for limiting what they
believed to be an unavoidable US-China battle in the Korean Peninsula to protect the
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 49
China mainland. Mao had famously described the Korean decision as “Chun Wan Chi
Han,” meaning if your lips are cut off, your teeth will be cold (Chinese Communist Party
News [CPC News], 2013). In other words, helping North Korea was to “self-save” China.
History will judge the decision and debates on this matter will continue. But what we do
know is that approximately 366,000 Chinese soldiers lost their lives in the Korean War
(Zhang, 2007). Since the Japanese invasion in 1937, Chinese people had suffered war
after war for 16 consecutive years.
Land Reform (1946-1953) and “Social Reconstruction” (1953-1957)
The goal of the so-called proletarian land reform in China was to confiscate lands
from landlords and rich peasants and then redistribute, for free, to poor peasants who had
little land or no land at all (Luo, 2011). According to the CPC (1947), before the reform,
landlords and rich peasants, who accounted for 10% of the rural population, owned 70%
to 80% of the cultivated lands. The pre-1949 stage of the reform was implemented during
the civil war in the “liberalized areas” controlled by the communist army. It is a widely
accepted view that the reform served as an effective political tool to mobilize the poor
masses in rural areas to support the CPC and to enlist in the communist army, and so
contributed significantly to the victory of the CPC in the civil war (Luo, 2011; Ruan,
1995; Wang, 2009; Zhang, 2003). Stage II of the reform was implemented nationwide
after the P. R. China was founded in 1949, through which 43% of the nation’s cultivated
land was redistributed and the social classes of landlords and rich peasants were put to
the end (Huang, 1995). It was not a peaceful reform, especially in the pre-1949 stage.
Influenced by the Marxist doctrine that abolishment of capitalism and exploitation can
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 50
only be achieved through revolution, the CPC regime mobilized the poor to take mass
actions against the landlords and rich peasants. According to Huang (1995), the CPC
required that every single village must identify “class enemies” and launch class struggles
against them, even though some poor villages did not have any rich residents who would
fit into the category of landlord or rich peasant. Many of these class struggle meetings
turned into torture and violence (Huang, 1995; Zhang, 2003).
From 1953 to 1957, the “Socialist Reconstruction” was implemented which
“nationalized almost all private property in the cities and collectivized almost all private
poverty in the countryside” (Huang, 1995, p.105). The land reform and social
reconstruction were key steps taken by the communist government to control economic
resources and consolidate the new regime. Communist China was hereby established in
both a political and an economic sense.
Great Leap Forward (1958-1960)
The Great Leap Forward (GLF) was a modernization campaign launched by Mao
and the CPC, aiming to rapidly transform China from a predominantly agrarian country
to a powerful, industrial state by speedily increasing agricultural and industrial output
(Kung & Lin, 2003). One of the ambitious slogans of the GLF was to surpass the
industrial production of Great Britain in 15 years and the US in 20 to 30 years (Li &
Yang, 2005). A study done by Kung and Lin (2003) found that 30% to 50% of the rural
labor force was diverted to industrial or public projects. For example, as steel production
was perceived by the leadership as a key step to achieve the industrial leap, millions of
peasants were mobilized to set up blast furnaces in their back yards to produce steel.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 51
Most of the steel produced was of poor quality or wasted. As a propaganda of striving for
“bigger, faster and greater” economic results to build a modern socialist state blew
through the country, it became a common practice for local and provincial officers to
claim non-existent economic achievement, which was referred as the “wind of
exaggeration” (Peng, 1987). State newspapers often reported grain yield surpassing 10
thousand pounds per acre and promoted picture posters such as pigs growing to the size
of a cow (People’s Daily, 1958; WanYi News, 2014). Based on false reports, the CPC
central leadership dramatically increased the state grain procurement to transfer the
“surplus” from the rural area to cities, while in reality, the grain output declined sharply
due to the mass diversion of rural labor. At the same time, Mao encouraged the
establishment of communal dining where the entire village or multiple collectives
gathered to have free meals together with no restriction of individual quota, resulting in a
great deal of food overconsumption and waste (Kung & Lin, 2003; Yang, 2008). The
GLF ended in a catastrophe of famine. Within three years from1959 to 1961, between
16.5 million and 30 million Chinese died because of starvation and severe malnutrition
(Kung & Lin, 2003; Li & Yang, 2005).
Culture Revolution (1966-1976)
The official report approved at the sixth session of the eleventh Central
Committee of CPC Plenary in 1981 set the tone that the Cultural Revolution (CR) from
1966 to 1976 was a nationwide political turmoil wrongly launched by Mao Zedong, and
imposed disastrous consequences to the nation and people (CPC, 1981). By name, the
proclaimed goal of the CR was to purify communist orthodoxy by eradicating any
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 52
thoughts and cultural elements of capitalism or “anti- proletarian revolution,” and remove
revolutionists who had become so-called capitalist roaders (Xinhua News, 2003a).
The send-down and the Red Guard were two iconic movements during the
Cultural Revolution. Two years into the CR, most academic institutions in China were
paralyzed and the regular curriculum was generally abandoned as students spent most of
their time participating in political activities (Xie, Jiang & Greenman, 2008). In 1968,
under Mao’s direct instructions, the government facilitated a nationwide mobilization to
send urban youth, upon graduation from junior high, high school and college, down to the
countryside so that they can be “re-educated” by the poor peasants and develop a
communist ethic, which was referred to as the send-down policy (Guan, 1995; Xie, Jiang
& Greenman, 2008; Zhou & Hou, 1999). The movement lasted from 1967 to 1979 and
impacted 17 million young lives (Zhou & Hou, 1999). These urban youth were sent to
pre-assigned rural areas far away from their home cities to undertake harsh farming work
as peasants. Except for a few volunteers, many children and families were reluctant but
were pressured to obey. Studies showed that parents’ political capital or status was not
able to save their children from being sent down, but some high-ranking cadres or
families with political connections were able to get their children back to cities sooner
than those who were less fortunate (Yang & Li, 2011; Zhou & Hou, 1999). Later, the
policy showed some flexibility, such as allowing one child in each family to stay in the
city. This state-mandated, massive mobilization had a profound and lasting impact on a
generation of urban youth. Many of them stayed in the underdeveloped countryside for
five to over ten years until the policy was denounced in 1979 (Zhou & Hou, 1999). They
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 53
missed opportunities to pursue higher education and obtain better-paid urban jobs in the
later reform era. They had to endure hard farming work and being far away from their
families. Some married a peasant and settled down in rural areas. For many, their lives
are forever changed.
The “red guard rebellion” drove the CR into violence, insanity, and a grand
human tragedy. Who were the red guards? They were youth who came from family
backgrounds that were considered privileged classes during the CR: revolutionary
soldiers, revolutionary cadres, factory workers, poor or lower-middle-class peasants (Lu,
1994-1995). They were Mao’s loyal troops marching across China to deliver this so
called “Great Proletarian Cultural Revolution.” The red guards dressed in military-like
green uniforms, wore a red armband and carried a “hong bao shu” – a red handbook with
their beloved Chairman Mao’s quotations. They brought the “revolution” from schools to
streets to government buildings. They burned books and attacked academic institutions,
museums, historical sites and temples to destroy anything that they considered as a sign
for bourgeois, feudal or foreign influence (Bridgham, 1967; Thurston, 1984-1985).
According to Lu (1994-1995), red guards targeted seven categories of class enemies:
landlords, rich peasants, counter-revolutionaries, evildoers, rightists, capitalists, and
reactionary intellectuals. The red guards ransacked these class enemies’ homes and, in
many cases, destroyed or confiscated private properties. Many university professors were
attacked and forced to sweep the floor, clean toilets and serve food on campuses where
they used to teach and conduct research (Thurston, 1984-1985). Many of these class
enemies were repeatedly accused at public class struggle meetings and were forced to
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 54
parade in the streets. Many were beaten or killed. Many committed suicide to escape
unbearable physical abuse and public humiliation (Bridgham, 1967; Lu, 1994-1995;
Thurston, 1984-1985). No one so far is able to provide an accurate estimate as to how
many died in this nationwide, ten-year human tragedy.
The Great Leap Forward and the Culture Revolution were arguably the darkest
time in the history of the P.R. China. Both movements reflected a brainwashed ignorance
and insanity, a mirror of Mao’s dictatorship, and a shameful memory shared by Chinese.
After 16 years of war and these two movements, this nation sank to the very bottom.
Chinese people desperately needed a change which would bring back common sense,
social stability and human dignity, and would generate economic activities and bring
food on the table.
Reform and Opening (1978-1999)
After Mao’s death in September 1976, Deng Xiaoping, who was purged twice
during the Cultural Revolution, regained prominence within the communist party (CPC
News, 2004). Deng is commonly referred to by Chinese state media as the “chief
architect” of China’s long march for reform and opening (CPC News, 2008). At the third
plenary session of the eleventh CPC Central Committee in 1978, the Reform and
Opening Policy was formally announced. At Deng’s plenary speech, he stated that the
core task for the CPC Central Committee was economic development rather than political
movement. In reviewing lessons from the Great Leap Forward and the Cultural
Revolution, Deng stressed the importance of “shi shi qiu shi”, meaning to seek truth from
facts and make policy based on evidence (Xinhua News, 2003b). The plenum was a
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 55
turning point for China. Soon after that, the reforms in both agriculture and industry were
implemented and China started gradually opening its door to the world.
Agricultural reform - household responsible system (HRS). The centralized,
collective farming under Mao proved to have low incentive and poor productivity. In
collective farming, famers had little say about the input and output, nor were they
rewarded based on individual or family contribution. In the early 1980s, the Household
Responsibility System was introduced, under which farm-households were responsible
for remitting a contracted quota to government and then were allowed to keep or sell
everything in excess of the quota (Dollar, 1990; Ravallion, 2009). Within a few years, the
collectives were dismantled and all farmland was distributed to individual farmers or
household groups through leasing (Ravallion, 2009). Farmers were given user rights of
land and freedom to choose inputs and outputs. The more they could produce, the more
they were able to keep. Chinese farmers responded dramatically to this market-oriented
incentive that allowed them to control their own labor and work for their family units
(Ravallion, 2009). From 1978 to 1984, overall agriculture output in China grew steadily
at 7% to 8% per year (Li & Lian, 1999), and grain, cotton, and oil-bearing crops grew at
annual average rates of 4.8%, 17.7%, and 13.8%, respectively (Bruce & Li, 2009). The
reform brought bumper harvests and visible improvements to the quality of lives in
China’s rural areas (Harvard International Review, 2008).
It is worth noting that the HRS was initiated by 20 farmer households in 1978 in a
small village in Anhui province (Xinhua News, 2009). In 1980, the China Rural
Development Research Group was funded by the central government to conduct a field
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 56
study on the local experience of HRS (Qiu, 2008). At that time many in the central and
local governments still had the mindset of collective farming and were resistant to this
“new” practice. But with the support from Deng and some other reformist leaders based
on findings from the field research and feedback from provincial governments, HRS was
scaled up and implemented nationwide in 1982 (Qiu, 2008). Later, the land lease was
extended from the initial short term of 3 to 5 years to a long term of 10 to 30 years (Li &
Lian, 1999). Ravallion (2009) argued that it was the HRS that got the ball of China’s
economic reform rolling, and its success benefited from a shift of mindset to evidence-
based policymaking at the central government level, and a strong state institutional
capacity for policy implementation in the Chinese context.
Initial industrial reform. The Chinese government also conducted industrial
reform from 1978 through the 1980s to allow some degree of autonomy, decentralization
and market-like incentives. The reform was mainly towards Chinese state-owned
enterprises (SOE), which accounted for three-quarters of national industrial output and
were the main source of government revenue at that time (Dollar, 1990; Groves, Hong,
McMillan & Naughton, 1994). Before the reform, the state controlled almost every aspect
of business from inputs to outputs to markets. As these two studies reported, the reform
allowed enterprises to retain some of their profit after fulfilling the contract obligation to
the government. Enterprises were able to sell some of the output as well as purchase
some raw materials in the free market. Managers were given rights to decide what to
produce and how much to produce, and received monetary rewards based on production
performance. Bonuses were used to improve worker motivation at SOEs. Although the
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 57
reform was piecemeal and gradual, it was sustained and achieved some success. Increases
in both production and worker’s income were observed in the cited studies (Dollar, 1990;
Groves, Hong, McMillan & Naughton, 1994). The Chinese government passed the
Company Law for the first time in 1993 (Liou & Wu, 2010). However, the initial reform
was not enough to tackle the intrinsic factors that diminished the competitiveness of
Chinese SOEs, which will be discussed next.
A comprehensive reform package (1998-2000). In 1998, China’s new Premier
Zhu Rongji, who was the former head of China’s central bank, announced an ambitious
reform and opening package, which mainly included further SOE reforms,
legitimatization and encouragement of private sectors, consolidation of industry-specific
regulatory agencies, pursuit of World Trade Organization (WTO) membership,
establishment of an unemployment insurance system, and tackling corruption such as
closing commercial businesses operated by the Chinese military (Zweig, 2001). Adhering
to the reform and opening policies initiated by Deng, China’s economy grew steadily at a
two-digit annual rate from 1993 to 1997, while the poverty rate dropped from 84% in
1981 to 47.8% in 1997 (World Bank, 2014e). At the 15
th
National Congress in 1997,
joint stock companies and shareholding firms with private investments were listed, for
the first time, as part of the Chinese socialist economy (Zweig, 2001). Private sectors and
economic special zones started showing increased competitiveness. China successfully
reclaimed Hong Kong from Britain in 1997. As Zweig pointed out, these positive
economic and political conditions gave CPC leaders the confidence to make a bold move.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 58
At the heart of this reform was to restructure the poorly performing Chinese SOEs
through various arrangements such as shareholding and joint stock enterprises, mergers,
sales and leasing (Zhu, 1999). As Zhu’s study reported, the losses of industrial SOEs
reached 79 billion yuan in 1996, equivalent to 13 billion US dollars at current prices. The
losses grew at an average rate of 17.7% per year between 1978 and 1996. These losses
were absorbed by the state banks, which put Chinese state banks persistently in a
condition of administrative-oriented loss. Zhu summarized three key reasons for the
growing losses of Chinese SOEs: growing competition from non-state sectors, intrinsic
agency problems, and heavy social burdens. SOEs faced increasing pressure from non-
state sectors, especially township and village enterprises, which showed more flexibility
than the SOEs in responding to market changes and adopting profit driven practices.
Labor efficiency was a big SOE challenge. Before the reform, employment in SOEs was
known as “iron meal bowl,” meaning a tenured contract until retirement. Studies reported
that between 20% and 40% of SOE employees were redundant workers (Dong & Xu,
2005, p. 6; Xu, 1998, p. 3). In addition, corruption such as dining using public funding or
illegally allocating state assets for personal gain, contributed to the failure of the SOEs
(Zhu, 1999).
Chinese SOEs had a heavy social burden. According to Hu (1996), in addition to
the pension burden, SOEs provided free or almost free housing for employees, operated a
large number of hospitals and clinics with one third of the country’s medical personnel on
the payroll, and were responsible for approximate 18,000 elementary schools and high
schools which employed an estimated 600,000 teachers and administrative personnel
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 59
(Hu, 1996, p. 128). Perhaps sharing an example would help an outsider understand this
unique Chinese SOE culture. The author’s parents used to work for a state owned
electricity company in Southeast China. The housing and utilities were provided free to
employees by the SOE and most of the housing units were the same size and located
within the company complex. There was a kindergarten, a medical facility and a large
cafe on site. Staff members working at these facilities were full-time employees of the
SOE. Therefore, as greater autonomy and more market-oriented practices emerged, these
non-production responsibilities diminished the competitiveness of Chinese SOEs
significantly. There was an emerging consensus among top leaders in Beijing that
something needed to be done to the SOEs (Zweig, 2001). Otherwise, Chinese SOEs
would not only quickly lose out to growing non-state sectors, but also stand no chance in
international competition if China joined the WTO.
In 1998, Premier Zhu Rongji announced an ambitious agenda to complete the
SOE reform in three years. Given heavy social burdens and a large number of redundant
workers, massive layoffs became inevitable. According to Hung and Chiu (2003), an
estimated of 9.11 million redundant SOE workers were laid off between 1998 and 2000.
These workers stepped down from their positions but still remained in a contractual
relationship with the SOEs for approximate three years. During this time, they continued
to receive fringe benefits and a small monthly paycheck but they would not be rehired.
China did not have an unemployment insurance system when the reform started. To assist
the implementation of the reform and prevent social unrest, the state media launched a
massive coverage of SOE reforms but the focus was not placed on the layoff part. It was
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 60
a nationwide propaganda preaching a change of mindset towards reform and efficiency,
and encouraging laid-off workers to participate in the re-employment programs provided
by government. For example, some laid-off workers enrolled in a training program
funded by the government to start a small mobile shop selling dumplings on the street.
The “xiagang gongren jiaozi,” meaning dumplings made by laid-off workers, quickly
became popular Small businesses started by laid-off workers soon gained publicity in the
state media as good examples of striving for self-reliance and re-employment (Xinhua
News, 2001; Wu, 1999). Many people preferred to buy from these laid-off shops because
people had sympathy for layoffs at such a large scale and wanted to offer their support for
these laid-off SOE workers. Beijing tasked the provincial and local governments to put
forth full efforts to help laid-off workers find work. Government assistance was offered
in various forms such as zero or low interest loans for small businesses opened by laid-
off workers, business tax waivers for several years and vocation training programs. (CPC
Central Committee & State Council, 2002).
There were successful re-employment stories, but for many laid-off workers, it
was a very difficult and emotional time, especially for older generations. As Hung &
Chiu (2003) found, many laid-off workers had only a simple set of skills. They had
stayed in the SOE system for so long and were barely exposed to the concept of a free
market. It was difficult for older workers to learn new skills and compete with youth.
Many laid-off workers were not able to find a job with pay equivalent to their previous
SOE jobs. Many could not find a job at all. Hung and Chiu (2003) argued that the age
group of 40-50 was most disadvantaged. Many of them had no educational credential
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 61
because they were sent down to the countryside during the Culture Revolution when they
were young. They lived through the most difficult time of P. R. China. Then, when the
economy started improving, they ended up being laid-off, with young children and old
parents at home who needed their support. Their lives were repeatedly and heavily
impacted by state policies, and they were never given a choice. The SOE layoff was the
most controversial part of the reform.
In terms of restructuring SOEs, Beijing implemented a strategy called “Zhua Da
Fang Xiao” meaning grabbing the big and letting the small go (Hung & Chiu, 2003). In
the process to convert SOEs to shareholding companies, Beijing made it clear that the
state must hold a majority share of big SOEs but was relatively relaxed about small ones.
Many medium and small SOEs were converted to mixed public-private ownership.
Massive sell-offs occurred, which provided corrupt leaders with opportunities for rent
seeking and diverting state assets to their own pockets (Zhu, 1999; Zweig, 2001). The
administrative reform cut 40-plus ministries down to 29 and consolidated industrial
regulatory agencies. Many government employees lost their bureaucratic posts. The
drive for more autonomy, corporatization, and privatization confronted a strong
opposition from the leftists in the CPC top circle (Zweig, 2001). Premier Zhu and his
reformist team faced enormous pressure from the leftists within the party and laid-off
workers on the street. It is hard to judge how much success the reform achieved, given
the mixed outcomes and the impact on many Chinese people in the process. But the
reform undoubtedly helped clear several roadblocks for the later steady economic growth
in the first decade of the new century. Without going through a shakeup reform, large
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Chinese SOEs would not be able to present themselves as competitive, profit-driven
corporations today and serve as Beijing’s economic and political wings in the China-
Africa development partnership.
Special economic zones (SEZs). Initiating SEZ was a crucial step that China
took to open its economy, and it turned out to be one of the most successful economic
development strategies carried out in China. Nishitateno (1983) described SEZ as areas
where enterprises receive more preferential treatment than elsewhere in regard to taxes,
scope of operation, etc., in order to attract foreign capital and advanced technology for
modernization. Following the Reform and Open-door Policy promulgated in 1978 under
Deng Xiaoping’s leadership, two coastal provinces in southern China named Guangdong
and Fujian, were selected as the experiment zones. In 1979 and 1980, four SEZs were set
up in these two provinces: Shenzhen, Zhuhai, Shantou, and Xiamen (Nishitateno, 1983).
As Ge (1999) stated, the objective of SEZ was to experiment with market-oriented and
outward-looking measures to promote economic development, and open a window and a
base for the rest of the country in these aspects. This experiment was conducted on a
trial-and error basis. The role of the Chinese SEZ included attracting foreign capital,
introducing advanced technology, promoting trade, creating jobs and serving as a school
for learning economic management and regulation making (Stoltenberg, 1984).
At the initial stage of SEZ, the main tasks were to build the necessary
infrastructure and facilities, and to establish investor-friendly policies. For example,
Shenzhen, the first SEZ in China with a size about one-third of Hong Kong, was an area
of fishing villages in 1979 (Xinhua News, 2005b). Ge (1999) reported that the central
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 63
government provided 48% of the fixed capital to support the initiation process. The
balance of the funds was from the Guangdong provincial government, domestic loans and
foreign investments. The provincial and local governments in Guangdong and Fujian
were given autonomy to establish the regulations for the SEZs (Nishitateno, 1983). The
incentive package to attract foreign investors included duty-free privileges, tax
concessions and exemptions, preferential fees for land use, etc. (Ge, 1999).
The performance of the SEZs was impressive after the initial stage. Ge’s study
(1999) on Shenzhen, China’s largest SEZ, reported that the foreign direct investment
(FDI) to Shenzhen increased by 30 fold from $23.4 million in 1980 to $672 million in
1993, and the export values in the Shenzhen SEZ increased from $9.3 million in 1979 to
more than $18 billion in 1994. China’s average annual economic growth rate was 9.95%
between 1980 and 1995 (World Bank, 2014g), while Shenzhen achieved an astonishing
annual growth rate of 35.5% in the same period, with the labor-intensive, light
manufacturing industry taking the lead in this dramatic leap (Ge, 1999). The Chinese
SEZs are where the globally recognizable label of “made in China” started. The flexible
investor-friendly policy allowed a diversity of economic entities to emerge in China’s
SEZs, from processing and assembling industries, to co-production and joint venture
firms, and to wholly foreign-owned firms (Ge, 1999). Evidence suggests that FDI inflow
to China not only supplied a source of capital but also helped facilitate technology
transfer and improve the total factor productivity (TFP) in Chinese industries (Liu &
Wang, 2003). The country as a whole received $623.4 billion in foreign investment from
1979 to 2002, of which FDI accounted for 71.6% at $446.3 billion (Fan & Zhang, 2003).
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 64
Job creation is another positive outcome of the SEZ experiment. As the household
responsibility system and further reforms significantly improved agricultural output, a
large number of “leftover” rural labor emerged in China. The rising SEZs on China’s
southeast coast helped absorb the excess rural labor, especially the fast-growing, labor-
intensive construction and manufacturing industries (Ding, Sun, Dai & Huang, 1994).
The strong performance of Chinese SEZs gave Deng and his successors the
confidence to commit to the “open-up” drive. Between 1984 and 2003, China opened 14
coastal cities applying similar polices as that in SEZs, added Hainan as the fifth SEZ, set
up 49 economic and technology development zones, established large coastal economic
liberalization areas in the Yanking River delta, Zhu River delta and three cities in
southern Fujian, approved 53 high-tech industrial development zones, developed 25
export-oriented processing and assembling industrial zones, initiated numerical bonded
zones, and announced the Pudong District in Shanghai as a new outward, multi-
functional economic zone (Xinhua News, 2003c). Between 1987 and 2007, China’s
economic model transformed from domestic-dependent to export-oriented (Liu & An,
2011). Among these economic zones, many are port cities or at the intersection of major
railroads and highways, so that they can connect the economy in different regions of
China and facilitate both export and inter-provincial trade.
Geographically, the open-up process is from the coastal line to the interior, from
the more developed south and east of China to the less developed north and west. This
reflects Deng’s view of allowing people in certain regions to be better off first, then
utilizing richer regions to lead poor regions and eventually realize the common prosperity
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 65
(CPC News, 2014). It was largely a central planning and top-down approach rather than
a representative and equal-development approach. Given the vast population and the all-
around poverty in the 1970s and early 1980s in China, concentrating resources and effort
in certain regions to facilitate the economic take-off, as the Chinese government did, may
have been the only choice. But it is worth noting that this strategy planted a seed for the
regional disparity and gap between rich and poor observed later.
Overall, Chinese SEZs delivered the objectives for more foreign investment,
trade, technology, employment and knowledge in economic management. The Reform
and Open-door Policy as well as the SEZs have been internationally recognized as key
strategies that helped China achieve a tremendous economic development in the last three
decades. China’s experience indicates that, if well pursued, a developing country’s
economic catch up can benefit from foreign investments and economic globalization.
One-child Policy (1979-2013)
The policy was implemented in 1979, which recommended that one couple have
only one child. Since 1980, it became strictly implemented as law. An amendment was
made in 1984, allowing couples living in rural areas to have two children (Xinhua News,
2005a). The policy is effective but highly controversial. The annual population growth
rate dropped from 1.3% in 1979 to 0.5% in 2013 (World Bank, 2014f). There are many
issues associated with such a strict population control policy. Violating individual
freedom and human rights through forced abortion and sterilization was a wildly heard
criticism (Washington Post, 2013). Intrauterine devices and sterilizations accounted for
90% of the contraceptive methods used in China since the mid-1980s (Hesketh, Li, &
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 66
Zhu, 2005). It was common knowledge that, if a married couple violated the policy, they
could face serious punishment such as a substantial fine, confiscation of belongings, and
dismissal from work. These measures vary widely from place to place because of local
discretion in implementing the policy (Hesketh et al., 2005).
Besides the well-known forceful measures, the social impact of the policy has
received increasing attention in recent years. The policy induced sex-selective abortion in
rural areas (Hesketh et al., 2005). It also contributed to the gender imbalance with an
estimated 24 million “leftover” men by the end of 2020 (BBC News, 2013b). It is against
the law in today’s China for doctors to perform sex-selective abortion and prenatal
diagnosis of sex for non-medical purpose (Nie, 2010). Besides gender imbalance, many
children are spoiled by parents and grandparents and become self-centered little
“emperors” and “empresses” (Chen, 2003). Then when they grow up, they have to solely
carry high expectations of their parents to excel in life and have no siblings for help,
when parents get old and ill. Married couples born after 1979 have to take care of four
parents and their own child. And if the single child dies due to illness or an unexpected
event, parents lose their only offspring who they could count on when they get old given
the under-developed social security system in China. Responding to these negative
impacts of the policy, Beijing relaxed the policy in 2013 by allowing couples in urban
areas to have two children if one of them is a single child. But Beijing made it clear that
fully lifting population control is not on the agenda for near future (Xinhua News,
2013a).
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 67
No one can make a convincing argument that the One-Child was a good policy,
but there were different perspectives as to if it was necessary at that time and what
current circumstances would be without it. As Hesketh et al. (2005) acknowledged, China
has only 7% of the world’s arable land but had a quarter of the world’s population in
1979 with two thirds of the population under the age of 30. The reality is that, thirty-five
years after the enactment of this policy, China still has 1.3 billion people, meaning one
fifth of the world’s population. The 0.5% growth rate in 2013 translates into 6,786,500
newborns in one year (World Bank, 2014f). Would the economic catch up be delayed for
years if the One-Child Policy had not been strictly implemented? China’s poverty rate
dropped from 84% in 1981 to 11.8% in 2009 (World Bank, 2014e). Could China achieve
an impressive record of poverty reduction and economic development without population
control? An unintended but positive consequence of the policy is that it helps reduce
gender inequity in China, as parents make their best efforts to provide for their only child,
regardless of whether it is a boy or a girl. Many Chinese “one-children,” with the support
from their parents, have been able to receive advanced education in China and abroad.
For example, at the University of Southern California, an expensive university with the
largest international student body in the US, 3,689 out of 8,745 international students
enrolled in fall 2013 are from mainland China (University of Southern California [USC],
2014), and there is no notable difference in the number of male and female Chinese
students at USC. Perhaps an attitude that is willing to see both sides of a coin would help
us better understand why history evolved in the way it has. We must face and tell the
truth about the negative impacts of this policy. But we should also respect and consider a
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 68
country-specific context in reviewing development experiences. In that way, we can truly
learn lessons from the past and move forward more representatively and inclusively.
A Rising China (2000-Present)
China’s rising and its ongoing transitions have become a global story since the
turn of the 21
st
century. There are both concrete achievements and immediate, serious
challenges. This section will briefly review China’s development since 2000 and
highlight several topics related to China-Africa cooperation, such as China’s “Go Global”
strategy and increasing investment power, its high demand for energy and raw materials,
the issue of workers’ rights, and the environmental costs associated with economic
growth.
Achievements. China has achieved an impressive record on economic
development and poverty reduction. According to the World Bank (2014g), China’s
economy grew at an average annual rate of 10.16% from 2000 to 2011. Only in recent
years have the growth rates dropped to 7.65% in 2012 and 7.67% in 2013. China’s
poverty rate fell from 84% in 1981 to 11.8% in 2009 by the international standard of
$1.25 per day (World Bank, 2014e), and down to nearly 10% in 2011 by the national
standard of 2,300 yuan per year or $1.80 per day at the 2010 price (China News, 2012).
Converting the percentages into headcounts, China has successfully lifted more than 500
million people out of poverty since 1978 (World Bank, 2014h). The improvements of
living standards are visible not only in Chinese cities but also in the rural areas. But still,
the near 10% poverty rate translates into 128 million people living under the national
poverty line (China News, 2012).
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 69
The new century is also the period when China developed the needs and the
investment power to “go global.” The Go Global Policy was officially introduced at the
third session of the ninth National Congress in 2000. Improving the international
competitiveness of Chinese enterprises, securing resources for domestic economic
development, exploring global markets, avoiding tariffs and other trade barriers,
advancing economic reform, and accessing advanced technology and global management
expertise are among the commonly cited reasons for going global (Forbes Magazine,
2014a; Li & Zhou, 2007; Li, 2009, p. 31; Yu & Jiao, 2011). This review selects two
reasons for discussion. The first one is the competitiveness of Chinese enterprises. After a
lengthy negotiation, especially with the United States, China made an important move to
enter the WTO in 2001. As Chow (2003) pointed out, WTO membership means more
exports and FDI inflows for Chinese enterprises, as well as tough competition from
foreign imports in the home market. Therefore, actively seeking overseas markets and
learning experiences in global corporation management have become a rational choice
for Chinese enterprises. Resource security is another factor led to the “go global”
strategy. China’s economy is energy-dependent, and energy is therefore critical for
China’s growth output (Yuan, Kang, Zhao & Hu, 2008). Rapid growth, large population,
and being the global factory generate a huge demand for energy and raw materials.
However, according to the National Report on Sustainable Development issued by the
Chinese government (2012), China’s per capita recoverable oil, iron ore and copper are
only 7.7%, 17% and 17% of the world’s per capita average, respectively. These factors
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 70
explain China’s aggressive global pursuit for energy and raw materials needed to fuel its
domestic economy.
In the new century, the “open-door” policy has been represented by the strategy of
“large scale attracting inflows” and “bold steps going global” (Xinhua News, 2008a). The
outcomes show that this strategy has been effective. Every year from 2000 to 2010, China
received the largest FDI in the developing world (Davis, 2013). China ranked second in
2012 as the FDI destination after the United States (United National Economic and Social
Commission on Asian and the Pacific [UNESCAP], 2013). According to the Chinese
Ministry of Commerce (2014a), FDI inflow to China and China’s outflow overseas
totaled $117.59 billion and $90.17 billion, respectively, and the outflow FDI is expected
to surpass the inflow in the next couple of years. The People’s Bank of China, which is
China’s central bank, reported (2014) that China’s foreign exchange reserves (FER)
reached $3.82 trillion at the end of 2013, showing an increase of $509.7 billion from
2012. The 2013 figure is nearly three times the FER of Japan, the world’s second largest
holder of FER. It was an international headline that China surpassed the US in 2012 or
2013 as the largest trading nation (BBC News, 2014e; Bloomberg News, 2013; Guardian
News, 2014a; Telegraph, 2013). Some raised questions about accuracy of Chinese trade
statistics (Chang, 2014). Based on the most recent statistics published by the World Trade
Organization (WTO), China’s merchandise trade was ranked second in 2012, with a total
of $3,867 billion including a surplus of $230 billion, while the US imports and exports
totaled $3,881 billion in 2012, with a trade deficit of $790 billion (WTO, 2013, p. 15).
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 71
Challenges. Being the largest developing country, China still faces tremendous
development challenges. Besides the 128 million people still living in poverty, China is
the only country that has 200 million senior citizens (Xinhua News, 2015a). Providing
affordable and quality healthcare for 1.3 billion people is a tremendous challenge,
especially in rural areas. Increasing regional disparities and income inequalities have
drawn wide attention. Although the coastal areas are the showcases of China’s economic
development, many interior regions are still in the mid- or early stage of industrialization
and urbanization (NRSD, 2012). Gaps between rich and poor are widening. According to
the Gini coefficient, a standard index for measuring income inequality, China’s income
inequality surpassed most other societies in 2007 (Whyte, 2014). Xie and Zhou‘s study
(2014) also confirmed that China’s household income inequality continued to rise in
recent years and is among the highest in the world.
As there have been concerns over workers’ rights and safety standards in Chinese
some Chinese firms in Africa, it would be helpful to review the domestic labor standards
in China. Workers’ rights and work safety in China are improving but still have a long
way to go in order to catch up with the level in developed countries. This review selected
one of the most reported worker rights issues for discussion, which is wage arrears,
especially the wage arrears for millions of “nongmin gong” (Chen, 2005; Fan, 2013; Li,
2013; Liu, 2013; Yan, 2004; Zhang & Zhang, 2005). The “nongmin gong” refers to
workers from rural areas who are employed in more developed urban areas and coastal
cities in China. As discussed earlier, the steady improvements of China’s agricultural
outputs generated a large number of “leftover” rural laborers. The rapidly expanding
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 72
labor-intensive industries in the more economically developed parts of China help absorb
a significant number of these workers. According to Li (2013), the number of rural
workers in Chinese cities reached 252.78 million in 2011, and more than half of them
were employed in the construction and manufacturing industries. The wage arrears cases
reported in 2011 involved 2.02 million workers. Majority of the cases occur in the
construction and manufacturing industries.
Studies found that a combination of factors, including the legal framework,
government administration, industrial standards and rural workers’ socioeconomic status,
make the wage arrears a persistent challenge in China (Fan, 2013; Li, 2013; Liu, 2013;
Yan, 2004; Zhang & Zhang, 2005). Based on these studies, the review shares an
insightful view on rural workers’ wage arrears issue in the construction industry.
Construction is a highly competitive business in China. Oftentimes construction
companies have to pay for the startup costs first, as well as part of the project, then
collect payments later from the developers (Fan, 2013; Yan, 2004). In some areas, there
is an unspoken culture of “building first and getting paid later” in order to win contracts
in competition (Fan, 2013). China did not have a labor law until 1994. The development
of a legal framework to protect workers’ rights is lagging behind the pace of economic
development, and oftentimes there is no serious consequence for misconducts like wage
arrears (Liu, 2013). Therefore, when developers default in payment to the construction
companies, the pay to construction workers is impacted. Excessive subcontracting is
another reason causing wage arrears. The construction law in China only allows a one-
time subcontract, but in reality a construction contract can be subcontracted multiple
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 73
times (Liu, 2013; Yan, 2004). The transactions among multiple parties are both costly
and time consuming, which leads to default payment and, in turn, the wage arrears. Some
local government officials irresponsibly approve public projects without a sound budget
plan, in order for them to claim a high growth rate and to look good on the performance
report. They then use the government credibility to request extensions for payment
without penalty (Liu, 2013; Yan, 2004). As long as the workers do not sue or organize a
group protest that would draw media attention, some local officials turn a blind eye to the
issue (Liu, 2013; Zhang & Zhang, 2005). Owners of some private construction
companies avoid formal labor contracts with rural workers, or only distribute a monthly
amount enough to support workers’ basic expenses and then cut a check for the rest at the
end of the year, which increases the chance for short payment or wage arrears to occur
(Yan, 2004).
The period of wage arrears can be from several months to several years. Rural
workers are large by number but weak in voice. Many of them do not have a good
education, and are from less economically developed part of China. They are at a
disadvantage when it comes to protecting their rights using legal tools. In addition, the
current legal process for resolving labor disputes is time consuming and costly, which
adds to the difficulty for workers to protect themselves through legal channels (Li, 2013).
This issue has induced labor disputes, group appeals or protests, and social unrest
in some areas. In 2012, labor dispute cases totaled 147,000, showing an increase of
16.7% from 2011. Similar increases were observed in 2011 and 2010 as well (Li, 2013).
In 2013, President Xi urged governments at all levels to protect the rights of rural
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 74
workers and take firm actions to forbid wage arrears (Xinhua News, 2013b). The State
Council approved an ambitious proposal in 2014, which set the goal to eliminate wage
arrears of rural workers by 2020, offer career training for 20 million rural workers each
year, speed up the urbanization in the middle and far west parts of China to generate
employment opportunities close to rural workers’ hometown, and set a goal to gradually
realize the universal social security coverage in the rural areas by 2020 (China News,
2014a).
Frequent industrial accidents are another commonly observed development
challenge in China. Already in the first nine months of 2014, there have been numerous
severe industrial accidents due to poor safety standards. For example, in August, an
exposure due to poor safety standards in a factory of metal products killed 75 and injured
187 (CNN, 2014c). In January, a fire accident in a shoe factory in Zhejiang Province
killed 15. The investigation found that the emergency exits on all three floors of the
factory building were blocked by racks of raw materials and products, the factory was
operating without a fire inspection certificate, and employees did not receive any training
in emergency response (Ifeng News, 2014). In March, a fire accident in a clothing factory
in Guangdong Province killed 12. The investigation report indicated that the factory had
neither a legal license nor a fire inspection certificate, and did not keep any formal
employment records for workers (China News, 2014b). Without a well-established legal
framework, profit-driven and cost-saving business practices are likely putting workers’
health and safety at risk.
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On-time pay and safe working conditions in China seem to be a benefit offered by
a decent job, rather than a legal obligation that all employers must fulfill. It should not be
neglected that, behind the grand figures of economic achievement and the fancy of a
modernized and economically powerful China in the making, there are sacrifices of
millions of everyday Chinese people, from the massive numbers “sent down” during the
cultural revolution, to the massive numbers laid-off in the state owned enterprise reform,
to the millions of workers who still do not have basic worker rights and a safe working
environment today. If Beijing is determined to achieve the goal of “building a socialism
harmony society by 2020,” as former President Hu announced at the 16
th
CPC Central
Committee Meeting in 2004 (Xinhua News, 2005c), concrete efforts must be made to
enhance law making and law enforcement to protect workers’ rights, and to facilitate a
more inclusive, representative, and balanced development process.
Another serious challenge for China is high environmental costs of economic
development. According to a joint study conducted by the World Bank and the Chinese
State Environmental Protection Administration (2007), the cost of premature death and
morbidity associated with air pollution was 157.3 billion yuan ($26.2 billion) in 2003,
which accounted for 1.16% of China’s GDP in that year. Between 2001 and 2005, an
average of 54% of the water in China’s seven main rivers was deemed unsafe for human
consumption. In 2010, air pollution was linked to 1.2 million premature deaths in China
(New York Times, 2013). Areas with heavy industry and mining are most polluted. For
example, in a coal-mining city named Xingtai, there were only 38 days in 2013 that met
Chinese national air safety standards (USA Today, 2014a). In recent years, a new term
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 76
emerged in the weather forecast in China called “mai,” meaning haze and smog. A public
survey conducted during the 2014 National People's Congress and Chinese People
Consultative Conference showed that ecologically responsible development ranked third
among the 10 topics that the Chinese public cares about most, and air pollution has drawn
a special concern (Guangming News, 2014).
It seems that the policy window has finally opened for a change to the long lasting
political culture of favoring economic development over environmental protection. At the
2014 National People’s Congress, when delivering the Report on Government Work,
Chinese Premier Li Keqiang declared a war against pollution and pledged to fight the
pollution war as hard as China has fought poverty. It is perhaps the firmest tone ever used
by the central government in regard to pollution control. Li announced a set of specific
goals for 2014, such as elimination of 50,000 small coal-fired boilers, desulfurization of
coal-fired power plants by15 million kilowatts, denitrification by130 million kilowatts,
dust transformation by 180 million kilowatts, removing 6 million vehicles from the road
that do not meet the emission standard, and launching a new scheme of water
conservation. (The State Council of China, 2014b).
With strong support from Beijing and backed by the steadily growing economy,
in recent years China has emerged as a leading investor in renewable energy. In 2010,
China was responsible for $48 billion of new financial investment in renewable energy,
which accounted for more than two-thirds of the developing country total and one-third
of the global total (United Nations Environmental Programme [UNEP] & Bloomberg
New Energy Finance, 2011, p. 18). In 2013, China’s new financial investment totaled $56
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 77
billion, followed by $48 billion from the European Union and $36 billion from the US in
second and third place, respectively (Frankfurt School of Finance and Management &
UNEP, 2014, p. 11). China’s investments focus on wind and solar power in electricity
generation. On land and offshore wind farms are quickly expanding in the western desert
and along the coastline of China. China’s installed wind capacity has jumped to No. 1 in
the world (UNEP & Bloomberg New Energy Finance, 2011, p. 20). Overseas investments
are growing strongly as well, and mainly concentrate on the developed country market
such as the US, Germany, Italy, and Australia (Tan, Zhao, Polycarp & Bai, 2013).
China’s rapidly growing investments in renewable energy is built on its steady economic
growth, manufacturing capability, strong support from the Chinese government and the
state banks, and incentives offered by the host countries (Tan et al., 2013). The record
making $400 billion China-Russia natural gas deal in 2014 indicates not only a strong
energy partnership between the two nations, but also the commitment of the Chinese
government towards clean energy (Washington Post, 2014). It is reported that, to
improve energy efficiency, the central government has planned to invest 210 billion yuan
($35 billion) to build twelve newly developed high-tech power lines, connecting the
energy-rich interior with heavily industrialized coastal areas (South China Morning Post,
2014).
After over three decades of neglecting the environmental cost in pursuing rapid
economic growth, it requires strong political will, concrete effort, and time, before visible
environmental improvements can be seen in Chinese cities. It is still yet to be seen if
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Beijing will be able to deliver on the promise of an ecologically responsible development
and lead the country to win the war against pollution.
Summary
China’s transition through the reform and opening has a centrally planned,
incremental, but sustained fashion. Compared with the rapid liberalization and foreign
expert-led development model observed in Africa, China’s opening up has been gradual
and strategic, and Chinese are in the driver’s seat in this process. As Fan and Zhang
(2003) stated, China’s opening up is step by step, and under protection to match its
development level. This is demonstrated through the gradual reducing of tariffs after the
WTO entry and the strategic opening, starting with the competitive manufacturing
industries, followed by the less competitive industries such as telecommunications and
automobile manufacturing, and the least competitive financial and banking services at
last (Fan & Zhang, 2003). China’s development experience suggests that, if well
managed, the economic takeoff in a developing country can benefit from foreign
investment and economic globalization. As discussed in the review, FDI inflows to China
not only provided financial resources for development, but also helped transfer
technology and generate jobs. On the other hand, rapid development has been
accompanied by increasing regional disparity and income inequality, and has put a heavy
burden on the environment. Neglecting workers’ rights and safety standards is a well
observed challenge in China, especially for people with disadvantaged socioeconomic
status. China is taking steps to address these challenges but still has a long way to go.
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Reviewing China’s development also helps provide a better understanding of
China’s behavior at the international level. As China arrives at the center of the global
stage, it draws the interest of many, rivals or strategic partners or both, to decode China’s
global strategies and monitor its movement. As the paper will further discuss, China-
Africa cooperation should be viewed as part of China’s global strategy, which is directly
linked to its development history and domestic economy. China’s needs for energy and
raw materials to fuel its fast-growing economy and a global market for Chinese goods are
key economic reasons behind Beijing’s move into Africa. In the next chapter, the paper
will review the development of China-Africa cooperation.
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Chapter Five: China-Africa Cooperation
In this chapter, the paper aims to recap the development of China-Africa
cooperation, including the transformation of China’s Africa policy, China’s engagements
with the continent in the ’60s and ’70s, Chinese development assistance to Africa in
recent years, trends of China-Africa trade, Chinese state-owned and private enterprises in
Africa, and the impact of China’s presence on the continent from different perspectives,
including concerns and criticisms. To present a balanced view, previous work done by
Chinese, Western, and African scholars are incorporated in the review.
An Ideology-based Beginning (1956-1978)
The formal political relations between the “new” People’s Republic of China and
the African continent started in 1956 when Egypt became the first African country to
establish diplomatic relations with China. Li (2007) stated that China’s Africa policy has
gone through a transition from an ideologically motivated approach, to political
pragmatism, and to the present economic pragmatism. Sharing a similar colonial history,
China considered Africa as an ally in its struggle against imperialism and hegemony, and
this political ideology strongly influenced its Africa policy from 1956 to 1978 (Li, 2007).
As a newly established state, especially after the China-Soviet Union split in 1960, P.R.
China aimed to build ties with third world countries. In spite of being a poor country
itself, China had provided a total of $1,322 million aid to Africa by 1972 (Bailey, 1975).
Between December 1963 and February 1964, Chinese Premier Zhou Enlai visited 3
Asian countries and 10 African countries (Chinese Ministry of Foreign Affairs, 2014b).
During his visit to Ghana, he announced the Eight Principles of Chinese Aid, which
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highlighted the equality between the donor and recipient countries, respect for aid
recipient countries’ sovereignty, and its support for African countries to achieve
liberalization and economic self-reliance. It is worth noting that the eighth principle was
to require Chinese experts to have the same standards of living as experts in aid recipient
countries, and not allow Chinese experts to make any special requirements or enjoy
privileges during the implementation of Chinese aid projects (Chinese Ministry of
Foreign Affairs, 2014b).
In the ’60s and ’70s, Chinese aid to Africa helped build a number of
infrastructures, such as stadiums, hospitals and conference centers, some of which
became the national symbols of independence and decolonization (Li, 2007). The best-
known Chinese assistance project in that time period was the Tanzania-Zambia Railway,
also known as the Tanzam Railway. The railway connected Zambia’s copper belt to
Tanzania’s seaport Dar es Salaam. According to Yu (1971), newly independent Zambia
and Tanzania sought to build the rail link to secure their political and economic
independence and forge new economic linkages. This was especially the case for Zambia,
a landlocked country depending on railroads controlled by white-ruled Rhodesia, South
Africa, and Portuguese Angola (Yu, 1971). An example of the threat that Zambia faced
was that, in 1973, Rhodesia closed its border with Zambia so the railroad access through
Rhodesia was cut off (Bailey, 1975). Bailey reported that the governments of Zambia
and Tanzania appealed to the traditional powers for assistance first but were unsuccessful,
including the United States, Britain, West Germany, Japan, Soviet Union, the World
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Bank, and the African Development Bank. Under this circumstance, the Chinese offer
was well welcomed.
China financed and led the construction of the Tanzam railway. The $401 million
aid provided in 1970 was the largest single Chinese aid to that day (Yu, 1971). Yu
reported that the aid was provided as an interest free loan divided equally between
Zambia and Tanzania, and was repayable over 30 years after a grace period of five years.
The repayments were made in the form of Zambian and Tanzanian exports or third party
currencies. China also agreed to offer extra assistance as a free grant, if the project’s
actual cost was higher than the agreed loan (Bailey, 1975). The project was completed by
15,000 Chinese and 45,000 Africans (Bailey, 1975). The full operation of the railway
started in July 1976 (People’s Daily, 2003). Adhering to the principle that Chinese
experts should have the same living standards as the locals and should help Africans to
achieve greater economic self-reliance, Chinese engineers took part in manual work and
lived a daily life according to the local conditions. Chinese technical assistance was
provided with not only the design and construction of the railway but also training in
maintenance, so that Africans could fully operate the railway after Chinese left (Bailey,
1975).
The aid did come with several conditions, which included the requirement to use
Chinese equipment and labor, and to pay the local cost, such as the salary for the 45,000
African workers, through the imports of Chinese goods (Bailey, 1975). China advanced
Chinese goods to the Zambian and Tanzanian state trading companies as credit, and then
the profits of selling these goods in local markets were used to pay workers’ salary (Yu,
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1971). Bailey (1975) argued that, compared to the hard conditionality and repayment
terms of the Western aid, the financial terms of this Chinese aid was generous. He stated
that the Tanzam railway was a line requested by the Africans and the development
assistance was provided with terms acceptable to the Africans. Given the fact that
Zambia’s GPD per capita was three times more than that of China between 1971 and
1976 (World Bank, 2014i), this Chinese offer was heavily based on political ideology and
did not make economic sense. The project was conducted during the Culture Revolution
(1966-1976) when political ideology overtook economic sense in China, which helped
explain China’s decision to offer such a large aid despite its precarious economic
conditions. As Bailey (1975) stated, the project reflected the newly established China’s
attempt to break its isolation and play an increasing role in the third world.
The diplomatic efforts and aid returned to China important political support from
African countries. In 1971, the 26 African votes were critical to help meet the
requirement for a two-thirds supermajority vote to pass the United Nations Resolution
2758, which expelled Chiang Kai-shek’s government and recognized the Government of
P.R. China as the only legitimate representative of China to the UN (UN, 1971). The
resolution received a total of 76 affirmative votes (UN, 2014b). It defeated the US
proposal to reintroduce China to the UN with the condition to also grant Taiwan UN
membership, which is so far only granted to UN-recognized sovereign states (Chinese
Communist Party News, 2014). By 1978, China established diplomatic relations with 43
African countries (Li, 2007).
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Concepts of “Co-development” and “Mutual Benefit” (1980s)
China’s policy towards Africa in the 1980s shifted from being almost purely
driven by political ideology to a more pragmatic approach that started promoting “the
spirit of co-development” (Li, 2007). As reviewed earlier, the “Reform and Open-door”
policy introduced in 1978 was a turning point for China. Under Deng Xiaoping’s new
leadership, domestic economic development replaced revolution to become the core task
of the Chinese government. Li (2006) reported a decline in economic aid and medical
missions to Africa between 1978 and 1982. During Chinese Premier Zhao Zhiyang’s visit
to 11 African countries in December 1982 and January 1983, he reiterated China’s
foreign policy philosophy of equality, mutual respect for sovereignty, non-interference of
internal affairs, and no-strings attached to Chinese aid. He also introduced the concept of
“co-development” and “mutual benefit” during the visit, and promoted the idea that
China and African countries should develop a “mutually complementary and beneficial
cooperation” for common development (China Network News, 2006a).
Solid Progress to Strengthen the Tie (1990s)
China-Africa cooperation continued to develop and made solid progress in the
1990s. The visits of Chinese top leaders to Africa increased from three times during the
1980s (China Network News, 2006a) to eight times between 1990 and 1999 (People’s
Daily, 2007a). With China’s fast-growing domestic economy as a background, state visits
of Chinese leaders to Africa between 1995 and 1999 placed an emphasis on expanding
and strengthening China-Africa economic cooperation. During Vice Premier Zhu
Rongji’s visit to Tanzania, Mauritius, Zimbabwe, Botswana, Namibia and Zambia in
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 85
1995, he discussed with the African leaders actions to encourage joint-ventures of
Chinese and African companies, provide finance support through state banks to boost
economic cooperation, explore diversified business opportunities for both sides, and
improve the efficiency of China’s development assistance by focusing on community
social welfare programs, and middle- and small-size industrial firms that the recipient
countries have both the need and local resources to develop (People’s Daily, 2007a).
During Chinese President Jiang Zemin’s 1996 visit to Egypt, Ethiopia, Mali, Namibia,
and Zimbabwe, he advocated an all-around China-Africa cooperation and stated that
China is keenly interested in developing a trustful “all-weather friendship” with African
countries. In 1999, President Jiang made another visit to Morocco and Algeria (People’s
Daily, 2007a).
An All-around Strategic Partnership in a New Era (2000-present)
China-Africa relations have grown dramatically in the new century, which is
evidenced by frequent state visits, “grand” China-Africa Summits, increased
development assistance, and steeply rising China-Africa trade. China’s state-owned
enterprises are at the frontline to realize Beijing’s “Go Global” strategy in Africa,
followed by more and more Chinese private enterprises. Subsequently, China’s continent-
wide presence in Africa has generated extensive debate as to how to characterize China’s
influence on the continent. This review will summarize the major points in this debate
and report important developments in China-Africa ties in the new century.
State visits. Chinese state media reported that, between 2000 and 2006, Chinese
Presidents and Premiers visited Africa seven times, as well as another eight visits by
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other members of the top leadership circle, such as the Vice President, the Vice Premier
and the head of China’s National Congress (People’s Daily, 2007b). The countries visited
by Chinese leaders during this period include South Africa, Uganda, Mauritius, Morocco,
Algeria, Tunisia, Libya, Nigeria, Egypt, Kenya, Cameron, Tanzania, Namibia, Zambia,
Benin, Togo, The Republic of Congo, Angola, Zimbabwe, and Ghana. Among the 20
countries, 11 were visited twice or three times (People’s Daily, 2007b). During former
President Hu Jintao’s tenure from 2002 to 2012, he visited Africa six times (China News,
2009, People’s Daily 2012). Current Chinese President Xi Jinping made Russia, South
Africa, Tanzania, and the Republic of Congo as the destinations of his first visit as the
head of state after he took the office in late 2012 (People’s Daily, 2013).
China-Africa summits. Besides the frequent state visits, China hosted periodical
high-level meetings and offered a comprehensive aid package to strengthen the tie with
Africa. In 2000, the first China-Africa Cooperation Ministerial Conference was held in
Beijing, attended by presidents of several African countries, the Secretary-General of the
African Union, and more than 80 ministers from 44 African countries. The Forum on
China-Africa Cooperation (FOCAC), which is the main governmental platform for China
to engage with African countries, was established as the result of this meeting ( Forum on
China-Africa Cooperation [FOCAC], 2013). The ministerial meeting has been held
every three years since then. In 2006, the FOCAC hosted the Beijing Summit and the
Third Ministerial Conference of FOCAC attended by leaders from 48 African countries,
including 35 heads of state and the Chairman of the African Union. The theme of the
Summit was “Friendship, Peace, Cooperation, and Development” (Chinese Ministry of
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 87
Foreign Affairs, 2014a). The Summit was widely reported by major world media (BBC
News, 2006a; CNN, 2006; Reuters, 2006), and yielded a total of $1.9 billion in bilateral
trade between China and African countries (Washington Post, 2006).
Development assistance. In typical “Chinese fashion,” development assistance is
normally announced by Beijing during state visits or at “grand” top-level conferences
such as the Beijing Summits. The year 2006 marked the 50
th
anniversary of the
establishment of diplomatic relations between the P.R. China and Africa. At the keynote
speech of the 2006 Summit, Chinese President Hu Jintao (2003-2013) stressed China’s
Africa policy principles of equality, mutual respect and common development, and
promoted an all-around strategic partnership with African countries in economy, political
relations, culture, regional security and other international affairs. He announced a
comprehensive aid package, which mainly included doubling the total amount of aid to
Africa by 2009 using the 2006 baseline, providing a $3 billion concessional loan,
establishing the China-Africa Development Fund, writing off of all interest free loans due
by the end of 2005 owed to China by highly indebted African countries, donating funds
to establish 30 malaria clinics, 30 new hospitals, and 100 new schools, and providing
scholarships for 4,000 African students to study at universities in China (Xinhua News,
2006).
At President Hu’s speech at the opening ceremony of the FOCAC Beijing Summit
and the Fifth FOCAC Ministerial Conference in 2012, which was attended by leaders
from 50 African countries, he stated that the pledges made in 2006 regarding 30 malaria
clinics, 30 hospitals and 100 schools, as well as the African Union Headquarters
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Conference Center as a gift, were fully delivered. He confirmed that the agreed
concessional loan of $15 billion was disbursed and the scholarship beneficiaries were
over 20,000, more than the pledged figures in 2006 (Xinhua News, 2012). President Hu
commended the increasing China-Africa academic and culture exchanges, and
highlighted the accomplishment that China and Africa has jointly established 29
“Confucius” Institutions, named after the most influential philosopher in Chinese history.
He then pledged a new credit of $20 billion by 2015 to assist Africa to develop
infrastructure, agriculture, manufacturing capacity, and mid-and small-size enterprises
(Xinhua News, 2012; BBC News, 2012b).
The Chinese government has released only two brief reports so far, in 2011 and
2014, on Chinese development assistance. The 2011 report stated that China wrote off a
total of 25.58 billion Chinese yuan of foreign debts by the end of 2009, among which
18.96 billion yuan ($ 3.16 billion) were debts owed by African countries (The State
Council of China, 2011). According to the 2014 report, between 2010 and 2012, China
provided 89.34 billion yuan ($14.89 billion) in foreign assistance, of which the aid to
Africa accounted for 51.8% or approximately $7.71 billion. The aid was offered in the
form of grants, interest free loans and concessional loans, which accounted for 36.2%,
8.1%, and 55.7%, respectively (The State Council of China, 2014a). The 2014 report
stated that Chinese aid reached 51 African countries as well as organizations such as the
African Union. The report enumerated Chinese aid projects in Africa, Asia, Latin
America and Caribbean, Europe and Oceania, but did not provide detailed financial data
for each project. Below are several examples of Chinese aid projects in Africa listed in
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 89
the 2014 report. Between 2010 and 2012, China established 14 agricultural centers in
countries such as Benin, Mozambique, Liberia, Sudan, and Rwanda, to conduct
experiments on crops suitable for local conditions and to transfer advanced agricultural
technology to the locals; provided humanitarian assistance to the Republic of Congo;
dug 200 deep wells for drinking water in Togo and 38 such wells in South Sudan;
provided care for over 1,000 cataract patients in countries such as Zimbabwe, Malawi,
Mozambique and Sudan; and constructed transportation infrastructures in Kenya,
Tanzania and Ethiopia, electric plants in Ghana, and fiber optic communication lines in
Cameron and Tanzania (The State Council of China, 2014a).
China-Africa trade. Accompanied by diplomatic efforts and aid packages,
China-Africa trade has grown steeply since 2000, as shown in Figure 1.
Figure 1. China-Africa trade volume, 2000-2012. Unit: $100 million. This figure is
from the “Report on China-Africa Economic and Trade Cooperation (2013)”
released by the State Council of China.
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China has become Africa’s largest trading partner. The volume of China-Africa
trade surpassed that of US-Africa trade for the first time in 2009 (CNN, 2013; Fortune,
2014; The State Council of China, 2013a). The 2013 Report cited under the Figure 1
stated that, Africa is one of China’s major import sources, the second largest overseas
construction project contract market, and the fourth largest investment destination (The
State Council of China, 2013a). According to the Chinese Customs (2013), in 2012,
China’s top five imports from Africa and their proportion to China’s total imports from
Africa were: oil (47.7%), iron (6.3%), copper (4%), pearls, diamond-like gemstones and
other gemstones (1.5%), and diamonds (1.4%). China’s top five exports to Africa and
their proportion to China’s total exports to Africa were: textile materials (10.7%),
garments and accessories (7.6%), shoes (3.7%), steel (3.6%) and furniture (3.2%). In
terms of oil, Africa has become an important new source of oil for China and it accounted
for 23.9% of China’s oil import in 2012 (Gong, 2014). It is reported that Angola ranked
2
nd
among China’s top oil suppliers in 2013, supplying approximately 14% of China’s
total oil imports, while Mideast countries remain as China’s primary oil source,
accounting for 52% of China’s oil imports (China Energy Network, 2014).
It is worth noting that, although China-Africa trade is growing at a dramatic speed,
it is still a relatively small portion of the total China trade. In 2012, China’s exports and
imports totaled $3,867 billion and ranked 2
nd
after the US (WTO, 2013, p. 15), of which
China-Africa trade accounted for 5.13% or $198.49 billion. Imports from Africa
accounted for 6.23% of China’s total imports in 2012 and exports to Africa accounted for
4.16% of China’s total exports (The State Council of China, 2013a). China’s top five
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trading partners in 2013 were the European Union (EU), the US, Hong Kong (China), the
Southeast Asia Union, and Japan (Chinese General Administration of Customs, 2014).
Chinese SOEs and private firms in Africa. The “Go Global” strategy has been
carried out by Chinese enterprises, with Chinese SOEs at the front and followed by more
and more Chinese private firms. According to the Report on China-Africa Economic and
Trade Cooperation (2013) issued by the State Council, there are over 2000 Chinese
enterprises in Africa. The report does not provide specific statistics on the numbers of
SOEs and private firms in Africa, as well as the industries invested in by each of the two
groups. But the report does present the overall distribution of Chinese investments in
Africa. The major four industries attracting Chinese FDI are: energy and minerals
(30.6%), banking and financial services (19.5%), infrastructure and construction (16.4%),
and manufacturing (15.3%).
It is worth noting that Chinese SOEs and private firms play a different role in the
China-Africa cooperation and receive different “treatments” in terms of government
support. The SOEs, especially the Chinese “Yang Qi”, meaning the central government
“directed” large enterprises, are the “VIP” members of Team China. Here are a few
examples: China Petrochemical Corporation (Sinopec Group), China National Petroleum
Corporation (CNPC), China North Industries Corporation (Norinco), China State
Construction Engineering Corporation (CSCEC), and China Nonferrous Metal Mining
Group Co. Ltd (CNMC). They serve as Beijing’s economic and political wings in Africa
and dominate investments in China’s key interests in Africa, such as energy, minerals,
infrastructure, and some “classified” business such as arm sale. The SOEs are the
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 92
pioneers who paved the way for China’s move into Africa. They enjoy strong financial
support from the state banks.
The private firms, especially mid- and small-size private business such as
furniture factories, grocery shops and family restaurants, are less privileged but their
numbers are increasing fast in recent years. Unlike the SOEs, Chinese private business
people follow their own path to Africa (Gu, 2009). Many come to Africa through
personal networks such as family and friends, independent entry, or entry with the private
firms where they work (Song, 2011). Opportunities in the African market, tough
competition in the China’s homeland, and a strong entrepreneurial spirit are the main
factors that motivate Chinese private firms to come to Africa (Gu, 2009, Peng, 2011).
They can be considered as free businesses operating on their own. Besides access to
banking and financial services being a major challenge, middle- and small-size private
Chinese firms are more vulnerable than large firms to political instability or street crime
in some African countries. There is an increasing awareness of the need for the Chinese
government to provide private businesses with greater investment support, such as access
to loans and business insurance services, given their growing role and potential in China-
Africa cooperation (Gu, 2009, Peng, 2011).
Good Influence or Bad Influence?
There have been extensive debates on China’s influence on the continent. The rest
of this review aims to summarize the major points in these debates.
Colonist vs. capitalist. Western political forces and media have long targeted
China’s economic interests in Africa, and tagged China’s involvement in Africa as a new
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form of colonialism. They accused China of plundering natural resources, such as oil, gas,
and raw materials, and argued that the increasing Chinese settlement in Africa forms a
crucial part of the new colonialism (BBC News, 2012c; Daily Mail, 2008; MIC Network,
2011, Deepak, 2014). Former US Secretary of State Hillary Clinton warned Africa
against “new colonialism” at an interview during her visit to Zambia in 2011, when
addressing questions regarding China’s investments in Africa (CNN, 2011, Reuters,
2011). She also criticized China’s investments in Africa as undermining US efforts to
develop good governance in Africa.
There are studies done by both Chinese and non-Chinese scholars suggesting that
the charge of “neo-colonialism” is unsubstantiated, and the view that China is a
“capitalist” rather than a “colonist” in Africa is better supported by evidence. Sautman
and Yan (2006) argued that China’s engagements with Africa focus on energy and
commodity trade, and do not involve the key elements that define colonialism, such as
direct political control, explicit racial hierarchy, monopolistic exploitation of colonies’
natural resources, and forced labor. Jian (2007) argued that the Chinese government did
not appoint military consultants to governments of African countries, nor does it install
military bases in Africa. He stated that China is a “successful capitalist,” not a “colonist”
in Africa. Kahn (2013) presented a comparison of the development assistance policies of
the EU and China, and argued that “China’s interest in the continent is commercial rather
than neo-colonial.” Natural resources have long been the advantage of Africa in its
international trade. China, the West and others have all imported natural resources from
Africa. For example, Sub-Sahara African oil exports to China, the EU and the US
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accounted for 22%, 17% and 11%, respectively, of the region’s total oil exports in 2012
(The US Energy Information Administration, 2013). As Sautman and Yan (2006) argued,
there is no evidence suggesting a monopoly in China-African resource trade, which
distinguishes ordinary capitalism and colonialism.
Trade seems to be a better explanation than colonial settlement for the increasing
number of Chinese migrants in Africa. Indeed many Chinese have come to Africa and the
number is likely to rise with the fast growing China-Africa trade. No reliable statistics are
available so far as to how many Chinese are in Africa. The most reported estimate is 1
million (China Today, 2014), mainly including workers on large Chinese infrastructure
projects, non-labor employees in China’s state owned or large private companies, middle-
and small-size private Chinese entrepreneurs as well as children brought by their parents
to Africa. Small Chinese business in Africa has grown fast in recent years. Chinese have
opened restaurants, pharmacies, furniture shops, as well as invested in farms in Africa
(USA Today, 2014b). However, there is no evidence suggesting an explicit racial
hierarchy between Chinese and local Africans or the privilege of extraterritoriality,
meaning Chinese are exempt from law of African countries, which would support the
charge of colonial settlement. It is worth noting that there are an increasing number of
African migrants in China as well, although the absolute number is much smaller than the
flow from China to Africa. It was reported that approximately 20,000 Africans live in the
City of Guangzhou, one of the most open and diverse cities in Southern China (Watts,
2013; China Network TV News [CNTV News], 2012). The town of Xiaobei in
Guangzhou is now known as “Little Africa” or “Africa Town,” similar to “China Town”
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overseas. Most of the Africans come to China for business. They buy Chinese goods,
from cheap clothes and shoes, to electronics, furniture, and motor vehicles, and sell them
back in their home countries for profit (Watts, 2013).
Business is business. China’s African policy principles of “business-is-business”
and providing development assistance with no political strings attached have drawn
heavy criticism from the West. The main charge is that China supports rogue states and
corrupt regimes, which has undermined Western efforts to promote good governance,
exacerbated conflicts, and worsened human rights in Africa (Brookes, 2007; Freemantle
& Stevens, 2012; Mawdsley, 2008; Washington Post, 2004). There are some cases often
cited to support the charge. For example, China was criticized for undermining the IMF’s
attempt to pressure the Angola government to improve transparency in oil revenue,
because the Export-Import Bank of China’s $2 billion interest-free loan with no strings
attached shelved the IMF aid proposal with the conditionality of measures to promote
transparency (Freemantle & Stevens, 2012; Lombard, 2006). China has heavily invested
in the oil industry in Sudan, a country viewed by the US as a rogue state (Nmoma, 2006).
It was reported that, in 2006, Russia and China blocked a UK and US-led sanction on
four Sudanese officers who were accused of being involved in the violence during the
Darfur crisis (Aljazeera, 2006; BBC News, 2006b). China was also criticized for selling
arms to Sudan and assisting it to build weapon facilities, as well as offering development
assistance to the Mugabe’s regime in Zimbabwe, which was accused of human rights
abuses by the West (Brookes, 2007; Washington Post, 2004).
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 96
Defending China’s Africa policies of “non-interference,” Sautman and Yan (2007)
argued that China respects developing states’ sovereignty and takes seriously their
aspiration for a more equal international order that was ignored by the West. Freemantle
and Stevens (2012) stated that largely unsuccessful Western interventions in internal
affairs to convert countries into democracies suggest that, importing democracy using
non-democratic means is likely to be unproductive. There are cases cited to make the
counter-argument that Western powers have also supported the authoritarian regimes in
Africa in order to advance their strategic interests. For example, the US maintains a good
relationship with autocrats in oil-rich Equatorial Guinea, Gabon and Angola, despite their
records of denying freedom of speech and abusing human rights (Peel, 2003). The US
media reported that European governments have long sold weapons to dictatorships and
authoritarians in Africa while claiming their efforts to defend human rights (New York
Times, 2012b). A report by the World Policy Institute (2000), a foreign policy think tank,
criticized the US government for selling arms to Africa, especially the role that US
weapon sales played in helping fuel the Congo war. A shared perspective among Chinese
is that the West has criticized every aspect of China’s involvements in Africa in order to
damage China’s image and contain the rising of China, and they often accuse China of
the exact same things that the Western powers have done in Africa such as arm sales.
Setting the “war of words” aside, it would be fair to acknowledge that absolute adherence
to the “business-is-business” principle, as China has been doing, could lead to a situation
where investors do business with authoritarian regimes that abuse the rights of or steal the
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 97
economic benefits from their own people. China’s African policy will be addressed in
detail in chapter VII.
Jobs and worker’s rights. A widely expressed concern over Chinese investments
in Africa is that Chinese firms hire largely Chinese workers and leave the local
population few opportunities (Alessi & Hanson, 2012; Bräutigam, 2011; Esteban, 2010).
And, in the cases that Chinese firms do hire the locals, wages are low and working
conditions are poor (Bracht, 2012; Brooks, 2010; Gill & Reilly, 2007; Haglund, 2008;
Larmer & Fraser, 2007). For example, Esteban (2010) found that Chinese investments in
Equatorial Guinea result in a fast increase of Chinese workers rather than local jobs, and
this is especially the case in Chinese construction firms. Esteban reported that, in private,
Equatoguinean officials had commented that Chinese laborers are hardworking, normally
more skillful and more docile than the local workers, and this advantage has helped
Chinese firms outbid others for Equatoguinean government projects. Corkin & Burke
(2006, p. 74) also found that Chinese labor is an edge for Chinese construction firms
because they are low-cost, highly organized, speak the same language with their Chinese
managers, and in most cases they work and live full-time on the construction site.
Although the preference for Chinese labor makes business sense, lack of opportunity for
the local population and poor workers’ rights in Chinese firms have become a major
source of local resistance towards Chinese and anti-China resentment observed in some
African countries.
Zambia is perhaps the most discussed case of anti-China resentment in Africa and
workers’ rights issue associated with Chinese firms. In 2005, an explosion of a Chinese
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owned copper mine killed 51 Zambian workers, which put the operating standards of
Chinese firms on the spotlight (Gill & Reilly, 2007; Guardian News, 2011). Many
Zambians in the Copper Belt resent the low pay, poor safety standards, and harsh
working conditions in Chinese firms (Thurston, 2011). In 2010, a Zambian miner killed
a Chinese manager at the Collum Coal Mine in Sinazogwe and more than 10 Zambian
miners were injured when two Chinese managers, facing a large group of angry Zambian
workers, shot into the crowd (Bracht, 2012, CNN, 2010). China’s influence was a key
issue in Zambia’s 2006 and 2011 presidential elections. Michael Sata, former Zambian
President who passed away incumbently on Oct. 28
th
, 2014, had made anti-China stance a
centerpiece of his presidential campaigns (Gill & Reilly, 2007; Larmer & Fraser, 2007;
BBC News, 2011). He lost the election in 2006 but won in 2011. Another study by
Brooks (2010) about a Chinese invested textile firm also reported poor wages and
working conditions, as well as Chinese owners who “strategically” maximized the
number of temporary workers to avoid costs for employee health benefits and work-
related injury. Although Brook’s argument was weakened by the fact that he interviewed
only 21 Zambian workers and no Chinese input was collected in his study, and although
behind the scene President Sata had a close tie with Taiwan and reportedly received
campaign funds from Taiwan (BBC News, 2011, Lusaka Times, 2014; Sautman & Yan,
2008), it would still be hard to deny the wide observation that some Chinese firms
practice poor operating standards and abuse workers’ rights. As discussed earlier in
Chapter IV, wage arrears and poor working standards have caused labor disputes, group
protests, and social unrest at some places in China’s homeland. This is a situation of poor
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 99
standards at home and then poor standards abroad. As Haglund (2008) pointed out, a
weak regulatory framework in host African countries, combined with certain features of
corporate governance among Chinese firms, have imposed a new challenge for African
governments to regulate foreign investors effectively.
Impact of Chinese FDI. Besides issues of employment and workers’ rights, what
have previous studies suggested in terms of the impact of Chinese FDI to Africa? Just
like everything reviewed so far, the view on Chinese FDI is mixed. Yan and Sautman’s
study (2010) on Chinese FDI in Africa’s agriculture sector suggested that Chinese
investments had made “small-scale positive contributions” to the domestic food market
because the majority of the products were supplied to local and domestic markets in
African countries. Izuchukwu and Ofori (2014) stated that economic indicators in Nigeria
from 1992 to 2010 indicated that Chinese FDI inflow played a positive role in the
economic growth in Nigeria. Rui (2010) argued that Chinese investment in Sudan
significantly helped the country’s oil revenue and human capital development in its oil
sector by hiring up to 95% Sudanese oil workers. The study by Tsikata, Fenny and
Aryeetey (2008) in Ghana from 2000 to 2005 found that cheap Chinese goods helped
improve the living standard of Ghanaian people but increasing Chinese imports imposed
a challenge on Ghana’s domestic industry, especially in the textile and manufacturing
sectors. Concerns of local Africans about a “land grab” associated with increasing
Chinese investments in agriculture are noted in some studies (Yan & Sautman 2010;
Brautigam & Tang, 2009). Economy (2012) is among those who strongly criticized
China’s involvements in Africa. She stated that, “Environmental, labor and safety
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 100
violations, corruption, and a lack of socially inclusive growth have become the hallmarks
of Chinese investment” (Economy, 2012, p. 54).
Africa’s perspective on China’s presence. When it comes to an Africans’
perspective of the Chinese presence, it depends on who you talk to and in which country.
Esteban (2010) found that traditional relationships between African countries and China,
occupation, and political affiliation are among the major factors influencing Africans’
view of China. For example, in Equatorial Guinea, people tend to have a positive stance
towards the Chinese partly because of the long tradition of good relationships between
the two countries. A majority of the Equatoguinean population enjoys affordable Chinese
goods and business, such as private clinics and internet bars opened by Chinese, while
some local business people experienced China’s imports as direct competition to their
livelihood. Equatoguinean political and economic elites who benefit from China’s
investment normally view China’s presence favorably. Sautman and Yan’s survey (2009)
on some 2000 randomly sampled faculty and students in African universities in nine
countries reported that country is a significant variable. The result showed that, in the
nine counties selected for study, China-Africa links were most favorably viewed by
Kenyans, Sudanese and Ethiopians, and most negatively viewed by people in Batswana
and Zambia, with Nigerians, Ghanaians, Egyptians and South Africans in between.
Summary
Built on a peaceful history, a third-world friendship working together to build the
longest railway in Southern Africa in the 1970s, and a consistent effort from both sides to
strengthen the tie in the ’80s and ’90s, China-Africa cooperation has grown dramatically
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 101
since the beginning of the 21
st
century. China presents Africa with a successful story of
economic development, impressive investment capacity, attractive aid packages, useful
technical expertise, and its great need for national resources and a trading market.
Although China’s Africa policy today is far more pragmatic and economy driven than the
ideology-based beginning in the ’60s and ’70s, the principles of equality, mutual respect
for sovereignty, non-interference of internal affairs, and Chinese aid with no strings
attached, have remained consistent through the course of China-Africa relationships.
Chinese aid has proven to be attractive and competitive, and Beijing has kept a good
record so far on delivering its aid pledges fully and on time. Chinese aid has played an
important role in strengthening the China-Africa tie, including in the energy and mineral
sectors. Diplomatic efforts and aid contribute to the steep growth of China-Africa trade.
China is now Africa’s largest single country trading partner. Its top five goods imports
from and exports to Africa listed in the review reflect China’s key interests in Africa:
natural resources and the African market for Chinese goods.
There is a mixed view on China’s influence on the continent. Some acknowledge
the affordable goods, jobs, technology transfer and business opportunities brought by
Chinese investments as well as China’s commitment to development assistance. Others
criticize China for implementing neo-colonialism, supporting corrupted regimes,
worsening human rights, abusing African workers and polluting the African environment.
It is not a surprise that, fourteen years into the dramatically growing China-Africa
cooperation, some problems have surfaced. It is a legitimate concern of Africans as to
whether African countries are able to equally benefit from the China-Africa cooperation.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 102
As a large country and new player at the center of the global stage now, China bears the
duty to bring prosperity to the 1.3 billion Chinese people, and to be a responsible member
of international community.
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Chapter Six: Methodology
Overall Strategy
The overall strategy of this study is to incorporate findings from existing research
into the author’s own research to advance a new way of understanding the China-Africa
cooperation, and to propose practical strategies for developing successful cooperation.
Compiling literature and major news events, this paper presents China-Africa cooperation
in a broader context of international development evolution, the different development
paths that China and Africa each have taken, and today’s new momentum of south-south
cooperation. It deliberately examines the links between China’s own development and its
behavior in Africa, to seek an in-depth understanding of China’s Africa policy and
several challenges related to Chinese firm’s practices. It draws lessons from past
experience for developing strategies to forge a successful cooperation. Because this
research requires investigating not only an economic perspective on China-Africa
cooperation, but also the working relationships between Chinese and Africans, mixed
methods were used to collect, analyze and interpret both quantitative and qualitative data.
Data Collection and Analysis
The quantitative data, such as trade data, development indicators, energy
consumption data, and outcomes of diplomatic visits, were mainly collected from
secondary sources. These sources were the World Bank Databank, the United Nations,
the World Trade Organization (WTO), the International Monetary Fund (IMF), the
Chinese Ministry of Commerce, the Chinese General Administration of Customs, the
State Council of China, the People’s Bank of China, the US Department of State, the US
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 104
Energy Information Administration, as well as major Chinese state media and
international media, such as Xinhua News, People’s Daily, China News, Guangming
News, Communist Party of China News (CPC), CNN, BBC News, Guardian News, Daily
Mail, and Reuters. A small portion of the quantitative data, such as income inequality in
China, was found in the literature. The financial data in the Egyptian-Chinese Drilling
Company’s annual corporate financial reports and quarterly business reports were
collected first-hand during an internship in Egypt in March 2013.
Quantitative data were mainly used to report and assess the magnitude of the
China-Africa cooperation, and identify new trends in Chinese investments. They were
also used to verify data reported in previous research as needed. For example, a previous
study on the Tanzania-Zambia railway stated that China’s GPD per capita was lower than
that of Zambia when China provided the two countries with the $401 million
development assistance to build the railway in the 1970s. The author then generated a
report from the World Bank’s World Development Indicator database, and verified that
the Zambia’s GPD per capita was three times more than that of China during negotiation
and construction of the railway from 1971 to 1976.
The qualitative data used in this study were collected via participatory observation
and interview. These research activities included a full-time internship with the United
Nations Department of Economic and Social Affairs (UNDESA) Division of Capacity
Building and Public Management, from May 2012 through July 2012, in New York; a
visit to the Center for African Studies at the Shanghai Normal University in December
2012; a three-week internship with the Egyptian-Chinese Drilling Company in March
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 105
2013 in Cairo; a two-day visit to three drilling sites in the Western Desert in Egypt where
Chinese and Egyptian oil crews work together; a visit to the cities of Luxor and Aswan in
south Egypt as well as Giza and Alexandra in the north; a visit to a Ghanaian community
in Long Island, New York, in May 2012; and a two-week research trip to Ghana in May
2013.
The UN internship offered first-hand experience in working with African
government agencies and opportunities to discuss the topic of China-Africa with African
officers at the UN. The work to assist the organization of the 2012 UN Public Service
Day and an international conference on anti-corruption helped the author gain an
insightful understanding of institutional corruption, underdeveloped legal frameworks,
and regional conflicts in Africa, and how these challenges could impact China-Africa
cooperation. The purpose of the Egypt internship was to investigate the energy
partnership between China and Egypt, especially the competitiveness of Chinese state-
owned companies in the Egyptian energy market, the working relationship between
Chinese and Egyptian employees, and the impact of the Arab Spring in Egypt, also
known as the Egyptian revolution, on Chinese oil companies. The internship and visits
also helped the author understand the acceptance of the Chinese presence by the Egyptian
public, the divided views of Egyptians on the revolution, and the overall impact of the
revolution on the Egyptian economy, including the tourism industry. During the research
trip to Ghana, the author visited the University of Ghana and communities across the
Great Accra area, including high-income neighborhoods and also places where people
suffer extreme poverty. By staying with a Ghanaian family, the author had opportunities
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 106
to observe and experience daily life in a typical sub-Saharan environment. The author
visited a Chinese community in the city of Tema several times during the trip to
investigate the development of private Chinese business in Ghana, such as Chinese
supermarkets, shops, and restaurants. The author also traveled to the hinterland Nkawkaw
area to visit a cocoa plantation since cocoa is one of Ghana’s major export revenue
sources.
Interviews for this study were conducted in person and online. Formal or semi-
formal in-person interviews were conducted with a Professor and a graduate student of
the University of Ghana on May 23
rd
, 2013, in Accra; an employee of a Chinese furniture
factory on May 25
th
, 2013, in Accra; the Managing Director of the Egyptian-Chinese
Drilling Company (ECDC) who represents the Chinese investor - China’s National
Petroleum Corporation, and the Managing Director of the Sino-Tharwa Drilling
Company who represents the Chinese investor - China’s Sinopec Group on March 5
th
,
2013, in Cairo; the Managing Director of China’s second largest telecommunication
company ZTE Corporation’s Egypt Branch on March 11
th
, 2013, in Alexandra; a
Ugandan Congresswoman Hon. Emma Boona on October 19
th
, 2013, during her visit to
Santa Clarita, California; an Assistant Professor at the Shanghai Normal University
Center of African Studies on December 26, 2012, in Shanghai; and a group of Nigerian
professors from Alvan Idoku Federal College of Education during their visit to California
State University Dominguez Hills on October 28
th
, 2011. Several online discussions were
conducted in Fall 2012 with two local residents in Lagos, Nigeria, via Facebook, and
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 107
with the Assistant Professor at the Shanghai Normal University mentioned above in
Summer 2013, via QQ, which is a popular Chinese social media similar to Facebook.
The diversified background of the interviewees brought perspectives on China-
Africa cooperation from different angles. For example, the interview with Chinese oil
company executives focused on the business operation of large Chinese state-owned
energy companies in Egypt and their market advantages and disadvantages compared to
their Western competitors. The interview with the executive of China’s second largest
telecommunication corporation not only included discussions about the competition
among Chinese, Westerners, and Egyptians, but also the intensified competition among
Chinese companies and between Chinese state-owned and private companies. The visit
with a Chinese worker provided an understanding of what life looks like being an
employee of a Chinese private firms in Africa, how Chinese workers interact with the
locals, as well as their perspective on African development. Interviews with Chinese and
African scholars included discussions about the advantage that China has over the West
because of a peaceful China-Africa history dating back to centuries ago, the concern
about the lack of job opportunities in Chinese projects for locals, and the progress made
in China-Africa academic exchanges. The interview with a Ugandan congresswoman
provided an African leader’s perspective on the increasing presence of China and India in
Uganda and their influence in the local economy and Uganda’s national development.
Questions designed for interviews included common questions asked in all
interviews and specific questions asked in particular interviews. For example, all
interviewees were asked, “if you can name one aspect of China-Africa cooperation that
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 108
needs improvement, what would that be?” Specific questions were used to collect
interviewees’ input on the China-Africa cooperation from different industrial,
professional and personal perspectives. For example, at the interview with the oil
company executives in Egypt, they were asked, “compared to competitors in the Egyptian
market, especially Western companies, what advantages do Chinese drilling companies
have?” At the interview with a Chinese employee of a private Chinese furniture factory in
Ghana, the author asked if the interviewee likes the local food and if there is a Chinese
supermarket in Ghana. Common questions and examples of specific questions used in the
interviews are provided in Appendix A.
The study followed a common method to analyze raw field notes and interview
transcripts, which involved coding data, finding patterns, labeling themes, and
interpreting the meaning of themes or catalogued data (Patton, 2002, p. 462). The author
of this paper conducted these procedures manually. The triangulation technique was used
to analyze two verbatim transcripts from the interviews conducted in Ghana. The author
and one of her academic advisors reviewed the transcripts and developed coding schemes
independently, then compared the similarities and differences to interpret the data.
Limitations
A challenge encountered during this study was that the Chinese government does
not publish detailed aid data as Western governments and development agencies
normally do. The Chinese government has released only two brief reports on
development assistance so far in 2011 and 2014, which summarized Chinese aid projects
in the world. There is no separate report on Chinese aid to Africa or a country specific
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 109
report. The 2014 report enumerated recent aid projects in African countries but offered no
project details. To address this challenge, the study traced news events of China-Africa
cooperation, such as state visits and Beijing Summits reported by major Chinese state
media, and crosschecked data from two or three major media sources for consistency
before citing them in the paper.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 110
Chapter Seven: Discussion
Built on the context of the evolution of development knowledge, the experience
of Africa’s development, the story of China’s transformation and rise, and the path of
China-Africa cooperation since 1950s, this chapter investigates three on-going challenges
and a new trend in this cooperation that have not been adequately addressed in previous
studies. First, the chapter presents an in-depth discussion of China’s African policy. From
the lens of China’s own history and development experience, the paper addresses the
origin and continuity of the core principles that have guided China’s Africa policy since
the 1950s, and provides a response to western criticism of the principles of non-
interference and no strings attached to Chinese aid. Second, it addresses a concern
frequently expressed in literature and media reports about limited opportunity for local
Africans and poor workers’ rights in Chinese firms in Africa by investigating the
following questions. 1) Why do many Chinese firms in Africa prefer Chinese workers to
African workers? 2) What causes poor workers’ rights in some Chinese firms in Africa?
3) Why should Chinese firms hire more African workers and improve labor practice? 4)
Are there examples of Chinese firms hiring a large portion of African workers? If yes,
how are the working relationships between Chinese and African workers? Third, the
paper discusses two salient gaps in China’s intensifying aid to Africa: the lack of
transparency and program evaluation. While existing studies largely seek a political
explanation for the transparency issue, the paper demonstrates how both China’s political
culture and its limited capacity and experience in aid management have together
contributed to the gaps in transparency and program evaluation. Then the paper explains
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 111
why it is in China’s interest to improve aid transparency and speedup the capacity
building in aid management. Fourth, the paper investigates the newly emerging China-
Africa cooperation on renewable energy with a focus on wind and solar energy. It
suggests that this new trend is driven and enabled by Africa’s growing interest and
China’s strong investment capacity. By comparing the conditions that have enabled the
boom of Chinese overseas investments elsewhere with conditions in Africa, the paper
identifies opportunities and challenges for further developing China-Africa cooperation
on wind and solar energy. Built on the findings discussed in this chapter, the final chapter
of this paper will then propose practical strategies for shaping win-win cooperation
between China and Africa.
China’s African Policy
This section addresses China’s African policy in the following three steps. First, it
reviews China’s official African policy paper and discusses Beijing’s stance on China-
Africa cooperation. Second, it describes how China’s own development history and the
path of China-Africa relations has shaped core principles of China’s African policy.
Third, it addresses the heavily criticized non-interference principle, and discusses
whether or not China should change it and why.
China’s African policy paper. In January 2006, Beijing issued the only official
paper so far on “China’s African Policy,” with which “the Chinese Government wishes to
present to the world the objectives of China’s policy towards Africa,” and Beijing’s view
of developing a long term and “mutually-beneficial cooperation” (People’s Daily, 2006).
In the foreword, the policy paper sets the stage for south-south cooperation by stating that
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 112
China is the largest developing country, and Africa is the land with the largest number of
developing countries. The policy paper starts the main section by addressing Africa as a
continent with a long history, vast land, rich resources, and great development potential.
It states that Africa plays an increasingly important role in international affairs. It praises
the African people’s efforts to free themselves from colonial rule, and states China’s
support for African countries’ striving for peace, stability, and a road for development
suited to their own national conditions. The paper especially acknowledges the role of the
African Union in Africa’s peace and development. Next, it highlights the peaceful history
and a sincere friendship, as Beijing called it, between China and African countries and
states that, “China has provided assistance to the best of its ability to African countries,
while African countries have also rendered strong support to China on many occasions”
(People’s Daily, 2006). Beijing expresses appreciation to an overwhelming majority of
African countries for their abidance by the One-China principle, which is not to have
official relations and contact with Taiwan. At the same time, Beijing shows its
willingness to work with the entire continent, by adding that China stands ready to
establish formal diplomatic ties with the rest of the African countries based on the One-
China principle. Then, importantly, the paper defines the current China-Africa
cooperation as a new type of strategic partnership built on a traditional friendship, and
sets the objectives of China-Africa cooperation as political equality, mutual support,
economic win-win, and common development. Lastly, the policy paper describes an “all-
round,” pragmatic cooperation between China and Africa in political relations, trade and
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 113
investment, science and technology, military, culture, education, agriculture, health,
environment, tourism and media (People’s Daily, 2006).
This study suggests that the African policy paper delivers three messages that are
important for understanding Beijing’s stance on Africa. First and foremost, China-Africa
cooperation is a strategic bilateral partnership that emphasizes pragmatic cooperation and
economic mutual benefits. Second, Beijing expresses a keen interest in and commitment
to broadening and deepening its ties with Africa. Third, the language throughout the
policy paper shows Beijing’s clear intent to express China’s respect for African countries
and a position of an equal partnership.
Before further discussion of China’s Africa policy, the author addresses a premise
question: whether or not China-Africa should be classified as south-south cooperation.
Some studies have suggested that China carefully labeling itself as a fellow developing
country is a strategy to engage with Africa, and questioned if China should still be called
a developing country (Center for Strategic and International Studies, 2014; Foreign
Policy, 2014; Haglund, 2008). This paper argues that China’s developing country status
is not a label but a reality, and therefore, it is appropriate to characterize China-Africa as
south-south cooperation. Despite its GDP and investment capacity, China’s per capita
income ranked 85
th
in 2013 (World Bank, 2015a). As discussed in Chapter IV, China has
128 million people still living in poverty (China News, 2012). The Chinese Government
is facing an enormous challenge to provide affordable and quality healthcare for a
population of 1.3 billion, including half of the population living in rural areas and over
200 million senior citizens (Xinhua News, 2015a). Pollution, energy efficiency, and basic
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 114
workers’ rights are issues far more challenging in China than in developed countries.
China being a developing country is not only Beijing’s message to outsiders but also a
widely accepted view by Chinese scholars and citizens in general, as well as the World
Bank and the UN (World Bank, 2014j; UN, 2014c, p. 146).
Core principles of China’s African policy. Equity, mutual respect for
sovereignty, non-interference, no strings attached to aid, mutual benefits, and common
development are core principles of China’s African policy. Western critics describe these
principles as merely strategies to access Africa’s resources and make deals with African
political elites. Although China does seem to take advantage of the negative effects of
colonialism and some Western-led development programs in Africa, viewing China’s
principles as merely strategic to serve its recent engagements with Africa is an inaccurate
view.
China’s core principles were not recently initiated. They have been consistent
through the course of China-Africa relations. As discussed in Chapter V, although
China’s policy towards Africa has evolved from being purely ideology-oriented to being
far more economically pragmatic, these core principles have shown their continuity since
the 1950s when China first established diplomatic relations with Africa. What makes the
current cooperation “a new type of strategic partnership” are not these principles, but
China’s thirst for energy and its trading and investment capacity derived from a rapidly
growing domestic economy. The continent-wide Chinese presence in Africa today is
made possible by China’s economic conditions and the high complementarity of China-
Africa trade, and benefits from the consistent efforts by China and African countries for
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 115
over a half century to develop their relationships based on the common values that these
principles represent.
These core principles are deeply rooted in China’s own development history. As
reviewed in Chapter V, once one of the world’s most advanced and brilliant ancient
civilizations, China was reduced to a semi-colony after losing the Opium Wars to Great
Britain in1840. For the next century, China lost much of its sovereignty through hundreds
of unequal treaties forced by foreign imperialists. Later in World War II, China suffered
one of the most brutal and notorious war crimes in history conducted by Japanese
invaders. Despite great hardships, the Chinese people, through a collective effort,
launched an extraordinary drive for economic development and delivered a remarkable
achievement, transforming a poor and starving country in the 1970s into the world’s
second largest economy in a timeframe of one generation. In their tenacious efforts to
uphold their national dignity and improve living standards, equality, respect, sovereignty,
and the right to explore a road of development suited to a country’s own conditions have
become common values shared by Chinese people, and these values have shaped their
view of international relations. A shared history of China and African countries lays a
natural common ground for China-Africa cooperation, and this common ground is
primarily value-based rather than strategic.
The principle of mutual benefit and common development reflects China’s
commitment to reciprocity in China-Africa cooperation. While Africa supplies oil and
imports Chinese goods, China has also injected unprecedented investments in the
continent, lowered and waved tariffs for a wide range of African products, and provided
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 116
generous aid with no political condition attached. In the Chinese view, development
assistance should not become a means to interfere in recipient countries’ internal affairs.
China has unconditionally written off over $3 billion of African debt, and delivered $7.7
billion of aid to Africa between 2010 and 2012, including 44.3% in the form of grants
and interest free loans and 55.7% concession loans (The State Council of China, 2011 &
2014a). Beijing pledged another $20 billion of concession loans to be delivered between
2012 and 2015 (BBC News, 2012b). Few others, on a single-country basis, have provided
aid to Africa at this combination of scale, terms and schedule.
The principle of mutual benefit and common development also indicate that the
main theme of current China-Africa relations is a pragmatic bilateral cooperation. As
viewed in Chapter V, this principle was initiated in 1982 and signaled a turning point in
China-Africa cooperation from ideology-based development assistance beyond China’s
economic reality to a more pragmatic approach seeking mutual benefit. China’s
unprecedented move into Africa in the 21
st
century is first and foremost to serve China’s
key economic interests. As China now becomes a world economic power, the Africans as
well as Western scholars and media have expressed the concern about whether Africa is
able to equally benefit from this partnership. It would be fair to say that current China-
Africa cooperation is of mutual benefit, but more needs to be done from both sides to
make it an equally mutual benefit and a long-term, win-win cooperation, which will be
discussed in more detail later.
Non-interference: values, self-interest, and challenges. The non-interference
principle reflects a deep ideological difference between China and the West in handling
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international relations. It also serves to safeguard China’s own interests. But this
trademark of China’s foreign policy has been put to a test in Africa, an environment
where violent conflicts and instability are a persistent challenge.
Different values. There is a clear divide between China and the West regarding
the extent to which one country has the right to be involved in another country’s internal
affairs and should be expected to solve its problems. In the Chinese view, non-
interference is the key to show respect for a country’s sovereignty, and such respect is the
political foundation for state-to-state relations. As Li (2007) stated, China views itself as
having no rights to intervene in the domestic affairs of African countries as an outsider,
and considers the African Union more qualified to do so. In an interview in 2004 with the
New York Times, Deputy Foreign Minister Zhou Wenzhong stated China’s position of
“business is business” in China-Africa cooperation, and commented that the situation in
Sudan was an internal affair so China was not in a position to impose its view on the
parties involved in the conflict (New York Times, 2004). Chinese leaders have
consistently stated that China never attaches and will not attach political conditions to
development assistance. The West, however, views human rights as a universal and
fundamental principle that comes before a country’s sovereignty. So they have criticized
China, stating that China’s non-interference principle and no strings attached aid help
keep the corrupt Africa regime in power, undermine Western efforts to promote good
governance, and worsen human rights in Africa. China’s position is that blaming African
governments’ corruption and misconduct in human rights on China because China comes
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to Africa for business is not a fair view, especially when the Western-led development in
the last 50 years has not been able to solve these challenges.
Self-interests. The non-interference principle is mutual, meaning that by not
getting into others’ internal affairs, Beijing expects other countries to leave the Chinese
government alone to handle the challenges related to human rights and democracy in
China. Many in the world consider China as an economically fast-developing, but
democratically “underdeveloped” country. Chinese people have not been given the rights
to participate in free elections that people in many parts of the world have enjoyed. The
Western media often report evidence of Internet censorship in China. Popular social
media such as Facebook and Twitter are banned in China as of today. Beijing has used
non-interference as justification when responding to criticism about democracy and
freedom of speech in China. At the same time, China faces an ongoing challenge with
regards to Taiwan, and from time to time the West attempts to challenge China’s
sovereignty. One of the most recent examples is related to the protest and occupation by
Hong Kong students demanding the rights of universal suffrage in the 2017 election of
the Hong Kong Special Administrative Region of China. It is worth noting that universal
suffrage is not included in the 1997 Basic Law, known as the legal framework for the
implementation of “one country, two systems” agreed to by Beijing and the Hong Kong
Government (The Government of the Hong Kong Special Administration Region of
China, 1997). But Hong Kong people have the right to request greater democratic rights
and pursue the goal of universal suffrage. The bottom line is that this is a protest by
Chinese citizens taking place in Chinese territory. A group of lawmakers at the British
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Parliament announced a plan in November 2014 to visit Hong Kong to investigate the
handling of this protest. No surprisingly, this is perceived by the Chinese government and
an overwhelming majority of Chinese people as an attempt to insert colonial influence
and interfere in China’s internal affairs. Beijing showed the British critics a hard line by
informing the British side that China will not grant visas for this visit (New York Times,
2014). As Li (2007) stated, the non-interference principle serves to safeguard China’s
own sovereign rights.
Challenges. As China-Africa cooperation goes broader and deeper, China is
facing increasing challenges to maintain its absolute adherence to the non-interference
principle. Conflicts and instability in some parts of Africa put China’s vast investments at
risk, and also present an increasing challenge for China to protect the growing number of
Chinese nationals in Africa. Libya and Sudan have put non-interference to the test.
The case of Libya. Chinese investments in Libya prior to its turmoil were mainly
infrastructure and housing projects sponsored by the Libyan Government and contracted
to Chinese state-own enterprises (SOEs) (Zhang & Wei, 2012). In May 2011, Chinese
state media reported that the fall of the Gaddafi regime cost Chinese firms a direct loss of
approximately $20 billion as most of the Chinese contracts were signed with the Gaddafi
government (People News, 2011a). The indirect cost was the surge of international oil
prices due to the Libya civil war as China is a big oil importer. In addition, China had to
remove over 35,000 Chinese nationals, most of whom were construction workers, from
Libya on a 12-day emergency basis. The Chinese navy’s Xuzhou frigate entered the
Mediterranean Sea for the first time to assist the operation (People News, 2011b).
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Non-interference in internal affairs, as Chinese understand it, includes limited
engagements with opposition parties in other countries. Shinn (2011) acknowledged that
China has not made any particular efforts to build ties with opposition parties in African
countries but the West normally does. Some might argue that China’s focus on the ruling
party and regime is because they have the power to cut deals with China. But this factor
is likely taken into account by all foreign investors, so it does not quite explain why the
West engages opposition parties but China normally does not. Adhering to its non-
interference principle, China was reluctant to intervene in the Libyan civil war, and had
little contact with the opposition prior to and during the war. China also opposed the
West’s campaign of military intervention in Libya. Erian (2012) stated that China’s non-
interference is simply not enough to meet the rigorous demands of international
diplomacy and to effectively protect its national interests, especially in the case of large
investments in troubled states. He argued that, although China later green-lighted the UN
resolution of imposing a no-fly zone in Libya by an abstained vote, and finally
recognized the rebellion government, namely the National Transitional Council (NTC), in
September 2011 after Gaddafi’s death, China was a step behind the West in terms of
securing national interests in post-Gaddafi Libya. NTC stated that contracts in Libya’s
post-war reconstruction would be dealt with according to the support that foreign
countries gave to the rebellion during the war, which is certainly not a favorable situation
for China (Erian, 2012). Although NTC later promised to honor Chinese contracts
previously signed (China Daily, 2011), the Libya case is still a huge loss for China in
overseas investments, given the great cost associated with camp attacks, operation
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suspension, delay and uncertainty in resuming the contracts, rescue of Chinese personnel,
and likelihood of losing preferential treatment in future business.
The case of Sudan. The Darfur crisis in 2004 started with rebel groups taking
arms against the Sudanese Government and then escalated into a full-scale military
confrontation. The crisis reportedly caused 50,000 deaths, including a large number of
civilians (CNN, 2004). Adhering to its “business is business” position, China was
reluctant to intervene in the crisis in Darfur. China and Russia also opposed Western
sanctions on Sudan. China’s insistence on non-interference and “business is business” in
the face of a humanitarian crisis received heavy criticisms from the West. It would be
hard to deny that oil interests weighed heavily in China’s handling of the Darfur crisis.
China is the largest foreign player in Sudan’s oil industry back then and still is today. In
2013, Sudan supplied 2% of China’s oil imports but this accounted for 86% of Sudan’s
oil exports (US Energy Information Administration [USEIA], 2014). China’s National
Petroleum Corporation (CNPC) played a major role in helping Sudan develop its oil
sector in the 1990s and built pipelines to bring Sudan’s oil to the international market.
The CNPC holds 40% and 41% share in Sudan’s top two oil companies (USEIA, 2014).
China’s heavy investment put it in an awkward position internationally in the Darfur
crisis. China was also criticized for its arm sales in Sudan, which indirectly enabled the
crisis.
Verhoeven (2014) argued that it was in Sudan that limits of non-interference were
exposed and the reversal of China’s non-intervention in domestic affairs was observed.
The study listed several actions as evidences. Beijing made an unprecedented move in
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2007 to pressure the al-Ingaz regime to accept the African Union peacekeepers and a
joint UN-AU peace operation in Sudan. Beijing also green-lighted the referral of the
Darfur crisis to the International Justice Court by an abstained vote at the UN Security
Council. The split into the Sudan and South-Sudan in 2011 left China a situation that the
two ends of the Chinese-built oil pipelines were extremely hostile to each other and large
Chinese investments were at risk (Verhoeven, 2014). Then, when South Sudan
unilaterally suspended oil production and a south-backed militant group kidnapped 29
Chinese workers in 2012, Beijing had no choice but to act (Reuters, 2012). Beijing
played an instrumental role in bringing the Sudanese Government back to the negotiation
table for the AU-US-Ethiopia mediation mission in late 2012 (Verhoeven, 2014). Beijing
also put forth full diplomatic efforts to mediate the cease-fire agreement between the
South Sudan government and the rebels in 2013 (BBC News, 2014f). Unlike the past
Chinese UN peacekeepers who were engineers, medical workers and policemen, China
for the first time deployed an infantry battalion of 700 troops to participate in the UN
peacekeeping mission in South Sudan in December 2014 (Guardian News, 2014). It is a
UN mission but the location clearly indicates China’s aim to safeguard its oil fields and
Chinese workers in this troubled region. Verhoeven (2014) made a good point that
although the focus of attention is overwhelmingly on how China has changed Africa,
Africa is changing China’s foreign policy and its understanding of non-interference.
Abandon or adjust? But this paper disagrees with the view expressed in cited
studies and some Western media that, as China is rising to a global power, non-
interference is losing its usefulness, and China is abandoning or will abandon this
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principle. At least, “abandon” should be defined more clearly. As discussed earlier, non-
interference reflects the respect for equality and sovereignty in international relations,
which is based on values deeply rooted in China’s own history, and has proven to be
working in China’s practice of foreign relations over the last 65 years. Non-interference
also serves to deal with criticisms on China’s democracy and human rights and to
safeguard China’s own sovereignty. Chinese state councilor Yang Jiechi reinstated the
principle of non-interference at a meeting with US Secretary of State John Kerry when
they discussed the recent “Occupy Central” protest in Hong Kong (China Daily, 2014b).
Therefore, non-interference is still relevant for China from both value and practical
perspectives. Lessons learned in Libya and Sudan suggest that, rather than deal with it
after the fact, China should take a more proactive approach to respond to political change
and mediate conflicts in countries where it has considerable investment interest. Beijing’s
greater involvement in Sudan’s peace negotiation after the Darfur crisis is an indication
that China has realized the gaps in its diplomacy. But it is worth noting that China
carefully aligns its efforts with the UN or the AU by supporting and later directly
participating in the AU and UN peacekeeping operations. In this way, China goes
through the “proper channel” to be involved rather than taking a single-country action to
interfere an African country’s internal affairs. The Chinese gift of the $200-million AU
headquarters compound reflects Beijing’s keen interest to develop a close cooperation
with the AU. Therefore, this study suggests that China is unlikely to abandon the non-
interference principle although it is expected to be move involved in preventing conflicts
in Africa in order to secure its investment.
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This paper supports revisiting absolute adherence to the non-interference
principle. China should uphold the non-interference principle. But in the face of violent
conflict, it should exercise investor leverage if applicable, and engage more in developing
joint solutions for peace and security in Africa. First, non-interference demonstrates the
respect for equality and individual country’s sovereignty rights, which are foundation for
building international relations. Dialogue and negotiation based on mutual respect are
likely more productive than threat and sanction to address differences and solve conflicts.
In a highly interdependent global economy, the effectiveness of sanction is limited. The
Western sanctions on Russia have not changed Russia’s behavior much on Ukraine, other
than to make the collaboration for peace more difficult to form. Aid attached with
coercive policy-based conditionality has not had much success in tackling violent
conflicts and poverty in Africa. Second, China, now one of the major players in Africa,
should assume greater responsibility to prevent conflict and humanitarian disaster in
Africa, which includes seeking collaboration with the West, and to promote dialogue and
negotiation in seeking a solution for peace. There will be a learning curve as China
transforms its economic power to political power, in a responsible way, to promote peace
in Africa while protecting its overseas investments.
Limited Employment Opportunities for Africans and Poor Workers’ Rights
This section addresses a frequently expressed concern in literature and media
reports, that Chinese projects in Africa largely utilize Chinese workers and leave local
population with few opportunities. And, in the cases where Chinese firms do hire the
locals, oftentimes wages are low and working conditions are poor. The anti-China
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resentment in Zambia reviewed in Chapter V is mainly due to poor wages and working
conditions in Chinese firms. Although much has been said about the problems, few
studies have provided an in-depth understanding of the root causes and offered practical
solutions as to how to include African workers in Chinese projects, how to improve
workers’ rights in Chinese firms, and how to develop a good working relationship
between Chinese and African employees at the firm level. This paper aims to fill these
gaps. This section in Chapter VII identifies root causes of the problems by investigating
the following questions. 1) Why do many Chinese firms in Africa prefer Chinese workers
to African workers? 2) What causes poor workers’ rights in some Chinese firms in
Africa? 3) Why should Chinese firms hire more African workers and improve labor
practices? 4) Are there examples of Chinese firms hiring a large portion of African
workers? If yes, how are the working relationships between Chinese and African
workers? Built on the discussion, solutions to the problems will be proposed in Chapter
VIII.
Why do many Chinese firms in Africa prefer Chinese workers to African
workers? Cost-effectiveness is a well-known advantage of Chinese workers and a main
reason behind the global label of “made in China.” The question is whether this
advantage can explain Chinese firms’ hiring preference in Africa, where the average
wage is low and many locals are poor and desperately need a job. This paper suggests
that the answer is affirmative, and the cost-effectiveness of Chinese workers in the
African context is enabled by the abundance of Chinese labor, comparable wages, low
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management cost, and a unique set of circumstances behind Chinese workers going to
Africa and their reputation of being “hardworking.”
Abundance of Chinese labor. The Chinese National Bureau of Statistics (2013)
reported that there were 788.94 million economically active people in China in 2012,
among whom 11.9 million were unemployed. The registered urban unemployment in
China stood between 4.1% and 4.3% from 2008 to 2012. In the Chinese context, the 4.1%
urban unemployment rate in 2012 translates to 9.17 million jobless Chinese in urban
areas (Chinese National Bureau of Statistics, 2013). Some Chinese scholars have argued
that the actual unemployed population in China is much larger than the figure published
by the government. There have been questions about the methodology used by the
Chinese government to collect unemployment data. It is reported that the urban
unemployment rate estimated by the Chinese Academy of Social Sciences in 2009 was
9.2% while the figure published by the Chinese government was only 4.2% (I feng News,
2013). The reality is that, with a vast population and large numbers of unemployed
people, Chinese firms and business owners have plenty of choices of domestic workers
for manual or low-skilled jobs like construction workers, factory workers and shops
assistants, which currently account for a large portion of job opportunities brought by
Chinese investments in Africa.
Low wages of Chinese labor. The average wage of Chinese labor is much lower
than those in developed countries, and, in general, comparable to the average wages in
African countries. A recent report shows that the average hourly wage of Chinese
manufacturing workers is $1.36, less than one tenth of their US counterparts (Huffington
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Post, 2012). According to Egypt’s largest news organization, Ahram News (2014), the
average weekly salary in Egypt was $106.4 in 2013, which converts to $2.66 per hour on
a schedule of 40 hours per week. That is higher than the average hourly rate of Chinese
factory workers. The current minimum wage in Ghana is 4.43 Ghanaian Cedi or $1.34,
close to what Chinese factory workers earn (Ghanaian Ministry of Finance, 2012).
Therefore, with plenty of cheap Chinese laborers, hiring Africans does not seem to
provide Chinese firms with much of a cost advantage.
Easy management of Chinese labor. Easiness in management is another key
reason for the preference for Chinese workers. Corkin and Burke’s study (2006) on
Chinese infrastructure and construction businesses in Africa suggested that, besides low
wages, highly organized and hard-working Chinese workers are a big advantage of
Chinese construction firms in Africa. Their study reported that Chinese managers and
workers in Africa normally live and work on the construction site full time, and speaking
same language saves considerable time for Chinese managers in communicating with
workers and helps workers have a good understanding of the projects. The author’s field
research in Egypt and Ghana also found that few mid-level Chinese managers in Chinese
state-owned and private firms who are responsible for giving instructions to workers
speak English fluently, and none of the Chinese managers who the author met in Egypt
can speak Arabic at a working level. It is a lot easier for these Chinese managers to deal
with Chinese workers than local African workers.
This paper suggests that the unique arrangement of Chinese construction workers
and managers living on-site as reported in Corkin and Burke’s study (2006) is an
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externalization of the domestic practice. Living on or nearby the work site is common in
domestic manufacturing and construction businesses. As reviewed in Chapter IV,
improvements in China’s agriculture outputs generated a large number of “leftover” rural
laborers. Under the “Reform and Open-door” policy, the boom of labor-intensive
industries, mainly manufacturing and construction, in more economically developed
urban and coastal cities absorbed a large number of laborers from rural regions and other
economically less developed regions. The housing in these coastal cities is expensive for
these laborers from these less developed regions, so employers normally provide cheap
company dormitory or camps on or nearby the construction or factory site for these
workers. Many workers are willing to tolerate basic housing conditions in order to save
money, and to work long hours including weekends to earn more in order to support their
families in economically less developed regions. The arrangement helps minimize the
commute, which enables employees to work longer hours. Because this is a common
practice in China and because the cultural and language barriers in the African
environment are challenging for Chinese workers new to the continent, this organized
living and working arrangement has been widely adapted by Chinese firms in Africa.
This arrangement helps workers to settle in the African environment and makes it easier
for Chinese managers to organize and manage workers.
It is also reported in Dasgupta and Oirere’s study (2014) that construction
drawing and mapping in Chinese projects are often filled with mandarin jottings which
local workers are not able to understand without translation. They offered an explanation
of why Chinese firms avoid dealing with local trade unions. Wage negotiation with local
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trade unions is time consuming, and local unions often demand a certain degree of
involvement in project management. But because Chinese firms win the bid with a thin
profit, Chinese managers need to have full control of the project in order to keep the cost
low and meet deadlines.
Unique circumstances behind Chinese workers going to Africa and their
reputation of being “hardworking.” It is a sensitive issue to compare the work ethic of
Chinese and African workers because acknowledging the reputation of hardworking
Chinese may be perceived as implying that Africans are less hard-working. This paper
suggests that the work ethic itself is not the difference between Chinese and African
workers. To gain a good understanding of Chinese workers’ behavior in Africa, we have
to look into what brings them to Africa, their expectations of life in Africa, the domestic
working culture from which they come, and how these factors differentiate Chinese
workers from their African counterparts from the employer point of view, in this case, the
Chinese firms operating in Africa. This section presents an insightful discussion of these
factors based on the author’s research, including the experience in serving as an executive
intern for the Managing Director of a joint venture co-founded by China’s National
Petroleum Corporation (CNPC), and living with CNPC’s Chinese employees in Egypt as
well as a local Ghanaian family in Accra during the research.
High competition in the domestic job market and incentives offered by Chinese
firms for overseas jobs are two main factors that bring Chinese workers to Africa. The
“Go Global” strategy not only serves to address China’s energy security and enhance the
competitiveness of Chinese enterprises, but also helps ease domestic employment
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pressure by creating jobs overseas. Compensation offered by Chinese state-owned and
private firms for working in Africa is normally better than that of the same job in China.
Two examples help illustrate this point.
The Egyptian-Chinese Drilling Company (ECDC) is a joint venture co-founded
by China’s National Petroleum Corporation (CNPC) and a private Egyptian drilling
company. In China, working at a large state-owned enterprise (SOE) like the CNPC is
considered a well-paid and privileged job. But the compensation at SOEs’ overseas
branches is even better. There is a phrase describing pay and benefits at Chinese SOEs’
overseas branches: “zheng duo shao, cun duo shao,” which means how much you make
on your paycheck is how much you are able to put in your saving account. Usually
overseas employees’ living expenses are paid, head to toe, by the SOEs. For example, at
the ECDC, the living expense of Chinese employees, from housing, food, basic furniture,
to Internet service and mobile phone bills, and to business suits and shoes, are provided
by the CNPC. The company dormitory for Chinese employees at the Cairo Office is a
villa in an up-scale neighborhood. A professional chef, who is a full-time CNPC
employee, is in charge of the logistic needs of the Chinese team.
Employees at Chinese private firms and workers on a temporary or project-by-
project basis, including those who work on infrastructure projects for SOEs or their
subcontractors, are less privileged than full-time SOE employees in terms of overseas
subsidies. But in general, they make more than the same job would pay in China. For
example, a translator at a private Chinese furniture factory in Ghana told the author at an
interview that her salary is approximately 20% more than that of the same job in the
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Chinese city where she comes from (Liu, 2013). It is reported that construction workers
could earn more than twice the amount of those who do the same jobs in China (Worker’s
Daily, 2014). Although not comparable to the head-to-toe SOE style, private firms
normally compensate part of living expense for workers from China as well. The
organized living arrangement helps employers provide these benefits at a relatively cheap
cost. The interviewee from the furniture factory in Ghana shared with the author that she
lives in the company dormitory free of charge, and most of her food expense and phone
bills are paid by the employer. Therefore, she is able to save approximately 50% of her
salary each month, which she would not be able to do in Chinese cities with a high living
cost (Liu, 2013).
But better compensation comes with conditions. Chinese SOE employees are
required to accept a challenging work schedule, commit to global mobility, and be
compliant with strict staff management policies. For example, ECDC’s Egyptian oil
workers at the drilling sites have a schedule of one month of working for 7 days per week
followed by one month off. Western petroleum companies in Egypt usually allow a home
break every 28 days. But Chinese employees, from the company executives to oil
workers at the drilling sites, unless for medical reasons or family emergencies, have a
work schedule of three months in Egypt and one month off. The long three-month
overseas work schedule is especially challenging for the drilling crews who work on a
12-hour shift for 7 days a week deep in the Western Desert. A Chinese drilling worker
told the author that at one time he had to stay on duty for six months on this 12-hour shift
schedule. This schedule is not easy for employees, their spouses and children back in
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China. Besides a challenging work schedule, employees of large Chinese SOEs also have
to accept global mobility. Most of the Chinese employees at the ECDC have worked for
years in other countries, such as Nigeria, Turkey and Tanzania, before they were posted
in Egypt. They go wherever the China National Petroleum Corporation’s rigs go. As the
SOEs are the pioneers who paved the way for China’s move into Africa, employees of
the SOEs are the ones standing at the front line to deliver this centrally planned “Go
Global” strategy. The staff management policy at ECDC is a mirror of the SOE’s culture
of top-down control. ECDC’s Chinese employees are not allowed to own a personal
vehicle. Engineers whose work involves local commutes have an Egyptian driver’s
license and the other workers don’t. Because Cairo’s public transportation system is not
robust, they rarely go out after work. They spend evening time in company housing
chatting with their families online, watching TV, or exercising such as playing Ping Pang.
Although it is not a hard rule, it is a well-understood culture that they are expected to
inform their boss in advance where they go during weekends.
Unlike the relatively comfortable housing offered by Chinese SOEs, private
employers, especially small-size or family-owned businesses in Africa, normally provide
housing with basic and crude conditions. It is reported that several construction workers
have to share a small room in the camps provided by private construction firms, and there
is no furniture in these rooms except for beds each covered by a mosquito net and a desk
(Workers Daily, 2014; WanYi News, 2011). This is partly due to the different
“treatment” from the Chinese government and state banks received by the Chinese SOEs
and private firms. As discussed in Chapter V, SOEs enjoy strong support from the
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government and the state banks while many private firms follow their own path to Africa
with a strong entrepreneurial spirit. Especially for middle and small Chinese private
businesses, access loans and business insurance services in Africa are difficult. Fewer
employee benefits are offered by private Chinese firms than those large SOEs. The
interviewee who works at the furniture factory in Ghana shared with the author that no air
conditioning is available in the company dormitory. Because power blackouts are part of
the daily life in Ghana, workers have to endure temperatures from 85 to over 100
Fahrenheit without a fan in the warm season, which is a day-to-day challenge. To save
gas, the factory owner does not allow air conditioning in the company vehicle. The author
has first-hand experience that car air conditioning is considered a luxury in Ghana. Taxi
drivers in Ghana normally do not turn on the air conditioning unless the customers pay
extra. In Ghana’s summer time, sitting in a car without air conditioning in the hot sun can
be quite a challenge, especially when encountering heavy traffic. Due to little variety in
the food supply and a different diet, food choices in local markets are often limited for
Chinese. Diseases such as malaria are a serious health concern to all. Several Chinese oil
workers at ECDC shared with the author their horrific malaria experiences in Nigeria and
stated that one good thing about being posted in Egypt is that, geographically, Egypt is
out of the malaria zone in tropical Africa.
Therefore, Chinese workers come to Africa almost entirely for work. They are
either posted in Africa or they come to Africa by choice to seek work and earn better pay
than the same job in China would offer. For many, working in Africa means leaving
family behind and accepting hard living conditions. Unlike some Chinese business
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owners who bring family members to Africa, few Chinese workers whom the author met
in Ghana and Egypt, from SOE employees to contracted construction workers and to
workers in private firms, bring their spouses or children to Africa. As a result of China’s
fast-growing economy, many Chinese experience a less developed infrastructure and less
comfortable living conditions in Africa than where they came from in China. Compared
to Africa, they prefer their one-child to receive education in China. Therefore, their
spouses normally stay in China to take care of their child and elders in the family. Unlike
immigrants from developing to developed countries, or from less developed areas to
more developed cities who seek for a permanent residency, Chinese workers normally
consider Africa as a workplace where they trade hardship for a better income for several
years rather than a permanent stay. These factors help explain why Chinese workers are
available and willing to work long hours and accept the basic living conditions in Africa
in order to earn more income.
These unique circumstances behind Chinese workers going to Africa differentiate
them from Africans who live a local life there. For example, African workers have family
obligations and activities, such as holidays, weddings and funerals. Mohan and Tan-
Mullins’s study (2009) reported that they were told by different businessmen that one
problem with Ghanaian productivity was ‘culture,’ as local workers can be absent from
work for weeks due to funerals or clan or family events. The author’s field research found
that the culture in West Africa, such as Ghana and Nigeria, attaches a great importance to
funerals. Funerals are normally open for visitors and can be a week long with family
members, relatives, and friends traveling long distances to attend. Underdeveloped
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infrastructure makes the commute more time-consuming. Therefore, it is understandable
why African workers find the intense working schedule of Chinese firms a challenge to
cope with. And Chinese firms find that Chinese workers who live on site and are willing
to work long hours are more cost-effective and easier to manage than local workers.
Sponsoring Chinese workers’ work permits in Africa also offers Chinese managers a
sense of control and security of a reliable work force. With other factors discussed earlier,
including an abundant domestic labor supply in China, comparable wages between
Chinese and African workers, no communication barriers, and easy management of
Chinese workers, it makes business sense for Chinese firms to favor Chinese workers
over the locals. Therefore, this paper argues that the preference for hiring Chinese
workers is a result of cost-saving and profit-driven business practices rather than racial
discrimination, and the circumstances behind Chinese workers going to Africa are more
complex than the work ethic itself. Although hiring more Africans would require other
conditions such as a legal framework in African countries demanding employment
opportunities for local people, this paper argues that a sound and sustainable solution
must be supported by business incentives.
What causes poor workers’ rights in some Chinese firms in Africa? This
paper suggests that poor workers’ rights and safety standards observed in some Chinese
firms in Africa are an externalization of the poor domestic standards in China. These
challenges are rooted in the cost-effective Chinese business model and enabled by an
insufficient legal framework for protecting workers’ rights in both China and African
countries.
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Poor standards at home, poor standards abroad. Labor standards in China are
not much different from those observed in Chinese firms in Africa. As discussed in
Chapter IV, wage arrears are a persistent challenge in the construction and manufacturing
industries in China. Some business owners avoid formal labor contracts with workers,
especially rural workers. Industrial accidents are another salient development challenge
in China. On-time pay and safe working conditions in China seem to be benefits offered
by a decent job, rather than a legal obligation that all employers must fulfill. These
domestic conditions help explain Chinese firms’ behavior in Africa. The chief complaints
about workers’ rights associated with Chinese firms in Africa are low wages, poor safety
standards, long working hours, and using casualization to avoid permanent contracts and
the cost of employee benefits (Bracht, 2012; Brooks, 2010; Haglund, 2008; Human
Rights Watch, 2011). These poor practices can all find their roots in China.
Cost-effectiveness: good or bad? Ironically, cost-effectiveness, the core of
Chinese international competitiveness, is also a root cause of the lack of opportunity for
local population and poor workers’ rights in some Chinese firms in Africa. The problem
with winning bids by offering a cheap price with a razor-thin profit margin and a quick
turnaround of delivery is that it leaves little room for providing training for local African
workers, addressing communication barriers, improving safety standards, and offering
more permanent contracts with health benefits and vacation time, because these measures
take time and resources which lead to cost increases and pose a threat to profitability.
Corkin & Burke’s study (2006) on Chinese involvement in Africa’s construction and
infrastructure sectors reported that local and non-Chinese foreign construction firms
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operate on profit margins of 15-25 percent but Chinese companies usually have a profit
margin under 10 percent which makes them extremely competitive. Another study done
by Sautman and Yan (2007) reported that the profit margin of Chinese firms in Africa
can be as low as 3-5 percent. The gaps in profit margins between Chinese and non-
Chinese foreign firms in the African market are often a result of fierce Chinese-on-
Chinese competition. The author’s research in Egypt found that the head-to-head
competition between China’s top two private telecommunication companies, ZTE and
Huawei, results in a very thin profit margin, and their prices are significantly lower than
those offered by other foreign firms. Heated competition among Chinese construction
firms, including between Chinese SOEs and private firms, is also reported by Corkin and
Burke (2006). Under these circumstances, a thin profit can only be achieved by strict
control of costs and project schedules, which, in turn, lead to poor wages and working
conditions, and to the preference for Chinese workers, who are used to the similar labor
standards back home, easy to communicate with, and willing to live on site and work
long shifts. This paper argues that, without addressing the price, there are few incentives
for Chinese firms to change their current module of operations, hire a large portion of
African workers, and provide decent employee benefits.
Insufficient legal framework to protect workers’ rights. This paper further
suggests that a weak legal framework, which is another root cause of poor workers’ rights
in China as discussed earlier, also applies to the case of Chinese firms in Africa. It is
worth noting that poor workers’ rights in China are not the case in domestic firms only.
Here is a recent example associated with the technology giant Apple. In 2013, when
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worker abuse in Apple’s two large suppliers in China, Foxconn and Pegatron, were
reported, Apple promised a serious investigation and committed to protect workers’
rights (BBC News, 2013c). In December 2014, BBC News broadcast a film taken by its
undercover panorama camera at Pegatron factories near Shanghai, and reported that
Apple’s promise to protect workers has been “routinely broken” (BBC News, 2014g).
Exhausted Chinese workers on the iPhone 6 production lines were filmed falling asleep
on their 12-hour shift. Other findings reported by BBC News (2014g) included that 1)
overtime was assigned by the management without offering workers a choice, 2) routine
meetings before and after work were unpaid, and 3) twelve employees shared a cramped
dormitory. Apple and Pegatron should accept the responsibility for abusing workers, but
this paper argues that the Chinese government deserves the blame, too, because it has
apparently failed to effectively enforce the labor law to protect the workers.
Turning the lens back to Africa, it is reported that the labor laws of Zambia
specify a 48-hour work week but workers in Chinese-run copper mining companies have
to endure a 12-hour work shift or longer for six days per week (Human Rights Watch,
2011). This would mean 72 or more working hours per week. Chinese firms have no
excuse for abusing workers. However, a question should be asked as to what the
government of Zambia has done to ensure that foreign investors who violate the law
receive a serious consequence. Referring to poor workers’ rights in Chinese firms,
Zambia’s former President Sata made an anti-China stance a centerpiece of his
presidential campaign in 2006 and 2011 and won the election in 2011 (BBC News,
2011). But workers’ rights in Chinese firms remain an issue of tension in Zambia today
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and are observed in other African countries such as Angola and Zimbabwe (Kabemba,
2012; Kwenda, 2012). Perhaps rather than playing the Chinese card in political
propaganda and election campaigns, and at the same time welcoming Chinese
investments and accepting generous aid, African leaders should make a serious
commitment to ensuring accountability by enforcing the labor law and protecting
workers’ rights. For example, Zambia’s Ministry of Mines and Minerals Development,
which is responsible for enforcing the country’s mining regulations including worker
health and safety, is under-staffed, under-resourced and corrupt, which virtually conducts
no proactive inspections (Human Rights Watch, 2011). Worker abuse is rarely heard of in
Apple’s factories in the US but has been repeatedly reported in its factories in China.
Poor workers’ rights are rarely heard of in Chinese-financed firms in developed countries
in Europe and North America but have been observed in Chinese firms in numerous
African countries. This evidence suggests that the environment in the host countries is an
important contributor to different outcomes. Without a well-established legal framework,
profit-driven and cost-saving business practices are likely putting workers’ safety and
health at risk. Therefore, the host country government bear a compelling obligation and
play a crucial role in effectively regulating foreign investors and enforcing the law to
protect workers’ rights.
Why should Chinese firms hire more Africans and improve labor practices?
First, lack of job opportunities for the local population and poor labor practices have
caused a growing resistance and, in some cases, hostility towards Chinese in Africa,
which imposes a serious threat to the business operation of Chinese firms and the safety
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of Chinese personnel. In Angola, there have been several incidents of physical attacks
and kidnap of Chinese workers. The central issue behind the hostility is Chinese firms
importing their own labor rather than employing Angolans to rebuild the country after a
long civil war (Faucon & Su, 2010). A separatist group in Angola’s oil province,
Cabinda, exclusively targeted Chinese projects and workers because these were Angolan
government contracted projects and largely used Chinese workers. It was estimated that
there were 70,000 Chinese workers in Angola in 2010 (Faucon & Su, 2010). As reviewed
in Chapter V, an explosion accident at a Chinese-run copper mining company in Zambia
killed 51 Zambian workers in 2005, which put Chinese firms’ labor practices in the
spotlight (Guardian News, 2011). A Chinese manager was killed at a coal mine, and 10
Zambian workers were injured in a wage dispute when two Chinese managers fired shots
while surrounded by a large group of angry Zambian workers (CNN, 2010). Ironically, a
country that benefited from the historical Chinese aid project in the 1970s--the Tanzania-
Zambia railway--which Beijing often uses as an example of China’s traditional friendship
with and sincere assistance to Africa, is now the place where anti-China sentiment is
most often reported on the continent. In Zimbabwe, some 600 workers at a Chinese
construction company went on strike because of long working hours and wages only half
of the minimum wage set by the Zimbabwe government. Zimbabwe people welcome
more technology transfer from Chinese investors but do not appreciate the Chinese for
importing a large number of low-skilled workers, and for competing with downstream
industries that traditionally are reserved for locals (Kwenda, 2012). The growing local
resistance extends a warning to Chinese firms: ignoring indigenization and importing
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poor labor practices from China can have costly consequences, including interruption of
business operations, labor disputes, attacks on company facilities and Chinese personnel,
and an unwelcome business environment. Therefore, the paper argues that business
incentives exist for Chinese firms to use more local workers and be compliant with
international labor standards.
Second, the capability of indigenization and attracting talent in host countries is a
shared quality of a successful multinational corporation, but many Chinese firms are still
early on the learning curve. As discussed in Chapter V, one of the objectives of Beijing’s
“Go Global” strategy is to strengthen Chinese firms’ international competiveness and to
gain experience in global corporation management. This especially applies to large
Chinese SOEs and private firms that play a major role in Beijing’s push for going global.
But if the competitiveness can only be achieved by being cheaper and, in turn, by
exploitive labor practices and fierce Chinese-on-Chinese competition, how will Chinese
firms be able to develop themselves into world-class enterprises? In China’s own
development experience, Western firms hire a large portion of Chinese employees.
Understandably, this is largely due to the cost-effectiveness of Chinese workers. But
Western firms benefit not only from cheap low-skilled workers like those who work in
the manufacturing sectors, but also from well-educated Chinese researchers, experienced
engineers, accountants and technicians. In the early years of China’ opening-up, a job at
an established-name foreign firm, such as the IBM and the London-based accounting
firm PricewaterhouseCoopers (PwC), was considered a “dream job” by many in China.
These foreign firms’ offices in large cities like Beijing and Shanghai attract graduates
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from the best universities in China and skilled higher career-level applicants because of
better compensation and advanced management concepts offered by these foreign firms.
They are a window for Chinese to see the operation of successful multinational
corporations and the business culture in developed countries. Even now, when large
Chinese SOEs and private firms are becoming popular career choices in China, positions
in these western companies remain competitive. Through local recruitment, both low-
and high-skilled Chinese employees contribute to the competiveness and success of
foreign firms in China. Now China has assumed the role of the most significant non-
Western foreign investor in Africa. If Chinese firms are able to attract the best African
workers, from factory workers to educated African engineers, it will help address the
growing local resistance towards the Chinese presence, and increase Chinese
competitiveness and chances of success in the African market. The current situation of
large imports of Chinese nationals, highly organized company dormitories with little
interaction with the local environment, and poor labor standards not only limits
opportunities for local Africans, but also for Chinese firms to take advantage of local
talent and to build experiences in becoming world-class multinational enterprises.
Third, inclusiveness and common development serve China’s strategic interests
in Africa and are important for the success of China-Africa cooperation. As discussed in
earlier chapters, China’s renewed interests in Africa are long-term. China has invested
heavily in Africa’s energy and mining sectors for a reliable, long lasting oil and raw
material supply. It also views the continent as a permanent trading market for Chinese
goods with a great potential to expand. Infrastructure such as a highway and a bridge take
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Chinese construction firms several years to build, but large oil-backed infrastructure
loans issued by Chinese state banks likely take African countries much longer to repay.
Therefore, a welcome and stable business environment, and a peaceful co-existence
between Chinese nationals and the locals in Africa, matter for China.
When addressing China-Africa cooperation, Chinese leaders have repeatedly
stated that China is willing to share experience in economic development with African
countries and committed to the goal of co-development and common prosperity. Then,
this paper argues that China should offer Africa one of the most valuable experiences in
capacity building that China has gained in its long march for “reform and opening,”
which is to take advantage of foreign direct investment (FDI) to help create jobs and
develop human capital. As reviewed in Chapter IV, FDI inflow to China not only
supplied a source of capital needed for China’s economic takeoff, but also helped create
jobs and facilitate technology transfer. The boom of manufacturing industries in which
foreign companies invested in China’s Special Economic Zones (SEZ) helped absorbed a
large number of Chinese labor. “Made-in-China” has helped the Chinese gain access to
the knowhow of world-class merchandise production and global corporation
management. For example, Chinese managers and workers in the Starbucks chain stores
or Nike factories in China learn not only how to make coffee in a style proven to be
successful multinationally, or how to make the world’s most popular sports apparel, but
also the knowledge and experience in marketing in a different culture, quality control,
inventory management, staff management, and public relations. This learning process is
mainly through on-the-job training. Many African countries have expressed an interest in
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learning from China’s experience in poverty reduction and economic development.
Hiring more Africans will enable experience sharing and capacity building. From the
Chinese point of view, it is a legitimate interest of China to ease domestic unemployment
pressure by exporting Chinese labor to work on overseas projects. The presence of
Chinese workers in Africa is likely to remain. What needs to happen is to increase the
percentage of African employees in Chinese firms in Africa so that local communities
can benefit more from Chinese investment.
Therefore, the presence of more African workers in Chinese firms and
improvement in labor practices serve not only the interests of Chinese firms but also
China’s national interests in Africa. There exist business incentives and political
feasibility for improvement. The key question is how to tackle the main causes of the
problem: the cheap price leaving little room to invest in local workers and the insufficient
legal frameworks in both Africa and China. But before proposing solutions, we should
examine whether there are cases in Africa where Chinese firms hire a large portion of
local workers, which will be discussed next.
Are there examples of Chinese firms in Africa that hire a large portion of
local workers? If yes, how are the working relationships between Chinese and
African workers? Although a big presence of Chinese workers is commonly observed in
Chinese projects in Africa, there are some exceptions. Rui’s study (2010) reported that
Chinese oil companies in Sudan hire up to 95% Sudanese oil workers. Mozambique’s
national football stadium, financed and built by Chinese, hired 273 Chinese and 331
Mozambicans in 2010 and is expected to hire a total of 500 Chinese and 1000 locals by
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the end of the project (South Africa-the Good News, 2009). The Imboulou Hydroelectric
Dam in Congo, for which China financed 80% of the total cost of $280 million, involved
400 Chinese and 2000 Congolese construction workers as of 2010 (Reuters, 2010). In
Egypt, the labor law prevents companies from hiring more than 10% foreign employees
(United States Department of State Bureau of Economic and Business Affairs, 2013). The
author’s research in Egypt in 2012 found that this 10% cap is regularly enforced in the
China-Egypt oil partnership. These cases indicate that, although there is a big presence of
Chinese workers in Africa as a whole, the use of local workers varies by country and
project, and the host country’s capacity to enforce its labor law and negotiate the
percentage of local labor with foreign investors plays an important role in influencing the
result.
The working relationships between Chinese and Africans at the firm level have
not been adequately addressed in previous studies. To promote inclusive development
and successful, long-term cooperation, this subject deserves more attention. Next, the
paper aims to contribute an insightful discussion based on the author’s research in Egypt
on two joint ventures under the Chinese-Egyptian petroleum partnership. To provide a
context, the paper first briefly describes the background of China-Egypt relations and the
corporate structure of the two joint ventures. It then addresses the relations between
Chinese and Egyptian employees, including several ongoing challenges faced by the
collaboration.
China-Egypt relationship. Egypt and China have a long-standing, good
relationship. If one were to name an “all-weather friend” of China in Africa, as Beijing
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calls it, Egypt would be one of the most qualified candidates. Egypt is the first African
country to recognize the communist People’s Republic of China. Diplomatic relations
between the two nations were established in 1956. Egypt is also one of the crucial 26
African votes that helped pass the UN Resolution 2758, which expelled Chiang Kai-
Shek’s government and recognized the government of P. R. China as the only legitimate
representatives of China to the UN (UN, 1971). During Mubarak’s over three decades in
power, he visited China nine times (Golia, 2007). During former President Morsi’s short
one-year tenure, he selected China as the first stop for his state visit outside the Arab
world in 2012 (Ahram News, 2012). President el-Sisi, former Commander-in-Chief of the
powerful Egyptian military, visited China in December 2014, six months after he took
office. Deepening the bilateral cooperation through investment and trade topped the
agenda of this visit (China Central Television [CCTV], 2014). During the Arab Spring
movement in Egypt, also known as the Egypt Revolution, the country experienced
dramatic political turmoil from 2011 through 2013, but the China-Egypt cooperation has
remained strong. The volume of China-Egypt trade climbed steadily from $8.8 billion in
2011 to $9.5 billion in 2012, and to $10.3 billion in 2013 (China Economic Daily, 2014;
CCTV, 2014). During the revolution, Beijing adhered to its non-interference principle
and walked a fine line to “respect the choice of Egyptian people” but avoided making
negative comments about the two former governments during Mubarak’s fall and Morsi’s
ouster. Instead, China made its position clear that the long-lasting China-Egypt friendship
and cooperation will remain unshaken (People’s Daily, 2011; The State Council of China,
2013b). The China-Egypt relationship is built on a set of mutual strategic interests.
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Egypt’s rich petroleum resources, subsidized energy, large local market, and access to the
markets in the EU, the African neighbors, and the US through trade agreements are
attractive to China (Golia, 2007). Egypt is interested in China’s investment capacity,
advanced technology, the world’s most populated market, and successful experiences in
economic development.
The author observed an overall positive view of Egyptian people towards Chinese
during the visits to major Egyptian cities, including Cairo, Giza, Alexandria, Aswan and
Luxor, as well as the ECDC’s three drilling sites deep in the Western Desert. There is a
consensus among Chinese businessmen and workers, whom the author met in Egypt, that
there is a business-friendly environment towards Chinese in Egypt. Complaints about few
opportunities for the locals in Chinese firms or cases of anti-Chinese sentiment in Egypt
are rarely heard. The locals appreciate Chinese tourists, especially after the eruption of
the revolution because the number of tourists from Europe has significantly declined due
to the revolution. In Luxor, many tourist shop owners can speak simple Chinese to greet
visitors from China, and they favor Chinese yuan over Egyptian pounds (EGP) because
the unstable political and economic situation during the revolution resulted in a large
depreciation of EGP. The two Egyptian-Chinese joint ventures are operating in this
overall welcome environment.
Two Chinese-Egyptian joint ventures: ECDC and Sino Tharwa. Both of the
joint ventures are oil drilling engineering firms. The Egyptian-Chinese Drilling Company
(ECDC) is co-invested by the China National Petroleum Corporation (CNPC) and a
private Egyptian drilling firm, with a majority of 51% share held by the CNPC. The Sino
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Tharwa Drilling Company is co-founded by China’s Sinopec Group and two Egyptian
state-owned petroleum companies, the Tharwa Petroleum Company and the Egyptian
Holding Gas Company (EGAS), with 50% share held by the Chinese (Sino Tharwa,
2015). The Sinopec Group and the CNPC are two Chinese state-owned oil giants, which
were the 3
rd
and 4
th
largest companies in the world by revenue in 2014 (Forbes Global
500, 2015). The leadership structure in these two firms is the same: the Chairmen of the
Board and Directors of the Human Resources Department are Egyptians, while Chinese
hold the positions of Managing Director (MC) and Chief Financial Officer. This structure
reflects a sense of equality and co-management.
The 10% cap on foreign employees is regularly adopted in both firms. As of
March 2012, when the author served as the Executive Intern for the Managing Director
(MC) of the ECDC, there were 540 employees at ECDC including 43 Chinese. Among
those Chinese, 32 of them were oil workers spreading out at 7 rig sites in the Western
Desert, and the rest 11 Chinese, including the MC, 10 engineers, one accountant and one
chef, worked at ECDC’s headquarters in Cairo. There were comparable numbers of
Egyptian engineers at ECDC. But Egyptians occupied all administrative positions at the
headquarters in Cairo and made up a large majority of the oil workers at the rig sites as
well. At a joint interview with the Chinese Managing Directors of ECDC and Sino
Tharwa, the author learned that there were more than 1,000 employees at Sino Tharwa
and the percentage of Chinese employees were also less than 10% (Li & Zhao, 2013).
Sino Tharwa and ECDC have together created approximate 1,800 jobs for Egyptians.
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Working relations between Chinese and Egyptians at ECDC and Sino Tharwa.
Overall, ECDC’s Chinese and Egyptian employees work together professionally and
peacefully on company business. They attend company meetings and design drilling
plans together. Business decisions are made jointly by the Chinese and Egyptian
executives. Although China holds a majority of the company shares, there is a clear sense
of ownership among Egyptian employees, maybe because they largely outnumber
Chinese. Chinese and Egyptians at the headquarters in Cairo have the same workweek
schedule of Sunday through Thursday as Friday is considered a weekend day in many
Muslim-majority countries including Egypt. Most of the Egyptian employees at the
ECDC are Muslims. Therefore, in addition to a 20-minute work break that applies to all
employees, Egyptians are allowed to take extra time for pray. The company also provides
a free meal around 10am everyday which observes the Muslin eating schedule. Chinese
employees normally do not take lunches until noon, which are delivered by the Chinese
chef to the workplace from the company dormitory. But Chinese workers often join their
Egyptian colleagues for an early lunch on Thursdays because the menu on Thursday is
kabab which is a local dish favored by many Chinese there. At the rig sites in the Western
Desert, Chinese engineers, technicians and oil workers work side by side with Egyptians.
The camp of the Chinese team is right at the rig site, partly because Chinese engineers
monitor the drilling process on a 24/7 schedule. The Egyptian camp with a larger number
of oil workers is two to three minutes driving distance from the rig site. Chinese and
Egyptians share a warehouse where food, water and other daily needs are stored.
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Although the overall working relationship between Chinese and Egyptians at
ECDC is collaborative and peaceful, there is a sense of segregation between them.
During the 20-minute morning breaks at the ECDC’s headquarters in Cairo, Egyptians
gather in several groups while Chinese form their own small group. English is rarely used
during the break. Chinese speak Chinese and Egyptians mostly speak Arabic. At work,
Egyptians speak a mix of Arabic and English but Chinese only speak English while
having a conversation with Egyptian colleagues. Most of the Chinese engineers and oil
workers at ECDC are still shy about their English, although they have been working in
Egypt for 5 to 15 years. At the weekly engineer meetings, if the Chinese MC is present,
the meeting will be conducted in English. But if not, the meeting will be chaired by the
Egyptian vice MC and mostly be conducted in Arabic, even though two Chinese
engineers, including the Operation Manager, are regularly seated in those meetings.
Serving as the executive intern, the author attended the weekly engineer meeting once
and had the firsthand experience of listening to Arabic for one hour. At the rig sites that
the author visited, the Egyptian team wore the blue ECDC uniform but some Chinese
engineers wore the red CNPC uniform. This sense of segregation and exclusive language
at company meetings, while non-Arabic speakers are present, generate negative energy
and does not help develop a trustful working relationship between Chinese and Egyptian
employees. Some Chinese engineers believe that when Egyptians do not want to share the
details of the drilling plan or make a negative comment about Chinese colleagues, they
would speak Arabic at the meetings.
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Besides cultural differences and the language barrier, overseas staff management
policies of China’s SOEs have contributed to the segregation. For example, Chinese
employees at ECDC are under a special compensation arrangement. ECDC pays only
part of their salary and benefits including health insurance and life insurance plans. The
other part of the salary is paid by CNPC along with overseas subsidies, retirement
benefits, disability insurance, supplemental health insurance, etc. Chinese employees
considered themselves as CNPC’s representatives at ECDC rather than ECDC
employees. In a real sense, their perspective is correct. They are full-time employees on
CNPC’s payroll. They are posted in Egypt like they were before in Tanzania, Nigeria and
Turkey. They follow wherever CNPC’s rigs go. For the same position, Chinese are paid a
higher salary than Egyptians because of this second paycheck from the CNPC. This
compensation arrangement draws a line between Chinese and local Egyptian colleagues.
It emphasizes the differences rather than commonality between them and presents a
challenge for forging a close working relationship.
As discussed earlier, decent compensation at large Chinese SOEs, like the CNPC,
come with conditions: acceptance of a challenging work schedule, commitment to global
mobilility, and compliance with strict staff management policies. While Egyptian
employees at the drilling sites have a schedule of one month work and one month off,
Chinese employees at ECDC, from the company MC to regular workers, have a work
schedule of three months in Egypt and one month off, including the drilling team
members who are in the Western Desert on a 12-hour shift for 7 days a week. Chinese
employees at ECDC and Sino Tharwa are not allowed to have an Egyptian driver’s
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license except a few of them whose work involves a local commute. Because the public
transportation system in Egypt is not robust, and given the restrictive dormitory rules,
Chinese employees rarely go out after work and are expected to inform their boss where
they go on weekends.
These policies are a mirror of the top-down culture of China’s state-owned
enterprises. An essential role of the staff management is to ensure control over the
overseas personnel and avoid any behavior or activities that would compromise China’s
interests or have a negative impact on China’s image. As a consequence, it limits
employees’ opportunities to interact with the local society, practice foreign languages,
and gain a deep understanding of Egyptian culture, which could help them better
communicate with their Egyptian colleagues and benefit them at work. Therefore, to
some degree, the staff management policies have contributed to the segregation.
Different performance evaluation criteria for the Chinese and Egyptian leaders
bring another challenge to collaboration. Taking Sino Tharwa as an example, Chinese
and Egyptians each hold a 50% share of the company and jointly manage the business.
Besides the common interests, leadership from each side has an agenda that serves their
own country’s interests but might not be in the best interests of the joint venture. On the
Chinese side, the company MC is also the representative of Sinopec in Egypt. Part of his
job is to make sure that the profit target is met and the agreed upon portion is transferred
to the Sinopec account on time. Another assignment for his team is to promote China’s
drilling equipment made by the Sinopec Group in the Egyptian market. Keeping in close
contact with the Embassy of China in Cairo is part of those SOE leaders’ job as well.
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Being a country representative of a large Chinese SOE, these Chinese executives in
Egypt are members of the Chinese Communist Party. Gatherings are regularly organized
by the Chinese Embassy to provide business executives with policy updates and discuss
China’s political and economic interests in Egypt. The author had the opportunity to
attend two of these gatherings and observed the presence of the executives of Chinese
SOEs in Egypt, such as Sinopec Group, CNPC, China North Industries Corporation
(Norinco), China Sate Shipbuilding Corporation (CSSC), China First Automobile Work
Group Corporation (FAW), China Ocean Shipping Company (COSCO), and China
Harbor Engineering Company (CHEC). In the case of Sino Tharwa, when it comes time
for performance evaluations and promotions, the Chinese executives will be judged not
only by business at Sino Tharwa but also by their efforts to promote the interests of the
Sinopec Group and the “Team China” in Egypt. It is understandable that Egyptian leaders
are evaluated by their performance to promote Egypt’s interests through the business of
Sino Tharwa as well. The difference in performance evaluation criteria and expectations
of the leaders from the two sides might affect the collaboration between executives and
lead to disagreements and conflicts in business decisions. Evidence presented in previous
studies shows that whether senior executives can demonstrate collaborative behavior
themselves, address internal oppositions effectively, and develop common goals in an
organization such as a joint venture has a profound influence on the employees under
them (Gratton & Erickson, 2007; Li, Xin, Tsui & Hambrick, 1999; Park, 2008). Leaders
play a significant role in forging a successful collaboration and developing good
employee relationships in a joint venture.
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The Egypt case discussed here suggests the following four findings: 1) there are
exceptions where Chinese financed companies hire a large portion of local workers; 2)
Chinese investors respond to the hosting country’s legal environment in recruiting local
workers; 3) a joint venture provides a platform for both sides to learn from each other and
develop cooperation that benefits both China and Egypt; 4) culture and language barriers,
China’s SOE management style, and different aims and expectations of business
executives from both sides together impose an ongoing collaboration challenge. Built on
these findings, the last chapter will propose constructive ideas to develop a successful
collaboration between Chinese and Africans.
Challenges Associated with Chinese Development Assistance to Africa
Two salient gaps in Chinese aid. China’s approach of no-strings-attached aid, its
full and on-time delivery of what has been pledged, and continually generous pledges
have made Chinese aid attractive to African countries and competitive to the
conditionality-based Western aid. However, there are two salient gaps in Chinese
development assistance: 1) lack of transparency, and 2) lack of program evaluation.
The Chinese government does not publish aid data on a regular basis as the
Western donors normally do. On the websites of traditional donors, such as the World
Bank, the US Agency for International Development (USAID), and the United Kingdom
Department for International Development (UKDFID), there are detailed reports at both
country and project levels as to which projects the aid goes to, how money is spent for
each aid program, and what the results are. The USAID not only publishes reports on its
aid programs but also the agency’s annual performance and financial reports released to
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the US Congress and the American public (USAID, 2014). The World Bank Databank is
perhaps the most robust and complete database that provides free and open access to
global development data. It is used by scholars, government agencies, businesses, and
citizens worldwide. The Databank has the capacity to generate customized reports by
selected development indicators, region, country, and time period. Information about
project operations, loan disbursements, and project outcomes are easy to access and
reports are available for download (World Bank, 2014i).
Compared to traditional donors, the reporting mechanism of development
assistance in China is still in an early stage of development. For a long time, there was no
specific report on Chinese aid. Brief data about aid were included in other government
reports, such as the Annual Report of China’s Statistics Bureau and the China Commerce
Yearbook (Grimm, 2011). The State Council of China released the first and second
official reports on development assistance in 2011 and 2014. These reports summarized
Chinese aid to the world. But no Africa-specific report or any country-specific reports are
available so far. The 2014 report enumerated recent aid projects in Africa. For example,
China helped built 14 agricultural experiment centers in countries such as Benin,
Mozambique, Liberia, Sudan and Rwanda. But no project details are provided in the
report (The State Council of China, 2014a). There is scarcity of information not only
about project financing and operation, but also about how effective these projects are in
terms of making an impact on development. At the 2012 Beijing Summit attended by
African leaders from 48 countries, Chinese President Hu Jintao reported that China
delivered the pledges made at the 2006 Summit to donate 30 malaria clinics, 30 hospitals
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and 100 schools in Africa (Xinhua News, 2012). But little information is available so far
about the impact of these outputs. For example, how many patients receive treatments in
these Chinese-built hospitals? How many malaria cases are treated in clinics donated by
Chinese? What percentage are these cases of the total reported local malaria cases? How
many students are enrolled in Chinese-donated schools? What about retention and
graduation rates? Is there a survey about how many graduates from the 100 schools are
able to advance to a higher level of education or find a job? Giving money alone is not
enough to ensure a positive impact of Chinese aid on Africa. Success of Chinese aid
depends on whether aid brings improvement to the life of African people. Therefore,
reports on development assistance programs should not only address the output but also
assess the impact of aid on the target population, which Chinese aid agencies should learn
from the Western donors.
What has caused these gaps? This paper suggests that two factors are largely
responsible for these gaps: 1) political culture in China, and 2) limited capacity and
experience of the Chinese government in managing development assistance.
Political culture. A lack of transparency about China’s foreign aid is rooted in its
domestic political culture. Although China’s public management has undergone changes
in order to support the market-oriented economic reforms and become more responsive to
public demands than before, it remains a top-down style. The central government in
China has an unchallenged authority in decision-making. In a country where citizens do
not have the right to vote, the government is not bound, in a real sense, to report to its
citizens how the government spends money and conducts investments. For example,
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ordinary citizens of China know little about the cost of the spectacular Beijing Olympic
opening ceremony or the world’s largest dam – the Three Gorges Dam that spans the
Yangtze River, nor are they invited to a town hall meeting when a highway or an airport
is built close to where they live. Brief information might be available through the state
media, but it is not a standard practice in China to conduct public hearings before
launching a public project, or to make information about government investment
available to citizens in real time. Under this political culture, the lack of transparency in
public financial management is an across-the-board issue. So the scarcity of information
about Chinese aid does not come as a surprise. As China is now becoming the most
significant non-western donor in Africa, the Chinese government has made some
improvement in providing aid information. The two official reports on development
assistance are examples. But China is far behind major Western donors in terms of aid
transparency. A London based non-government organization, named Publish What You
Fund, placed the Chinese Ministry of Commerce Department of Foreign Assistance
(MCDFA), which is the main government body overseeing foreign assistance in China, at
the bottom of the 2014 Aid Transparency Index’s donor ranking list. The list includes 68
governmental, non-governmental, and non-profit donors selected for evaluation. On top
of the donor transparency-ranking list are the UNDP, the UKDFID, and the US
Millennium Challenge Corporation (Radio Free Asia, 2014).
Limited capacity and experience. Besides inadequate political will, a capacity
barrier is another major reason for the scarcity of aid information. China currently does
not have an aid database. Not until October 2014, did the Chinese government, namely
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the MCDFA, promulgate the country’s first Foreign Assistance Management Regulations
effective December 15, 2014, noting in the title that it is a version for trial
implementation. This policy paper states that China will establish a foreign assistance
database to collect, tabulate and formulate aid data (Chinese Ministry of Commerce,
2014b). A recent study also recognized, China lacks a mechanism to report and track its
sizable development finance in Africa (Strange, Parks, Tierney, Fuchs & Dreher, 2014).
China is inexperienced in the management of development assistance. The
western aid agencies, such as the World Bank and USAID, have been heavily involved in
African development on a continuing basis since the 1950s, and accumulated rich project
experiences, local knowledge, and human capital in aid management. China, except for a
few known projects in the 1970s, did not intensify its aid to Africa until the 21
st
century
after its domestic economic development enabled it to “return” to Africa as an emerging
donor and investor. As China-Africa trade soars, the aid to Africa increases significantly.
This places an unprecedented challenge on Chinese government agencies to manage the
fast increasing aid flow. From bookkeeping and reporting, to development of regulations,
and to project implementation and evaluation, China is early in the learning curve.
China’s first policy paper on Foreign Assistance Management Regulations.
Based on a thorough review of the policy paper on Foreign Assistance Management
Regulations promulgated by the MCDFA, this study concludes that it is an important step
to improve aid management but it is still inadequate. The policy paper reiterates that
Chinese development assistance will adhere to the principles of respecting the recipient
country’s sovereignty and no political conditionality attached to aid. It states the goals to
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establish an aid database and develop a mid- and long-term development assistance plan,
as well as country-specific aid portfolios. It states that Chinese aid is provided in the form
of grants, interest free loans and concessional loans, and that the types of Chinese aid
include: 1) a complete set of infrastructure assistance, 2) equipment and supply aid, 3)
technical assistance, 4) human capital development assistance, and 5) volunteer services.
The policy paper focuses on regulating aid projects to be delivered by Chinese, especially
projects that are contracted to Chinese companies. It provides some specific information
about regulating the bid, procurement, quality control, personnel management and legal
liability of Chinese contractors. It states that Chinese firms and personnel should abide by
the laws in recipient countries. It also publishes a fine schedule for situations in which the
contractors violate this regulation (Chinese Ministry of Commerce, 2014b).
Inadequacy of the policy paper lies in three aspects. First, the policy does not
provide complete regulatory coverage for the existing Chinese aid types. It places an
emphasis on the most common form of Chinese aid–infrastructure projects being
contracted to Chinese companies--but provides few policy guidelines for newly-pledged
aid types such as concession loans to help develop small businesses in African countries,
which were included in the $20 billion pledge made in the 2012 China-Africa Summit
(BBC News, 2012b). Effectively delivering this type of aid requires China to go out of its
comfort zone of dealing with Chinese firms and workers, and enter into uncharted
territory by interacting with local government and communities in recipient countries,
with which the MCDFA and its subsidiary agencies have little experience. Second,
evaluation of aid programs is barely addressed throughout the policy. There is only one
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line in the policy paper that states, “The MCDFA will develop a policy to assess the
implementation of aid programs” (Chinese Ministry of Commerce, 2014b). The paper
offers no specific information as to when this policy will be developed. Third, the policy
paper, overall, is brief. It is five-page long, and says more about what should be done
than specific regulations on how it should be done. For example, it states that a feasibility
study should be conducted prior to the installation of an aid program, but offers no
instructions as to what is required in a feasibility study and which government agency is
responsible for reviewing and approving the study (Chinese Ministry of Commerce,
2014b).
No strings attached to aid. Chinese aid has long been a subject of criticism by
the West. The main criticisms are no-strings attached to aid and the lack of transparency.
As addressed earlier in this chapter, no conditionality attached to aid reflects a divide of
ideology between China and the West in dealing with development assistance and
international relations, which is deeply rooted in China’s own history and development
experience. In the Chinese view, aid should not become a means of imposing political or
economic reform on recipient countries, and China’s experience presents an example that
the Western philosophy of addressing under-development is not universal. Therefore, it is
unlikely that China will change its political stance on aid.
Why should China improve aid transparency and program evaluations? To
secure its long-term interest in Africa and be a responsible emerging donor, China must
make a greater commitment to improve aid transparency and speed up the capacity
building in program monitoring and evaluation. Aid is an important policy instrument for
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China to strengthen its ties with African countries and to serve its renewed interests in the
continent. Whether or not benefits from Chinese aid can be passed on to ordinary African
people is important not only to the target population, but also to the acceptance of
increasing Chinese presence in Africa, and in turn, to China’s long term interests in
Africa. Literature, media reports, and the author’s field experiences share the common
observation that African people want more than a sports stadium or a highway funded
and built by Chinese. African people have expressed a clear and strong will to be offered
job opportunities and to be part of these Chinese projects. They also expect China to be a
responsible donor by doing more to help ensure that the resources of Chinese aid can
penetrate into local communities and benefit ordinary people. African development
experiences reviewed earlier in Chapter III present a lesson that, without ensuring
transparency and accountability, state-to-state aid could lead to rampant corruption.
China’s sizable aid flow in the absence of open data and program evaluation creates
conditions for corruption.
Therefore, China should commit to publish what it funds, and should take an
inclusive approach to work with and learn from others to better manage what it funds.
The growing China-Africa academic cooperation may be a platform for Chinese and
African scholars to work together to improve the effectiveness of Chinese aid, which will
serve the interests of both China and Africa. There exist good practices in the West that
can provide useful advice to China as well. Western donors such as the World Bank have
rich experience in managing a large volume of development data. In the US, program
evaluation in the public sector has become an indispensable component of program
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operations. Separate standards and rigorous review processes have been established for
different fields of public service, such as health care, social services, education and law
enforcement, to assess both the program process and outcomes (Sylvia, 2004).
Development NGOs who have played a significant role in the Western aid delivery
system can offer Chinese aid agencies local expertise and serve as a bridge between them
and local communities in African countries. In the final chapter, the paper will examine
the political and implementation feasibility of several options, and will propose practical
strategies for improving the effectiveness of Chinese aid.
Emerging China-Africa Cooperation in Renewable Energy
This section investigates the emerging China-Africa cooperation in renewable
energy, especially in wind and solar energy. The paper first looks into Africa’s growing
interests in renewable energy and China’s investment capacity. Next, it reviews major
renewable energy projects in Africa in which China has been involved, and explains why
this study places an emphasis on wind and solar energy. It then investigates China’s
domestic and international investments in wind and solar energy, and the policy and
market factors behind these developments. Last, it discusses the potential for China and
Africa to deepen their cooperation in wind and solar energy development.
Africa’s growing interests in renewable energy. Africa suffers widespread and
persistent power shortages. A widely-cited World Bank report (2008) stated that the
entire electricity generation capacity of 48 sub-Saharan African countries’ was 68
gigawatts in 2008, which was no more than the capacity of Spain, and only one-fifth of
the population in sub-Saharan African countries had access to electricity (p.1). According
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to the most recent report by the International Energy Agency (2014), the situation has not
improved much since then. The report states that only 290 million out of the 915 million
people in sub-Saharan Africa today have access to electricity. Geographically, in half of
the sub-Saharan Africa, less than 25% of population has access to electricity (p.13 &
p.31). Even in relatively advanced African countries such as South Africa and Egypt,
chronic power shortages and frequent blackouts are a salient challenge to industries and
citizens (Focal Solar, 2014; Reuters, 2014b).
At the same time, Africa has vast solar, wind, hydro and geothermal resources
that are under-exploited. In light of well-publicized environmental impacts from fossil
fuel use and the increasing international investments in clean energy by both developed
and emerging economies like China, India and Brazil, many African countries now look
to renewable energy for solutions and intensify their efforts to attract foreign investment
to unlock their energy potential. The Climatescope is an initiative conducting a country-
to-country assessment of the renewable energy investment environment funded by the
Bloomberg New Energy Finance, the Inter-American Development Bank, the UK
Department of International Development, and the US government initiative named
Power Africa. According to its 2014 report on the investment environment in 55
countries including 19 African countries, South Africa, Kenya and Uganda scored highest
for Africa. South Africa is a clear leader in Africa by attracting $10 billion of investment
in renewable energy from 2012 to 2013. Kenya and Uganda ranked high in establishing a
policy framework to incentivize renewable energy development. Ethiopia is leading the
continent’s wind power development with diversified investors. Nigeria and Ghana have
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not received a sizable investment so far but have introduced power sector reforms and
feed-in tariffs (Climatescope, 2014). In brief, feed-in tariffs is a policy mechanism to
promote rapid deployment of renewable energy for electricity by offering producers long-
term contract, and differentiating the price according to the cost to produce the energy
(US National Renewable Energy Laboratory [NREL], 2014).
China is a leading global investor of renewable energy. According to the
annual reports on Global Trends in Renewable Energy Investment 2012-2014, China’s
total investment in renewable energy, excluding large hydropower, amounted to $52
billion, $67 billion, and $56 billion in 2011, 2012 and 2013, respectively, putting China
in the lead for global renewable energy investments (Frankfurt School of Finance and
Management & UNEP, 2012, p.13; 2013, p.17 & 2014, p. 11). In 2013, for the first time,
Chinese investments in renewable energy surpassed the whole of the Europe, which
invested $48 billion. The US came in third place at 36 billion in 2013 (Frankfurt School
of Finance and Management & UNEP, 2014, p. 11). Currently, renewable energy
industries mainly include wind, solar, hydroelectricity, geothermal, biofuel, biomass
electricity, and waste-to-energy such as landfill gas. Among those, power generation
through wind, solar, and hydro are the major interests of China. Its investment in wind
and solar energy in 2013 amounted to $28 billion and $20.6 billion, respectively, which
accounted for most of its total investment of $56 billion in renewable energy (Frankfurt
School of Finance and Management & UNEP, 2014, p. 26). China currently has the most
installed wind power capacity, but due to challenges of grid connection, the US still leads
the total amount of electricity generated by wind power (Renewable Energy Policy
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Network for the 21st Century [REN21], 2014, p.16; The White House, 2015). In 2013,
China also ranked first in installed hydropower capacity and second in solar
Photovoltaics (PV) capacity (REN21, 2014, p.16). In addition, China was ranked first in
renewable energy investment environment by Climatescope for two reasons: 1) China is
now both the largest manufacturer and largest market of wind and solar equipment, and
2) the Chinese government has made a big push to improve the policy framework for
promoting renewable energy development (Climatescope, 2014).
Chinese renewable energy investments in Africa. China is one of the major
foreign investors in Africa’s newly emerging wind and solar energy development. As the
resource-poor Eastern African country of Ethiopia is ambitiously pioneering the
continent’s wind energy development, China is one of its first and major foreign partners.
Hydrochina, a state-owned enterprise (SOE), built the Adams One wind farm in 2013,
which is the first wind farm in Ethiopia and the East Africa region. The $117 million
project was 85% funded by the state-owned Export-Import Bank of China (China Daily,
2014a). Besides China, investments from France, India and Turkey are growing in the
Ethiopian market (The Ethiopian Embassy in Belgium, 2013). The French firm Vergnet
Group constructed the country’s second wind farm in Ashegoda, which is currently the
largest wind farm in Africa. The French government and several French private banks
financed 91% of this $290 million project (Aljazeera, 2013). South Africa is among the
top ten destinations of China’s overseas investment in solar and wind industries from
2002 to 2012 (Tan, Zhao, Polycarp & Bai, 2013). In October 2013, China’s largest wind
power company, Longyuan Power Group Corp, won a bid to jointly develop two wind
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farms with local South Africa companies at a total production capacity of 244 megawatts
(MW) (Venture Capital Post, 2013). Longyuan is a subsidiary company of the China
Guodian Corp, one of the top five Chinese state-owned power companies with a total of
$296 million of overseas contracts in 26 countries as of August 2013 (China Daily,
2013). Egypt is also intensifying its effort to attract foreign investment to unlock the
potential of its sun-drenched climate and Suez’s wind resources in the costal area.
Immediately following President Sisi’s visit to China in December 2014, the Energy
Minister of Egypt told reporters that Egypt will open its long-term government-controlled
electricity market to private investors in 2015, and Egypt attaches great importance to
expanding its cooperation with China in electric power infrastructure and renewable
energy (Focal Solar, 2014).
Besides wind and solar, China has been actively involved in large hydro-
infrastructure projects in Africa. Hydro-engineering is China’s traditional expertise. The
Three Gorges Dam on the Yangtze River in China still holds the record of being the
largest hydro dam in the world with an installed power plant capacity of 22,500 MW
(International Commission on Large Dams, 2015). In Sudan, the Chinese SOE Sinohydro
built the 360 MW Kajbar Dam on the Nile, and two other Chinese SOEs have won the
contract for the Shereik Dam. Chinese, German and French companies together built the
1,250 MW Merowe Dam, which is the largest dam in Sudan (International Rivers, 2015).
In Zambia, the China-African Development Fund, Sinohydro, and the Zambian national
power company named Zesco, are jointly building the $2 billion Kafue Gorge Lower
Hydro-electric Power Station with a capacity of 750 MW, which is scheduled to be
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completed in 2017 (Lusaka Times, 2011). In Ethiopia, the China National Water
Resources and Hydropower Engineering Corporation (CWHEC) built the 188-meter tall
(617 feet) Tekeze Dam in 2009, which is part of the Ethiopian government’s $365
million Tekeze hydropower project that added 300 MW to Ethiopia’s grid (Power
Magazine, 2009). Another Chinese SOE, Gezhouba Water and Power Co., is building the
100 MW
Amerti-Neshe Dam on the Neshi River. There are other Chinese hydroelectric
projects in Mozambique, Nigeria, Ghana, Republic of Congo and Gabon (International
Rivers, 2015).
Among the three renewable energy types for which China has demonstrated a
strong investment interest and installation capacity in both domestic and international
markets, this study will focus on the potential of China-Africa cooperation in wind and
solar energy development. Large hydroelectric plants on major rivers are powerful
electricity generators, but they often have destructive effects on the environment. The
grand Three Gorges Dam on China’s largest river, the Yangtze River, is one good
example and a hard lesson learned. The impact of the dam on the ecosystem and local
residents in the reservoir area has been well-documented in Chinese literature. The
Yangtze is China’s mother river with a long and rich human history dating back several
thousand years. The dam is built on the main stream of the Yangtze and lifts the water
level by more than 100 meters (328 feet) in a large dam inundation area. Although the
Chinese government made extensive efforts to relocate a majority of the historical sites in
the dam inundation area, still many are forever submerged in the water. The 18-year
project resulted in a relocation of 1.4 million residents, and submerged 365,900 Chinese
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Mu (60,263 acres) of cultivated land and 744,000 Chinese Mu (122,536 acres) of fruit
farms (Chen, 1991; Wanyi News, 2010). The total cost of the dam is approximately 200
billion Chinese yuan ($32.2 billion), including $6.5 billion spent in the resident
immigration project (Xinhua News, 2003d). With the Chinese authority’s weak
understanding of environmental sustainability back in 1992, the pathway for fish to reach
their spawning ground in the upper streams was not included in the design of the 185-
meter (606-feet) tall dam. There is also evidence that the dam contributes to increasing
landslides and other signs of environment degradation in the reservoir area (Chen, 1987
& 1991; Xinhua News, 2003d). The engineering achievement of building a grand dam in
highly complex geographic and hydrologic conditions, and its significant electricity
benefits, are overshadowed by high environmental costs and huge citizen sacrifice. This
is another example of China’s public management culture of development at all cost.
International Rivers, an environmental anti-dam organization based in California,
criticizes China’s current involvement in large hydro projects in Africa, stating that
China’s poor record of protecting the environment and human rights would harm African
rivers and the local communities depending on these rivers (International Rivers, 2015).
The potential environment impact is the main reason why this paper does not
promote China-Africa cooperation in renewable energy through large hydro projects. On
the other hand, it would be fair to say that it is the African country governments’ decision
to push large hydro-infrastructure development, and also their responsibility to conduct
sufficient assessment of the environmental impact prior to these decisions. The Chinese
presence in Africa’s hydro projects in particular and infrastructure projects in general is
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mainly because China’s engineering capacity, low labor cost, marginal-profit contract,
and quick turnaround help Chinese companies win the bid. If Chinese do not build the
dams, others would. As reviewed earlier, Sudan’s largest dam was jointly built by
Chinese, Germany and French companies. In November 2014, the World Bank approved
a fund of $73 million for the assessment study on the expansion of the Inga III dam in the
Republic of Congo, which is expected be the third largest dam in the world after its
completion (Reuters, 2014c). Because of Africa’s abundant hydro resources, it is likely
that many African countries will pursue hydroelectric projects. Therefore, it is crucial that
the governments in African countries learn from others’ experience, and take
environmental sustainability into serious consideration while seeking solutions for the
desperate power shortage. Based on the discussion above, this study will focus on wind
and solar, which are eco-friendly and newer clean energy technologies that have the
potential to promote inclusive green growth for both China and African countries.
China’s domestic and overseas investments in wind and solar energy. In order
to assess the potential of China-Africa cooperation in wind and solar energy
development, it is necessary to investigate China’s domestic and international
investments in these two renewables, as well as the policy and market factors that have
driven the development.
Domestic investments in wind and solar energy. Beijing announces China’s
national development plan every five years. In the 12th Five-year National Development
Plan (2011-2015), the central government pledged to invest 1.8 trillion yuan, equivalent
to $290.3 billion, in the renewable energy industry between 2011 and 2015, and to spend
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another 2.3 trillion yuan, or $371 billion, on energy-saving and emissions reduction
technology and equipment. Beijing also committed to raise non-fossil fuel energy
consumption percentage to 15 percent of its energy mix, and reduce carbon emissions per
unit of GDP by 40 to 45 percent from the 2005 level by 2020 (Xinhua News, 2013c).
Turning pledge into action, China increased its wind power capacity from 62,364
MW in 2011, to 75,324 MW in 2012, and to 91,413 MW in 2013, with 77,160 MW
connected to the grid so far, according to a joint report on 2014 China Wind Power
Review and Outlook (Chinese Renewable Energy Industries Association [CREIA],
Chinese Wind Energy Association [CWEA] & Global Wind Energy Council [GWEC],
2014, p.22). Onshore and offshore wind farms are expanding in China’s landscape. In
2013, the total electricity generated by wind in China was 134.9 million megawatt hour
(MWh), second only to the US with 168 million MWh (American Wind Energy
Association, 2015). Although China has the most installed capacity in the world, limited
grid connection has been a bottleneck challenge for many wind farms located in remote
parts of the country, a long distance to population-dense cities. The Chinese government
has taken steps to address this challenge. For example, the installations now focus on
areas with grid connection even though the wind speed in some of these areas is less than
that in remote areas. China is also putting forth efforts to improve energy planning by
pairing up wind resources and grid connection, and to offer incentives to power
companies to expand the grid connection (CREIA, CWEA & GWEC, 2014, p.24; Global
Wind Energy Council, 2012). The developing of solutions for grid connection has been
placed on the agenda of the 13
th
Five-year National Development Plan (China Energy
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Newspaper, 2014). It is worth noting that, although the 134.9 million MWh landed China
in second place in the world in terms of wind electricity, it only accounted for 2.5% of
China’s total electricity generation in 2013. Coal is still the dominant electricity source
with a share of 78.5% (CREIA, CWEA & GWEC, 2014, p.23). China has a long way to
go before clean energy becomes a large portion of its energy mix, but the current trends
backed by Beijing’s strong commitment are encouraging.
In 2013, China set a new world record of solar installations by a single country in
a year. The new installation of 12 GW solar photovoltaics (PV) is more than the total
capacity that China had installed in all years prior to 2013 (Guardian News, 2014d).
Between 2010 and 2012, China’s solar PV capacity grew nearly nine-fold to 7 GW. The
number of large solar panel parks is growing in the sunny western provinces of Gansu,
Xinjiang and Qinghai (Roney, 2014). Since grid connection is a challenge for both wind
and solar energy developments in China, the Chinese government has been promoting
small systems such as roof-top installations which do not require long distance grid
transmission (Guardian News, 2014d; Roney, 2014). Figure 2 shows the top five
countries by total installed solar PV capacity as of 2013 (Roney, 2014).
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Figure 2. Cumulative installed solar photovoltaics capacity in leading countries,
2000-2013. Units: Megawatts. This figure is from “China Leads World to Solar
Power Record in 2013” by J. M. Roney, 2014. It shows that, among the top five
countries by total installed solar PV capacity, Germany is clearly in the lead in solar
PV capacity and China comes in second.
The City of Zhongwei presents an example of clean energy development in
western China. Zhongwei is a small city in the middle of Ningxia Province, a small sunny
province in western China with a population of 6.3 million (Chinese National Bureau of
Statistics, 2012). Ningxia is blessed with rich resources in wind, solar and coal. Ningxia
set a target to install 5 GW of wind power and 600 MW of solar power by 2015. The City
of Zhongwei established a clean energy partnership with the City of Beijing through
which the research and development planning are conducted in Beijing and the
manufacture takes place in Zhongwei. The cooperation has three main components: 1)
build coal gasification facilities in Zhongwei with technical support from Beijing to
convert dirty coal to cleaner burning gas; 2) develop both wind and solar farms in
Zhongwei; and 3) take advantage of Zhongwei’s low-cost electricity from rich resources
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in coal, wind and solar to build a cloud-based data storage industry. Today, not only has
China’s largest coal company Shenhua built a major coal gasification facility in
Zhongwei, but IBM and Amazon are also building new data centers there (Forbes
Magazine, 2014b).
Overseas investments in wind and solar energy. China’s overseas investment in
wind and solar energy was approximately $40 billion between 2002 and 2012 (Tan, Zhao,
Polycarp and Bai, 2013). As reviewed earlier, China led the world’s new investment in
renewable energy from 2011 to 2013. On January 19, 2015, China’s state media reported
that China’s total renewable energy investment reached a record high of $89.5 billion in
2014, including $38.3 billion in wind and $30.4 billion in solar (China Energy
Newspaper, 2015). However, figures regarding the overseas portion of this investment
are not available. Tan et al. (2013) conducted a study on China’s overseas investment in
wind and solar energy development from 2002 to 2012 and found that outbound
investments largely concentrated on developed countries such as the US, Germany, Italy
and Austria. Several developing countries, including South Africa, Pakistan and Ethiopia,
also attracted investment. In 2014, China’s largest wind power producer Longyuan Power
entered the Canadian market and started building its first overseas wind farm with a
capacity of 100MW in the Province of Ontario (Renewable Energy Technology, 2014).
After helping Pakistan build a 10,000-acre solar park in the Punjab Province, the Chinese
government footed the entire bill to install a $60 million, 1.8MW solar system for
Pakistan’s Parliament building as a gift to support the Pakistan government’s new plan to
promote solar energy development in both large scale and household installations. The
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installation will save the Pakistan government $1 million per year in utility bills
(Guardian News, 2014e). This is a typical example of how the Chinese view aid. Aid is
help, so it should not be attached with political conditions or directly bound to specific
economic conditionalities. Instead, it is a gesture of goodwill and serves as an effective
tool to build a positive business environment for Chinese firms to explore overseas
markets and for China to strengthen bilateral ties with developing countries.
Tan et al. (2013) concluded that the main drivers for the boom of China’s
overseas investment in renewable energy are: 1) China’s manufacturing capacity, 2)
policy support from the Chinese government, 3) financial support from Chinese banks,
mainly the state banks, and 4) host countries’ policy incentives for foreign developers.
Their study suggested that China’s drive to seek the overseas wind and solar markets is
largely because its manufacturing capacity exceeds domestic demands. This is still
currently the case, but the domestic demand has grown at a fast pace in 2013 and 2014.
As discussed, China has climbed to second place in wind electricity generation and set a
new world record of 12GW solar installations in 2013. Beijing’s determination to push
clean energy is undoubtedly a crucial contributor to China’s astonishing growth in wind
and solar development. This, in the Chinese context, leads directly to strong financial
support from Chinese state banks to enable Chinese firms to explore the overseas market.
Tan et al (2013) provided several examples of host countries’ regulatory and policy
incentives. Illinois’ Renewable Portfolio standards allowed the Chinese firm, Goodwind,
to ensure a 20-year electricity supply contract with Commonwealth Edison starting in
2012. A renewable energy manufacturing tax credit in Arizona enabled China’s Suntech
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Power to open a $30-million solar panel assembly factory in the city of Goodyear. Feed-
in tariffs in South Africa and bilateral agreements also help attract Chinese investors (Tan
et al., 2013) Their study also discovered that joint ventures and acquisitions are the main
forms of Chinese overseas investments in wind and solar electricity production and
equipment manufacture. For example, China’s Data Corp formed a joint venture with the
REA Group in UK, holding a minority 49% stake in REA. China’s Suntech Power
partially acquired KSL Kuttler in Germany to gain new production technologies and to
localize the production.
Opportunities and challenges. The new development of China-Africa
cooperation in renewable energy is enabled and driven by Africa’s growing interest and
China’s investment and installation capacity. China has been involved in several
pioneering wind and solar projects in Africa. The China-Africa cooperation in renewable
energy is part of a bigger picture of China’s dramatic push for clean energy, domestically
and internationally, to address its well-publicized pollution and dependence on foreign
oil, and at the same time, to develop Chinese renewable energy firms into globally
competitive enterprises. China’s drive for green provides Africa with an unprecedented
opportunity to diversify its energy mix and address the persistent power shortage through
an eco-friendly approach. China-Africa clean energy cooperation will also create
opportunities of employment and technology transfer for Africa and help promote
inclusive green growth for both China and Africa. But there are challenges to be
identified and addressed in order to provide an enabling environment for broadening and
deepening this new cooperation.
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Reviewing key conditions that have enabled the boom of Chinese overseas
investment elsewhere--China’s manufacturing capacity, strong support from the Chinese
government and the state banks, and host countries’ market and regulatory incentives--it
would be reasonable to assume that conditions related to the Chinese side are likely to be
available for Africa. China’s current investment trends have demonstrated its keen
interest in investing in both developed and developing countries’ markets including
African countries. However, the business environment and market in African countries
for wind and solar development might be quite different from that in developed countries,
which, at this moment, are the main destinations of Chinese overseas investment. First,
large-scale wind farms and solar parks require roads to transport heavy machines and
equipment but many African countries still lack this basic infrastructure. Second, grid
connection is likely to be a serious challenge for Africa as well. Third, building
conditions are a decisive factor for rooftop solar systems. In Egypt, most buildings are
made of concrete, and there are many 3-5 floor residential compounds in Egyptian cities,
which are suited to rooftop solar installation. But in Ghana, even in its capital Accra and
the surrounding area, many of residential units and street shops are made of a mix of
mud, brick, and wood with no electricity access, which might not be strong enough to
secure rooftop solar installations. Further, without electricity access means an off-grid
rooftop system is needed, which requires large batteries and a backup generator, both
expensive and in need of maintenance (Energy Informative, 2013). Fourth, supportive
policy framework is an important enabler for attracting in clean energy investment. It is
the task of governments in African countries to integrate green initiatives in their energy
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strategic plans, and to provide supportive policy frameworks that offer regulatory and
market incentives to attract foreign investors. South Africa and Ethiopia have set a good
example for other African countries.
Besides electricity supply, household solar products such as solar cookers, which
do not need infrastructure support and electricity, might be able to immediately benefit
African people. The Chinese government has intensified its efforts to promote the use of
solar cookers in the western provinces of China since 2008 (Xinhua News, 2008b). Now
the use of solar cooker has expanded to six western provinces of China especially in rural
areas, and China has become a leading manufacturer of solar cookers (CICosulting, 2014).
A Chinese made solar cooker with a basic design costs about $20 at a wholesale price for
200 to 500 units (Alibaba, 2015), which is a reasonable price for scaling-up in developing
countries. In the last chapter, the paper aims to examine good practices suited to African
conditions and to propose practical options to deepen China-African cooperation in wind
and solar energy development.
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Chapter Eight: Contribution to Practice
This chapter will propose practical strategies to address the challenges discussed
in Chapter VII and develop win-win cooperation between China and Africa. The first
section discusses strategies to help bring more African workers to Chinese projects and
improve workers’ rights in Chinese firms in Africa. The second section offers
constructive ideas to develop good working relationships between Chinese and African
employees at the company level. The third section focuses on improving transparency
and strengthening program evaluation of Chinese aid. The fourth section looks into ways
to boost China-Africa cooperation on wind and solar energy. Then, built on these
discussions and from the viewpoint of China’s emergence as a major global player, the
last section makes several recommendations on China’s future policy and strategies
towards Africa.
Hire More Africans and Improve Workers’ Rights
The investigation into the challenges of limited job opportunities for local
Africans and poor workers’ rights in Chinese firms presented in Chapter VII concludes
that, those challenges are rooted in the Chinese business model of winning bids by taking
marginal profits and insufficient legal frameworks in both China and African countries to
enforce labor laws and protect workers’ rights. The paper has discussed that the Chinese
price advantage, or cost-effectiveness, is enabled by largely using Chinese labor and also
resulted from fierce Chinese-on-Chinese competition. The paper presents how a
combination of factors associated with Chinese workers, namely the abundance of
domestic labor, low wages, low management costs, and the unique circumstances behind
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Chinese workers going to Africa, have together established the cost-effectiveness of
Chinese workers in the African context, and argues that this advantage of Chinese labor
is a main reason why many Chinese firms prefer Chinese workers to local Africans.
There are exceptions where Chinese projects use a large portion of African workers, such
as the cases of China-Egypt petroleum partnership and the Hydro infrastructure project in
Congo. These exceptions indicate that the use of local workers in Chinese financed firms
and projects varies from country to country and project to project, and the host country
environment plays an important role in influencing the outcomes. Based on these
findings, the paper proposes the following strategies to help bring more jobs to local
communities and improve labor practices in Chinese firms in Africa.
Raise the price but maintain a comparable price advantage. A sustainable,
long-term solution to the problem of limited opportunities for local populations must be
supported by business incentives and must address the cheap price with a razor-thin profit
margin observed in many Chinese projects. Without modifying the current business
model of winning bids by taking a thin profit margin, there are few incentives for Chinese
firms to hire more locals and provide decent employee benefits, because providing
training for Africans, addressing communication barriers, improving safety standards,
and offering more permanent positions with employee benefits require time and
resources, which, in turn, leads to cost increases and impose a threat on profitability.
Although the legal framework in host countries plays an important and sometimes
decisive role in hiring local workers, if not making business sense, it would be
challenging to make the use of a large portion of local Africans a common practice
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among Chinese firms, from SOEs to large private firms and to mid- and small-size
private firms. This paper suggests that raising the price to absorb additional costs
associated with hiring and training local workers is a necessary step to bring more
African workers to Chinese projects.
Because the price advantage is the core of Chinese international competitiveness,
it would make sense to raise the price but remain competitive. For example, as cited
studies in Chapter VII reported, non-Chinese foreign construction firms and local firms in
Africa operate on a profit margin of 15-25 percent but Chinese firms’ profit margin is
usually less than 10 percent (Corkin & Burke, 2006). Some firms accept a profit margin
as low as 3-5 percent (Sautman & Yan, 2007). If the profit margin is raised to 10 percent,
the Chinese price remains competitive in comparison to other foreign firms and local
firms, and at the same time a higher price would help allocate resources for training
African workers and improving working conditions. Raising the price does not guarantee
more local jobs and improvement of labor practice, which are significantly influenced by
the hosting country’s capacity to enforce labor law and negotiate terms of loans and
contracts with the Chinese. But the point this paper tries to make is that the cost to invest
in local workers has to be addressed. Raising price will help provide an important
enabling condition, which makes business sense, to help solve the problem.
Address the fierce Chinese-on-Chinese competition. As discussed in Chapter
VII, fierce competition among Chinese companies is a major reason behind the thin profit
margin of Chinese contracts, and largely responsible for the gap between the prices
offered by Chinese firms and foreign and local firms. This is especially the case in labor-
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intensive Chinese infrastructure and construction projects in Africa, which could have
been a source to create jobs and develop skills for many locals. This “internal friction”
among the Chinese not only drives out foreign competitors but also hurts Chinese firms
themselves, which has been recognized by Chinese media and scholars. Sun (2014)
reported that two large SOEs, China Road and Bridge Corporation (CRBC) and China
Railway Construction Corporation (CRCC), made “attacking comments” on each other in
local media during the bidding for railway projects in East Africa in 2014. China Harbor
Engineering Company (CHEC) and China Civil Engineering Construction Corporation
(CCECC) ended up bringing their dispute over a railway project in Uganda to court.
CCECC signed a memo of understanding (MOU) with the Uganda government on a
railway project at $1.75 billion. Later CHEC offered a price at $1.25 billion trying to
“snatch” the project. The Uganda government then terminated the MOU signed with
CCECC, which prompted CCECC to file a law suit against the Ugandan Minister of
Transportation (Hu, 2014; Sun, 2014). This event was referred to as a “scandal” of
Chinese SOEs (Hu, 2014). The fighting negatively impacted China’s interest in Uganda
from both business and political perspectives. As discussed in Chapter V, these SOEs
with “China” in their names are the privileged state-owned enterprises, which control
China’s economic lifeline and are “directed” by Beijing through the government body of
China’s State-owned Assets Supervision and Administration Commission of the State
Council (SASAC). Large SOEs are strongly supported by the Chinese state banks and
serve as Beijing’s economic and political wings in Africa. For these SOEs to offer a price
cut of a half-billion US dollars attempting to snatch a contract that another Chinese SOE
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had been rewarded, and to attack each other in African media, is certainly not helpful in
promoting China’s interests in Africa. Liu (2014) reported that some private Chinese
construction firms offer a price even below the cost needed to complete the project in
order to compete with other Chinese firms. Then after winning the bid, some firms
reportedly used cheaper materials and compromised the quality of projects in order to
make a profit, which has caused a negative impact on the local business environment for
Chinese firms, and damaged the reputation of Chinese construction, which has long been
an icon of Chinese expertise.
The growing cutthroat competition among Chinese in Africa reflects an
inadequate regulatory framework for China’s overseas investment and the absence of
cooperation among Chinese firms. It imposes a threat on profitability. A cheap price
might save the African governments some expenses but may not benefit Africans in the
long run because it requires strict control of costs and project schedules, which, in turn,
contributes to poor wages and working conditions and leads to the preference for using
primarily Chinese workers, who are used to similar labor standards back home, easy to
communicate with, and willing to live on site and work long shifts.
Liu’s study (2014) on China’s investment in Africa’s infrastructure made the
following suggestions to prevent cutthroat competition among Chinese: 1) enhance the
role of the Chinese chamber of commerce in African countries in bridging Chinese firms,
sharing industry information, and exchanging successful investment experiences in
Africa; 2) establish an industrial cooperation mechanism to mediate the disputes among
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Chinese firms; and 3) promote collaboration between the SOEs and private firms and
encourage them to jointly bid for African contracts.
The cutthroat competition between Chinese SOEs in overseas business has led to
Beijing’s decision in 2014 to merge two large Chinese SOEs, which drew much attention
from the domestic media. China CNR Corporation Ltd. (CNR) and China SNR
Corporation Ltd. (SNR) are the two largest manufacturers of locomotives and rolling
stock in China. These two SOEs control the market share of all high speed trains, 80% of
cargo locomotives, and the majority of subway trains in China (Xinhua News, 2015b).
They used to be one company but in 2000 were split into two, CNR in north China and
SNR in south China, during China’s SOE reform aiming to promote competition and
revitalize Chinese SOEs (Zhou, 2014). Now China has become a rising player in the
high-speed train market and Chinese-made trains have been sold to more than 80
countries (People’s Daily, 2015). But fierce price-cutting competition between these two
has been a problem for Beijing. Similar to the fight between China Harbor Engineering
Company (CHEC) and China Civil Engineering Construction Corporation (CCECC) in
Uganda mentioned earlier, SNR offered a deep price cut only half of the price offered by
CNR in a high speed train bid in Argentina in 2013 which pushed the CNR out. The price
offered by SNR is reportedly not profitable (People’s Daily, 2015). SNR was able to offer
this price only because of the strong support normally received by SOEs from China’s
state banks.
This case received heavy criticism in domestic media for damaging the image of
Chinese companies and China’s national interests, and was believed to be the trigger for
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Beijing’s decision to merge these two companies. According to the Chinese state media,
the new SOE after the merger will be the world’s largest company in this industry by
revenue. The merger specifically aims to prevent the Chinese-on-Chinese competition,
allocate more resources to research and development, and team up these two SOEs to
compete with major rivals in the global market, namely the German Siemens, the
Canadian Bombardier, the French Alstom, the American GE and the Japanese Kawasaki
(People’s Daily, 2015). But not all praise the merger. Some scholars in both China and
the West have called the merger a setback for China’s sustained, market-oriented
economic reform by using a monopoly to enhance competition at the global level (Wall
Street Journal, 2014). It been rumored that the merger is an experiment and more mergers
of Chinese SOEs might be coming. This paper shares the concerns of these scholars.
Although the merger might help global competition, it forms a monopoly in the domestic
market given the already dominant market share of these two SOEs. China will soon have
one giant manufacturer of locomotives and rolling stock with which no other domestic
companies can compete. It is yet to see if the merger is a step forward or backwards in
terms of improving Chinese companies’ global competitiveness in the long run.
China needs to develop a comprehensive mechanism to address the competition
and cooperation among Chinese companies in overseas markets. Top-down
administrative interference by Beijing is inadequate to solve the problem. Mergers might
help avoid the cutthroat competition between SOEs but still not solve the fierce price
cutting competition between SOEs and private firms and among private firms, where
Beijing does not have the power to “order” a change administratively as it does to SOEs.
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The paper suggests that a legal and policy framework to regulate competition, as well as
industrial associations and business chambers to share information and promote
cooperation as suggested by other studies, are important steps that the Chinese
government must take to develop a comprehensive solution for this “internal friction”
problem among Chinese firms, which contributes to a razor-thin profit margin and does
not help bring more African workers to Chinese projects.
In the process of developing a solution, the paper suggests that China learn from
others’ successful experience in dealing with competition among companies in overseas
business. Japan presents a best practice that might advise China. For example, Toyota,
Honda and Nissan are the three largest Japanese car companies. There is competition
among them in international markets such as in the US and China. But unlike Chinese
companies in the global market who seem to do their best to cut each other’s profit which
results in a hard business environment for everyone, these Japanese companies are able to
each develop their own strengths and customer groups. The success of Canon and
Nikon’s in the camera industry is another example of “Team Japan.” Although economic
and political conditions in Japan and China are different, China can explore and learn
from Japan as to how the government and corporations manage competition and
cooperation in overseas business among companies in the same industry to advance
individual companies interests and enhance the global competiveness of the industry as
well.
Offer capacity building as an option. This paper suggests that Chinese firms can
offer two business proposals, especially for projects contracted with African governments
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or sponsored by Chinese aid because these are likely to be more supportive of capacity
building. Proposal A has an integrated component of hiring more local workers and
offering skill development training with the estimated costs, which might result in a
relatively higher price and longer project delivery time. Proposal B is based on the
current model of largely using Chinese workers and a quick turnaround delivery. Then it
is up to the governments of African countries to decide whether they would accept a
trade-off between a reasonably higher price and opportunities for local capacity
development vs. a cheap price and no capacity development opportunities. African
politicians want cheap price and quick results but capacity building takes resources and
time. As China-African cooperation deepens, it is clear that local people have high
expectations out of Chinese investments. More than a highway funded and built by
Chinese, Africans want the highway project to offer jobs and opportunities for skill
development. But on the other hand, the Chinese business model, as findings of this study
and others have suggested, is not a monopoly making a big profit, rather, it is often
winning bids by offering a cheap price and quick delivery. Therefore, given the cost-
effectiveness of Chinese workers and hot competition between Chinese and foreign firms
as well as among Chinese firms, the cost associated with capacity building needs to be
addressed. African countries may need to pay more for Chinese-led projects to allow and
encourage Chinese companies to invest more in African workers. Offering capacity
building as a contract option may be a feasible measure worthy of experimenting.
Embrace indigenization and attract African talent. Chapter VII discussed that
addressing the growing demand for indigenization serves both the interests of Chinese
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companies and China’s long-term strategic interest in Africa. Increasing the presence of
African workers in Chinese firms is an important condition for a friendly local business
environment and the peaceful co-existence between Chinese and the locals in the long
run. The lack of opportunities for local populations and poor labor practices in some
Chinese firms have resulted in growing local resistance towards Chinese in Africa and
led to numerous incidents of labor disputes, kidnapping of Chinese workers, and
attacking Chinese camps in multiple African countries. It would be wise for Chinese
companies to take a proactive approach to embrace indigenization and turn it into a
practice of global corporation management rather than put themselves in a reactive
position to deal with the aftermath of local resistance and, in some cases, hostility
towards Chinese.
Chinese firms should hire more local workers, provide a career path for good
workers, and invest in competitive compensation packages to attract African talent.
Attracting talent in hosting countries is a common quality of successful multinationals.
China’s own experience has presented a case in which both low-skilled Chinese workers
and Chinese professionals have contributed to the success of Western companies in
China. Managing local workers has been a common challenge faced by Chinese business
owners and managers. If more African managers can be brought on board or be promoted
from local workers who deliver good performance, it would help both sides to work
together and also provide an opportunity for Chinese managers to learn from African
colleagues how to supervise and work with the locals. Africans understand the local
business environment and culture better than Chinese, so they are able to provide
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insightful perspectives in developing marketing and production strategies in the local
market, which are invaluable for the long-term success of Chinese businesses in the host
country. During the research in Egypt and Ghana, the author met many talented Africans,
from well-educated engineers, technicians and scholars, to experienced local drivers,
dressmakers and housemaids. Nearly half of the Ghanaian faculty in the University of
Ghana’s Institution of African Studies completed their graduate studies in Europe and
North America (University of Ghana, 2015), as did several Egyptian engineers and
executives at ECDC where the author served as an intern. If Chinese companies can
duplicate the successful experience of Western firms in China by offering competitive
compensation and benefits to attract experienced local workers and well-educated
African professionals, it will help enhance Chinese companies’ competitiveness, develop
and maintain a friendly local business environment, and promote an inclusive business
practice that benefits both Chinese and Africans. For large SOEs and private Chinese
companies, this is the right path towards realizing the ambition of becoming a world-class
company.
Therefore, this paper suggests that Chinese companies should revisit the existing
model that focuses on being cheaper and quicker. Given the growing local resistance and
occurrence of hostile incidents, it would be logical to project that the current model
featuring a large number of imported Chinese workers and highly organized company
dormitories with little interaction with the local environment will face increasing pressure
from Africans. A proactive, long-term approach is to turn creating local jobs and offering
capacity building into an advantage rather than a disadvantage of the Chinese companies
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 189
in Africa. One important enabling condition for achieving this is to establish cooperation
among Chinese companies to prevent the cutthroat competition as discussed earlier.
Strengthen the legal framework for more local jobs and protecting workers’
rights. Strengthening law making and law enforcement from both sides are a necessity to
address the challenges of limited local jobs and poor workers’ rights in Chinese firms
operating in Africa.
The government in African countries. The host country government plays a
crucial role and bears a compelling obligation in effectively regulating foreign investors
and enforcing the law to protect workers’ rights. Evidence reviewed in Chapter VII
indicates that the use of local workers varies from country to country and project to
project, and the host country’s capacity to enforce its labor law plays an important role in
influencing the results. For example, the 10% cap of foreign employees is regularly
implemented in the two joint ventures in Egypt-China petroleum cooperation. Over 90%
of employees in these two firms are Egyptians. In developed countries where the labor
laws normally have higher standards than those in China and are able to impose costly
consequences against violations, cases of poor workers’ rights associated with Chinese
investment are seldom reported. But it has become a well-publicized issue in numerous
African countries such as Zambia.
The paper suggests that governments in African countries look into the possibility
of working with the Chinese government to develop joint solutions to address this
challenge in the bilateral framework. First, there exist business incentive and political
feasibility from the Chinese side to welcome such partnership opportunity. It is in
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Beijing’s interests to be able to help shape the outcomes rather than deal with the
aftermath of local resistance towards Chinese and the negative impact of China’s image,
such as physical attacks and kidnap of Chinese workers, growing labor disputes, and
frequent accusations by western and some African media as well as civil society about
poor workers’ rights in Chinese firms as reviewed in previous chapters. Second, such
partnership may be funded by Chinese aid. One salient challenge faced by African
governments wanting to strengthen regulation in labor practice is the lack of funding for
developing institutional capacity. For example, Zambia’s Ministry of Mines and Minerals
Development, the government body responsible for the country’s mining regulations
including workers’ health and safety, is under-staffed, under-resourced and corrupt, and
conducts virtually no proactive inspection (Human Rights Watch, 2011).
Beijing has demonstrated its will to respond to the feedback from African
countries in providing aid. The new type of Chinese aid pledged in 2012 to help develop
small businesses in Africa is an example. Therefore, it is worth an attempt to channel
Chinese aid to the following three areas: 1) Chinese aid can help establish a collaborative
mechanism between two governments to share information, exchange views, and jointly
develop regulations and preventive measures to help industry uphold labor standards; 2)
since neither side has a strong record of good labor practices and a well-established legal
framework in this field, funding can be used to sponsor joint study tours and trainings to
learn from developed countries or through the capacity building programs sponsored by
inter-governmental organizations like the UN, AU and World Banks to help develop
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 191
human capital in regulatory agencies in Africa and China; and 3) aid can help address the
challenge of under-staffed regulatory agencies in African countries.
The Chinese government. China is in urgent need of a well-established legal
framework to regulate the labor practice of Chinese firms operating overseas. Beijing has
repeatedly stated that Chinese firms should obey the laws and regulations of host
countries. But without effective legal tools to regulate Chinese firms’ behavior, this is
inadequate to solve the problem of poor workers’ rights and to address the growing
African resistance towards Chinese due to this issue. Unlike the effective legal
framework in developed countries, the African context requires the Chinese government
to bear a greater responsibility for regulating Chinese firms’ overseas behavior and to
welcome collaboration as suggested above. Besides regulations applying specifically to
Chinese firms operating overseas, solving the problem also relies on concrete efforts to
protect domestic workers’ rights. As discussed in Chapter VII, this is an issue of poor
standards at home and poor standards abroad. Poor practices that exist in Chinese firms in
Africa, including low wages, wage arrears, poor safety standards, long hours, and using
casualization to avoid the cost of employee benefits, can all find their roots in China.
Therefore, improving domestic workers’ rights will help improve working conditions for
Chinese and African workers in Chinese firms in Africa. To achieve the goal of “building
a socialist harmonious society by 2020” announced by Beijing (Xinhua News, 2005c),
and to support its “Go Global” strategy, the Chinese government must make a serious
commitment and take time-bound accountability to strengthen the legal framework for
protecting workers’ rights domestically and abroad.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 192
Offer greater investment support to private Chinese enterprises. This paper
argues that inadequate investment support to private Chinese enterprises, especially mid-
and small-size businesses, contributes to the challenge of limited job opportunities for
locals and poor workers’ rights in Chinese firms, such that Beijing should provide private
Chinese enterprises in Africa with greater access to loans and business insurance
services. A big advantage that Chinese SOEs have over Chinese private enterprises in
Africa is the access to banking and financial services. This advantage comes from the
strong support from Beijing, and, in turn, from the Chinese state banks. It is a well
understood business culture in China that if SOEs make a big investment mistake or
experience a loss due to unforeseen reasons such as the Libyan civil war, the Chinese
state banks will likely step in and back them up. Therefore, Chinese SOEs, with a strong
government background, multinational profile, and privileged domestic market share,
have access to loans from not only Chinese banks but also established-name foreign
banks in Africa as well as African banks.
When it comes to Chinese private firms, it is a different story. Large private firms,
such as Lenovo or ZTE, are normally able to receive loans from Chinese banks for their
business in Africa. But for mid- and small-size Chinese private firms in Africa, such as a
construction or mining firm, a furniture factory, a Chinese grocery store or restaurant,
having accessing to financial services is a salient challenge. As discussed in Chapter VII,
these businesses take independent paths to Africa and are motived by the opportunities in
the African market, tough competition in the China homeland, and a strong
entrepreneurial spirit (Gu, 2009; Peng, 2011). Due to their low business profile and the
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 193
risks of doing business in Africa, such as war, conflicts, street crime, and communicable
diseases, Chinese banks hesitate to lend to these mid- and small-size private enterprises.
For the same reasons, plus the lending restrictions on foreigners in some African
countries, it is difficult for these private businesses to receive loans from non-Chinese
banks as well. Therefore, owners of these businesses have to raise funds on their own and
try every way to keep their costs low, which in part leads to poor wages and worker’s
rights in Chinese firms. For example, Chapter VII reported the poor condition of the
company dormitory of a small private Chinese furniture factory in Ghana. An employee
told the author during an interview that the owner of the factory lives in the same
dormitory with the Chinese employees in order to save money and get the business
started (Liu F., 2013). Although there is no doubt that poor labor standards in the China
homeland and a weak legal framework in Africa largely explain Chinese business
owner’s labor practice in Africa, this paper argues that the lack of investment support to
mid- and small-size Chinese private enterprises in Africa also contributes to the problem.
There are business and political reasons for Beijing to provide greater investment
support for Chinese private enterprises in Africa, including for the mid- and small-size
enterprises. The number of Chinese private enterprises in Africa has been growing in
recent years. Private Chinese enterprises, large or small, contribute to the growth of
China-Africa trade and have become a new force for carrying out Beijing’s “Go Global”
strategy (China Trade News, 2012). Unlike SOEs focusing on the energy, mining and
infrastructure sectors, many mid- and small-size private Chinese enterprises, such as
furniture factories, grocery stores, restaurants, and cloth shops are located in local
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 194
communities. They can be a source of local jobs and their role in maintaining a peaceful
co-existence between Chinese and Africans should not be underestimated. Responding to
the increasing presence of Chinese private enterprises in Africa, the Chinese government
should provide greater investment support for these enterprises and help them make a
positive impact on China-Africa cooperation.
Develop Good Chinese-African Working Relationships at the Company Level
The working relationships between Chinese and Africans at the company level
have not been adequately studied in the literature. In light of the growing demand for
more African jobs in Chinese projects, this topic deserves greater academic attention.
Based on the author’s field research on two joint ventures under the China-Africa
petroleum cooperation, ECDC and Sino Tharwa, the paper offers three constructive ideas
to help develop good working relationships between Chinese and Africans.
Adhere to a collaborative approach. A joint venture, as observed in ECDC and
Sino Tharwa, is an example of a collaborative approach that helps build a platform for
developing working relationships between Chinese and Africans. In these two joint
ventures, Egyptian and Chinese partners contributed equally or almost equally to the
initial investment and jointly manage the companies. The leadership team in both
companies has a “2+2” structure with Egyptian Chairmen of the Board and Directors of
Human Resources, and Chinese Managing Directors and Chief Financial Officers. These
arrangements bring a sense of equity and partnership to employees on both sides. The
two companies together have approximately 2,000 employees including fewer than 200
Chinese. There are 540 employees at ECDC and among them 43 are Chinese. Overall,
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ECDC’s Egyptian and Chinese employees work together professionally and peacefully
on company business. They attend company meetings and design drilling plans together.
Although there are collaboration challenges due to cultural and language barriers, as well
as differences in aims and expectations of company executives as discussed in Chapter
VII, overall the collaboration between Chinese and Egyptians has proven to be working.
The two joint ventures are also an example of China-Africa cooperation for
mutual benefit and co-development that can be duplicated elsewhere. Joint ventures
provide a platform for Chinese and Egyptians to work together and learn from each other.
For Egypt, they generate approximately 1,800 local jobs and bring in the direct foreign
investment and technical assistance that is needed to develop the potential of Egypt’s
petroleum sectors. For China, they offer access to petroleum resources and have helped
bring Chinese drilling services and equipment to the Egyptian market. While Egypt’s oil
sector receives technology transfer in oil drilling, Chinese SOEs gain valuable experience
in going global.
Develop employee’s language skills and promote cultural exchange events at
the company level. Developing good working relationships between Chinese and
Africans requires language skills and knowledge about each other’s culture. As discussed
in Chapter VII, language and cultural barriers contribute to a sense of segregation
between the Chinese and Egyptian employees at ECDC. Improving language skills seems
to be more relevant and urgent to Chinese than Africans because the working
relationships between the two primarily take place in Africa, and the language barrier is a
common challenge faced by Chinese employees, especially Chinese managers whose job
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involves direct supervision of local workers. Using ECDC as an example, the paper
makes the following suggestions to help address the communication barrier 1) promote
English as the primary working language, 2) include the use of English as one of the
criteria for employee performance evaluation, and 3) offer language training as part of the
employee development program.
Sino Tharwa’s first Pyramid Cup Photography and Essay Competition was a
successful attempt to promote cultural exchanges and a team spirit between Chinese and
Egyptian employees. Serving as the executive intern of the Chinese Managing Director at
ECDC, the author had the opportunity to attend this event along with several executives
from ECDC. Sino Tharwa has approximately 1,500 employees, with a little less than 10
percent of them being Chinese. The contest was open to all employees with one general
guideline, and that was to share their stories of working at Sino Tharwa. The contest
received good participation from both Chinese and Egyptian employees. Several essays
written by Egyptian employees shared personal stories about their experience working at
the rig sites and how they felt about the petroleum development in Egypt. Some Chinese
employees shared how they cope with being newcomers in Egypt and what they have
learned about the difference and commonality in Chinese and Egyptian cultures. Some
Chinese expressed their admiration for Egypt’s rich cultural heritage and ancient
civilization through pictures and essays. At the ceremony, the leaders from both sides
together cut a cake and awarded the prizes to the Egyptian and Chinese winners. It was a
successful event with a high turnout from both sides and everyone had a great time
enjoying the stories, pictures, music, and delicious Egyptian food. The contest and the
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ceremony offered an opportunity for Chinese and Egyptians to get to know each other at
a personal level, and understand how people from different cultures and backgrounds
view work and life, which would help them better communicate with each other at work
and have a positive influence on their working relationships.
Enhance the role of leaders in forging a successful collaboration. In a
company where Chinese and Africans work together, the extent to which executives from
the two sides can efficiently address collective planning, trust building, and conflict
management has a profound influence on the success of the collaboration and the
development of good working relationships between Chinese and African employees
because employees seek guidance, support and feedback from their leaders. In the cases
of ECDC and Sino Tharwa, the leaders from both sides have facilitated an overall
successful collaboration but there is room for improvement. As discussed in Chapter VII,
Chinese and Egyptian executives are evaluated according to different performance
criteria set by the parent companies in China and Egypt that co-founded the two joint
ventures, which may lead to disagreements in business decisions and conflicts between
managers. Egyptian executives facilitate weekly company meetings in Arabic when
Chinese engineers are present. While Egyptian workers at the rig sites wear the ECDC
uniform, Chinese engineers and oil workers are allowed to wear the uniform of their
parent company, Chinese National Petroleum Corporation (CNPC). These arrangements
and behavior generate negative energy at the work place and do not help develop a
trustful working relationship between Chinese and Egyptian employees.
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It should be acknowledged that some collaboration challenges are rooted in the
establishment of the joint venture, such as the different evaluation criteria for Chinese
and Egyptian executives and compensation packages between Chinese and Egyptian
employees. As discussed in Chapter VII, Chinese employees at the ECDC are full-time
employees at CNPC payroll, so, in addition to the salary paid by the joint venture, they
receive a separate compensation from CNPC which their Egyptian colleagues don’t
receive. It would not be feasible to suggest elimination of those differences. But this
paper suggests that leaders from both sides should do more to set a good example for
employees in working together collaboratively.
First, leaders should openly discuss business interests, build common
expectations, and collaboratively address disagreements on behalf of the joint venture.
Second, the Chinese and Egyptian leaders should work together to promote an English
working environment and a workplace culture of inclusiveness. Executives from either
side chairing a company meeting should facilitate the meeting in English because English
is the reasonable choice of language to include everyone in a discussion. Leaders should
speak to employees from their country in English when employees from the other country
are in the conversation. The uniform is a symbol of a team. Chinese leaders should
encourage Chinese engineers and technicians at the rig sites to wear the ECDC uniforms
instead of the CNPC uniform. Cultural exchange activities, such as the photography and
essay contest at Sino Tharwa, should continue to receive support from the leadership
team.
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Although the above ideas are drawn from the experiences of two companies only,
they help to address language, cultural, and managerial challenges commonly observed in
Chinese-African working relationships. Successful cooperation means a greater African
presence in Chinese financed businesses and that the two sides enjoy a trustful and
productive working relationship. The suggestions that this paper made, namely, adhere to
a collaborative approach, promote the commonly used working language, offer incentives
and training to help employees improve language skills, support cultural exchange
events, and enhance the leader’s role in forging an inclusive work place culture and
trustful working relationships between Chinese and Africans, are a step forward towards
this goal and may help improve Chinese-African working relationships elsewhere in
Africa.
Improve Transparency and Program Evaluation of Chinese Aid
This section focuses on strategies to address two salient gaps in Chinese aid to
Africa: the lack of transparency and program evaluation. Before proposing solutions, the
paper gives a recap of the major findings about the problem discussed in Chapter VII.
China has become the most significant non-western donor in Africa, and has kept a good
record so far of delivering pledged aid fully and on time. But the Chinese government has
published limited information about Chinese aid, including its sizable aid flow to Africa.
There is scarcity of information not only about project financing and operations, but also
how effective the aid is in terms of meeting project objectives and making an impact on
the target population. Beijing released the first and second official reports on Chinese
development assistance in 2011 and 2014, which provided a summary of Chinese aid to
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the world. The reports briefly enumerated recent aid projects in Africa but offered no
detail as to how much funding each project received, how money was spent, and what
results each project produced. There is no specific report on Chinese aid to Africa issued
by Beijing, nor are country specific reports or individual project reports available.
The lack of transparency of Chinese aid has been a subject of criticism, especially
by the West. But existing studies and western media largely focus on political
explanations, such that the scarcity of aid information is a reflection of China’s non-
democratic political system, top-down public management, and tight media control by the
Chinese authorities. Few studies have looked into China’s capacity and experience in
managing a dramatically increasing aid flow or have offered practical solutions to address
the problem, which take into account China’s economic interests and political reality.
This study aims to fill this gap. Chapter VII presents an analysis that both the
well-recognized top-down political culture in China and the capacity barriers faced by the
Chinese government, in this case, the Chinese Ministry of Commerce Department of
Foreign Assistance (MCDFA), are main reasons for the lack of transparency and program
evaluation of Chinese aid. With regards to reporting mechanisms, regulatory frameworks,
and program evaluations, China is early in the learning curve. China currently lacks an
aid database, which is a necessary foundation for developing a comprehensive reporting
mechanism. Not until December 2014, did China implement its first regulation on
development assistance, which, as reviewed in Chapter VII, focuses on infrastructure aid
and provides few policy guidelines for newly pledged aid types, such as the concession
loans to help develop small business in African countries. Program evaluation, a crucial
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part of aid management, is barely addressed throughout the brief policy paper that is only
five-pages long (Chinese Ministry of Commerce, 2014b). The MCDFA and its subsidiary
agencies have little experience in interacting with local governments and communities in
recipient African countries, which limits their capacity in program monitoring and
evaluation. Based on these findings, the paper makes the following recommendations to
improve the transparency and program evaluation of Chinese aid to Africa.
Make a greater commitment to transparency and capacity building. Fast
growing aid has become an effective tool for China to strengthen its bilateral ties with
African countries and to advance its strategic interests on the continent. But the success
of Chinese aid lies in whether it can penetrate into local communities and benefit
ordinary African people. The review of African development experience has shown that
rampant corruption associated with state-to-state aid is a main reason why aid in the past
failed to make a substantial difference in the life of African people. China’s sizable aid
flow in the absence of open data and program evaluation creates conditions for
corruption, which would not only waste precious resources for development but also
damage China’s long-term strategic interests in Africa. Therefore, China must make a
greater commitment to publish and better manage what it funds, and this commitment
should include providing open access to aid data and investing in capacity development
in program evaluation.
The MCDFA should adopt the standard practice of established donors, such as the
USAID and the World Bank, to provide open access to aid data and publish reports on
development assistance on a regular basis. Detailed reports on Chinese aid projects
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should be prepared and made available to the public. To be consistent with reporting
standards of the established donors, government reports on Chinese aid should include
information about the country and the local context, project objectives, financing, loan
disbursements, procurement, contractors and government agencies involved, labor and
cost, and an assessment of how well a project meets the designed objectives and what
impact it makes on the target population. Besides reports on individual projects, a
regional report on Chinese aid to Africa and country portfolios should be developed to
track the distribution of Chinese aid among African countries, as well as projects funded
by China in a particular country. Reports on a development scheme, such as Chinese aid
for agriculture or education in Africa, should also be included in the reporting system.
The two official reports on Chinese aid in 2011 and 2014 as well as the first
policy paper of Chinese development assistance reviewed earlier indicate that Beijing has
realized the need to track its financial flow to Africa and be more open about publishing
aid data. But the important question is, “to what extent should the information be
disclosed.” This paper calls for a serious commitment by and time-bound accountability
of the Chinese government to provide the public with detailed information at both project
and country levels and on multiple development schemes. The official reports on aid
should not merely be brief overviews of funding and projects that mainly serve to deliver
a message about China’s generosity to support African development. The MCDFA
should align its reporting practice to the standards of established donors and commit to
quality evaluation on project performance and impact. In this way, the evaluation
findings can be used to inform stakeholders and the public about Chinese aid to Africa,
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advise program improvement, support organizational learning, and in turn, contribute to
improving the effectiveness of Chinese aid to Africa.
Given the limited capacity of the MCDFA and its subsidiaries in aid management,
this paper suggests that China can start by establishing an aid database and conducting
comprehensive evaluations of projects that are most familiar to Chinese, such as
infrastructure projects financed by Chinese aid in the form of grants, interest-free loans
and concession loans. China has rich experience in implementing infrastructure aid
projects in Africa, and since many of these projects are financed by the state banks and
entirely delivered by Chinese SOEs and their Chinese subcontractors, it might be easier
for MCDFA to obtain information and conduct an evaluation of them than those projects
funded by China but delivered by the governments of African countries. Besides Chinese
companies and banks, China should work with and learn from others to strengthen its
capacity in aid management, which will be discussed next.
Fast track capacity building through partnership and collaboration. In
particular, this paper looks into three types of partnership opportunities to fast track
China’s capacity development in aid management: 1) the growing China-Africa
cooperation can provide a platform for Chinese and African scholars to work together to
improve the effectiveness of Chinese aid; 2) established donors, such as the Work Bank
and the US government, possess rich experience in developing robust aid databases and
conducting quality program evaluations that can advise Chinese; and 3) development
NGOs can offer the MCDFA local expertise and help the MCDFA establish working
relationships with the local communities.
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Utilize China-Africa academic cooperation to improve the effectiveness of
Chinese aid. In supporting China’s broad strategic interests in Africa, the Chinese
government has provided increasing funding to promote China-Africa academic
cooperation. Chapter V reported that China and Africa have jointly established 29
“Confucius” Institutions in 22 African countries that offer programs to promote Chinese
language and China-Africa cultural exchanges. These institutions are named after the
most influential philosopher in Chinese history- Confucius, and are largely funded by the
Chinese Ministry of Education. China also provided scholarship grants to more than
20,000 African students by 2012 (FOCAC, 2012). Since 2009, a university partnership
program called the “20+20 Cooperation Plan,” initiated and funded by the Chinese
government, has helped 20 universities in China partner with 20 universities in 17
African countries. A completed list of the selected Chinese and African universities in the
“20+20 Cooperation Plan” are provided in Appendix B. The paper lists five from each
side as examples: Peking University, Beijing Language and Culture University, China
Agricultural University, Shanghai Normal University, Tianjin University of Traditional
Chinese Medicine, Cairo University, University of Stellenbosch (South Africa),
University of Botswana, University of Zambia, and University of Ghana (United Nations
Educational, Scientific and Cultural Organization [UNESCO], 2015).
During visits to the University of Ghana and Shanghai Normal University in
2013, the author learned that the “20+20 Cooperation Plan” currently focuses on
language study, cultural exchanges, and joint research in fields such as agricultural
development and African studies. The Chinese Ministry of Foreign Affairs has been
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sponsoring exchange visits between Chinese and African scholars on a regular basis. For
example, a professor in history at Shanghai Normal University shared with the author that
he and colleagues have been making annual visits to the University of Botswana and the
University of Zambia in recent years, and have hosted African professors on their campus
several times. One salient challenge faced by many African universities is the scarcity of
funding. With Chinese government funding and China’s rising presence in African
development, universities from both sides have shown a growing interest in academic
collaboration.
This paper suggests that China-Africa academic cooperation has the potential to
make an immediate and valuable contribution to help address the capacity gaps faced by
Chinese aid agencies like the MCDFA. A government-academia partnership between the
MCDFA and universities in both China and the recipient country can provide a platform
for scholars from both sides to work together to assist with the feasibility study of an aid
program, systematic data collection, development of project performance evaluation
criteria, and facilitation of surveys to assess project impact on the target population.
These activities require a good understanding of and effective communication with both
the donor and the target population. Chinese scholars who are familiar with China’s
political and business culture and African scholars who possess indigenous language
skills as well as knowledge about local conditions and African development can be a
great help to the MCDFA and its subsidiaries. If well pursued, strengthening capacity
building through the China-Africa academic cooperation and government-academia
partnerships can be a win-win strategy to promote common development for China and
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Africa. It can help the Chinese aid agencies address the salient capacity barriers in local
knowledge and program management, promote knowledge production and sharing
regarding Chinese development assistance to Africa, provide African and Chinese
university students research and project opportunities on development subjects relevant to
their countries, and help Chinese universities gain experience in international
collaboration. The Chinese government has provided increasing aid to support China-
Africa academic cooperation. It would be a wise investment for China to channel this
academic cooperation so as to help improve the effectiveness of Chinese aid. It will serve
not only the interests of African people but also China’s strategic interests in Africa, and
support its new role as an emerging global donor.
Learn from the West. One way to fast track capacity building in aid management
is to learn from established donors and governments in the West who have rich
experience in aid management and program evaluation of public projects. As discussed in
Chapter VII, established donors, such as the World Bank and the USAID, have been
heavily involved in African development on a continuing basis since African countries’
independence era in the 1950s. They have developed a robust aid database and
accumulated extensive local knowledge and project experience. In the US, program
evaluation in the public sector has become an indispensable component of program
operations. Separate standards and rigorous review processes have been established for
different fields of public service, such as health care, social services, education and law
enforcement, to assess both the process and outcomes (Sylvia, 2004).
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There is a great deal of knowledge and experience from the West that can help
China fill the capacity gaps in aid management. But a question that should be asked is
whether political feasibility exists on both sides to enable the learning, given a clear
ideological divide between China and the West in handling development aid. As
discussed in previous chapters, Western aid has long been conditionality-based in that aid
and debt relief come with conditions of free-market reform as well as political reform to
forge democracy and protect human rights. In the Chinese view, aid should not become a
means of imposing political or economic reforms on recipient countries, and every
country should be respected for pursuing a path of development suited to its country-
specific conditions. This view is deeply rooted in China’s own history and development
experience. Beijing has adhered to the principle of not attaching political conditions to
aid since the 1950s when China first provided aid to African countries, and it has
repeatedly stated this political stance despite western criticism. So, would a partnership to
build capacities in aid management between China and the West be politically feasible?
This paper argues that although deep ideological differences might make it
challenging for China and the West to jointly offer and co-manage an aid program, there
is no hard evidence suggesting that it has been an obstacle for both sides to exchange
views and for China to learn best practices of public project management from the West.
Using the World Bank as an example, the Chinese government and the World Bank have
mutually attached importance to their cooperation in recent years and recognized each
other’s role in international economy and development. For instance, China and the Bank
worked together to address the international financial crisis in 2008 (Chinese Ministry of
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Foreign Affairs, 2008). The Bank has provided assistance to China’s development in
various projects. Two current examples are a project implemented in eight provinces of
China to help develop health insurance and improve health service delivery in rural areas
(World Bank, 2015b), and an environmental project to improve water and sanitation
services in the Chinese city of Guiling (World Bank, 2015c). World Bank President Jim
Yong Kim also delivered a welcome message to the recent initiative of the Chinese-led
Asian Infrastructure Investment Bank (AIIB) and stated the Bank’s good will to work
with the AIIB in fighting poverty (Guardian News, 2015). In an interview with Japan’s
national news organization NHK, Kim was asked how the Bank will keep its high profile
in a new environment where the Bank is no longer the only player in world development.
Kim responded that, “what we want to be able to do is to bring global knowledge to the
table in every setting that we're working in, and be unique in that” (NHK, 2014).
Therefore, the Bank is open for cooperation and knowledge sharing with global partners
including China.
Chinese delegates from government agencies have been making regular visits to
the US for short-term training in various areas of management that can be applied to aid
management, such as employee development, information technology in public
administration, and evaluation of public projects. The author has served as a lecture
interpreter for visiting groups of Chinese provincial and local government officials and
university administrators at three campuses of the California State University since 2008.
Therefore, the paper concludes that collaboration and learning are not new to China and
the West although there are differences in political views. There exists political feasibility
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for China-West partnerships in helping China to develop human capital and institutional
capacity in aid management.
The paper suggests that these partnerships can work in two ways. One is through
workshops and study tours. For example, China can establish a capacity building
partnership with the World Bank in how to develop a comprehensive aid database, and
with the USAID in learning how to conduct a quality program evaluation. The USAID
published it Evaluation Policy in 2011, a guideline for “systematic collection and analysis
of information and evidence about program performance and impact,” which will well fit
China’s needs (USAID, 2015). Chinese government can help fund regular workshops and
study tours for staff of the Chinese aid agencies to visit the World Bank or the USAID
facility for training, or invite experts to teach in China. Distance learning format via
Intranet can be an option as well. Training curriculum can be customized to better match
China’s needs and African context. This partnership would not only help Chinese build
capacity in aid management, but also allow both sides to exchange views, have a better
understanding each other’s work, which would help lay a foundation for future
collaboration on world development. The other way is through a learning-by-doing
approach by co-funding aid projects in Africa. The different views in conditionality of aid
may impose a challenge in China-West partnership on some projects, but there are
cooperation opportunities not directly involving conditionality. For example, the World
Bank may assist China on assessing the potential environmental impact of an
infrastructural aid project and integrating the findings into project design, on which China
has not established a strong record in the past. In addition, China can co-fund projects
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with the UN or the Africa Union (AU). Both organizations have rich experience in
project delivery in Africa. They are the partners with whom China has demonstrated a
keen interest to maintain close cooperation, as discussed in earlier chapters. This paper
suggests that China does not have to adapt the conditionality approach of some
established western donors, but it should embrace partnership and commit to adapt the
best practices of others to improve the transparency and effectiveness of Chinese aid.
Take an inclusive approach to partner with development NGOs. As discussed in
Chapter II, development NGOs have become a major player in the western aid system
and today they channel significant development resources. However, they are rarely
present in projects funded by Chinese aid. As many issues in China-Africa cooperation
can be explained by China’s domestic context, the absence of development NGOs in
Chinese aid is a reflection of the weak political status of civil society in China. NGOs’
self-governance and grassroots-oriented character, combined with their work in public
service delivery, do not seem to “fit well” in China’s political culture, where public
management is top-down and the government plays an unquestionably central role in
managing development resources and projects. There is a lack of political will and
funding support to promote NGO development in China, which helps explain the rare
presence of NGOs in Chinese aid projects in Africa.
So, why should the Chinese government, like the MCDFA, take an inclusive
approach to work with NGOs in Africa? First, NGOs possess local expertise and can
serve as a bridge between the Chinese aid agencies and local communities. This NGO
advantage is especially valuable for newly-pledged concession loans to help develop
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small business in African countries, which were included in the $20 billion pledge made
by Beijing in the 2012 China-Africa Summit (BBC News, 2012b). This type of aid
requires China to go out of its comfort zone of dealing with Chinese companies and
workers and enter into uncharted territory by interacting with local communities. This is a
weakness of Chinese aid agencies but a main strength of development NGOs.
Second, Beijing’s African policy that relies highly on government-to-government
relations has shown its limit in the African context, where other segments of society play
a more important role than they do in China. As Shinn (2011) pointed out, China gives
highest priority to developing strong ties with African governments, especially with
ruling parties and politicians, but its relationship with opposition political parties, African
labor unions, and civil society in African countries have been less successful and even
problematic. Indeed, Beijing has provided generous aid to Africa but the voices from
civil society about Chinese aid are largely critical, focusing on issues such as the lack of
transparency, contributions to African corruption, limited opportunities for locals, and
negative environmental impact of infrastructure aid projects. It would be fair to
acknowledge that these problems do exist. But it seems to be the case that civil society
focuses on problems only, and rarely recognizes China’s sizable aid with nearly half
being grants and zero-interest loans to Africa, and many hospitals, schools, malaria
clinics, agricultural centers, and medical assistance that provided free of charge to local
communities. The paper suggests that the largely negative feedback from civil society
indicates 1) the common challenge faced by both Chinese and western donors to
penetrate aid to ordinary Africans, and 2) an absence of working relationships between
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China and the civil society in Africa. As major players in the western aid system, many
NGOs in Africa receive funding from western donors but they are rarely present in the
Chinese aid system. As China-Africa cooperation deepens, it would be wise for China to
adapt to the African context by establishing ties with broader segments of African
society. In the case of Chinese aid, development NGOs in Africa would be a rational
choice of a partner for China. This partnership has potential to help improve the
effectiveness of Chinese aid, strengthen Chinese aid agencies’ capacity for project
delivery, and at the same time, support China’s long-term interests in Africa.
The paper suggests that the MCDFA seek collaboration with willing NGO
partners and start the experiment to establish a principal-agent relationship with these
NGOs in aid delivery. There are many types of NGOs in Africa- large and small,
northern and southern, international and indigenous, and faith-based and secular.
Establishing partnerships with a foreign organization has to take political feasibility into
account, especially in the Chinese context. For example, a northern NGO mainly
receiving funding from traditional western donors may adapt conditionality-based aid
delivery, which would conflict with the Chinese stance on aid. It may be challenging for
the MCDFA to partner with some faith-based development NGOs as well due to political
reasons. An indigenous NGO that is in need of funding support and has established
connections to the target population may be a good candidate for the MCDFA to
consider. Sponsoring a multi-party partnership with development NGOs, African
universities and local governments is worthy of experimentation as well. In summary, by
committing to aid transparency, working with others and borrowing best practices, China
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can improve the effectiveness of its sizable aid and help make a positive impact on the
life of ordinary African people.
Boost China-Africa Cooperation on Wind and Solar Energy
Chapter VII conducted an investigation on the newly emerging China-Africa
cooperation on renewable energy. This new trend is part of the bigger picture of China’s
dramatically increasing investments in clean energy both domestically and
internationally. The investigation concludes that the new China-Africa renewable energy
cooperation is driven by Africa’s growing interest and China’s strong investment and
manufacturing capacities. The paper reported that China has risen to a leading global
investor of renewable energy, and its investment focuses on power generation through
wind, solar and hydro. China trails only the US in wind power and Germany in total
installed solar PV capacity (American Wind Energy Association, 2015; Roney, 2014).
Although its outbound investments currently concentrate on developed countries, China
has been one of the major and earliest foreign players in Africa’s new wind and solar
energy development. Chinese companies have built Ethiopia’s first wind farm and
secured a contract to jointly develop another wind farm with a local company in South
Africa (China Daily, 2014a; Venture Capital Post, 2013). China-Egypt cooperation
welcomes a new plan to expand their cooperation on electric power infrastructure and
renewable energy. Especially, Egypt seeks to attract Chinese investment to help unlock
the potential of Egypt’s sun-drenched climate and Suez wind (Focal Solar, 2014).
China’s drive for green energy presents an unprecedented opportunity for African
countries to diversify their energy mix and develop solutions for their persistent and
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salient power shortages in an eco-friendly way. But several challenges, as discussed in
Chapter VII, will have to be addressed in order to expand and deepen the China-Africa
cooperation on wind and solar energy. First, African countries need to develop a
supportive policy framework to attract foreign investment in renewable energy including
Chinese investment. Second, weak infrastructure imposes a challenge to building wind
farms and solar parks because transporting equipment and materials require good road
conditions. Third, due to the under-developed electricity sector in Africa, grid connection,
a challenge faced by China in its effort to expand wind farms and solar parks in remote
areas, will likely become a serious challenge in Africa as well. Fourth, given the different
conditions in developed countries and in Africa, it is not an easy task to develop
businesses suited to local market conditions. The paper presented the example that
rooftop solar installation may not be a suitable business option in Ghana due to poor
building conditions. Based on these findings, the paper proposes the following three
strategies to boost China-Africa cooperation on wind and solar energy.
Accelerate the development of policy incentives to attract Chinese FDI.
Among the major factors contributing to the boom of Chinese investment in wind and
solar energy in developed countries, namely China’s manufacturing capacity, strong
support from the Chinese government and Chinese state banks, and host countries’
regulatory and market incentives (Tan et al., 2013), the conditions on the Chinese side are
likely applicable to Africa. As Chapter VII discussed, China has demonstrated a keen
interest in developing country markets including African countries. So, an important
condition to be met in order to attract more Chinese FDI is an investor-friendly policy
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framework. There are two main regulatory strategies that have been proven to be working
internationally in accelerating investments in green energy that African countries can
import: renewable portfolio standards and feed-in traffic.
A Renewable Portfolio Standard (RPS) or Renewable Electricity Standard (RES)
is “a regulation that requires the increased production of energy from renewable energy
sources, such as wind, solar, biomass, and geothermal” (Solar Energy Industries
Association, 2015). Basically, the RPS regulation requires utility supply companies to
produce a certain percentage of their electricity from renewable energy sources. Supply
companies can purchase electricity from certified renewable energy generators in helping
them meet the regulatory obligations (Solar Energy Industries Association, 2015). In the
US, the RPS was first implemented in Iowa in 1983. As of 2013, 29 states in the US have
the RPS mandates (American Wind Energy Association, 2013). The 20-year electricity
supply contract between the Chinese firm, Goodwind, and Commonwealth Edison in
Illinois reviewed is an example of Chinese investment under the RPS policy (Tan et al.,
2013). The RPS mechanism is also adopted in UK, Italy, Poland, Sweden, Belgium and
Chile (Governor’s Wind Energy Coalition, 2014).
The Feed-in Tariff (FIT) is a policy tool that offers long-term contracts and
guaranteed pricing tied to the cost to produce electricity from different renewable energy
sources (Investopedia, 2015). For example, the FIT for solar panels is usually higher than
that for biomass because the later requires less initial investment. The contract terms are
typically 15 to 20 years (Pure Energies, 2015a). The tariffs are payments for every
kilowatt hour of electricity produced by renewable energy generators, including
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homeowners, businesses, farmers, government agencies and private investors. In the UK,
if a homeowner has solar panels installed on the roof, the owner will be paid a fixed
income, or generation tariff, for the amount of electricity produced by the solar system
according to a price table set by the government. The homeowner will be paid extra,
called an export tariff higher than the generation tariff rate, for the electricity surplus they
sell back to the grid. Therefore, homeowners in the UK with a solar installation can
receive three financial benefits: generation tariff, export tariff, and reduced utility bill as
they produce utility themselves (Feed-in Tariff Ltd., 2015). The FIT mechanism varies
from place to place. In California, homeowners are paid only when they “feed-in” extra
utility to the grid and the tariff rates in California are lower than those in European
countries like Germany (Pure Energies, 2015b). The FIT-style polies were enacted in at
least 50 countries by early 2010 including many in Europe, as well as in China, Egypt,
Uganda and South Africa (Daily News Egypt, 2014; Gipe, 2009 & 2011; REN21, 2007,
p. 43 & 2010, p. 37).
This paper suggests that FIT may be a more feasible policy option than RPS for
Africa to attract FDI. First, FIT guarantees a long-term contract and price, which helps
investors reduce the risks. Second, FIT takes into consideration the cost to produce
electricity via different types of renewable energy and offers investors a relatively fair
pricing. Third, it may be easier for African countries to access tools for the FIT
mechanism than RPS. RPS requires the government to place an obligation on utility
supply companies to produce a specified percentage of electricity via renewables. Given
the African context, it may be difficult to set a workable percentage. As Chapters VII and
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 217
VIII have discussed, the conditions for green energy development in developed countries
and African countries are largely different. Using wind and solar energy as an example,
developed countries like Germany and the US possess advanced technology in wind and
solar energy and have been implementing these types of projects for years and on a fairly
large scale. In Africa, only a few countries, such as Ethiopia and South Africa, have built
wind farms with foreign techniques and financial assistance. Both infrastructure and
policy frameworks to enable further expansion of wind and solar energy are much more
well-established in developed countries than in Africa. Thus, it would be challenging for
African countries to conduct a sound projection as to what percentage of the utility
should come from renewables and require utility companies to demonstrate compliance,
when green energy projects have just been developed or have not even started.
The FIT mechanism requires the government to develop a tariff rate table,
according to which the eligible renewable energy generators are compensated for the
electricity they produce. The tariff rates are determined based on scientific studies of a set
of cost factors, normally including renewable type, peak or off-peak time, installation
methods such as roof-top or ground-mounted solar system, scale, region, as well as the
local retail electricity prices (California Public Utilities Commission, 2008; Couture,
Cory, Kreycik & Williams, 2010). Formulas to calculate tariff rates have been developed
based on these scientific studies and put to use in developed countries, which African
countries can adapt and modify according to local conditions. South Africa and Uganda
have developed categorized tariffs and started their FIT experiments. Both RPS and FIT
focus on accelerating the establishment and expansion of green energy generators.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 218
This paper proposes that another policy option to boost China-Africa cooperation
on green energy is for African countries to offer preferential treatment, such as tax
credits, duty-free privileges, and preferential fees for land use, to attract Chinese
investment in opening manufacturing and assembly factories of wind power and solar
equipment in Africa. First, an important strategy to boost China-Africa cooperation in
wind and solar energy is to seek business opportunities that would utilize China’s
strength, and at the same time be suited to African conditions. As reviewed in Chapter
VII, China is the world’s largest manufacturer of wind and solar equipment
(Climatescope, 2014). China possesses the technology and investment power, and has
demonstrated a keen interest in being a major player in Africa’s renewable energy
market. On the African side, costs of land, labor and living are normally cheaper in
Africa than in developed countries. These establish a base for Chinese to open factories
in Africa. Second, the suggested preferential treatment in taxes and fees has proven to be
effective in attracting FDI in China’s own experience and current Chinese overseas
investments. As reviewed in Chapter V, these regulatory and market incentives helped
bring significant FDI inflow to Chinese Special Economic Zones and made a positive
impact on China’s economic takeoff. Chapter VII presented the example of a renewable
energy manufacturing tax credit in Arizona that enabled China’s Suntech Power to open a
$30-million solar panel assembly factory in the city of Goodyear (Tan et al., 2013).
Third, if well pursued, the manufacturing and assembly factories of wind and solar
equipment can become a source of creating local jobs and facilitating technology transfer.
In this way, China will make a contribution to help Africa develop human capital in
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 219
pursuing sustainable and green growth. Fourth, given African’s growing interest in
renewable energy, it would be logical to anticipate a gradually increasing demand in wind
and solar equipment in Africa. Local made and assembled equipment will not only help
meet the needs of the domestic green energy market but also can be exported to
neighboring African countries as well as the global market.
These incentives can be applied across the board to all foreign investors or in a
bilateral framework between China and African countries, which would allow flexibility
and a better match of China’s and a host country’s interests and conditions. Since China
is now the leading global investor in wind power and solar energy and pushing its
outbound investments, it may be a worthy attempt for African countries to develop
regulatory and market incentives specifically for attracting Chinese FDI.
Attach importance to feasibility assessment and project planning. Either RPS
or FIT mechanism requires grid connection in order to promote the establishment and
expansion of renewable energy generators. But grid connection is a salient challenge in
many parts of Africa. As of 2014, only 290 million people out of the 915 million sub-
Saharan population have access to electricity (International Energy Agency, 2014). In
some areas with electricity access, the power shortage has caused frequent blackouts,
which can impose a serious challenge on the operation of the proposed manufacturing
and assembling factories for wind and solar equipment. What’s more, building wind
farms and solar parks requires good roads, and rooftop solar panels need suitable building
conditions. Thus, before diving into a project, a comprehensive feasibility study on local
conditions, such as grid connection, infrastructure, regulatory framework and economic
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 220
conditions, as well as advantages and disadvantages on the Chinese investor side, is
important to ensure good project outcomes.
Africa should avoid the mistakes that China has made in domestic wind farm
development, that many wind farms were built in remote areas with good wind conditions
but then development of the grid connection stalled. These wind farms, which cost a large
investment to build, are now standing in remote areas of China with no grid connection or
only partial connection. This has triggered Beijing to slow down the installation, develop
incentives to encourage electricity companies to expand the grid, and to shift the focus to
areas with grid connection even though the wind speed is less (CREIA, CWEA &
GWEC, 2014, p. 24; Global Wind Energy Council, 2012). This is a lesson of diving into
an investment without a comprehensive feasibility study and sound project planning,
which should be prevented from happening again. Given Africa’s underdeveloped
electricity infrastructure, feasibility study and planning are critical steps that Chinese and
African partners must take seriously in developing successful cooperation.
Sound project planning also means taking a proactive approach to address the
growing local demand for indigenization. For example, capacity development for the
local population will need to be integrated into project planning from the get-go, and
costs to bring in and train local workers should be included in the business proposal and
negotiation. In that way, the emerging China-Africa cooperation on green energy can be
means of creating local jobs and developing Africa’s human capital in green energy
industries, and in turn, making a positive impact on Africa’s development.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 221
Utilize China’s strength and suit measures to local conditions. Besides the
wind and solar equipment factories discussed earlier, this paper suggests that turnkey
projects and small household solar applications such as solar cookers are two options that
may utilize China’s strength and at the same time be suited to Africa’s conditions.
Turnkey projects. A big advantage that makes China a good choice of partner for
Africa in wind and solar development is that China possesses the investment capacity,
technology and experience to offer Africa turnkey projects. Taking a wind farm as an
example, China can not only assist African countries to select a location, provide
financing, supply wind turbines and other equipment, and install the turbines, but also
help build roads for equipment transport and power lines to connect the grid. As
discussed earlier, China is the largest wind and solar equipment manufacturer in the
world. It has built much transportation infrastructure in Africa and has rich experience in
building electrical grids as well. Since 2007, China has launched a massive undertaking,
called “Xi Dian Dong Song,” to transfer power from hydro and coal rich Western China
to Eastern and Southern Chinese cities with dense population and industries (Xinhua
News, 2007). Now China is intensifying the efforts to improve grid connection in order to
support its ambitious plan to develop wind power and solar energy. China also has direct
experience in offering turnkey projects in Africa. Many infrastructure projects such as
highways financed by Chinese aid are entirely delivered by Chinese companies, from
initial assessment to project design, to equipment and supply, construction, and to test run
and finally put into use.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 222
Turnkey projects have the potential to bring mutual benefits to China and Africa.
A comprehensive turnkey package helps create more opportunities for Chinese
companies. This is another reminder for Chinese SOEs and private firms, in the same
industry or related industries, to enhance their cooperation and team up to go global. For
Africa, a comprehensive Chinese package might bring a good price advantage since the
prices offered by Chinese companies are normally competitive. If well pursued, turnkey
projects can provide Africans with capacity development opportunities in the entire chain
of wind and solar development. Therefore, this paper suggests that turnkey projects may
be a feasible and mutual beneficial option for China and Africa to boost their cooperation
on wind and solar energy
Solar cookers. The successful scale-up of household portable solar cookers in the
sunny western provinces of China is a best practice that may be duplicated in Africa. This
paper shares an example of how family-size and affordable solar cookers can bring
immediate benefits to people who live in a remote village in the Tibet Province of China,
a high-latitude region on the northeast of the Himalayas. A short 12-minute film
demonstrating this example is available online (YouTube, 2012). For generations, the
villagers have been cutting bushes for fuel. As the population grows, they have to go
farther and farther to look for bushes. The narrow slippery mountain trails and rocky
cliffs are difficult to travel for both humans and horses. In spring and summer, the trips to
cut and collect bushes take about half a day. But in winter, villagers often have to leave
their houses in early morning and do not return until the evening. Burning bushes is not
an easy task in Tibet where the air is thin. With a small portable solar cooker, villagers
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 223
can now boil water in about 10 minutes and bake bread within 30 minutes. They need
many fewer bushes than before. The size of the solar panel is comparable to an open
umbrella and the cooker can be placed in the back yard or any open space around the
house under the sunlight. Operating the cookers is easy so that villagers in the film are
able to master it with little effort. The temperature on the surface of the sun panel is not
high during cooking so it is safe to operate and clean afterwards. A small solar cooker has
proven its capacity to immediately benefit people’s life on a daily basis without placing a
negative impact on the environment. It does not require grid connection, is easy to
operate, and, importantly, is affordable. At the Alibaba website, solar cookers are
available at a wide range of prices. A Chinese-made solar cooker like the one used in the
Tibetan village costs about $20 at a wholesale price for 200 to 500 units (Alibaba, 2015).
They might work well in African countries like Ghana where many residential buildings
are not suited to install rooftop solar panels.
Moving Forward: China’s Future Policy towards Africa
This paper has conducted a comprehensive assessment of China-Africa
cooperation. It presented the cooperation in a broad context of international development
evolution, the different development paths that China and Africa each have taken, and
today’s new momentum of south-south cooperation. In particular, the paper investigated
the three ongoing challenges associated with China’s Africa policy, job opportunities for
Africans, and Chinese aid to Africa, and it assessed a new trend of emerging China-
Africa cooperation in renewable energy. The paper demonstrated how China’s own
history and development experience has a profound influence on its African policy and
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 224
business behavior in Africa. The paper offered practical strategies and constructive ideas
to hire more African workers and improve workers’ rights in Chinese firms, develop
good working relationships between Chinese and Africans, enhance transparency and
program evaluation of Chinese aid, and boost China-Africa cooperation in renewable
energy. This last section makes three recommendations to the Chinese government on its
future policy towards Africa, in terms of how to best move forward and develop long-
term, win-win China-Africa cooperation.
Assume a greater role in facilitating peace and stability in Africa. The paper
supports an adjustment to China’s absolute adherence to the non-interference principle
and suggests that, to support African development and protect China’s national interests,
China should assume greater responsibility for mediating conflict, facilitating peace, and
preventing humanitarian crises in Africa. As China-Africa cooperation goes broader and
deeper, China’s Africa policy faces a challenging question: how to uphold its non-
interference principle and, at the same time, protect vast Chinese investments and the
safety of the growing number of Chinese nationals in Africa, where conflict and
instability are ongoing challenges. As discussed in Chapter VII, Beijing’s struggle to
cope with the Libyan civil war and the Darfur crisis, and the huge loss of Chinese
investment in Libya exposed the limit of China’s absolute adherence to non-interference
in serving its “Go Global” ambition. Some have suggested that non-interference is losing
its usefulness, and Beijing’s greater involvement in Sudan’s peace negotiation is an
indication that China has abandoned or will abandon non-interference in order to advance
its renewed interests in Africa (Erian, 2012; Verhoeven, 2014). This paper offered an
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 225
alternative view that non-interference is still relevant for China from both the ideological
and practical perspectives. It represents the Chinese view of international relations that is
deeply rooted in its own history. It serves to safeguard China’s sovereignty rights, and as
a justification by Beijing to deal with criticisms towards issues related to democracy and
human rights in China. Therefore, it is unlikely that Beijing will abandon this core
principle and trademark of its foreign policy.
The paper supports the upholding of non-interference to promote equity and
mutual respect in state-to-state relations, but calls for China to assume greater
responsibility for facilitating peace and security in Africa. China’s insistence that
“business is business” in the face of a humanitarian crisis in Sudan contradicts Beijing’s
pledge of China being a responsible big country. Its position on the Darfur crisis received
heavy criticism from the West. Now, as a major investor in Africa, China is in the
position to and should play a greater role in developing peace solutions through
promoting dialogue, negotiation and collaboration. Chapter VII presented examples of
dialogue and negotiation based on mutual respect that are likely to be more productive
than threats and sanctions for addressing differences and resolving conflicts. China’s
investor leverage can help its role as a conflict mediator in Africa, especially in countries
where China has made considerable investments. China should also embrace broad
collaboration not only with parties directly involved in a conflict, but also with the
western countries who have a stake in the conflict, as well as the UN and the AU, to
develop joint, lasting peace solutions.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 226
Besides engaging more in peace, the paper shares others’ view that China should
attach importance to risk assessment in overseas investment and be more careful in
selecting business partners (Erian, 2012). Otherwise, it might find itself again in the
situation of vast investment in conflict zones or trouble states. Chapter VII has discussed
how China’s investments in Sudan’s oil sector weighed heavily in how China handled the
Darfur crisis and put China in an awkward position internationally.
Embrace indigenization and collaboration to support capacity building. The
investigation into the challenges of limited job opportunities for local Africans, poor
workers’ rights in Chinese firms, and the lack of transparency in Chinese aid suggests
that there is a great need for capacity building on both African and Chinese sides in order
to forge a successful cooperation. Capacity building is the key to helping African
countries combat poverty and develop Africa’s human capital. Chinese leaders have
repeatedly stated that China is willing to share experience in economic development and
commit to co-development and common prosperity of China and African countries. The
Chinese government should thus respond to the growing demand of Africans for
indigenization and make greater efforts to offer Africans one of the most valuable
experiences in capacity building that China gained in its long march for “reform and
opening,” which is to take advantage of FDI to create jobs and develop human capital.
Through supporting indigenization of Chinese business and greater presence of African
workers in Chinese aid projects, China has the opportunity to make a positive impact on
African development and, at the same time, create a welcome business environment for
Chinese investments in Africa.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 227
The Chinese government should put forth greater effort and investment in
establishing collaboration to help fast track the development of China’s own capacity as a
global donor and investor. When it comes to capacity building, the focus seems to be on
Africa. But the paper has demonstrated how capacity barriers on the Chinese side have
contributed to those challenges in the cooperation. For example, the political culture in
China is only one of the reasons for the lack of transparency in Chinese aid. The capacity
barriers of the Chinese aid agencies, including the lack of a comprehensive aid database
as well as inexperience in interacting with local communities in Africa and conducting
quality program evaluations, are also main reasons for the scarcity of information in
Chinese aid. As discussed earlier, the cutthroat competition between Chinese companies
in overseas markets, which leads to prices with a razor-thin profit margin, and in turn, the
preference for using Chinese workers over Africans to save costs, reflects an inadequate
regulatory framework for overseas investment and the absence of an industrial
cooperation mechanism in China.
The paper has suggested that one way to fast track capacity building is to work
with and learn from others through a broad-based collaboration with partners such as
academia in China and Africa, established donors in the West, development NGOs in
Africa, and countries such as Japan that possess advanced knowledge and experience in
establishing industrial cooperation mechanisms. Therefore, the Chinese government
should take an open and inclusive approach to support and facilitate such collaboration to
enhance China’s capacity, which will help promote long-term, win-win cooperation that
would benefit both China and African countries.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 228
Put People first. The third recommendation for the Chinese government to
develop successful China-Africa cooperation is an essential truth, revealed from the
trends in the body of knowledge that has guided development practice over the last 70
years: “people must be at the center of all development” (UNDP, 1990). The African
experience has shown that economic development will not succeed if it is not
accompanied by the improvement of living standards of people. China achieved a
remarkable record of lifting over 500 million people out of poverty (World Bank, 2014h).
But it should not be neglected that, behind the grand figures of economic achievement
and the fancy of a modernized and economically powerful China in the making, there are
sacrifices of millions of everyday Chinese people, from the massive human tragedy
during the cultural revolution, to over 9 million laid-off workers in the state-owned
enterprise reform between 1998 and 2000 (Hung & Chiu, 2003), to millions of workers
who still do not have the basic rights of on-time pay and safe working conditions in
China today. Many policy decisions, from strict population control and drastic state
enterprise reform, to deliberately allowing certain regions to be better off first, were made
based on China’s vast population and all-around poverty at that time. They indeed
contributed significantly to China’s economic growth, but they also have had broad social
consequences and are the root causes for widely observed regional disparities in China
today. Now it is time for the Chinese government to give priority to a more inclusive,
representative and balanced growth, and apply this mindset change to its engagements
with others including African countries.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 229
Therefore, the success of Chinese aid to Africa relies not only on generous
pledges and on-time delivery but on its capacity to penetrate into local communities and
benefit ordinary people. The success of Chinese businesses in Africa cannot merely
depend on being cheaper and quicker, and in turn, on exploitative labor practices to save
cost. Besides a competitive price, the success of Chinese firms in Africa depends on how
well they respond to the growing demand for indigenization to bring Africans productive
jobs with a safe working environment, take advantage of African talents to strengthen
competitiveness, and help forge a good Chinese-African working relationship. If well
pursued, the newly emerging China-Africa cooperation in wind and solar energy holds
great potential to help Africa address its energy shortage and promote an inclusive green
growth that will benefit current and future generations of Chinese and African people.
Being a responsible big country means to be responsible for the impact of its own
involvements in Africa, and to assume a greater role in facilitating peace and security
through dialogue, negotiation and collaboration. By working together under the essential
concept that development is ultimately about people and the improvement of human life,
China-Africa cooperation in a new era of south-south partnership has great potential to
make a positive impact on the life of Chinese and Africans who have participated in and
contributed to the cooperation.
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 230
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Appendix A
Questions Used in Interviews
Common Questions Asked in All Interviews
• In general, how well do you think Chinese are received in this (African) country?
• Do you feel that the Chinese presence in this (African) country has had some
positive impact on the local economy and people’s daily life at all?
• If you can name one aspect of the China-Africa cooperation that needs
improvement, what would that be?
Examples of Questions Asked in a Particular Interview
Below are specific questions asked in the following three interviews: 1) an
interview with an employee of a Chinese furniture factory on May 25
th
, 2013, in Accra,
2) an interview a Professor and a graduate student on May 23rd, 2013, at the University
of Ghana in Accra, Ghana, and 3) an interview with two Managing Directors of the
Egyptian-Chinese Drilling Company and the Sino-Tharwa Drilling Company on March
5
th
, 2013, in Cairo, Egypt.
• How many Chinese are in Ghana?
• Do you like the local food here in Ghana and is there a Chinese supermarket here
in Accra?
• What brings you to Ghana and do you like your job?
• You mentioned that the Chinese state-own enterprises here in Ghana prefer to
bring Chinese employees to Ghana rather than hire local Africans or Chinese who
are already here, why?
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 302
• Why do Chinese students at the University of Ghana rarely socialize with the
Ghanaian students? Then why do they come here at the first place?
• What type of visa is issued to Chinese workers who come to Ghana?
• Do these Chinese private gold mining teams have legal mining licenses?
• In terms of attitudes towards China, what is the difference between the everyday
people in Africa and African leaders?
• In your opinion, where does the negative view of Africans towards China’s
presence originate? Can you provide some examples?
• Why do you think Chinese firms hire few African workers?
• You commented that the West is not going to make it easy for China in Africa,
could you elaborate more on this?
• Can you please tell me more about your perspective that China should invest
more in education and culture exchange in Ghana in order to build long lasting
and successful cooperation?
• How is the business in this year (2013) for Sino Tharwa?
• Can you two please elaborate a little bit more why you experience a serious
challenge of payment past due from your suppliers?
• Compared to competitors in the Egyptian market, especially Western companies,
what advantages do Chinese drilling companies have?
• Compared to competitors in the Egyptian market, especially Western companies,
what disadvantages are Chinese drilling companies facing?
AN ASSESSMENT OF CHINA-AFRICA COOPERATION 303
Appendix B
List of Selected Chinese and African Universities in the “20+20 Cooperation Plan"
Below is the complete list of the selected Chinese and African universities in the
“20+20 Cooperation Plan,” which is published at the website of the United Nations
Educational, Scientific, and Cultural Organization (UNESCO, 2015).
Chinese Universities African Universities
Peking University Cairo University, Egypt
Beijing Language and Culture University Suez Canal University, Egypt
Hunan University University of Stellenbosch, South Africa
Northeast Normal University University of Pretoria, South Africa
Nanjing Agricultural University Egerton University, Kenya
Donghua University Moi University, Kenya
China Agricultural University Tunis University
Shanghai Normal University University of Botswana
Tianjin University of Technology and
Education
Ethiochina Polytechnical College
Zhejiang Normal University University of Yaounde I, Cameroon
East China Normal University University of Dar Es Salaam, Tanzania
University of International Business and
Economics
Higher Learning Institute of Agronomy
and Veterinary Surgery of Faranah, Guinea
Southeast University University of Zambia
Tianjin University of Traditional Chinese
Medicine
University of Ghana
Jilin University University of Zimbabwe
Beijing International Studies University University of Mohammed of V-Agdal
China University of Geosciences University of Namibia
Yangzhou University University of Khartoum, Sudan
Xiangtan University Makerere University, Uganda
Suzhou University University of Lagos, Nigeria
Abstract (if available)
Abstract
This paper investigated three ongoing challenges and a new trend in the fast‐growing China‐Africa cooperation: 1) the Chinese foreign policy principles of non‐interference and no‐strings attached to aid, 2) limited employment opportunities for Africans and poor workers’ rights in Chinese firms, 3) the lack of transparency of Chinese aid, and 4) the emerging China‐Africa cooperation in renewable energy. The paper examined the links between China’s development experience and its behavior in Africa to provide a new perspective for understanding China’s engagements with Africa. The major findings include: 1) China’s African policy is deeply rooted in its own history and development experience
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Asset Metadata
Creator
Chen, Xi
(author)
Core Title
China-Africa cooperation: an assessment through the lens of China’s development experience
School
School of Policy, Planning and Development
Degree
Doctor of Policy, Planning & Development
Degree Program
Policy, Planning, and Development
Publication Date
12/18/2016
Defense Date
05/14/2015
Publisher
University of Southern California
(original),
University of Southern California. Libraries
(digital)
Tag
AID,China‐Africa cooperation,jobs,OAI-PMH Harvest,policy,renewable energy
Format
application/pdf
(imt)
Language
English
Contributor
Electronically uploaded by the author
(provenance)
Advisor
Robertson, Peter John (
committee chair
), Karber, David (
committee member
), Natoli, Deborah (
committee member
)
Creator Email
anna.usc@gmail.com
Permanent Link (DOI)
https://doi.org/10.25549/usctheses-c3-573021
Unique identifier
UC11300324
Identifier
etd-ChenXi-3478.pdf (filename),usctheses-c3-573021 (legacy record id)
Legacy Identifier
etd-ChenXi-3478.pdf
Dmrecord
573021
Document Type
Dissertation
Format
application/pdf (imt)
Rights
Chen, Xi
Type
texts
Source
University of Southern California
(contributing entity),
University of Southern California Dissertations and Theses
(collection)
Access Conditions
The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the a...
Repository Name
University of Southern California Digital Library
Repository Location
USC Digital Library, University of Southern California, University Park Campus MC 2810, 3434 South Grand Avenue, 2nd Floor, Los Angeles, California 90089-2810, USA
Tags
AID
China‐Africa cooperation
policy
renewable energy