[FBEC 2001] Chinese Investment in Africa Essay
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Transcript of [FBEC 2001] Chinese Investment in Africa Essay
Philip Hammer Leona Lam Leona Lam Cindy Lu
Duanrui (Gloria) Shi Eunice Wang
Jingbi (Marina) Ying
China’s Investment in Africa
The global rise of China has had an impact across the globe, restructuring the
international market, affecting every corner of the world. China’s growth has been
unprecedented, growing at an average of 10% every year, drastically changing the internal
dynamics of the Chinese economy and pulling millions of its citizens out of poverty. This
unheard of growth has been the result of market reforms and liberalizations that took place in the
early 1980s, which resulted in a massive influx of FDI into China from the rest of the world. As
China has risen as a global power, however, it has gained the capacity to invest its own wealth
abroad, and has done so on a monumental scale. Nearly every country, from Pakistan to Canada,
has been a target of the new Chinese global reach, as the middle kingdom’s desire for energy,
resources, safe investments, technology, and political connections, pushes it to invest abroad.
China’s interest in Africa raises eyebrows all over the world, maybe most pressingly,
from Western powers. Part of the problem of China’s involvement in Africa has been a
misunderstanding of goals and methods. China’s current hard interests on the continent have
been misunderstood for manipulation and neo-colonial motivations, but China’s involvement in
Africa has been about development, meaning, supporting forces that can create long-term,
sustainable growth in a country, leading to improved quality for life of citizens. For the most
part as we find that China’s interests are anchored by their policy of mutual benefit, respect and
non-intervention. Going over the leading assumptions by Western powers of Chinese
motivations, we find that Chinese interest in Africa have prominently been in African natural
resources. Rapid economic growth coupled with dwindling domestic Chinese petroleum and
Philip Hammer Leona Lam Leona Lam Cindy Lu
Duanrui (Gloria) Shi Eunice Wang
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mining deposits have encouraged Beijing to look abroad for such resources. China obtains one
third of its oil imports from African countries, and recently became the world’s second largest
consumer of petrol products. Africa is also a significant source of minerals and natural gas
imports to China, growing 20% annually1. In this regard it would be challenging for China to
meet all of its raw material needs from non-African resources. Secondly, Africa’s population of
nearly 1 billion people and a growing middle class provides a huge opportunity for China to
grow its export market. Between 2000 and 2010, China’s export to Africa grew by a factor of
13.2 To satisfy China’s population and prevent a crisis of legitimacy as their role as leaders,
those in Beijing need to keep economic growth rates high and continue to bring hundreds of
millions of people out of poverty. And to do so, China needs land, oil, minerals, as well as
export opportunities.
China’s involvement in multilateral institutions puts itself, as well as Africa in a prime
position when it comes to geo-political strategies. China welcomes African support in forums
such as the World Trade Organization (WTO), and it in turn often supports African position in
the UN Security Council. Although, this mutually beneficial relationship leads to such situations
such as: China and many African countries that are criticized for their human rights records tend
to support each other in the UN Human Rights Council, which replaced the UN Commission on
Human Rights, since China helped fill it with African worst human rights abusers, including
1 Cate, Wesley. "Africa's New Marketplace: From Donor Target to Investment Opportunity." Sagamore. N.p., 20 June 2011. Web. 10 July 2013. 2 SUB-SAHARAN AFRICA Trends in U.S. and Chinese Economic Engagement. Rep. Washington D.C.: United States Government Accountability Office, 2013. Print
Philip Hammer Leona Lam Leona Lam Cindy Lu
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Sudan and Eritrea. But Western countries have no moral high grounds on which they can judge
China, as these Western countries have also been engaged in mutually beneficial relationship
with a number of repressive leaders. The United States has had great interests in Saudi Arabia’s
massive oil wealth and its own ability to check Iran’s power in the region, making Saudi Arabia
an important ally. But Saudi Arabia’ human rights records is quite brutal, in that the country has
used a great deal of force and money to quickly silence the Arab Spring-inspired protests at
home. And all the while, the United States goes on to support Saudi Arabia through a massive
$60 billion weapons sale.3
The deployment of 90 peacemakers to Liberia in December of 2003 occurred two months
after Liberia switched its diplomatic recognition from Taiwan to China; this displays the
strategic importance that African nations hold in the struggle between Taiwan and China efforts
to gain recognition.4 Currently, only four African countries still recognize Taiwan. China’s
investment in Africa pays an added bonus in the diplomatic effort to deny Taiwan “international
space” through recognition by individual countries and their resulting support in multilateral
forums. But this is just a natural example of a nation attempting to establish a soft power sphere
of influence by providing economic benefits for countries and encouraging them to accept
policies friendly to Chinese interest. The Soviets were the primary competitor to the US, in
terms of soft power, throughout the Cold War. Attempts to attract Europe through its resistance 3Keiswetter, Allen L. "The Arab Spring: Implications for US Policy and Interests | Middle East Institute." The Arab Spring: Implications for US Policy and Interests | Middle East Institute. Middle East Institute, 13 Jan. 2012. Web. 2 July 2013. 4 Thompson, Drew. "China's Emerging Interests in Africa: Opportunities and Challenges for Africa and the United States." Center for Strategic and International Studies. Center for Strategic & International Studies, n.d. Web. 2 July 2013.
Philip Hammer Leona Lam Leona Lam Cindy Lu
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of Hitler, as well as colonized areas around the world because of its opposition to European
Imperialism, the goal was to convince the world of the attractiveness of the Communist system,
all of which were done through public diplomacy program. Despite their attempts, the Soviet
closed system and lack of popular culture were barriers that lead the US to come out on top in
the end of this. By establishing itself as a soft power, China makes itself an attractive partner to
do business with, a natural business strategy.
The above-described motives are dominant narratives when it comes to China’s
involvement in Africa. “It’s about diplomacy, to promote good relationships and the pattern is
clearly not linked to natural resources,” states Deborah Brautigam, an expert on Sino-African
Relations at John Hopkins University. China has committed $75 billion in aid and development
projects in Africa in the past decade.5 China has been investing in many aspects of African
development, infrastructure, agriculture and even manufacturing, areas that have traditionally
ignored by the West. By investing in these areas, China helps these African countries become
less reliant on foreign powers, and become self-sustaining. The Western foreign aid regime was
established after WWII, though successful in reconstructing Europe, wasn’t able to work
everywhere since it was used as a tool of containment rather than actual development. Villaya
Ramachandran, a senior fellow at the Washington D.C.-based think-tank, Center for Global
5 Provost, Claire, and Rich Harris. "China Commits Billions in Aid to Africa as Part of Charm Offensive." The Guardian. Guardian News and Media, 29 Apr. 2013. Web. 1 July 2013.
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Development insists China is playing an important role in closing funding gaps in Africa, “China
is a major emerging player in development finance…”6
These investments have had a very favorable affect in Africa have both positive and
negative social effects. The infrastructure built— hospitals, universities, roads, etc—has
improved living conditions by providing the foundations for further effective programming, such
as an improved health system. Such long-term investment is extremely important because
traditional donors have been reluctant to provide this type of aid due to the slow rates of return.
Although some African officials have claimed China to be neo-colonizers through the removal
raw material from African land to use in their (China) manufacturing industries to sell back to
African, the Chinese have also claimed that, unlike their Western counterparts who only take but
do not return, they view Africa as an equal partner.
Furthermore, Chinese investments have been able to domestically boost Africa’s status.
For example, China’s investments in medical products have helped Africa build a better health
model. With China’s admirable record of delivering health service as well as its potential to
develop and produce useful products at international standards with significantly lower costs,
China’s foreign medical aid program in Africa has saved many lives.7 Another example is the
Chinese investments in the superhighway in Naobi. Approximately 353 million US dollars were
invested for the construction of this highway. Africa has experienced the efficiency brought by
the infrastructure that has been built. However, some argue that China is not taking responsibility 6 Ibid. 7 "China Seen as Model for African Health." |Cover Story |chinadaily.com.cn. N.p., n.d. Web. 21 July 2013.
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of their investments in Africa. Since the 1950’s, China has used “non-interference” to guide its
foreign policy in aiding development, including Africa. 8 Compared to Western countries that
been involved in Africa, China does not require conditions with its investments. It is said that
these kinds of ineffective aid cannot benefit Africa’s wellbeing, which reflect that economic
cooperation happened as well as backdoor dealings. It also contributes to the fueling of poor
governance in areas like Zimbabwe, Angola, Ethiopia, and Sudan where there is continuing
suffering regardless of China’s aid. China has be continuously criticized for it non-interference
policy. 9China defends itself by claiming that they provide aid to help Africa benefit the people,
not for political purposes of showing off to the world. Overall, the social effects of Chinese
investments in Africa are positive.
In addition, China’s investment has strengthened Africa’s economy significantly., The
cumulative FDI investment is $14.7 billion.10 This has impacted the county in many different
ways. For example, as a direct result of the investment, Africa’s debt with the U.S. has been
reduced by $10 billion dollars, thus weakening Western influence in Africa.
8 "China’s ‘Image’ Problem in Africa." The Diplomat. N.p., n.d. Web. 2 July 2013. 9 Kapchanga, Mark. "China's Aid to Africa Needs Transparency - Globaltimes.cn."China's Aid to Africa Needs Transparency - Globaltimes.cn. Global Times, 27 Jan. 2013. Web. 21 July 2013.
10 Shinn, David H. "The Impact of China’s Growing Influence in Africa." European Financial Review. N.p., n.d.Web.
Philip Hammer Leona Lam Leona Lam Cindy Lu
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In fact, as the chart from McKinsey Global Institute illustrates, overall government debt has been
reduced by 28% GDP from 1990’s to 2000s. Inflation and budget balance has also improved
resulting in macroeconomic stability.
Next, the Economist states that China has also benefited Africa in the form of loans.
Currently, China gives Africans more loans than the World Bank. The largest type of these loans
comes from concessional loans provided by the China Ex-Im Bank. Concessional loans are
unique in that 50% of the value of these loans must be used for purchasing goods and services
from China—which not only benefits China but also helps to increase consumption in Africa,
raising overall GDP. Investments in China have also helped employment. On one hand, China
pays less than the minimum wage in Africa, on the other; China pays more than the labor cost in
Philip Hammer Leona Lam Leona Lam Cindy Lu
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Jingbi (Marina) Ying
China.11 Despite these circumstances, overall job opportunities have increased in Africa—a low
paying job is better than no job at all.12
Although jobs have increased, a counter argument is that China only employs laborers
from China. This in turn makes locals feel threatened; Sanou Mbaye, a former senior official at
the African Development Bank has stated that more Chinese has came to Africa in the past 10
years than Europeans in the past 400.13 And because of this tension and the large influx of
migrants, heated strikes have resulted from African workers, who are violently dispersed by
Chinese employers.14 Despite views of Chinese manufacturing employers only hiring Chinese
workers—statistics reveal that there is on average 2 Chinese workers for every 8 African
workers.15 Furthermore, grant related projects under the Chinese have a majority of African
workers—as required by the law.16 To further boost employment, the National Development and
Reform Commission (NDFC) in China has efforts to actively encourage Chinese enterprises that
are eligible to invest in Africa in effort to create jobs for locals. Some areas include: textiles,
mining, transportation, resource development and much more.17
Lastly, the cost of goods in Africa has been lowered because of cheap production costs
from China. This has benefited consumers as this matches domestic demand as more people
11 Zhou, Dillon. "PolicyMic." PolicyMic. N.p., n.d. Web. 10 July 2013. 12 "Chinese Businesses in Africa" Forum Held in Beijing." Fmprc.gov. N.p., n.d. Web. 17 July 2013. 13 "The Chinese Are Coming...to Africa." The Economist. The Economist Newspaper, 22 Apr. 2011. Web. 12 July 2013. 14 Zhou, Dillon. "PolicyMic." PolicyMic. N.p., n.d. Web. 10 July 2013. 15 Ibid. 16 Zhou, Dillon. "PolicyMic." PolicyMic. N.p., n.d. Web. 10 July 2013. 17 Shinn, David H. "The Impact of China’s Growing Influence in Africa." European Financial Review. N.p., n.d. Web
Philip Hammer Leona Lam Leona Lam Cindy Lu
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being able to affordable basic items. However, on the producers side, it has done more damage
than good. Local markets simply cannot compete with the cheap labor that the Chinese supply
and thus force many factories to go out of business. 80% of Nigerian’s textile industries have
been shut down as a result of direct competition. On the flip side, China has invested millions in
African factories helping African industries become self-sustainable.18 This long term of
investment is extremely important because traditional donors are reluctant to provide this type of
economic support promoting development due to a long period of return.
Overall, the views about China’s influence on Africa vary, depending on the perspective. It
seems to be that while on the local level, tensions are quite evident, but overall, China’s
investments has been benefiting the economy quite substantially. Chinese companies can
diversify investment by investing in African industry. China has been looking to invest in
different ways in Africa, instead of focusing only on building infrastructure projects.
Additionally, Africa's ambitions for urbanization, commodities, jobs, new overseas markets, and
improved manufacturing, trade, services and resource sectors, have presented unprecedented
business opportunities to foreign investors. To further strengthen cooperation with Africa, the
Chinese government has consistently encouraged state-owned and private companies to invest
there. Thus, in order to boost China's investment in Africa, the China-Africa Business Council
and the China-Africa Development Fund have decided to set up two new funds this year as well.
One fund is for commercial ventures, the other for mining activities. Zheng Yuewen, chairman
of CABC, which represents the interests of more than 550 Chinese companies in Africa, says
18 Zhou, Dillon. "PolicyMic." PolicyMic. N.p., n.d. Web. 10 July 2013.
Philip Hammer Leona Lam Leona Lam Cindy Lu
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each fund will raise $1 billion in its initial phase from member companies and the CADFund,
China's largest private equity fund focusing on African investments. Furthermore, China can
gain a lot of rich natural resources from Africa, which can help china’s economy develop
steadily. Ambassador David Shinn notes that China obtains about one third of its oil imports
from African countries and significant of mineral resources, for example about 90% of its cobalt,
35% of its manganese and 30% of its tantalum.19 Africa is of great importance for China because
it would be difficult for China to meet its entire mineral needs from non-African sources
However, there are also numerous risks of investing in Africa. First of all, challenges
from other countries makes it difficult for Chinese companies to survive in Africa. The changing
global investment environment and the lingering debt crisis in the Euro Zone have prompted
major economies such as the United States, the United Kingdom, France, India and Japan to shift
their investment focus from traditional markets in Europe and Asia to Africa. Secondly, political
environment is unstable in some African countries. Leadership transition can cause policy
change, which is not beneficial for long-term business operation. In addition, economic
environment is also volatile. Chinese companies may suffer losses because of fluctuating
currencies, with it pertinent that the RMB be changed into USD and then having the USD
changed into African currencies. Thus, fluctuation of these three currencies can have negative
effects when it comes to profit making. Furthermore, there are cultural differences between
19 Antwi-Danso, Vladimir. "Sino-Africa Relations: The Myth and Reality, the Conjectures and Refutations | Vladimir Antwi-Danso - Academia.edu." Sino-Africa Relations: The Myth and Reality, the Conjectures and Refutations | Vladimir Antwi-Danso - Academia.edu. N.p., n.d. Web. 10 July 2013.
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African countries and China. To buy a land, companies do not only apply to the government but
must also gain the permission from the chief of a tribe. If businessmen cannot understand these
cultural differences, he may fail to run his business in Africa.
China’s investment in Africa continues to grow year over year. China is holding onto
over $2 trillion in foreign reserves and the US Treasury bonds are paying very low returns. In
hopes of diversifying its investment and profiting from greater potential returns, China has
invested in stable and unstable countries throughout the African continent.
South Africa is one of the relatively stable countries that have received Chinese
investments. The Global Heritage estimates that China invested $8.6 billion to date. This
investment, both public and private, is in a variety of sectors including Metals ($2.7B),
Transportation ($100M), and Finance ($5.9B).20
As a member of the BRICS, South Africa has many qualities that attract investors. South
Africa serves as a gateway for trade with much of the African continent and has adequate
infrastructure in place. The political environment in South Africa is more stable than that of
many other African countries. South Africa has a well-developed financial system and
restrictions on the areas of investment are minimal to none. It has a substantial domestic market
and has comparative advantage in primary sector commodities such as metal ores, gold, and coal.
20 "China Global Investment Tracker Interactive Map." The Heritage Foundation. N.p., n.d. Web. 2 July 2013.
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Hisense, a Chinese technology manufacturer, has been relatively successful in conducting
business in South Africa. It has grown significantly since it first entered the country in 1996. In
June 2013, the company opened a 24,000 square meter factory that brings the total area of the
company to 100,000 square meters of space in Atlantis, South Africa. 6,000 square meters were
allotted for producing flat screen televisions and 18,000 square meters were for the company’s
refrigeration operation.21 In South Africa, the company currently has 30 percent of the market
share in televisions.22 Hisense also has an electronics technology research and development
training facility within the “industrial park” that is run by Chinese engineers and is developing
the skills of local technicians.23
Another Chinese company that has established its presence in South Africa is Huawei.
The mobile technology company announced in March 2013 that it was launching its first South
African call center. This call center will be responsible for dealing with inquiries and assisting
African customers with technical difficulties.24 The investment in this call center signifies the
size of Huawei’s penetration into the African market and the successful Huawei operations in
South Africa.
From this South African case study, we can see that the relative political stability in
South Africa gives investors a greater sense of trust in their South African investments. The
21"Hisense Keeps Expanding in South Africa." [1]|chinadaily.com.cn. N.p., n.d. Web. 2 July 2013. 22 Ibid. 23 "Chinese Electronics Manufacturer Opened Industrial Park in South Africa." - E & T Magazine. N.p., n.d. Web. 12 July 2013. 24 "Huawei Launches First Call Centre in SA." SouthAfrica.info. N.p., 26 Mar. 2013. Web. 21 July 2013.
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development of the South African economy encourages Chinese investments and is a promising
channel for China’s capital diversification.
Ethiopia is another relatively stable country that has received Chinese investments. The
Global Heritage estimates that China invested $7.8 billion to date. China invested $2.4 billion in
technology, $2.4 billion in transportation and $2.9 billion in energy.25
Ethiopia is currently on its Growth and Transformation Plan under which the Ethiopian
government hopes to industrialize the economy as a way of eradicating poverty and driving
economic growth.26 Chinese investments are one of the main drivers that are enabling the
industrialization of Ethiopia. Ethiopia’s main exports to China are oilseeds and leather
products.27 Meles Zenawi, the Ethiopian prime minister, said that there are tax incentives such
as rebates that help to encourage foreign investment into the country.28 Ethiopia is a potential
consumer market for China with a population of 82 million.29 The Chinese investments that are
helping to strengthen the Ethiopian economy will eventually lead to greater demand for Chinese
manufactured goods.30
25 “ China Global Investment Tracker Interactive Map." The Heritage Foundation. N.p., n.d. Web. 2 July 2013. 26 Erdal, Zeynep. "Strengthening New Bonds: Chinese Investment’s Role in Boosting Ethiopian Industrialisation." Consultancy Africa Intelligence. N.p., 4 Feb. 2013. Web. 27 Ibid. 28 "Ethiopia Seeks More Investment." Chinese Business News. N.p., May 2011. Web. 2 July 2013. 29 Ibid. 30 Erdal, Zeynep. "Banner Strengthening New Bonds: Chinese Investment’s Role in Boosting Ethiopian Industrialisation." Consultancy Africa Intelligence. N.p., n.d. Web. 4 Feb. 2013
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One of the largest Chinese shoe exporters, Huajian Group, announced in June 2013 that it
was planning a multimillion dollar factory expansion in Ethiopia.31 The company and the China-
African Development Fund are jointly investing $2 billion over the next 10 years to develop
shoemaking manufacturing clusters in Ethiopia.32 The labor costs in Ethiopia and tariffs for
African exports to the US and EU are relatively low.33 In addition to investing in physical
capital, Huajian also invested in human capital but sending 50 Ethiopian technical school
graduates to receive training in China.34 Chinese investments in the shoe industry in Ethiopia are
helping Ethiopia transition from an agriculture-based society to one that has a greater
manufacturing base.
Another issue that China is helping Ethiopia tackle is the limited access to electricity in
the country. While 86 percent of the Ethiopian urban population has access to electricity, only 2
percent of the Ethiopian rural population has access to electricity. This is a tremendous problem
that is hindering Ethiopian economic growth considering the fact that 17 out of 20 Ethiopians
live in rural areas.35 As a result, this offered China the opportunity to be involved in building
hydropower plants including the Tekeze Dam and the Amerti-Neshe Dam.36 Eventually, the
31 China Plans Multimillion Ethiopia Investment." Financial Times. N.p., n.d. Web. 21 July 2013. 32 Ibid. 33 Ibid. 34 Ibid.
35 Erdal, Zeynep. "Banner Strengthening New Bonds: Chinese Investment’s Role in Boosting Ethiopian Industrialisation." Consultancy Africa Intelligence. N.p., n.d. Web. 4 Feb. 2013. 36 Ibid.
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generated electricity from all the dams may be exported to countries such as Djibouti, Sudan, and
Kenya.37
Unfortunately, the positive impacts of Chinese investments in Africa come with its
negative aspects. The Chinese-financed dam and railway construction projects are awarded to
Chinese construction companies.38 These companies import their labor from China and therefore,
these large-scale projects are not creating many jobs for the local Ethiopian population. Some
are arguing that in the short run, Chinese companies seem to be benefitting the most but in the
long run, Ethiopia will benefit from greater efficiency and a higher possible volume of trade.39
From this Ethiopian case study, we can see that Chinese investments in Ethiopia are
mutually beneficial because while increasing returns for Chinese investors, it helps to
industrialize Ethiopia and to drive economic growth. Even though China is clearly sourcing a
new market for its manufactured goods, China’s investments are helping to lift Ethiopia out of
poverty slowly. The relative stability of the Ethiopian government is once again conducive to
foreign investments. Investing in Ethiopia helps China to diversify its capital investments.
While China may not be the major investor of FDI in many countries, it is rapidly
spreading and deepening its influence on every continent, and unlike many of its western
competitors, China has not shied away from cutting deals with dictators or oppressive rulers, and
seems to cares very little about local negative externalities resulting from its investments. This
37 Ibid. 38 Ibid. 39 Ibid.
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indifference to domestic consequences has led China to directly or indirectly support oppressive
and often genocidal regimes in Libya, Sudan, Zimbabwe, and others. China often shields these
governments from international condemnation and props up their economies with massive
infusions of capital, gaining them political influence and special access to the resources which
are critical to Chinese growth. China can invest in these less stable states because instead of a
cost-benefit analysis, that most free market corporations need to make, much of Chinese FDI is
undertaken by SOE’s, who will make the investments necessary if it fits the central government
strategy. These SOE’s are not necessarily profit-oriented but seek to realize the energy security
strategy of the Chinese government. China’s oil and infrastructure investments are part of a
broad emerging strategy based on soft power and strong bilateral relationships.
A good example of this phenomenon can be seen in the nearly $20 billion investment
China has made in Libya, mostly in real estate, transportation, and oil production, involving 75
companies and 50 projects.40 China has made deals with many African states, including Libya,
providing Chinese expertise and infrastructure in exchange for access to critical resources.
Because of political instability and a deterioration of security caused by the Libyan civil war, the
36,000 Chinese workers had to be evacuated, and all projects suspended indefinitely. Chinese
losses are difficult to determine, as there is limited access and the extent of property damage is
unknown, but it are likely to be in the billions of dollars, and the abandoned construction projects
have an uncertain future.41 Despite the risks in making deals with a new and still unstable
40 "China Global Investment Tracker Interactive Map." The Heritage Foundation. N.p., n.d. Web. 2 July 2013. 41 "China's Investment in Libya Is More than $20 Billion and the Amount of Loss Is Difficult to Estimate." HubPages. N.p., n.d. Web. 2 July 2013.
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government, China seems determined to continue its economic relationship with Libya. The
president of the Electrical Association said that they would “Continue to explore overseas
markets and learn experiences in Libya to avoid potential risks.”42 Especially critical for China
is Libya’s oil reserves, which in 2010 made up 3% of its crude oil imports, approximately
150,000 barrels per day. China has sought to gain political favor with the new government and
increased access to Libya’s oil market by hosting several rebel leaders and sending envoys for
talks. This example exemplifies the problem of risk that is inherent in the Chinese investment
strategy, where investments are not made in accordance with the laws of supply and demand but
based on the decisions of the Chinese central government, which despite some losses, continues
to push its SOEs to expand abroad, capturing an ever-broader quantity of global resources to
power the Chinese economy.
Another recipient of Chinese foreign direct investment has been Sudan, which has a long
and established trade relationship with China. Sudanese-Sino relations were established after
Sudan’s successful independence from Great Britain in 1956. Chinese FDI was minimal in
Sudan for decades until the discovery of massive oil reserves, which spurred an infusion of
Chinese capital (approximately $7.6 billion over the last decade), technology, and industrial
expertise, offering a significant boon for the Sudanese economy. When Sudan initially began
exporting oil in 1999, its GDP growth more than doubled, from 3% in 1999 to 7% in 2000. Oil
currently accounts for 90% of Sudanese exports. Real GDP experienced strong growth from
42 Ibid.
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1999-2008 with the rate of growth averaging 7.9%.43 The growth of Sudan’s oil industry has
made it a critical source of Chinese resources, currently contributing 10% of Chinese oil.44
Despite this, Sudan has been an unstable country for years, having fought two decades-
long civil wars with its south; The First Sudanese Civil War (1955-1972) and The Second
Sudanese Civil War (1983-2005) which has resulted in the deaths of two million people and the
displacement of 4 million. Both conflicts stemmed from major differences between the north
and south, including race, religion, and the perceived exploitation of periphery populations by
the central government. The government of Sudan has also been labeled a state sponsor of
terrorism by the united states, and its president, Omar al-Bashir, has been charged by the
International Criminal Court with genocide and other crimes, and been an international pariah for
decades.
China has continued to support the government in Khartoum, shielding them from the full
force of the international community, and providing critical investments for the oft-beleaguered
state. China has repeatedly blocked UN Security Council’s efforts to combat the conflict by
threatening to veto resolutions aimed at the issue. According to a report in Human Rights First,
“Between 2004 and 2007, the Security Council debated 14 substantive resolutions about Darfur,
and China used its power to weaken nine of them. On most occasions, China forced the removal
43 Suliman, Kabbashi M. "An Assessment of the Impact of China’s Investments in Sudan." Editorial. n.d.: n. pag. Print.
44 "Sudan." Wikipedia. Wikimedia Foundation, 20 July 2013. Web. 2 July 2013.
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of tough language, including the threat or imposition of targeted economic sanctions.”45 Chinese
oil investments in the war-torn state, according to international rights activists, has “perpetuated
decades of violence in the Darfur region.”46 Chinese involvement may be even more critical than
just economic and political contributions. According to a former Sudan government minister,
China is the largest arms supplier to Sudan. “In violation of a UN embargo, $100 million worth
of aircraft and small arms were sold to Sudanese President Omar al-Bashir between
1996 and 2003. In response to these revelations, Chinese Deputy Foreign Minister Zhou
Wenzhong was quoted as saying, “Business is business. We try to separate politics from
business...I think the internal situation in the Sudan is an internal affair.” However, the Chinese
government has since changed this policy and has pressured Sudan into accepting some
concessions, including a joint African Union and United Nations peacekeeping force in Darfur in
2007. This case is a prime example of negative repercussions resulting from Chinese
investments and the devastating effect that China’s reach can have on unstable states, especially
those engaged in domestic conflicts.
The Chinese position has for decades been one of non-intervention, and respect for the
sovereignty of other states. China’s official policy statement on foreign trade and relationships
with African states is that China “respects African countries’ choice in political system and
development path suited to their own national conditions, does not interfere in internal affairs of
45 "CRIMES AGAINST HUMANITY»." Human Rights First Investing in Tragedy Chinas Money Arms and Politics in Sudan Comments. N.p., n.d. Web. 2 July 2013.
46 China Vows More Sudan Investment." Wall Street Journal, n.d. Web. 2 Jan. 2013.
Philip Hammer Leona Lam Leona Lam Cindy Lu
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African countries, and supports them in their just struggles for safeguarding their independence,
sovereignty and territorial integrity.” Whether this strategy is the best choice for the African
continent has been a topic of fierce debate among policy makers and academics, many arguing
that this investment supports dictators, worsens corruption, and undercuts Western efforts to
improve the region. While some Chinese choices have been extremely questionable and
certainly had negative effects, we must compare more than rhetoric. Despite western calls for
democracy, transparency, and economic growth, Africa has generally remained stagnant.
American strategies for African growth have shifted with the ever-changing ideological fashion
in Washington. Western academics and politicians have shifted their views and policies from
rural development, to industrial and manufacturing development, to emphasis on good
governance, to the privatization and liberalization efforts argued in the Washington Consensus.
None of these strategies have produced the desired effects, and some have gone as far as to make
the situation worse. While the Chinese model does not conform to traditional Western
conceptions of democracy promotion and the overarching powers of American hegemony, it
does have the potential to succeed, and pull millions in Africa out of poverty, and establish next
hundred years as The African Century.
Philip Hammer Leona Lam Leona Lam Cindy Lu
Duanrui (Gloria) Shi Eunice Wang
Jingbi (Marina) Ying
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<http://www.policymic.com/articles/10632/6-myths-about-the-evils-of-chinese