CHINA’S AID TO AFRICA: THE CASE OF CAMEROON

MSc. Thesis for Chinese Area Studies, Development and International Relations

Department of Culture and Global Studies

Aalborg University

Denmark

STUDENT

EYONG ETA MBUAGBAW

SUPERVISOR

PEER MOLLER CHRISTENSEN

MAY 2015

1

Table of Content

Preliminary Pages

Title page

Table of content

Abbreviations

Abstract

Chapter 1 Pages

1.0 Introduction-------------------------------------------------------------------------------------------------- 7

1.1 Sino-Africa Relations -------------------------------------------------------------------------------------- 7

1.2 Sino-Cameroon Relations --------------------------------------------------------------------------------- 10

1.3 Effectiveness of Aid ---------------------------------------------------------------------------------------- 11

1.4 Problem Statement ------------------------------------------------------------------------------------------ 15

1.5 Research Question --------------------------------------------------------------------------------------------16

1.6 Objective of the study ----------------------------------------------------------------------------------------16

1.7 Aims of Study -------------------------------------------------------------------------------------------------16

1.8 Research Focus ------------------------------------------------------------------------------------------------17

1.9 Structure of the study -----------------------------------------------------------------------------------------17

2

Chapter 2 Pages

2.0 Methodology ------------------------------------------------------------------------------------------------- 18

2.1 Research Design -------------------------------------------------------------------------------------------- 19

2.2 Research Strategies ----------------------------------------------------------------------------------------- 19

2.3 Case Study ---------------------------------------------------------------------------------------------------- 19

2.4 Data Sources -------------------------------------------------------------------------------------------------- 20

2.5Document Review -------------------------------------------------------------------------------------------- 20

2.6 Method of analysis ------------------------------------------------------------------------------------------- 21

2.7 Use of Theory ------------------------------------------------------------------------------------------------ 21

2.8 Limitation of Study ------------------------------------------------------------------------------------------ 23

2.9 Sub-Conclusion ---------------------------------------------------------------------------------------------- 23

Chapter 3

3.0 Literature Review -------------------------------------------------------------------------------------------- 24

3.1 OECD and Chinese Definition of Aid -------------------------------------------------------------------- 24

3.2 China’s Aid to Africa ---------------------------------------------------------------------------------------- 25

3.3 Measuring Chinese Aid --------------------------------------------------------------------------------------- 26

Chapter 4

4.0 Theory --------------------------------------------------------------------------------------------------------- 29

4.1 Economic Liberalism and Trade --------------------------------------------------------------------------- 29

4.2 Economic Development ------------------------------------------------------------------------------------- 31

3

4.3 Social Development ----------------------------------------------------------------------------------------- 33

4.4 Critique of the theory ---------------------------------------------------------------------------------------- 34

4.5 Dependency Theory ------------------------------------------------------------------------------------------- 35

4.6 Economic Development -------------------------------------------------------------------------------------- 36

4.7 Social Development ------------------------------------------------------------------------------------------- 37

4.8 Critique of the Theory ---------------------------------------------------------------------------------------- 40

4.9 Interdependency Theory -------------------------------------------------------------------------------------- 40

Chapter 5

5.0 Findings and Analytical Discussion ------------------------------------------------------------------------ 44

5.1 Sino-Cameroon Trade ---------------------------------------------------------------------------------------- 44

5.2 Chinese investments and infrastructural Development --------------------------------------------------- 55

5.3 Analysis of Chinese investments in Communication sector --------------------------------------------- 58

5.4 Chinese Aid in the Health Sector ---------------------------------------------------------------------------- 60

5.5 Hydro-Electrical Dam project and Economic Development -------------------------------------------- 62

5.6 Agricultural sector --------------------------------------------------------------------------------------------- 63

5.7 Infrastructural Development and Economic Development -----------------------------------------------63

Chapter 6

6.0 Conclusion ----------------------------------------------------------------------------------------------------- 66

References ---------------------------------------------------------------------------------------------------------- 68

4

Abbreviations

AFRODAD: African Forum and Network on Debt and Development

DRC: Democratic Republic of Congo

DAC: Development Assistance Committee

FOCAC: Forum on China-African Co-operation

GDP: Gross Domestic Product

ODA: Official Development Assistance

OECD: Organization for Economic Co-operation and Development

ODF: Official Development Assistance

IMF: International Monetary Fund

LDC: Less Develop country

USAID: United States Agency for international Development

UN: United Nations

W.TO: World Trade Organization

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ABSTRACT

China surge in the global political economy and entrance as a major aid donor is one of the most

challenging debates in the donor community. This has altered the balance of power in favor of African

countries with different alternatives to the western model of aid. Chinese aid to Africa has received a

mixed appraisal from friends and foes of this relationship and has thumped up world attention. Foes of

this relationship argued Sino-African relation is exploitative in nature. Pointing to the fact that cheap

Chinese manufactured goods has been detrimental to the growth of African home industries. Similarly,

Chinese Firm’s preference for Chinese labor has raised serious doubts on Chinese genuine intentions.

However, friends of this relationship argued that China aid has offer a different alternative of western

aid which has helped to spur economic growth and has enhanced African self-reliance.

Nonetheless, a lot of aid assistance has been provided to Africa by the aid donor community geared

towards economic development to enable African countries to meet developmental goals. However,

African is still facing lots of developmental challenges despite huge aid assistance which has led to the

perception that aid assistance to Africa specifically Cameroon has not had the desired outcome. In the

light of the above assumption this research seeks to investigate the consequence of Chinese aid in

Cameroon.

The analysis of this study was done in conjunction with appropriate theories relevant in investigating

Chinese aid in Cameroon. Economic liberalism theory was selected to provide an insight of the

beneficial nature of the Sino-Cameroon trade, whereas, dependency theory was selected because it

provides a critical aspect of the Sino-Cameroon trade relations. While, interdependence theory was

selected since it portrays the dependent nature of Sino-Cameroon relationship.

In conclusion, according to relevant data collected and investigations carry out on Chinese aid in

Cameroon, this study concludes that Sino-Cameroon relations is “Win-Win” for both parties in this

relationship.

China’s Aid to Africa: The Case of Cameroon

6

1.0 Introduction:

This section examines the Sino- African relationship and evolving nature of this relationship.

1.1 Sino- Africa Relations

The government of China has always maintained a cordial relationship with Africa; this union is built

on mutual trust and interest. China needs Africa natural resources and a market to sell manufactured

products to sustain its fast growing economy. According to Li Xing et al, (2013) during the cold war,

this relationship was centered on ideological motives in which Chinese government supported African

independent struggles and in return Africa governments supported Chinese agenda in the international

arena, like the vote to claim the seat of Taiwan in 1971 in the United Nations. African States supported

Chinese application for entry into World Trade Organization and Chinese desire to host 2008 Olympic

in order to attract Chinese aid and investments in Africa, (Rotberg, 2008: 2) both shared a historical

familiarity of being colonized by the West. The government of China uses both cards in the

international arena, when dealing with Africa States Chinese government portrays itself as a

developing nation and when dealing with the West and NATO as a developed nation, (Zafar, 2007) as

cited by Li Xing et al, 2013:28).

Presently, the Sino-African relationship has moved from an ideological standpoint against imperialism

to a more pragmatic and co-operative relationship. The government of China desires African friendship

to support its agenda in the international arena and respects African Countries as equal partners.

Chinese government has built mutual trust with African countries in comparison to European countries

which do not respect African countries as equal partners, (Rotberg, 2008:2). The government of China

wants African support for its global dominance and African governments are in need of Chinese aid to

meet developmental targets and Chinese model of aid is longed-for by African governments (Li Xing,

2013). Chinese huge demand for natural resources has escalated commodity prices; Nigeria was able to

pay its outstanding debt by trading with China. Sudan over a few years went from an oil importing

country to an oil exporting country due to huge Chinese financial investments in the oil sector, in

Sudan (Anshanl. L, 2008: 39). Marks, (2007) states this relationship can be analyzed from the

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perspective of South to South cooperation as one developing nation helping another developing nation.

China as a nation has undergone and is still undergoing most developmental challenges and is better

place to direct the African states. Chinese aid model which focuses on infrastructural development is

appreciated by African governments as a more effective model of aid as compared to the western

model of aid which place a lot of conditions before aid is granted. Such assessment of Chinese aid was

further echoed in the Tokyo International Conference on African development in 1993.In that

conference, African governments expressed their support for aid which focuses on development and

production and argued it was more effective than traditional western aid which places conditions before

aid is approved1. Chinese aid model, unlike the Western aid model, is helping African countries to

obtain self-reliant skills vital to sustain economic growth (Liu, 2010: 62) as cited by (Li Xing et al,

2013: 28). The Chinese model of aid is established on the following principles: low interest loans,

mutual benefits and respect of both partners, aid without attachments or conditions, equality in aid

relationship, faster projects with results, respecting State sovereignty, technology transfer by training

locals, empowering recipient countries to be self- reliant, providing material and equipment’s to do

these projects (State Council, 2011).

Right now, Sino- African relationship is more pragmatic in terms of economic and political goals in an

era of globalization where countries are more interconnected, (Thompson, 2005) as cited by (Li Xing et

al 2013:24). The combination of good policy reforms, hard work and good economic directives China

has witnessed a growth rate of more than 8 percent for the past decade which is the envy of the world,

(Zafar, 2007). When the world’s most populated nation with a growth rate of 10- 11 percent needs raw

materials to sustain its fast growing economy, it has to suck up resources all over the globe including

Africa to sustain its fast growing economy and no nation, not even the colonial powers has such an

appetite for natural resources (Rothberg, 2008: 1).

Recently, the highlight of this union was reaffirmed in a strategic meeting between China and African

in 2006 and 2012, (FOCAC). African countries were invited for a strategic meeting on the cooperation

between China and Africa. Zhang (2011) as cited by (Li Xing et al, 2013) coined the union of having

reached the “partnership phase” Li Xing, et al, (2013:25).The Chinese government by 2005 had offer

1 Zhang Zhixin, “Carrying out New Principles Of Foreign Aid to open Up a New Phase,” in Ministry of Foreign Trade and Economic Cooperation, Almanac of China’s Foreign Economic Relations and Trade 1994/95 (Beijing, 1995) 62.

8

scholarship to more than 18,000 Africans to study in China, financed more than 720 projects in Africa,

posted Chinese medical personnel’s who treated 170 million patients in Africa, (Yao, 2006) as cited by,

(Li Xing, 2013). By 2009, African states had greater access to Chinese markets and Beijing had

cancelled debt worth (US$2.7 Billion) for 35 African nations, most in the form of zero- interest loans

and abolished tariffs on more than 440 lines of African import to China, (State Council, 2011) as cited

by (Li Xing, et al,2013: 25). African leaders were assured by Chinese President Hu Jintoa in 2006

when he reaffirmed China commitment to Africa by forging a new strategic partnership. He

commitment to doubling Chinese aid to Africa, cancelled more African debts, (Li Xing, et al, 2013:

25). Some researchers have called such a strategic relationship between Africa and China as the “The

Year of Africa” (Alden et al, 2008: 2). Nowadays, when delegations from China and Africa visits one

another, the delegation is consist of Cultural consultants, entrepreneurs, investors, financiers

(Thompson, 2005) as cited by( Li Xing, et al,2013:25) providing opportunities for both partners in this

relationship.

Though, these figures of Chinese aid to Africa are impressive and this union is in a strategic phase,

many valid questions need to be raised about Chinese increase presence in Africa. Western rhetoric is

loud; the media and critics point to the fact Africa is bless with abundant natural resources and Chinese

huge appetite for raw materials and Africa’s wiliness to supply China with raw materials to sustain its

economy making the relationship exploitative in nature, (Marks, 2007). According to Marks, (2007)

Chinese government support of repressive regimes and its principle of non-interference have derailed

international efforts of good governance and not a good sign for the consolidation of democracy in

Africa. He argues that the notion that Chinese companies are not bound by western standard of good

governance has led to human right infringements and exploitation of African workers and is counter-

productive to the growth of workers’ rights in Africa (Ibid). A good example is the case of Zambia

where workers in Chinese- owned mines, were protesting against inhumane working conditions and

demanded answers about the death of their colleagues who died in a mining accident killing 46 miners.

In response, Chinese security forces opened fire on the protesters, killing six of the protesters which led

to massive criticism of Chinese presence and way of conducting business in Zambia (Arnold, 2009:70).

According to (Brautigam, 2011) cheap Chinese imported products are affecting the sustainability of

African home industries. African industries do not have technology skills and competitive edge to

9

compete with Chinese firms. This criticism of Chinese businesses was better expressed by Moelestsi

Mbeki, when he explains in a conference organized by Chinese parliament the effects of cheap Chinese

imported products to African home industries he said, Sino-Africa trade relations does not favor

African countries since China exports finished products to Africa and import natural resources from

Africa. Such a scenario is risky for African nations since it locks their economies in the primary

industry which is not sustainable since Africa’s need to keep its natural resources for its own

industrialization, (Mbeki, 2006)2as cited by Marks, ( 2007: 5).

1.2 Sino- Cameroon Relations

After achieving independence in 1961, Cameroon established diplomatic relations with Taiwan.

Nonetheless, Cameroon diplomatic relations with Taiwan lasted for ten years since in 1971 Federal

Republic of Cameroon disconnected relations with Taiwan, and recognized China. This relationship

has transformed into a strategic partnership in social and economic collaboration (Khan and Baye,

2008). According to Jansson (2009) the 1st high- level high official meetings between the two countries

occurred in August 1972 when Cameroon Minister of Foreign Affairs, Vincent Efon visited China to

open diplomatic ties. Likewise, the first Chinese high-ranking officials to visits Cameroon was in 1978.

Chen Muhua, the then Vice- Premier of the State Council visited Cameroon Jasson, (2009: 4).

Cameroon attended the inaugural meeting of (FOCAC) in 2000. In 2007, Hu Jintao, President of China

visited Cameroon and numerous economic co-operation agreements were signed (Jasson, 2009: 4).

Cameroon partnership with the government of China greatly captures Chinese approach of mutual

respect. Illustrated in, (FOCAC) in 2000, 2006 and 2012 respectively where Chinese officials

reiterated the strategic importance of Sino-African relationship based on equality and mutual respect

(Ibid).

Sino- Cameroon relationship covers an array of sectors which comprises of trade, investments in

infrastructural sector: roads, bridges, dams and natural resources. Similarly, the Chinese government is

constructing hospitals and schools in all regions of Cameroon, cancelling of debts worth millions of

dollars and the provision of interest- free loans. This model of aid which focuses on production and

2 M. Mbeki (2006) South African Journal of International Affairs, 13(1): 7.

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infrastructural development is welcome and applauded by Cameroonian government, (Khan and Baye,

2008).Chinese aid to Cameroon follows the pattern of concessional loans, debt cancellation,

scholarships and technical assistance with the first of such notable gifts being the construction of the

Congress Hall and the Presidential Place, in 1977. The government of China has constructed many

schools and hospital in almost all regions in Cameroon, provided scholarships to Cameroonians to

study in Chinese universities and opened the Chinese language center in 1997 to facilitate the learning

of Chinese language and culture (Khan and Baye, 2008).

It is worth noting that Chinese aid to Cameroon follows the same patterned of Chinese aid principles,

which consist of, mutual respect, equality and non-interference in domestic politics of recipient’s

countries. This principle of mutual respect and non-intervening in domestic policy was reiterated when

Hu Jintao the President of China visited Cameroon in 2007. He reiterated Chinese government’s

commitment to Cameroon by explaining that China will never impose her beliefs, social patterns and

approach of economic development upon others (Ibid). The government of China has provided

substantial aid relief to Cameroon which takes the form of debt cancellation; the first of such

cancellation happened in 2000 in the, (FOCAC) conference where China cancelled US$ 34 million

worth of Cameroonian debts owed to China. The second cancellation occurred when Hu Jintao the

President of China visited Cameroon in 2007; US$ 32 million worth of debts was cancelled

(Cameroon’s Ministry of Economics and Financial Report, 2007).

Nonetheless, critics of this union argued this relationship is exploitative in nature since China is

interested in Cameroon’s raw materials to fuel its growing economy and a market to sell manufactured

products, (Khan and Baye, 2008). The government of China needs African support in the international

arena and Cameroon is willing to offer such support in return for Chinese aid and investments.

1.3 Effectiveness of Aid

Discussion about the usefulness of aid is a highly contested one. According to Boone (1996) there

exist a correlation between the positive effect of aid and the relative size of the government.

Nonetheless, there are studies which indicate a negative connection between development and aid.

11

Empirical studies by Burnside and Dollar (2000) established that if the beneficiary country has sound

monetary and fiscal policies with a vibrant civil society, foreign aid will have a positive impact.

Similarly, this position was supported by Paul Collier (2008) in his book The Bottom Billion, he argues

that from empirical studies he conducted in Africa demonstrates aid contributed to the minimal growth

of African countries and without aid African countries would not have experienced any economic

growth. He further explains foreign aid has helped to maintain the minimal growth in Sub-Saharan

African which has helped Sub-Saharan African governments to meet developmental targets, (Ibid).

Nonetheless, empirical studies by Easterly and Roodman (2003) found no correlation of foreign aid and

economic development even in recipient countries which have sound financial and monetary policy.

But a recent study by Akramov (2012) indicated aid ensures a helpful influence in financial output of a

beneficiary nation when certain sectors are targeted such as agriculture, and infrastructures.

Nevertheless, in that study they also came to the conclusion that if such aid is given to sectors such as

health and education, such aid would not contribute to the beneficiary country meetings its

developmental targets country (Ibid). Nevertheless, another firsthand study conducted by Morrisey and

White (1996) indicates that foreign aid is less effective when compared to the role exports can

contribute to economic growth. Exports contributed more in terms of economic growth to the recipient

countries and are more helpful to the population than foreign aid.

The various discussions regarding usefulness of aid have given rise to persistent paradoxes of the

impact of foreign aid. These paradoxes were first acknowledged by Mosley, (1987). He could not

establish the correlation between aid and development since foreign aid allocated to developing nations

went to fruitless public sector disbursements. His perspective was supported by Peter Boone (1996) in

an empirical study he conducted with 95 countries in less developed countries in which he concluded

that there was a link between aid and development. He argues further that most aid allocated to

developing countries goes to consumption which does not contribute to the development of these

nations.

Aid donor countries have adopted different approaches to determine the effectiveness of aid, one of

such approach is the recipient country must meet certain conditions before such aid can be disbursed.

Traditional aid donors such as OECD members States and international aid agencies such as World

Bank, IMF and USAID have all put certain conditions before aid is approved.

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According to Radelet and Bhavani, (2004) different approaches or modalities of foreign aid have

different outcomes with respect to the influence of aid. They argued that aid granted to beneficiary

countries which focuses on productive investment like the constructions of roads; bridges, have a short

term effect on economic growth hence limiting its effectiveness. They further argued that aid given as

technical assistance to promote good governance; democracy and aid that focus on sectors such as

education and health will contribute to a nation meeting its developmental targets.

Zambian Economist, Dambisa Moyo argues that developmental aid has not been beneficial to Sub-

Saharan African; she remains a fierce opponent of developmental aid and depicts foreign aid as

encouraging corruption in Africa preventing African countries meeting developmental targets, (Moyo,

2009). Dambisa Moyo argues bilateral aid between aid donor’s countries and Sub-Saharan African

countries which takes the form of budget support has only helped to promote corruption,

mismanagement and aid dependency which has profited corrupt government officials and is detrimental

to the overall growth of African economies (Moyo, 2009). Furthermore, she argues foreign aid has led

to massive corruption and a motive for politicians in African to cling to power because of the

incentives from aid money entering the continent from donor agencies and countries (Ibid).

Nevertheless, the view of Moyo, (2009) has been vigorously contested by other researchers. Paul

Collier, (2008) in his book, The Bottom Billion, elucidates the link between aid and development. He

explains that without foreign aid Sub-Saharan African economies would not have experienced

economic growth. Similarly, two prominent economists of the World Bank Rajan and Subramanian,

(2005) demonstrated a link between aid and development in countries which have sound public

institutions and vice versa. They also argued that aid which comes with conditionality and has a

political motive limits its effectiveness. However, they emphasize the need for a better management of

aid. The diagram below highlights the various types of Chinese aid flows.

Diagram 1: Categories of Chinese aid flows

13

Source: Global Development Finance by Deborah Brautigam (2011)

The diagram overhead illustrates the various flows of Chinese aid which comprises of three channel of

distribution. Firstly, the government of China provides aid via interest- free loans to developing nations

to meet developmental challenges.

Secondly, the government of China provides aid in the form of grants which targets the infrastructural

sector.

Thirdly, the government of China provides aid through concessional fixed low- interest loans and debt

relief. It is worth noting the Chinese model of aid is different from the western model of aid since the

government of China does not place conditions before aid is approved to developing nations. Likewise,

Chinese companies operating in developing countries benefit from debt relief, to give a helping hand to

Chinese companies investing in Africa.

The effectiveness of aid is definitely an empirical question and one that this study seeks to address.

This study will employ the most relevant and recent data on Chinese aid to analyzed the impact of

Chinese aid to the lives of Cameroonians.

14

1.4 Problem Statement

The ultimate aim of aid is the eradication of poverty which is geared towards self-sufficiency.

Likewise, aid is meant to assist in the stabilization of the economic output of recipient countries.

Proponents of foreign aid such as Paul Collier, (2008), argue that foreign aid is vital for the economic

development of Africa and that aid has contributed to the minimal growth rate of African countries.

Paul Collier, (2008) states that foreign aid is vital for developing countries to meet developmental

goals. Nevertheless, other researcher such as Brautigam, (2011) argues that Sino-African relationship

has been detrimental to the growth of African home industries since they do not have the necessary

skills and knowledge to compete with Chinese manufacturing firms. She expounds Chinese aid to

Africa through trade promotes the dumping of cheap Chinese manufactured products in African

markets which have been detrimental to the growth of African home since they cannot compete with

cheaper imports from China. Equally, Marks (2007) is of the opinion China existence in African is

detrimental in the advancement of democracy in the continent and has derailed international hard work

to encourage democracy. The government of China is supporting or conducting business with

undemocratic nations. Furthermore, Arnold, (2009) is also supportive of the view that Chinese

companies doing business in Sub-Saharan African is counterproductive to the promotion of human

right and good governance and has stalled the progress of human right in Africa. He argues the fact that

Chinese companies do not follow international working standards and conditions of work has led to

many African workers’ rights being exploited by Chinese companies.

According to Lundsgaarde Erik, (2005) there is persistent calling by advocates of foreign aid for aid to

be increased. He is of the opinion that without foreign aid, developing nations will not have sufficient

funds to tackle developmental challenges of the 21st century. Cameroon, like most African countries, is

highly dependent on foreign aid to meet developmental targets. Cameroon has been a huge benefactor

of foreign aid since she gained her independence in 1960. Traditionally, Cameroon receives aid from

Europe and USA, international organizations such as UN, IMF, World Bank (Mbaku, 1994). However,

over the last decades China is becoming an important player in the international aid system and with its

15

new status is forging a new relationship with African states. With this in mind, this study seeks a

detailed investigation of Chinese aid in Cameroon.

1.5 Research Question

Intrigued by, Chinese huge appetite for raw material to sustain its robust economy, Chinese dependence

in Africa as a vital partner for supplying natural resources. Chinese government over the last decades

has significantly increased its aid to Africa to forge a new strategic partnership. Considering the above

circumstances, the research question of this study is:

1 What are the impact of Chinese aid, trade, and investment in Cameroon?

To comprehend the research question other sub-questions will be relevant to support the main research

question:

What are the opportunities and challenges of this relationship?

Is this relationship a win-win or a zero sum game?

The impact of Chinese aid to the economic development of Cameroon?

1.6 Objective of the Study

To add to the body of knowledge on the ongoing debate of Chinese aid in Cameroon.

To investigate how Chinese aid has impacted the lives of Cameroonians.

1.7 Aims of the Study

To examine the impact of Chinese aid in Cameroon.

To examine the impact of Chinese aid to the economic development of Cameroon.

To examine the challenges and opportunities of this relationship.

16

1.8 Research Focus

To examine the impact of Chinese aid in Cameroon.

To examine the Sino-Cameroon relationship.

To examine the challenges and opportunities of this relationship.

1.9 Structure of the Study

To improve the readability of this study, I have incorporated a brief summary of the structure of this

study. Chapter one, compromises of a brief introduction of the topic area, the problem statement,

research question, and the objective of the study. Chapter two, compromises of methodological

consideration. Chapter three encompasses literature review. Chapter four presents theories. Chapter

five consists of findings and analysis of this study. Chapters six, consist of the conclusion of this study.

Sub-Conclusion

This chapter has provided a detailed background of the Sino-African relationship. Presently, the Sino-

African relationship is centered on mutual respect and equality which has moved into a strategic

partnership. Furthermore, this chapter has also provided a synopsis of the opportunities and challenges

of this relationship. The next chapter will dwell on the methodological considerations relevant in

collecting data for this study.

2.0 Methodology

17

This chapter outlines the methodological platform appropriate in answering the research question. It

comprises of philosophical considerations, use of theory, data sources, case study, research strategy,

research analysis and limitations of the study.

Diagram 2: An outline of the structure of the Study

Error! Objects cannot be created from editing field codes.

2.2 Ontological Consideration,

2.1 Research Design

18

Research field: China´s Aid to Africa : The case of Cameroon

Research question; Impact of Chinese aid, trade, and investments in Cameroon

Methodology

Secondary Data: qualitative and quantitative

Data Analysis; Interpretation

Dependency theory

Economic Liberalism

t

Interdependence theory

Cameroon as a case study;

Findings and Analysis

Conclusions

According to Bryman, (2008) research design is imperative in formulating the research questions in

social research science. This study will adopt the research design approach of interpretive to

comprehend Chinese aid in Cameroon. Interpretive is best suited for this study as social reality is based

on how individual members of the society construe realities in which they participate. Social reality has

significance for individual members of the society and these social realities and connotation are access

through human interaction, observation and through interpretation of the text, (Bryman, 2008:17). To

acquire data relevant in answering the research question, this study will employ secondary sources,

which includes Newspapers, government documents, journals, data from government departments in

Cameroon like National Institute of Statistics, Autonomous Public Debt Repayment Fund.

2.2 Research Strategies

According to Alan Bryman, (2008) there is a clear difference between qualitative and quantitative data

collection methods in social research because of the diverse ways of collecting data. A qualitative

research method of collecting empirical knowledge deals with any data that is non-numerical and

describes the collecting process which includes in-depth interview, written documents review, and

direct observations. Whereas, quantitative data collecting research methods deals with data which is

numerical in nature and is verifiable (Ibid). Quantitative data collecting method includes collecting

techniques such as participant observations; interview with closed- ended questions, questionnaires.

This study employs both the qualitative and quantitative methods of data collection to help in analyzing

the impact of Chinese aid, trade and investments in Cameroon.

2.3 Case Study

According to Bryman,( 2012) there are five applicable research strategies when conducting a social

research study which include case study, survey, experiment, archival analysis and history. To offer

an accurate picture of the impact of Chinese aid, trade and investments in Cameroon, this study will

adopt the case study strategy. Bryman, (2012) defines case study as an investigation approach to

study difficult entities. This study adopts a case study designed because case study offers the

19

researcher a means of studying complex units comprising of several variables in a real life scenario.

Furthermore, the case study’s designed strategy provides the researcher with a holistic view of the

realities on the ground of the impact of Chinese aid, trade and investment in Cameroon. Similarly,

case study design is well suited for this research to provide the relevant knowledge in analyzing the

impact of Chinese aid, trade and investment in Cameroon. Furthermore, another reason for

choosing case study design is that China is providing aid to many African countries to get a clear

perspective of the impact of Chinese aid, trade and investment in terms of developmental aspect. It

is imperative to narrow it to a single country, to verify the impact of Chinese aid in Africa.

2.4 Data Sources

To provide all-inclusive picture of the first-hand knowledge on the impact of Chinese aid in

Cameroon. This study employs several data collection techniques which include:

Document review

Data interpretation

Content analysis

Use of theories

Limitation of the study.

2.5 Documents Review

In any research, document review is very vital in providing a clear picture of the research area.

Consequently, an exhaustive overview of the works of earlier researchers will provide valuable data

on the research topic. Secondary data was collected from government institutions in Cameroon:

National Institute of Statistics Cameroon, Autonomous Public Debt Fund Cameroon, local and

international newspaper like Cameroon Tribune, China Daily, Financial Times and World trade

atlas. Equally, books, journal and articles of other researchers who have written extensively on the

topic area have been of much assistance in analyzing the impact of Chinese aid, trade and

investments in Cameroon.

20

2.6 Method of Analysis

The most appropriate methods of analysis to provide a holistic investigation of Chinese aid in

Cameron is both qualitative and quantitative data analysis methods. According to Bryman, (2012) a

qualitative analysis is how the researcher constructs reality by interpreting a text through coding of

the text. Furthermore, this study will also adopt a quantitative data analysis. According to Bryman,

(2012) quantitative data analysis involves interpreting the numerical aspect of social research. A

quantitative data analysis is best suited for this study since it offers an objective analysis because of

the numerical aspect of such an analysis. In this study data is collected from both qualitative and

quantitative methods in order to create themes to demonstrate the impact of Chinese aid, trade and

investments in Cameroon.

2.7 Use of Theory

In this study, the researcher wants to find out which theory is best suited for analyzing the impact of

Chinese aid in Cameroon. Therefore, the researcher will use different theories in the field of

international relations to determine which theory is best suited for analyzing the impact of Chinese

aid in Cameroon. Economic liberalism, dependency, and interdependence are the three theories

best suited in analyzing the research question. The diagram below displays theories applicable for

the analysis of this study.

Use of Theory Diagram

21

The diagram overhead displays three different philosophical approaches in analyzing the nature of

the Sino-Cameroon relationship. Supporters of economic liberalism argue free trade is the greatest

engines of prosperity and is the best mechanism to lift people out of poverty. Similarly, David

Ricardo explains that the capitalist mode of production base on free market principle is good for the

efficient management of a nation economic productivity, when he formulated the idea of

Comparative advantage. He explains that a country that produces a particular product at a higher

cost at home is better off importing that product from a country that produce that product at a lower

cost3. Whereas, proponents of dependency argue that development center on free trade is not good

for developing nations, due to the exploitative nature of free trade. On the other, proponents of

interdependence theory illustrates that both actors in this relationship are dependent on each other,

China needs African resources to sustain its fast growing economy and African countries are in

need of Chinese aid to meet developmental goals.

2.8 Limitation of the Study

3Library Economics liberty. Available online at: http://www.econlib.org/library/Enc/bios/Ricardo.html. Accessed on 5/25/2015.

22

Economic liberalism

Dependency

Interdependence

The Impact of Chinese Aid, Trade, and Investments in Cameroon.

It is worth mentioning that due to time constraint, this study relies solely on secondary data.

According to Bryman, (2012) secondary data has many shortcomings. It is data collected for a

different purpose and might lead to troubles in interpreting the data. Nonetheless, with the

availability of books, articles on the topic, data from the government of Cameroon, Word trade atlas

and other related sources, offer valuable data to investigate the impact of Chinese aid, trade and

investments in Cameroon.

Another limitation of this study is it focuses solely on Cameroon, it would have been appropriate to

include several African countries to offer a better representation of the Sino-African relationship.

However, by limiting the Study to Cameroon, it has provided a genuine insight into the impact of

Chinese aid in Cameroon.

2.9 Sub-Conclusion

Secondary data is the main data collection technique of this study with emphasis on content

interpretation in order to get a holistic analysis of Chinese aid, trade and investment in Cameroon. It

is important to mention that there are different methods in collecting and interpreting knowledge in

social science research. This study will adopt the interpretation of texts to get a wide-ranging

analysis of the impact of Chinese aid, trade and investments in Cameroon. Similarly, the next

chapter will dwell on relevant literature available on the impact of Chinese aid in Africa.

3.0 Literature Review

23

There exists a wide range of data on foreign aid. Beneath is the two main demarcations of aid as

purported by China and OECD?

3.1 OECD and Chinese Definition of Aid

OECD defines aid as any monetary contributions gear towards the improvement of living conditions of

recipient country and must have a grant component of 25 percent, (OECD, 2009).

The overhead definition, it is clear aid engulfs debt cancelation, relief operation, transfer of cash, the

deliverance of goods, financing developmental projects to recipient countries. The definition of aid via

OCED was agreed upon by, (DAC) comprising of 23 members which includes USA, UK, Japan,

Belgium, Italy, France, Australia, Austria, Norway, Greece, Canada, New Zealand, Ireland, Finland,

Denmark, Luxembourg, Portugal, Netherlands, Spain, Switzerland, Sweden, Germany and the

Commission of European Communities. Similarly, it is worth mentioning OECD approaches aid in two

dimensions, firstly as, (ODA) which comprises of credits aim at encouraging economic development

and well-being of the recipient nations (Wolf, et al, 2013). Secondly as, (ODF) which includes, non –

concessional developmental lending by international institutions like IMF, World Bank and USAID

(Ibid). OECD procedures of providing aid are in conformity with the principles of Bretton Wood

institutions of placing conditions before aid is approved. Nonetheless, with the entering of China as an

important actor in the giver community the approach of OCED member with regards to placing

conditionality before aid is approve is witnessing great alterations since China is providing aid to

African countries without conditions.

According to Davies, (2011) the government of China does not have a clear agreed definition of aid

since Chinese government definition of foreign aid comprises of both (ODA) flows and (ODF) creating

difficulties in differentiating aid from trade. Chinese aid to developing nations focuses on economic

and technical collaboration. It is worth mentioning the Chinese model of aid is different from western

aid since China does not place conditions before aid is approved. Chinese aid is based on mutual

respect and equality which is appreciated by African governments, (Li Xing et al, 2013).

3.3 China’s Aid to Africa

24

According to Brautigam, (2011) Chinese aid is delivered through various schemes and channels.

Chinese aid takes the form of low- interest- free loans, equity support to Chinese companies and firms

investing in Africa. Similarly, Chinese government also provides aid through grants and concessional

loans to fund infrastructural developments such as roads, bridges, dams, sport complex, hospitals, and

schools, which are the most standard methods of Chinese aid, (Brautigam, 2011: 205). Likewise, most

Chinese aid to Africa is provided through interest- free loans, debt cancelation, and concessional loans

fiancé by Exim Bank of China.

Chinese aid to Africa has been received with a lot of mixed feelings. Mark, (2007) is critical of Chinese

policy of non-intervening in the domestic policies of recipient Countries and argues it has been

detrimental to the international efforts to promote good governance, which has derailed international

efforts to promote the Rule of Law and democracy in Africa. He explains that governments like Sudan

and Zimbabwe whose human right stance is questionable, still benefit from Chinese political and

economic backing, which has led to mass human right violations which is not good for human

improvement in Africa.

Another criticism of Chinese aid is the aspect of dumping of cheap Chinese manufactured products into

African markets, which is detrimental to African home industries. A good example is the textile

industry which has lost majority of its sales to cheap imported Chinese textile products, (Brautigam,

2011). The effects of cheaply imported Chinese products has led to local companies and business

shutting down which has contributed to declining employment opportunities.

Nonetheless, there are some positives aspects of the Sino-African relationship. According to Li Xing et

al, (2013) Chinese aid in the infrastructural sector is appreciated by African governments since it places

emphasis on infrastructural development. Furthermore, Li Xing states for aid to be sustainable and

effective it must include financial support training. According to Nour, (2010) Sudan has moved from

an oil importing country to an oil exporting country because of huge Chinese investments in the oil

sector. The Sudanese government has profited from Chinese aid in the oil sector through Chinese

finance, equipment and knowledge transfer.

The impact of Chinese aid in Cameroon has a received mixed appraisal from researchers. Researcher

such as Khan and Baye, (2008) portrays that the relationship is a complex but gutted with

25

opportunities. The government of China is searching for a market to sell its manufactured products and

Cameroon offers such a market. Whereas, Cameroon is in need of Chinese investment in the

infrastructural sector and aid money to meet developmental goals. Nevertheless, Khan and Baye,

(2008) states Chinese aid in Cameroon cut across the broad spectrum such as investing in

infrastructural projects such as roads, dams, bridges, sports complex. Another, element of Chinese aid

in Cameroon is allocating scholarship to Cameroonian students to study in Chinese universities

(Jansson, 2009). The government of China has provided aid assistance in educational and health sectors

in Cameroon by donating health equipment’s, renovating hospitals across the country and constructing

schools. Nonetheless, he argues that Chinese businessmen and companies are affecting the output of

local companies and business in Cameroon, (Khan and Baye, 2008).

3.4 Measuring Chinese Aid

There are numerous agencies accountable for Chinese foreign aid disbursements; foreign affairs

ministry, Commerce ministry. Likewise, another vital component of Chinese foreign aid is Exim Bank

which finances most infrastructural projects. Similarly, another important actor with regards to private

financing is China Development Bank (CDB), founded in 1994.It finances commercial undertakings by

Chinese companies and firms in Africa, (Dreher and Fuchs, 2011). Furthermore, according to

Brautigam (2011) numerous agencies and Ministerial Departments are also involved in the decision-

making procedure of Chinese aid.

There are no concrete figures concerning Chinese aid to Africa because of the secrecy in which Beijing

disburses aid funding. Approximately, the amount of aid China has disbursed to Africa varies

significantly. According to (Dreher and Fuchs) in 2006 Chinese Premier Wen Jiabo estimated China’s

foreign aid to about US$ 5.6 billion from 1949-2006. Nonetheless, this figure is considered by most

Chinese scholars as inaccurate. For example, Exim Bank provided concessional loans in 2007 to the

amount of 8-9 billion, (Manning, 2007: 7). Furthermore, Kurlantzick, (2006) valued that about 2.7

billion dollars of aid was provided to Africa in 2004. Similarly, according to the Financial Times

26

(2011), China is the biggest supplier of loans to developing countries; such loans are financed through

the Exim Bank to the sum of 110 US$ billion in 20104.

Due to international criticism of the way China provides its aid figures and the secrecy nature of its aid

figures lead the Chinese government in 2011 to publish a White Paper to provide information on

Chinese foreign aid, (State Council, 2011). According to the State Council (2011) 161 countries have

profited from Chinese aid. Until 2009, most of these beneficiaries of Chinese aid are from developing

countries consisting of 123 out of 161 (Ibid). China has provided aid to the sum of US$ 38.54 billion,

mostly in the form of grants 41.4 %, 28.7 % concessional loans, 29.9 % in the form of interest- free

loans (Ibid). Table 1, displays the announcement of Chinese aid to Africa by Chinese leaders to

demonstrate Chinese commitment in Africa.

Table 1: Announcements of Aid by Chinese leaders.

Source: Deborah Brautigam (2011: 208)

4 “China’s lending hits new heights” Financial Times January, 17, 2011

27

Table 1 overhead demonstrates Chinese aid to African is constantly increasing from 2008 which was

313 million dollars to 10.8 billion dollars in 2011.This demonstrates China’s commitment in forming a

strategic partnership with African nations. Similarly, table 1displays Chinese aid is provided through

different mechanisms such as concessional loans and investments in infrastructures.

Sub-Conclusion

The impact of Chinese aid to Africa has received a mixed appraisal from researchers. Researchers such

as Marks, (2007) is very critical of Chinese aid model of not intervening in internal politics of recipient

countries has derailed international efforts to promote good governance in Africa. Similarly,

Brautigam, (2011) argues that Chinese trade in Africa is disastrous to the growth of home based

industries. Nonetheless, other researchers such as Li Xing, (2013) argued that African governments

appreciate Chinese model of aid which focuses more on infrastructural development. The next chapter

of this study will dwell on the theoretical consideration relevant for the analysis of this study.

28

4.0 THEORY

A glut of theories in international relations have flourished in enlightening the effectiveness of aid

stretching from world system theory, constructivism, idealism, classical realism, dependency theory,

and constructivism, all in a bid to explain the effectiveness of aid. Nevertheless, this study will adopt

Economic Liberalism and Dependency theory which are two opposing theoretical standpoints employ

by researchers to investigate Sino-African dealings. Similarly, this study will also adopt

interdependence theory to portray dependency nature of Sino-African relationship.

4.1 Economic Liberalism and Trade

According to Adams, (2001) economic liberalism is a free market system with limited government

interference and regulations. In such an economic system, commerce operates with limited government

interference and regulation. The idea of an economic system based on limited government interference

and less regulation was better coined by Adam Smith as the “invisible hand”. He explains limited

government intervention in commercial activities will spur prosperity (Library of economics and

liberty, 2013). Nonetheless, he explains the State is allowed to interfere in the economic activities in

order to provide basic services to citizens such as water, schools, electricity, hospitals, and roads.

According to Brown, (2005:39) economic liberalism does not support socialism or mixed economies

and it is against all forms of tariffs and protectionism.

David Ricardo was a huge advocate of free trade. He formulated the idea of comparative advantage, an

appropriate notion which is the key argument in support of capitalist system. He explains that a country

is better off importing cheaper goods produce abroad and exporting locally cheaper goods abroad.5 This

idea is based on the notion of opportunity cost; which means when a country is producing certain goods

it automatically loses on producing other goods.

According to Gomes, (2003: 36) the cost of producing good A is not measured in term of financial

costing but in terms of number of good B that would have been produced exploiting the same

production abilities.

5 Library of economics and liberty, 2013): Available online at: //www.econlib.org/library/Enc/bios/Ricardo.html.Accessed on5/25/2015.

29

Using the example of two countries, he further enlightens this notion, two countries producing the same

goods wine and cloth which are demanded in the same country.

Cost of Production:

Cloth Wine

Portugal 80 70

England 90 110

From the above, Portugal produces both cloth and wine cheaper than England and one might presumed

that Portugal will be better off not importing for England. Nevertheless, the wine production cost is

very high in England as compared to Portugal and the English prefer to import wine than producing it

locally and such an opportunity can be exploited by the Portuguese by concentrating in producing wine

and exporting wine to England and England will concentrate on the production of clothes and exporting

to Portugal. Thus, Portugal will pay a higher price for clothes produced in England than if these clothes

were produced domestically but the overall profit from selling wine to England will cover for that and

the volume of trade between the two nations will increase Gomes,( 2003 :55)

The nature of the Sino-African relationship is complex since Africa is a huge continent made up of

diverse countries with varied socio-political history. Consequently, Chinese trade with African nations

should be evaluated from individual cases. African Countries exports natural resources, agricultural

products and imports finished goods from China that is the nature of the Sino-African relationship,

(Alden, 2007).

According to Hanson, Kararach and Shaw, (2012) Africa’s future in the 21st century is promising due to

increase trading and collaboration with China in a host of important issues that is going to shape the

21st century. African trade with China improved from US$ 10.5 billion in 2000 to US$ 29.5 billion in

2004. Subsequently, a dramatic increase from 40 billion US dollars in 2005 to 55 billion US dollar, by

2007 there was an increase of 25 percent of Sino-African trade to the amount of US$ 32 Billion Alden,

(2007: 11). During this period African trade with its traditional trading partners OECD countries

witnessed a drop in trade, at the same time Sino- African trade increase from 1.3 percent in 1995 to 9.3

30

percent in 2004 (Ibid) This illustrates Chinese trade with Africa is rising at an alarming rate whereas

African trade with the Europe is dwindling.

4.2 Economic Development

The increase Chinese demand for raw materials to sustain its fast -growing economy has increased

commodity prices predominantly oil and metals which has given a lift to African economies,

(Kaplinsky and Morris, 2009). China huge appetite for raw materials to fuel its economy has retained

minimal economic growth in Sub-Saharan Africa despite global financial crisis. Increased commodity

prices due to huge Chinese demand have contributed in a lift in GDP of Sub-Saharan African. A boost

in GDP in Sub-Saharan African because of increased trade with China has enabled African

governments to provide basic services such as clean pipe borne water, electricity, roads, hospitals and

schools which have improved standard of living in the continent, (Arnold, 2009: 54-56).

State Council, (2011) depicts that by 2009, the government of China had eliminated tariffs on more

than 440 lines of African exports. The elimination of most tariffs on African products to Chinese

market has boost African exports to Chinese markets and opened up unprecedented access of African

companies’ (Yao, 2006). Furthermore, another positive aspect of the Sino-African trade agreement is

zero tariffs to African agricultural products. Huge Chinese population has created opportunities for

African countries to supply agricultural product to China and has increased the volume of trade

between African and China, (Fan, 2007).

Agricultural growth is imperative in the wellbeing of farmers since it is a mechanism of alleviating

poverty in Africa since agriculture is the backbone of African economies (Sammis, 2011).Increased

African agricultural export to China has improved living standard in African since farmers have the

financial ability to spend more on basic goods and services which subsequently have improved the

quality of life in the continent (Ibid). A worthy example is the government of China financing a

training programmed, to train farmers in Guinea Bissau to produce hybrid rice, (Fan, 2010). Therefore,

the production of hybrid rice has helped reduced hunger in Guinea- Bissau.

31

Guy Arnold, (2009) states that infrastructural development is fundamental in improving the living

conditions in Sub-Saharan African. African states are profiting from huge Chinese investments in the

infrastructural sectors: the agreement between Chinese Export-Import Bank (Exim Bank) with the

Democratic Republic of Congo to finance infrastructural projects worth 6.5 billion dollar, in a bid to

improve infrastructures in the Democratic Republic of Congo (Arnold, 2009: 60-70) is fundamental in

the economic development of the DRC. Likewise, Angola is benefiting from huge Chinese investments

in the infrastructural sector to the amount of 300-500 million US$ to improve Angolan railway network

(Ibid). One of the most significant Chinese infrastructural investments in Africa is the TAZARA

railway. It was constructed during the peak of the Cold War to demonstrate its loyalty to fellow

socialist states. The railway linked Dar es Salaam to the copper belt completed in 1975 Brautigam,

(2009: 40) and facilitated movement between Zambia and Tanzania. The improvement in transport

network due to huge Chinese investment in Tanzanian helped the Chinese government to transport raw

materials out of East Africa. TAZARA railway was used as an opening to transport raw materials from

landlord countries like Uganda, Zimbabwe and Zambia (Ibid). Improvement in transport network

facilitated the shipping of agricultural and raw materials out of the country which increased the volume

of trade and boost GPD of African countries. With a positive balance of payment, African government

have more flexibility in terms of budget choice and can spend more on social services such as schools,

hospitals, electricity and pipe borne water and has improved living conditions.

Nevertheless, the impact of Sino-African trade in improving the standard of living based on individual

countries. Countries which exports agricultural products and raw materials to China will benefit from

high commodities prices due to China huge demand for natural resources. Nonetheless, manufacturing

countries with vibrant home industries like South Africa have much to lose trading with China since it

is detrimental to the growth of home industries, (Eichengreen and HUI, 2006: 227). According to the

IMF forecast as cited by, (Arnold, 2009: 63) Sino-African trade will surpass the US$ 50 in 2007 and

will eventually reach US$ 100 in 2010. Such a forecast indicates Sino-Africa trade is increasing at an

alarming rate and has lifted many people out of poverty. China is importing different commodities from

all over African; such commodities include timber from Cameroon, Liberia, Gabon and Equatorial

Guinea. The Chinese government also imports diamonds from Zimbabwe, Congo, copper from

Zambia, oil from Sudan and Nigeria. Even countries which do not have natural resources have

32

witnessed a dramatic increase of trade with China like Ethiopia which has double its trade with China

from US$ 150 in 2003 to US$ 300 in 2005, (Arnold, and 2009:56).

4.3 Social Development

According to Ademola et al, (2009) cheap consumer products from China have improved living

standards in Africa since individuals are able to afford made in China goods as compared to goods

from Europe. Cheap motorcycles, vehicles, mobile phones, textiles products, household appliances

such as fridges, gas cooker have improved the quality of life of most Africans, (Ademola et al, and

2009:469). Furthermore, the availability of cheaper transport equipment’s to African business has

lowered the cost of doing business in Africa, (White Africa, 2009). The availability of cheap

motorcycles from China is significantly supplementing the production of taxi services in all

municipalities in Africa, generating employment opportunities for the youths. Motorcycles are very

useful in conducting petite business activities in cities and villages since most roads are inaccessible.

Improved communication due to the availability of cheap mobile phones from China has made it much

easier for farmers to get in contact with prospective buyers. Similarly, the availability of cheap mobile

phones from China has improved the efficiency of African business since businessmen can contact

prospective trading partners much faster than before which has improved trading in Africa, (Parr,

2013). Equally the availability of cheap mobile phone from China has transformed millions of lives in

Africa through mobile money transfer, the effects of mobile money transfer in the lives of ordinary

Africans is amazing because people can received and send money without the complication of bank

transaction and has improved the circulation of money, hence improving living standards of most

Africans.

Haughton and Haughton, (2011) states that African has benefited from cheap consumer goods from

China such as fridge’s, gas cooker, household furniture’s, and kitchen utensils have improved the

quality of life of most Africans. These cheaper goods from China has improved living standard among

African since they are more affordable as compared to Africans buying such goods from other trading

partners like Europe, Japan and the USA,( Haughton and Haughton, 2011 :113-114).

33

The government of China is financing various training schemes to assist African countries meet the

challenges of the 21st century, (Besada et al, 2008). This various technology centers which primary

focus is innovative research have helped African countries to produce improved quality products. A

good example of Sino-African collaboration in knowledge such as the training schemes in Guinea

Bissau to train farmers how to grow and produce hybrid rice has improved the quality of rice in

Guinea- Bissau, (Fan, 2010). The effect of the Chinese training program is a knowledge transfer which

has helped African countries to gain necessary skills needed for the 21st century. Furthermore, the rice

training scheme in Guinea- Bissau has increased rice productivity which has help reduced hunger in

Guinea-Bissau.

4.4 Critique of the Theory

Helleiner, (2003) states advocates of economic liberalism fails to understand for an efficient capitalist

system in which the poor in the society are protected the state must play an important role in regulating

certain activities such as currency exchange rate, bank regulations, labor regulation. He explains

without the government regulating commercial and financial transactions there are bound to be

disastrous economic consequences and in such a scenario it is the underprivileged members of the

society that are bound to suffer. Therefore, the state must intervene and regulate financial activities to

protect the underprivileged in society.

Ghosh, (2001) states that a society based on economic liberalism exploits the working class. He

explains such a society which the capitalist elite exploits the working class is unjust since economic

gains of the system are in the hands of a few capitalist landowners.

Ghosh, (2001) argues economic liberalism market principles based on Bretton Wood institutions

desires structural adjustment for developing nations to reap the benefits of free trade and without such

structural adjustments from these Bretton Wood institutions developing nations will not profit from

free trade.

According to Helleiner, (2003:691) members of the green party revolution argue advocates of

economic liberalism do not pay much attention to environmental issues and are much more interested

34

in how much profit is to be made. Similarly, they argued that Bretton Wood institutions do not place

much emphasis on environmental issues.

Similarly, feminist argues the theory fails to take into account men and women participate differently in

economic production. Women are engaged in low- paying jobs like housekeeping and export

processing jobs while men are involved in high paying service jobs Helleiner, (2003:692). They argued

capitalist system of production does little to protect rights of women in the job market.

Summary

Sino-African trade is beneficial to African countries because of cheaper products from China which has

improved living conditions of most Africans. Increased Sino-African trade through investments has

contributed to African countries meeting developmental goals. The affordability of made in China

goods has improved living conditions in the continent since Africans are able to purchase goods they

could not buy from Europe, (Hanson, Kararach, Shaw, 2012). Increase size of trade concerning Africa

and China has boost GDP of African nations which has contributed to economic growth which has led

to a positive balance of payment. A positive balance of payment enables African governments to

provide basic services to the population due to the availability of cash to spend on such services like the

provision of pipe borne water, electricity, hospitals, and schools. Nonetheless, there are some negative

effects of Sino-African trade, African economies are becoming too dependent on trade with China

which focuses more on natural resources and it is not good for the future industrialization of Africa.

4.5 Dependency Theory

Dependency theory seeks to enlighten the circumstances contributing to the underdevelopment of less

developed countries (LD C). It is deep-rooted in the Marxism doctrine of exploitation of less developed

countries by developed countries. Nonetheless, to have a better analysis of dependency theory the

works of authors who have written extensively on the topic will be useful.

35

B.N. Ghosh, (2001) in his book Dependency Theory Revisited defines dependency as an unequal

trading relations between the developed economies the core nations dominate the less developed

economies periphery nations, all trading activities are determined by the developed economies at the

expense of the less developed economies,(Ghosh, 2001: 1). Similarly, Dos Santos, (1970) in his book

Structure of Dependency defines dependency as when the expansion of the periphery less developed

economies is determined by developed economies Dos Santos, (1970:231).

4.6 Economic Development

According to Ademola, (2009) cheaply imported made in China goods is detrimental to the growth of

African home industries since the goods are more affordable than locally made goods. This has

contributed in workers losing their jobs since African home industries do not have the necessary skills

and knowledge to compete with Chinese manufacturing firms. A good example is the South African

textile industry which has been affected by cheap imported Chinese textile products. The South African

textile industry has lost from 23.000 to 85.000 jobs due to competition from cheaper textile products

from China and has resulted in workers being laid off which has aggravated the unemployment

situation.

Giovannetti and Sanfilippo, (2009: 522) illustrates there is a correlation between increasing Chinese

exports and decreasing African export when both countries produce the same products. They argued in

areas where Africa and China are competing for the same targeted customer. African companies are in

a disadvantageous position. The textile industry in South Africa, the influx of cheaper textile products

from China has reduced the demand for local textile products. Such a scenario is not good for the

employment situation in South Africa. South African home industries are bound to lay off workers due

to low sales. This situation has led to severe criticism by high ranking government officials in South

Africa, President Mbeki, as cited by Arnold, (2009) states that the nature of Sino-African trade

whereby China exports manufactured products to Africa and imports raw materials is not good for the

industrialization of Africa, Arnold,( 2009: 71-72). This is a true picture of effects of Sino-African trade.

36

According to Munemo, (2013:303-304) Sino-African trade relationship, has been disastrous to the

African continent. He explains Sino-Africa trade relationship is not good for industrialization prospects

of Africa, since Africa is exports raw material and imports finished products from China makes it

challenging for African economies to diversify.

According to Kofi and Desta, (2008: 36-37) African countries have failed to adapt their economies to

the challenges of the 21st century and have structured their economies to depend on exporting raw

materials and agricultural products. Bretton Wood institutions like W.T.O is putting African economies

on an unfair advantage when they advocate for free trade ,whereas, develop countries are protecting

their home industries from outside competition by providing subsidies Moyo, (2009:115). For example

US agricultural sector which benefits from government subsidies making it difficult for the African

agricultural sector to compete.

According to Ghosh ,(2001) industrialized nations like China are exploiting economic situations in less

developed countries by providing aid to have influence and complete dominance of African economies

which has contributed to African countries continuous reliant on aid.

4.7 Social development

Chinese increase presence in Africa has had disastrous consequences as far as the promotion of human

right is concerned. Marks, (2007) argues that Chinese support of dictatorial regimes with a poor human

right record has derailed international efforts to promote good governance and not a good sign for

African democracy. A striking case is in Zambia where protestors of Chinese -owned mines protested

against poor working conditions, low wages and demanded accountability from Chinese top

management when a mining explosion killed 46 Zambians miners. Miners demanded an answer from

top Chinese management instead 6 protesters were shot by Chinese security forces leading to the

massive discontent of Chinese presence in Zambia, (Arnold, and 2009: 70).

Similarly, Chinese trade with Zambia has resulted to dumping of cheap Chinese goods at the detriment

of infant industries which has led to discontent of local businessmen and women in Zambia who

question Chinese involvement in petite business activities. This situation prompted the former Zambia

37

minister of trade to question Chinese true intentions in Zambia by stating ingenious businessmen

cannot compete with Chinese businessmen in petite trading activities such as selling of eggs, clothes

and chicken in the market and it presents a great challenge to local businessmen, (Arnold, 2009:70).

This model of Chinese trade in Africa has contributed in African economies being too dependent on

trade with China.

Another contentious aspect of Chinese involvement in Africa is Chinese support of dictatorial regimes

and conducting business with such regimes like selling arms to Zimbabwe and Sudan which both

presidents are known human right offenders, (Brautigam, 2009: 287). The sale of arms to dictatorial

regimes that cling to power by all means has led to massive human right abuses in the continent and

such arms are used in conflict regions like Sudan. Likewise, president Mugabe of Zimbabwe is using

arms from China to torture and silence any opposition voice in the country (Arnold, 2009:57-74). The

supply of arms to dictatorial regimes has derailed international efforts to promote good governance and

it is not good for consolidation of democracy in Africa (Marks, 2007). Nonetheless, Chinese officials

insist Chinese government principle of non-intervening in the internal policymaking of foreign regimes

must be respected by the international community, (Arnold, 2009:57). Such statements do not help

anti-China sentiments in the continent since it demonstrates that China does not care about good

governance and democracy.

Nevertheless, African civil societies are exacting pressures on their governments to protect their

citizens when dealing with Chinese companies and business. For example, the humiliating encounter

China had in 2008 where a Chinese bound cargo ship with ammunition comprises of assault rifle,

rocket –propelled grenades intended for Zimbabwe was refuse to be uploaded by South Africa

dockworkers because of the intended purpose of the arms and cargo ship was recall back to China and

China suffered international the humiliation (Arnold, 2009:71).

Another aspect of Chinese trade with Africa countries which contributes to dependency is the fact that

Chinese trade in Africa focuses solely on raw material which is not good for the industrialization of

infant industries due to limited transfer of knowledge by Chinese Firms since they prefer Chinese

workers (Marks, 2007). Such a trajectory of Sino-African trade makes Africa economies too reliant on

trade with China. Furthermore, Chinese trading with Africa countries focuses more on raw materials

38

locks African economies in the primary industry and susceptible to prices fluctuation (Ibid). Similarly,

Chinese investment in oil and gas sectors in Africa which has not encourage African oil exporting

nations to diversify their economies and have made oil exporting nations too reliant on Chinese

investment in the oil sector which has a negative effect on the employment situation, (Adenikingjin and

Bamou, 2006:18-19). The figure below describes the organizational framework of dependency theory.

Diagram 3: Organizational Framework of Dependency Theory

The overhead diagram displays the dynamic of Sino-African trade relations. China imports raw

materials and agricultural products from Africa and exports manufactured products to Africa, valued

added to the Chinese economy. Whereas, Africa export raw materials and agricultural to China and

imports manufactured products which leads to a zero- sum gain, which led to the dependency of

African economies on trading with China.

39

CORE STATES;

CAPITALIST IN ORIENTATION

PRODUCER AND EXPORTER OF FINISHED MANUFACTURED PRODUTCS, IMPORTER OF RAW MATERIAL

VALUE ADDED

CAMEROON/AFRICA

SUPPLY NATURAL RESOURCES AND AGRICULTURAL PRODUCTS

BUYS FINISHED MANUFACTURED PRODUCTS. ZERO SUM GAIN

CONTACT CENTRE

THE CASE OF CHINA

IMPORTS NATURAL RESOURCES AND AGRICULTURAL PRODUCTS

EXPORTS MANUFACTURED FINISHED PRODUCTS

4.8 Critique of the Theory

According to Ghosh, (2001) dependency theory fails to provide any practical alternative to overcome

the economic dependency of less developed economies from developed economies. The theory is too

subjective and does not provide better alternatives or solution to overcome the challenges of

underdevelopment in less developed countries, (Ghost, 2001:12).Dependency theory lacks concrete

details on how developing countries can become less dependent on developed economies.

Furthermore, the theory has failed to illustrate how poverty and wealth are the outcomes of capitalism

(Ghosh, 2001: 11). Dependency theory has failed to give a proper explanation of how capitalism

generates enormous wealth and while also creating the conditions of economic hardship and poverty at

the same time

Finally, the theory fails to take into account class and cultural aspect which plays a factor in the

underdevelopment and generating poverty of the less developed countries, (Ghosh, 2001:13).

Dependency theory fails to acknowledge some of the issue of poverty and underdevelopment of less

developed countries have a cultural aspect which has hindered any real economic progress. He further

argues that dependency theory is constrained by a naïve interpretation which makes the theory fail to

provide better alternatives on how less developed countries can break away from poverty.

4.9 Interdependence Theory

According to Brenner, (2000) interdependence theory gained popularity in the 1970s once advocates of

political realist philosophy could not offer a better description of the recent happenings in international

relations and failed to recognize several new features of interstate relations. Though, this theory has

witnessed some changes over the years the core principles of interdependence theory have remained the

same over the years. Researchers such as Robert Keohane and Joseph Nye, (1977) are of the opinion

that interdependence theory encompasses nations avoiding conflict because of the benefit of

commercial activities. They explained it is hard for trading nations to go to war because of the cost of

war and the benefit of trading outweighs wars. Although, scholars such as Robert Keohane and Joseph

Nye, (1977) portrays interdependence theory as a situations in which actors of international relations,

40

that is states are engaged in a reciprocal relationship with other states because of the benefits of trade

and opportunities to be derived from trading activities as opposed to conflict which leads to financial

cost.

In reality, Sino-African relationship both partners are reliant on one another. China offers financial

incentives in the form of aid, whereas, African countries provide raw materials, natural resources and a

market for manufactured Chinese goods.

Such a scenario of the relationship as describes above is better illustrated by Enuka, (2011, 44-53)

when he explain that Africa is a poor continent which is in need of aid and financial money to meet

developmental targets and it is willing to partner with any nation that can offer much needed financial

assistance.

It is worthy of mentioning that state relations are not always equally balance as illustrated by Robert

Keohane and Joseph Nye (1977) they presented a logical example where country A is dependent on

trade with Country B with respect to oil and country B is dependent on trade with country A with

respect to food. Both nations are dependent on each other, but it would be wrong and incorrect to

assume that the trading relationship between country A and B is a balance trading relationship. The

picture of this relationship explain overhead is not balance since country B that sells oil has more

money than country A that sell food.

That is the nature of Sino-Africa relationship is not a balanced relationship. China buys raw material

and sells finished products to Africa value is added to the Chinese economy .Whereas, Africa countries

sells raw material to China leading to zero sum-gain. Nevertheless, both partners are dependent on each

other for trade. The Chinese government is in need of African natural resources to sustain its fast-

growing economy. While, Africa nations are in need of Chinese aid to meet millennium development

targets. The figure beneath will illustrate the application of the interdependence theory.

41

Diagram 4: Application of interdependence theory

The diagram overhead displays the dependent nature of the Sino-African relationship. The Chinese

government is dependent on African raw materials to sustain its fast growing economy. Africa nations

are dependent on Chinese aid and investment to meet developmental targets. It is worthy of pointing

out that Sino-African trade relationship is unbalanced since Africa’s exports raw materials and imports

finished products from China.

4.9 Criticism of the Theory

Firstly, less developed economies are in a disadvantageous position when bargain with developed

countries since they are too reliant on financial and economic grants from developed economies putting

African countries in a weak bargaining position6. Nations with robust economy such as China are in

6Omojarabi Femi (2015): The relevance of interdependency theory in a Globalization Age. Available online at: http://www.academia.edu/4327944/. Accessed on 5/26/2015.

42

Dependent Relationship

AfricaSells raw materilas and

agricultural productsBuys Manfactured

Products

Chinalow instrest loans

Concessional loansInvestmnets in infrastrutres

strong bargaining position when negotiating and are able to direct and determined the outcomes of

trading negotiations because of financial incentives they offer.

Secondly, another critique is that international organizations like W.T.O. World Bank, UN are not

democratic enough and do not protect the interest of smaller nations but promote the agendas of

powerful nations. For instance, UN Security Council with veto powers allocated to permanent members

supersedes the decision of the National Assembly which is undemocratic. Likewise, W.T.O and I.M.F

decisions are conducted behind closed doors and in secrecy which is not good for democratic processes

of such organizations (Ibid). There is a need for structural reformation of Bretton Wood institutions in

order for African nations to profit from free trade.

Finally another critique of the theory is that the theory fails to explain states will always put the interest

of their nations before any other nations and will resist any common profits if it is not profitable, (Ibid).

Sub-Conclusion

It is clear from the overhead description Sino-African relationship is complex but gutted with

opportunities. From an African perspective, the relationship offers opportunities in terms of investment

and financial incentives. Equally, from the Chinese perspective, it offers China a ready market to sell

Chinese manufactured products and a constant supply of raw materials.

The theories explained overhead illustrate how Sino-African relationship works and offers different

perspectives of this relationship. Economic liberalism portrays the benefit of free trade. Whereas,

dependency theory demonstrates that Sino-African trade relations has contributed in African economies

becoming too dependent on trade with China which has disastrous consequences. Lastly,

interdependence theory describes Sino-African relations as both nations dependent on each other;

Chinese government needs African raw materials and a market to sell its manufactured products

whereas Africa needs Chinese aid to meet developmental targets.

5.0 Findings and Analytical Discussion

43

This chapter data will be analyzed in conjunction with relevant theories to generate meaning of Sino-

Cameroon relations, whether this relationship has created opportunities or challenges for Cameroon to

meets its developmental goals. This chapter will be grouped into themes for easy readability.

5.1 Sino-Cameroon Trade: Opportunities and Challenges.

Trade is an essential element in the economic development of a nation. Chinese increased status as a

key actor in international political economy has increased its trading with the outside world. Sino-

Cameroon trade over the past two decades has witnessed dramatic increase as represented below.

Figure 1: Sino-Cameroon Exports and Imports from 1995 to 2008

Source: World Trade Atlas Complied by CCS (2008)7

It is clear from figure 1 overhead that the size of trade concerning Cameroon and China is on an

upward trend. Cameroon exports to China was US$ 30 million in 1995 which improved to US$ 475

7 Centre for Chinese Studies

44

million in 2008, while at the same time Cameroon importations from China improved from 10 million

US$ in 1995 to 380 US$ million in 2008.It is clear from figure 1 Cameroon imports from China is in a

continuous upward trend which means Cameroon is importing more products from China from 10

million US$ in 1995 to 380 million US$ which indicates China is an important import destination for

Cameroon business. Likewise, figure 1 also shows Cameroon’s exports to China constantly fluctuate

which are not good for the overall trading relations with China.

Nonetheless, it is important to determine the degree to which Cameroon is benefiting from trading

relations with China. The increased importation of cheaply manufactured products from China is

advantageous to the lower stratum of the Cameroonian society because of the affordability of made in

China products. The importation of cheap consumer products from China has created employment

opportunities for youths in the service sector in Cameroon. For instance, the importation of cheap

motorcycles from China has supplemented the availability of taxi services which has generated

employment opportunities for youth who are employed in taxi services transporting passengers.

Similarly, the low-cost importation of motorcycles from China has generated revenues for city councils

through the issuing of licenses and the collection of taxes from owners of these motorcycles operating

taxi services. Furthermore, the importation of cheap mobile phones from China has also created

employment opportunities for youths who work in phone booth services. Khan and Baye, (2008)

explain the availability of cheap mobile phones from China has eased money transfer in Cameroon

through mobile transfer which has contributed to stress-free financial transactions as people can

received and send money via mobile phones .Another, findings of this study is phone booth services

generates revenue for city council through the collection of taxes for operating a phone booth service.

Due to the increase job opportunities created from cheap motorcycles and mobile phones from China

has contributed to the reduction of crime rate in the major cities in Cameroon. Figure 2 beneath shows

employment situation in Cameroon by sectors.

Figure 2: Employment by sectors

45

2005 20100%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ServicesIndustryAgriculture

Source: World Bank

From the overhead figure, it is clear that Agriculture remains the main employer in Cameroons. In 2005

55.7 percentage of the Cameroonian labor force was employed in the agriculture sector, whereas, in the

same period in 2005 the industry sector employed 14.1 percent of the workforce. Similarly, in 2005

service sector employed 30.2 percent of the labor force. Nevertheless, in 2010 the percentage of the

labor force employment in the agricultural sector dropped from 55.7 percent to 53.3 percent, whereas,

industry sector also witnessed a drop from 14.1 percent to 12.6 percent. However, the service sector

witnessed a slight increase in employment from 30.2 percent in 2005 to 34.1 percent. What this

indicates is more Cameroonians were employed in the service sector which was made possible because

of cheap consumer imports from china. This has provided job opportunities for the youths in the

service sector made possible by cheap motorcycles and cheap mobile phones from China. The

availability of cheap consumer products from China like mobile phones and motorcycles has created

job opportunities for youths who are involved in taxi services and phone booth services. To have a

clear picture of the effect of cheap consumer products from China on job creation in Cameroon figure

3, beneath will displays Cameroon increasing imports from China from 2009 to 2012.

Figure 3: Cameroon imports from China 2009-2012

46

2009 2010 2011 20120.00

100,000.00

200,000.00

300,000.00

400,000.00

500,000.00

600,000.00

700,000.00

800,000.00

US$

US$

Source: World Bank

From figure 3 overhead, it is clear Cameroon imports from China are continually increasing thus there

was a slight decrease in 2012. Cameroon Imports from China increased from 442,046.22 US$ in 2009

to 678,286.39 US$ in 2012 which indicates an increase in imports of consumer goods from China.

Figure 3 illustrates Cameroon imports a lot of products from China which have improved living

standards in the country. Cameroonians are able to purchase goods they could not afford when

purchasing from traditional trading partners such as USA and Europe.

Another finding of this study is the importations of cheap products from China has improved living

standard in Cameroon. These cheaper consumer goods have improved living conditions because of the

affordability of made in China good to all segments of the Cameroonian society from business which

can buy cheap and efficient machinery , to ordinary Cameroonians who have profited from cheaper

consumer products from China. To further explain this point, figure 4 below shows the composition of

Cameroon top 20 imports from China from 1995 to 2008.

Figure 4: Structure of Cameroon 20 imports from China

47

Source: World trade Atlas Complied by CCS8

Figure 4, shows Cameroon imports numerous products from China which includes electrical

machinery, textile products, Vehicles parts, ceramic products, insecticides, machinery, leather art,

cement, iron and steel, clothing and footwear. Figure 4 overhead helps to establish the fact that

Cameroon’s importation from China is not limited to few items but covers a wide range of

manufactured goods which have contributed in improving living conditions. Khan and Baye, (2008)

states that the availability of cheap affordable products from China has improved living conditions of

most Cameroonian since Cameroon being a developing nation most of the populations cannot afford

products from Europe and USA. The availability of cheaper products from China has enabled most

Cameroonian households to purchase consumer goods such as television sets, fridges, gas cooker,

textile products and shoes which have improved living standards. To understanding the significance of

Chinese imports in improving living conditions of ordinary Cameroonians diagram 1display top 4

imports origins of Cameroon.

8 Centre for Chinese studies (2008)

48

Diagram 1.Top 4 imports origins of Cameroon in %

%

NigeriaFranceChinaIndia

Source: Observatory of Economics Complexity9

The above diagram demonstrates China is Cameroon 3rd biggest import origins. However, it is worth

mentioning that though Cameroon imports more products from Nigeria and France, Chinese imports

are concentrated in Consumer goods which have profited Cameroonians of lower incomes because of

the affordability of made in China goods, (Khan and Baye, 2008). Cameroon is a less developed

country with most of the population under poverty line, the importation of cheaply manufactured

products from China such as fridges, gas cookers, cement, iron and steel, foodstuffs and electrical

appliances such mobile phones, television sets have improved living standards in Cameroon.

Nonetheless to get a better understanding of Sino –Cameroon trade trends it is necessary to show top

20 Cameroon exports to China from 1995 to 2008.

9Observatory Economics Complexity: Available online at: https://atlas.media.mit.edu/en/profile/country/cmr/ accessed on 5/15/2015.

49

Figure 5: Structure of Cameroon 20 exports to China from 1995-2008

Source: World Trade Atlas Complied by CCS10

From figure 5 overhead, it is clear that Cameroon’s exports to China comprises of wood, cotton, and

oil. It is worth mentioning that Cameroon exports to China is unbalanced as Cameroon started

exporting oil to China in 1999 but stopped in 2004 and started exporting oil once more in 2008 to

China. The cause for this unbalance nature of oil exports to China is Cameroons oil agreement with

China is based on periodic basis which is constantly renegotiated with the government of Cameroon,

(Khan and Baye, 2008).During the period from 2005-2007 a new agreement was being negotiated.

To remain focus on the analysis of Sino-Cameroon trade in job creation, this study will examine

Chinese increased involvement in the logging industry in Cameroon and job creation.

10Centre for Chinese studies (2008)

50

The logging industry is a key employer of Cameroonians who are engaged directly or indirectly from

logging- related activities. As illustrated in figure 5 overhead, timber consist one of Cameroon’s main

exports to China which has created jobs for Cameroonians. According to Global Forest Watch, (2000)

55,000 Cameroonians were employed in the logging industry in 1998.Logging undertakings entails a

lot of manpower and youths are profiting from numerous low- skilled jobs in the logging industry.

Another finding of this study is logging industry provides employment to unskilled Cameroonian in the

economic sideline parts of the country, (WWF Global, 2015)11. Apart from providing jobs to

communities of economic sideline parts of the country, local communities were logging is carry out

also benefits from services provided by various logging companies such as maintenance of roads,

construction of schools, hospitals, community halls, electricity which have improved living conditions

in these economically sideline parts of the country. Furthermore, the local communities were logging is

carried out benefits from royalties from Chinese logging companies. Royalties provided by Chinese

logging companies to these communities where logging is carried out use the royalties’ money to

provide basic services to the population such as pipe borne water, construction of schools, health

centers which have improved quality of life in these communities. Furthermore, the government of

Cameroon profits from logging activities through the collection of taxes from Chinese logging

companies. The increase in revenues via taxes from logging companies dominated by Chinese

companies has enable the government to provide basic services to remote parts of the country which

have improved living conditions.

Another, findings of this study is medium Size companies are benefiting from cheap imported

machinery from China as can be seen from figure 4 overhead that Cameroon imports machinery from

China. According to a scoping study carry out by Khan and Baye, (2008) on Sino-Cameroon trade

relations they illustrate manufacturing industries in Cameroon are profiting from Cheap machinery

from China. Similarly, Khan and Baye, (2008) explains cheap imported Chinese transports and

machinery equipment’s are the fastest growing imports groups from China. This demonstrates that

medium size industries are profiting from cheap machinery from China which is less expensive in

11WWF is one of the world’s largest Conservation organizations. ( Online) Available at http://wwf.panda.org/what_we_do/where_we_work/congo_basin_forests/problems/deforestation/logging/#4(Accessed on 5/11/2015)

51

comparison from machinery imports from Europe, USA, and Japan, which is a welcome relief to the

manufacturing industry since it has contributed in the reduction in the overall cost of production.

David Ricardo in the theoretical chapter of this study explains the benefits of comparative advantage in

a free market economy, relating comparative advantage to Sino-Cameroon trade relations both nations

have utilized their respective advantage on trading with each other. Cameroon sells raw materials to

China and is benefiting from higher prices because of huge Chinese demands. Similarly, China is

selling manufactured products to Cameroon both parties are exploiting their comparative advantage.

Similarly, as explained by Adams, (2001) in the theoretical section when he explained nations engage

in free market principles will profit from opportunities offered by free trade. When one looks at Sino-

Cameroon trade one can assume that trade between Cameroon and China has created jobs for

Cameroonians. Putting on the lapses of interdependence theory one would conclude parties are

dependent on each other, China needs raw materials and Cameroon is in need of Chinese aid to meet

developmental targets.

Nevertheless, to provide a better analysis of Sino-Cameroon trade one needs to look at the challenges

of Sino-Cameroon trade. According to Bruatigam, (2011) Chinese manufacturing industries are

counter-productive to the growth of African home industries especially in the textile industries where

competition is stiff. Looking at figure 4 overhead, it is clear that Cameroon is importing diverse

manufactured products from China from food products, electrical appliances, leather arts, machinery,

cement, iron and steel, insecticides, clothes and textile products. Putting on the dependency theory

lenses, one would argue such a scenario is not good for the growth of home industries in Cameroon.

Sunday A. Khan, (2010) in a scoping study on the relationship between China and Cameroon

demonstrates that cheap Chinese manufactured products are a huge challenge for Cameroon

manufacturing industries since they cannot compete with cheaper influx of made in China products. A

good example is the local manufacturing batteries company in Cameroon (PILCAM) which is losing

out from stiff competition from Chinese manufactured batteries, PILCAM management complained

about the cheap nature of Chinese batteries as compared to the locally manufactured batteries by

PILCAM and the effects it is having on sales of PILCAM batteries nationwide. As an illustration, a

pact of size 4 AA (Hellenes) PILCAM batteries cost 67 cents whereas, Imported Chinese Royal

batteries cost 22 cents Sunday A. Khan, (2010). Another findings by Sunday A. Khan, (2010) in an

52

empirical study conducted was that some consumers are sensitive to made in China goods because of

the presumed low quality especially those at the upper strata of society since they believed it is inferior

to western goods. On the other hand, those at the lower strata prefer imported goods from China since

they are affordable. The importation of various manufactured products from China has paved the way

for Cameroonian economy to be too reliant on trade with China. Another, critical aspect of the Sino-

Cameroon trade, it has led to the shutting down of home industries since they cannot compete with

cheaper imports from China which has led to jobs loss especially in the manufacturing sector in

Cameroon.

Figure 4 and 5 overhead, shows China exports manufactured products to Cameroon while Cameroon

exports raw materials to China relating it to dependency theory it makes it tough for Cameroon to

diversify its economy since Cameroon is too reliant on imported products from China. Observing

figure 5 it is clear the structure of Cameroon’s exports to China remains unchanged exporting three

main commodities that is wood, oil, and cotton , whereas, China exports finished products. The

consequence of such trading is record trade deficits between Cameroon and China. The table beneath

shows trade balance between Cameroon and China.

Table 1: Sino-Cameroon trade balance, (cost in US dollars)

Source INS (2004) and INS (2006) 12

12 Institute National de la Statistique ( National Institute of statistics Cameroon 2004 and 2006)

53

Table 1 overhead shows Sino- Cameroon trading; it is definite that Cameroon’s does not enjoy

favorable trade relations with China starting from 2004. From 1999 until 2003 Cameroon was enjoying

favorable trade with China since Cameroon was exporting more than it was importing from China.

However, beginning from 2000 Cameroon exports to China began falling while at the same time

imports from China was growing. What this shows is from 2004 Cameroon began recording trade

deficits with China since Cameroon was importing more than it was exporting to China. Relating this

to dependency theory one might argue that it is not good for the overall economic output since it makes

Cameroonian economy too reliant on trade with China. It should be noted that Cameroon’s trade

shortfall with China is contributing considerably to the overall Cameroon trade shortfall which affects

government abilities to provide basic services. The situation of Cameroon trade deficit with China is

even made worst by the importation of made in China goods from third party countries such as United

Arab Emirates (Dubai), Nigerian and Benin Republic. The downside of this increasing importation of

cheaply made in China goods from China and another third party country is that it hinders the

diversification of the economy and locks the economy in the primary sector.

The growing Cameroon trade deficit with China hinders the growth of manufacturing industry since

Cameroon exports purely raw material such as oil, cotton and wood to China and imports manufactured

products from China, which impedes the growth of manufacture industry in Cameroon. The economy

of Cameroon is too dependent on exportation of raw materials which has destroyed the manufacturing

industry. The lack of diversification of Cameroon’s economy is not good for the overall economic

output of Cameroon because of the constant fluctuation of commodities prices.

This issue was raised by the President of Cameroon, Paul Biya when Hu Jintao the President of China

visited Cameroon in 2007. President Biya raised the issue of deteriorating trade deficit with China and

appealed for consideration in the form of quotas intended for selected Cameroon raw materials export

to China such as cotton, wood, coffee (Cameroon Tribune, 2 February, 2007 p:3)13. President Paul Biya

explains Cameroon being a primary exporting country needs some form of relief from China in order to

reduce the trade deficit between the two nations.

5.2 Chinese Investments and Infrastructural Development

13 National Bilingual newspaper

54

Infrastructural improvement is vital for a nation economic development. Investments in infrastructures

such as road, bridges, hydro-electrical dams, are vital to a nation’s developmental advancement as the

saying goes “where there is a road development follows”. Chinese investments in roads, railways, pipe

borne water and electricity has spurred development through job creation and economic growth which

has been essential in the reduction of poverty in Cameroon. China’s aid assistance to Cameroon is

center on infrastructural development which follows a similar pattern of Chinese investments in Africa.

The government of China has funded numerous infrastructural investments as indicated in table 2, 3, 4

and 5 beneath:

Table 2: Completed projects financed with Chinese Aid

Source Khan and Baye, (2008:25)

Table 3: Ongoing Projects Financed by Chinese Aid

55

Source Khan and Baye, (2008:26)

Table 4: Forthcoming projects to be financed by Chinese Aid

Source Khan and Baye, (2008:26)

Table 5 Chinese Assistance to Cameroon from 1996-2009

56

Source: “Caisse Autonomed”Amortisement” (Autonomous Public Debt Repayment Fund)

57

Observing table 2, 3, 4 and 5 overhead, the overall information gathered is, Chinese investments in

Cameroon is not focused in a specific sector but covers several sectors. Chinese investments in

Cameroon cover a wide range of sectors like health, culture, sports, telecom, education, social work,

water, electricity, agriculture, military, technical assistance, roads and so forth. Furthermore, table 2 to

5 demonstrates Chinese aid assistance to Cameroon is diverse and not uniform to a particular sector

which is fundamental in Cameroon meeting its developmental goals.

To stay focus in the analysis of this study, the following sub-section will analyze the impact of Chinese

aid in the economic development of Cameroon and how it has improved living conditions of ordinary

Cameroonians.

5.3 Analysis of Chinese investments in Communication Sector and Economic development

The financing of the modernization of the telecom sector in Cameroon to the amount of 45.2 million

US$ (see table, 3) by the Chinese government is vital for the development of Cameroon because in an

era of globalization modern communication systems are essential in conducting business. Chinese

Telecom Company HUAWEI is supplying equipment’s to Cameroon Telecom Company

CAMTEL .Chinese telecom company HUAWEI in collaboration with the government of Cameroon is

providing wireless network system in Cameroon which has greatly improved communication systems

in Cameroon. In the researcher opinion, modern communication systems is an instrumental tool to

integrate with the global political economy since in the 21th- century modern communications systems

are vital for the advancement of a nation development. Therefore, the modernization of the telecom

system in Cameroon to the amount of 45.2 million dollars by China is contributing to the development

of Cameroon. Similarly, China is funding the connection of communication system between remote

parts of the country with the rest of the country which has contributed in the economic development of

Cameroon. The Chinese ambassador in Cameroon Wei Wenhua in a diplomatic meeting he held with

Emmanuel Nganou a senior government official in the Ministry of Economic Planning and Regional

Development on 29th of April 2015, said “I have never seen any African country that has such

agreements with China to this level” (Wei Wenhua, 2015) explaining that China is committed in the

continuous financing of developmental projects in Cameroon. He explains the modernization of

58

Cameroon telecommunication system by Chinese telecom company HUAWEI will facilitate the

integration of Cameroon in the global political economy (Cameroon Tribune 4th May 2015)14. Such

investment in the telecommunication sector by Chinese government has helped in the development of

Cameroon. The provision of the wireless network by the Chinese telecom company HUAWEI has

benefited Cameroonian companies and businesses since they are able to communicate quicker to the

outside world. Similarly, the modernization of telecom sector by the Chinese government to the amount

of 45.20 million US$ has widened the scope of internet coverage. Remote parts of the country are

connected with the rest of the country. The improved internet access has profited Cameroonians who

are able to gain access to the outside world. I was able to look for admission to come to Aalborg

University thanks to a local internet café which benefited from Chinese aid in the telecommunication

sector in my local community.

Another finding of this study is that through cheap Chinese mobile phones, most Cameroonians are

able to purchase a mobile phone which has eased daily transaction and is of much assistance in the

mobile money transfer scheme. Graph1 display the use of mobile phones by percentage.

Graph 1: The use of Mobile Phones in %

2001 2004 2007 2010 20130

10

20

30

40

50

60

70

80

n/100

n/100

14 National Bilingual newspaper

59

Source: UNESCO Institute of Statistics

From graph 1 overhead, it is definite that the percent of Cameroonians having access to mobile phones

is constantly increasing from 5 percent in 2001 to 72 percent in 2013.This illustrates that more and

more Cameroonians are able to purchase cheap mobile phones from China which has increased the

percent of Cameroonians who possess a mobile phone (see figure 4 above), which shows the

importation of electrical machinery increased significantly in 2007 and 2008. This means Cameroon is

importing more electrical appliances such as mobile phones from China which has increased the access

of mobile phones in Cameroon. Importation of cheap mobile phones from China has benefited the

common man in the street since Chinese phones are affordable which has contributed to the economic

development of Cameroon. Farmers and business people are able to conduct business activities more

quickly. Similarly, the availability of cheap mobile phones has helped in the development of the

country via money transfer schemes which has helped the lower income Cameroonians since they can

send and receive money instantly to conduct their daily activities.

5.4 Chinese Aid in the Health Sector

The government of China has provided a lot of health assistance in Cameroon via the renovations of

hospitals, providing drugs; equipment’s and the medics from China who work in hospitals all over the

country (see table, 2, 3 and 4, overhead). The Chinese government has delivered a 200 bed

Gynecological- Obstetrical hospital in Yaoundé worth 10 million dollars to the government of

Cameroon (see table2, overhead). Similarly, the Chinese government has also renovated and expanded

the Regional Hospital in Buea to the amount of 5.2 million dollars, (see table 3). The government of

China has also, provided equipment worth 0.13 million dollars to the Gynecological-Obstetrical

hospital in Yaoundé and has also constructed a Gynecological-Obstetrical hospital in Douala the

economic capital of Cameroon to the amount of 0.90 million dollars (see table 4, above). Furthermore,

the building of hospitals by the Chinese government has helped in the improvement of hospitals quality

in Cameroon. Likewise, the supplying of equipment by the Chinese government to hospital in

Cameroon has improved diagnosis of diseases and has improved the quality of treatment provided to

Cameroonians. A good example is the renovation of the general hospital in Buea to the amount of 5.2

60

million dollars has helped the local population. In the researcher opinion, the municipality of Buea has

profited from the renovated and expanded hospital since the research originate from Buea. The

residents of Buea are contented with the renovated hospital and appreciate such aid gesture from the

Chinese government. Another, discovery of this research is the affordability of Chinese medicines

which are becoming popular and prefer by most Cameroonians, (Khan and Baye, 2008). The

affordability of cheap Chinese drugs has provided alternatives to western medicines which are

expensive in comparison to Chinese drugs which has helped low- income Cameroonians. Likewise,

Chinese traditional medicines are popular nationwide among Cameroonians especially in the treatment

of malaria and other tropical diseases, (Pokam, 2011: 54). The government of China also partakes in

the distribution of Chinese traditional medicines in Cameroon through dispensaries to patients of

Chinese doctors and to the general public who are interested (Ibid). Furthermore, Chinese

pharmaceutical Cameroon Company has an agreement with the Ministry of Public Health to sell

Chinese manufactured malaria medicines in the country. It has special privileges to sell medicine to

treat malaria manufactured by Guilin Southern Pharmaceutical laboratory established in Guilin in

China which produce a single treatment of malaria drug which is package in two forms Artesunat in the

injection form or Arsuamon in tablet form which has been recommended by W.H.O in 2004 Pokam,

(2011: 54)15. This medicine is popular among Cameroonians since it is effective and cheap.

Another aspect of Chinese assistance in the health sector in Cameroon is the 1975 agreement between

the governments of Cameroon and the Chinese government to provide professional training to medical

personnel in Cameroon. The 1975 agreement led to the arrival of many Chinese medics on a temporary

basis which Cameroonian medics have benefited enormously by acquiring knowledge. Similarly, as

part of the 1975 agreements Cameroon doctors were given scholarships to study acupuncture which

presently is fashionable in Cameroon, (Pokam ,2011: 54). The graph 2 beneath displays malaria

mobility in Cameroon from 2008 to 2012.

Graph 2: Malaria Morbidity in Cameroon from 2008-2012 in %15 Pokam H.D (2011). Chinese Medicine in Cameroon. Retrieved 5/17/2015 from China Perspective at : http://chinaperspectives.revues.org/5642?file=1

61

2008 2009 2010 2011 20120

5

10

15

20

25

30

35

40

45

n/100

n/100

Source: World Trade Organization

As depicted in graph 2 overhead, malaria morbidity is continuously reducing; it was 41 percent in

2008, while in 2012 it drop to 27 percent which illustrates Chinese assistance in the health sector is

having an effect. The effectiveness and affordable of Chinese drugs has contributed to low malaria

mobility in the country since most Cameroonians can afford cheaper medicines from China in

comparison to drugs from Europe and USA. Likewise, the provision of treated mosquito’s nets to

pregnant women by the Chinese government has also helped in reducing malaria morbidity, (Pokam,

2011: 54).

5.5 Hydro-Electric Dam Project and Economic Development

Electrical power is vital for a nation’s economic development since sufficient electrical power will

attract foreign investments which are vital for a nation’s economic development. Likewise, sufficient

electrical power will help manufacturing companies to operate in maximum capacity. Therefore, the

financing of the hydro-electrical dam in Ladgo in the northern part of Cameroon to the amount of 56

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million dollars (see table 2, overhead) contributes to the economic development of Cameroon. Upon

completion, the Ladgo hydro-electrical will increase electricity capacity which will attract foreign

investments. Another, finding of this study is increased electrical power has provided incredible

benefits to Cameroonian households since they are able to use electrical appliances like fridges,

television sets and so forth which has improved the living conditions.

5.6 Agricultural sector

Another finding of this study is Chinese aid has improved agricultural productivity. The financing of

rice cultivation to the amount of 56 million dollars in Ladgo has helped in improving rice productivity

in Cameroon, (see table 2, above). Similarly, the supplying of tractors to the Ministry of agriculture to

the sum of 10 million dollars has helped in agricultural productivity. As indicated in figure 2 overhead

agriculture is the back bone of the Cameroonian economy employing more than half of the population?

The provision of tractors to the Ministry of Agriculture by the Chinese government is important

because it has helped farmers to transport agricultural produce out from the farms which have

improved productivity. Better productivity in agriculture due to Chinese aid has helped in reducing

hunger which has contributed in improving living conditions of Cameroonian Farmer.

5.7 Infrastructural Development and Economic Development

Progress in infrastructures development is vital to the economic development of a nation. One of the

findings of this study is Chinese investments in infrastructures in Cameroon have contributed to the

economic development of Cameroon. A good example is the Kribi port project which is a combined

undertaking between the government of Cameroon and the government of China. China Harbor

Engineering Company Ltd is the company in charge of building the port. The agreement cost of the 1st

phase of the port execution is 568 million dollars of which 85 percent of that amount for the project is

provided by the Import-Export bank in China, while, Cameroon government is to provide 15 percent of

the amount for the implementation of the 1st phase of the project. The China Harbor Engineering

63

Company Ltd completed the 1st phrase in June 2011(The Diplomat February 27, 2015)16.Nonetheless, it

is estimated that the final Kribi seaport project will cost 1 billion dollars and a size of more than 100

million tons yearly. The Kribi port has boosted the Cameroonian economy as describe by the deputy

coordinator of the project Mr. Hand Bahiol Magloire to Xinhua newspaper that port will boost the

economy of the Southern Region and the country as a whole. He explains that Cameroon is rich in

aluminum, iron, oil and natural gas, the new port will make it easy for Cameroon to exports minerals

out of the country (Ibid). Chinese investment in the Kribi port has accelerate economic development in

the Southern Region and the country as a whole and has acted as a gate for land lock neighboring

countries such as Chad to export natural resource. Similarly, employment opportunities in the Southern

region have been generated as many Cameroonians are employed to work in the Kribi seaport project.

However, putting on the dependency theory lenses one will argue limited Cameroonians have profited

from job opportunities since Chinese construction companies prefer Chinese workers. Take for

example the Kribi port project there are numerous complaints by local of being look over for menial

jobs like truck driving since the jobs are given to Chinese workers. In August 2013 out of 1,125persons

working at the port project only 609 were Cameroonians (Ibid) such a scenario is not good for the

overall employment situation in Cameroon.

Another finding of this study is the government of China is financing various road construction projects

in Cameroon. In 2011 China Exim Bank provided the loan of 482 million dollars for the construction of

the Douala – Yaoundé highway to connect the economic and the administrative capitals in Cameroon.

The road will cover 215 km and is expected to be completed in 2017 to be constructed by a Chinese

constructing firm; China Highway Industrial Corporation (Aid data)17. The construction of Doula-

Yaoundé highway has spurred economic development because it has connected the two biggest cities in

Cameroon which has increased commercial activities. Furthermore, the construction of the Doula-

Yaoundé highway by China Highway Industrial Cooperation has provided employment opportunities

for Cameroonians who are employed in skill and unskilled jobs. Nonetheless, it is worthy of pointing

out the government of China is investing in infrastructures in Cameroon in order to exports raw

materials out of Cameroon to China.

16 The Diplomat is the premier international current affairs magazine for the Asia pacific. Available online athttp://thediplomat.com/2015/02/whats-it-like-to-have-china-build-you-a-port-ask-cameroon/: accessed on 5/14/2015.17 Aid Data. Available online at:http://china.aiddata.org/projects/30189. Accessed on the 5/14/2015.

64

Another finding of this study is that Chinese constructing firms in Africa do not follow internal

working values since they continuously insist of long working hours, (Khan and Baye, 2008) and do

not provide good working conditions. Similarly, African employed in Chinese companies are exploited

and suffered human right mistreatments from Chinese management, (Marks, 2007).Mark further argues

Chinese increased presence in Africa has derailed international efforts to good governance.

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6.0 Conclusion

The Sino-Cameroon relationship has progressed over the years once Cameroon disengaged relations

with Taiwan in 1971, this relationship is complex though gutted with opportunities. Chinese

investments in the infrastructural sector like the construction of the Kribi seaport, the financing of

215km of Douala –Yaoundé road linking the economic and administrative capital has contributed to

economic development of Cameroon. Similarly, Chinese investments in the energy sector like the

building of the Lagdo hydro-electrical dam has increased energy capacity which has attracted foreign

investors and has contributed to the economic growth. Furthermore, Cheap imported goods from China

has been advantageous to Cameroonians particularly those at the lower strata of society since they are

able to purchase goods they could not buy from Europe. Likewise, China’s aid in the health sector has

helped ordinary Cameroonians through cheap and effective Chinese medicines. The construction of the

Gynecological- obstetrical hospital in Yaoundé the administrative capital of Cameroon has helped to

improve the quality of health in Yaoundé. The renovation of Buea reference hospital by the Chinese

has profited the population of Buea due to improved diagnosis of diseases which has improved the

quality of care of patients. Cheaper Chinese medicines are preferred by most Cameroonians since it is

affordable and effective which has helped low income Cameroonians. Also, Chinese investments in the

logging industry, agricultural sector, construction, energy and trade have created both skilled and

unskilled jobs for Cameroonians who are employed in Chinese construction companies which has

contributed in reducing unemployment. Similarly, the importation of cheap consumer products has

profited Cameroonians who can purchase manufactured products such gas cooker, fridges, household

furniture’s, electrical appliances which were too expensive to buy from Europe which has improved

living conditions.

Nonetheless, this relationship also has lots of challenges like the unbalance nature of trade since

Cameroon imports more products than it is exporting to China which has contribute significantly to the

overall trade deficit of Cameroon. Similarly, the importation of cheap manufactured products from

China has been detrimental to the growth of home industries since local manufacturer cannot compete

with cheaper imports from China leading to closure of some manufactured firms’ in Cameroon. A

good example is the local batteries manufacturing company (PILCAM) which is losing sales because of

cheap imported Chinese batteries. Such a scenario is not good for the industrialization prospect of

66

Cameroon manufacturing industries since it has locked the country into the primary sector which

makes diversification of Cameroon economy difficult.

In order for Chinese aid to have any real impact, Cameroon government must promote good

governance and limit corruption, since corruption is the single biggest obstacles of the efficient

implementation of aid projects. The government must build strong public institution to limit the

influence of corrupt government officials and must invest in human capital such as proving

scholarships to Cameroonians to pursue technical education in fields such as engineering, medical

doctors, planners, nurses, and so forth. Human capital investment by the government of Cameroon is

vital for the economic development of Cameroon since without skilled Cameroonians it is will be

difficult to make any real progress in terms of development targets. Therefore, Chinese scholarship to

Cameroonians to go study technical education fields in China is vital in the economic development of

Cameroon. Likewise, the government of Cameroon must put in place effective mechanisms of

evaluating and checking the impact of Chinese aid. Civil society organizations must protect the interest

of the public by making their voices heard on the challenging aspect of Chinese aid to Cameroon; they

should act as watchdogs and formulate policies for evaluating the impact of Chinese aid and assistance

to Cameroon.

In the nut shell Sino-Cameroon relationship presents both opportunities and challenges though the

relationship is a “Win-Win” situation for both Cameroon and China. China has a market to sell its

manufactured products and imports raw materials from Cameroon to sustain its fast growing economy.

While, Cameroon is also profiting from huge Chinese investment in infrastructures, agriculture, energy

and health sectors which have improved living conditions and created jobs for Cameroonians.

However, Cameroon should regularly evaluate its relationship with China so as to ease the challenges

and increased the benefits.

67

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