China frightens the West – August 2013
“China frightens the West” so says the well-known columnist Martin Wolf in his leader page Financial Times article: Why China will not buy the world.
The central tenet of his article is that the striking feature of the Chinese economy remains its dependence on the know-how of others and that China is very far indeed from “buying up the world”.
He argues that:
- the paranoia about its “China’s impact” is unwarranted;
- however, so central is China that almost all global companies are likely to find themselves enveloped by China as it will be too central to their activities for them to escape its demands;
- deep global business entanglements are what the world needs. They are desirable. We should keep calm and just carry on he says.
And in Africa, carry on we do.
China’s engagement with Africa is nothing new: it never left the continent in the first place. The noticeable impact on the performance of Africa economies is underpinned by the growing strategic partnership between China and Africa.
According to Chinese official figures, China has invested $40 billion in more than 50 African countries till the end of 2010, benefiting over 2000 enterprises. In 2010, direct investment in Africa from China firms amounted to $2.11 billion up by 46.8% year on year.
Investment and engagement with Africa will only grow. The Chinese President Xi Jinping said
“No matter how international landscape may change, China will continue to support and promote Africa’s efforts to achieve peace, stability, prosperity and development, seek strength through unity and participate in international affairs on a basis of equality,”.
This pledge came soon after his election at this year’s session of the National People’s Congress, China’s top legislature. Xi Jinping was elected President, in addition to his role as General Secretary as Ruling Party of China as well as Chairman of the Party’s central military commission.
International analysts has commented widely on the new leadership of the CPC. Western magazines such as Fortune and Time have carried on their covers “China – the new future” and “The world according to China” respectively.
The President emphasised the importance the new leadership attaches to China -Africa relationships by making a visit to Africa soon after his election in March. The visit included stopovers in Tanzania, South Africa and the Republic of Congo.
He Wenping, Director of the African Research Section with the Chinese Academy of Social Science wrote in the China daily (Africa weekly-April 12- 18 2013) that Xi’s visit to Africa had three important messages:
- “Firstly, although Africa has gone through several complicated and profound changes, such as the civil war in Côte d’Ivoire, the South Sudan Independence struggle, a war in Libya, the North Africa turmoil and civil wars in Mali and the Central African Republic, China still remains confident on African development.
- Secondly, based on optimism and confidence in the African situation and its future developments, China will continue strengthening and advancing its relationship with Africa.
- Thirdly, China’s policy toward Africa continued to be based on sincerity, friendship and cooperation with less empty talk and more practical work”.
Wenping cites as an example of visible significant engagement by China in Africa the signing of bilateral agreements for several infrastructure projects, including the construction of a modern port at Bagamoyo with an investment of $10 Billion. The project is expected to be an important port and trading hub that will link Tanzania with China, the Middle East and Europe.
President Obama made news recently when addressing an audience at the Cape Town university hepledged $7 Billion for an American-inspired power initiative. He tapped into the need for energy to defeat poverty in Africa.
In a recent China and Africa summit held in Johannesburg, Liliang Teng, Chief Marketing Officer of the China Africa Development Fund spoke to the substantial capacity of Chinese investors to build power plants in Africa as examples there has been successful independent power producers in Ghana with projects which have been completed within 18 months. This was given as a direct comparison to the normal 3 year construction period of domestic power companies.
Apart from large infrastructure projects, trade volume has grown significantly between Africa and China. Aid projects have also benefited African countries and so too has credit assistance to develop agriculture, manufacturing and small and medium sized enterprises.
The Chinese dream of rejuvenation so powerfully spelt out at the 17th National People’s Congress in March by President Xi is not only a dream of rejuvenation for China but a dream for the developing world.
In a meeting in Beijing that same week of Xi’s election, when the last snow of the season had fallen on the city, the author of this article met a young business leader of one of China’s largest and most significant mining houses. In the election of President Xi, the young and vibrant business leader said with all humility, China could dream not only for China, but for the world. He was proud of what China had accomplished in his short lifetime and what it still could do in its engagement with the rest of the world. The voice was one of self-belief, confidence and humility.
Martin Wolf says “China frightens the West”
In my view, Africa needn’t be.