Relations between China and Africa may never have been better, with China offering the continent $10 billion in loans, but a host of knotty questions like a trade imbalance pose a big challenge.
Beyond the bonhomie, competition from nimble and low-cost Chinese firms, a feeling that China’s capacity to give is endless and an influx of migrants to Africa from the world’s most populous nation could sour the tone of ties.
At a just finished summit in the Egyptian resort of Sharm El-Sheikh, Chinese Premier Wen Jiabao promised Africa $10 billion in concessional loans over the next three years, and praised the long and deep friendship between China and Africa. Yet kind words alone cannot smooth the path ahead.
According to a recent white paper by the Rockefeller Foundation, only 15 of Africa’s 53 countries run a trade surplus with China. “The real challenge is that trade is lopsided and the expansion has mainly benefited a handful of states, mostly the resource-rich ones, and the challenge now is to spread it a bit further,” said Adrian Davis, the China head of Britain’s Department for International Development.
Egyptian Investment Minister Mahmoud Mohieldin said he was concerned about the trade imbalance with China, adding that Egypt imports from China 11 times the amount it exports.
“We need to deal with this particular issue,” he said. “We need to encourage more investments from the Chinese side and more cooperation in the investment front... The second way to deal with the issue of the trade imbalance is to encourage more of the trade in services,” he added. Others worry about a lack of long-term planning by African nations when presented with the kinds of huge Chinese investment in natural resources like oil, timber or minerals which grab headlines worldwide.
“Once the natural resources run out, then what happens to us?” said one senior African diplomat based in Beijing. “We need to think longer than the next 25 or 30 years.
Another problem is the need to temper African expectations about exactly how much help China, the world’s third largest economy but still a developing one, can actually give. “I do think there’s a need to be realistic about what China can provide,” said Chris Alden, an Africa expert at the London School of Economics.
“Sheer size of the economy does not mean it doesn’t retain very serious domestic development challenges. For African states, it would behoove them to recognize the limits of what China can offer.” Even Wen sought to put the relationship in perspective.
“In terms of energy development, China is not the largest importer of energy and resources from Africa. China’s imports of Africa’s energy and resources only account for 13 percent of Africa’s total exports,” he told reporters. China likes to trumpet that the aid it gives is “without strings,” suggesting it does not come with the conditions sometimes demanded by Western donors, such as a need to respect democracy and human rights. But that is a misunderstanding, said Duncan Innes-Ker, Beijing-based China analyst for the Economist Intelligence Unit. “The concept of no-strings-attached Chinese money is bandied about an awful lot,” he said. “Let’s be absolutely clear — Chinese money comes with strings, like a large number of Chinese workers.”
While in many areas this has benefited Africa, for example by providing much needed investment or access to cheap consumer goods, it has not been without problems.
In Algeria, tensions spilled over in August in a suburb of the capital, when about 100 local residents and Chinese migrants fought a mass brawl using knives and bludgeons in a flare up of anger against Chinese migration.
While such incidents have been rare so far, experts say the Chinese government needs to pay closer attention to this issue.
“You have Chinese entrepreneurs, private sector, state-owned companies, all spread out throughout the continent,” said Chin-hao Huang, a researcher with the Stockholm International Peace Research Institute, who writes on China-Africa relations. “Some have pointed to Chinese taking away jobs from African merchants. I think this is something the Chinese government is going to have to consider very carefully going forward.”
