Africa and China are good for each other

By Qu Xing

Beijing aims to be a good partner in the continent’s development, says Qu Xing

Lamido Sanusi, the governor of the Central Bank of Nigeria, wrote in a recent article for the Financial Times that China’s approach to Africa embodied “the essence of colonialism” – the export of manufactured goods and the import of primary resources. China is a “significant contributor to Africa’s deindustrialisation and underdevelopment”, he said. I disagree: the relationship is actually mutually beneficial.

There are at least four areas where China’s actions have been of benefit to both sides: skills, trade, industrialisation and energy. Let’s take them in turn.

First, skills and the exchange of knowledge. It is a common complaint that Chinese companies in Africa import equipment and labour from home. But the Chinese government stresses that it encourages Chinese companies to use local equipment and labour.

The reality in Africa is that a lot of equipment is not available locally and costs much more if imported from markets other than China. Using Chinese equipment is for now a cost-effective way of production. In some cases, Chinese workers are sent to work in Africa. It is because the Chinese companies have no other choices if they want to facilitate the progress of certain projects.

In fact, recruiting local employees has been routine for Chinese companies in Africa. A report issued by Standard Bank of South Africa indicates that, with very few exceptions, local labour now accounts for 85 per cent of the total employment in Chinese companies in Africa. Dambisa Moyo, a Zambian economist, believes that the ratio of local employees to Chinese workers in Zambia exceeds 13 to one.

Accusing China of deindustrialising Africa is also unfair – the reality is quite the opposite. The Chinese government has launched a series of initiatives, including the China-Africa Development Fund and the China-Africa Economic and Trade Co-operation Zone, to encourage enterprises to invest in Africa. China has also introduced several large-scale financing programmes to help Africa develop its manufacturing sector.

With its rising labour costs, China’s manufacturing sector has started to relocate to other countries. African countries, as well as many other states, all hope to take advantage of this trend. Frankly speaking, if African countries fail to provide competitive investment incentives and skilled labour forces, they will probably miss another good development opportunity.

African consumers are free to choose what to buy. China has never acted like western colonialists by forcing African people to buy Chinese products. It is unfair to blame China’s trade policy for the deindustrialisation of Africa. According to the statistics of a well-known international institute in the US, the trade similarity index between China and Africa is as low as 4-7 per cent. A couple of years ago, to make more room for African products in the market, China voluntarily cut back its textile exports to certain African countries. But it eventually turned out that the market share China had given up for Africa was seized by non-African countries.

As for energy, Africa’s rich endowment in natural resources is its major comparative advantage. It should be transformed into Africa’s development advantage. Co-operation with China offers an opportunity in this regard. But if one thinks China’s co-operation with Africa only focuses on oil and minerals, that is a lopsided view. Deborah Bräutigam, an American scholar, argues that the infrastructure facilities built by China in Africa are not a step in a grand plan to grab resources. She once admitted that the Chinese were trying to participate in different areas of Africa’s economy but the western countries’ interest was only in oil, oil, oil and nothing else.

China’s imports of oil from Africa only account for about 17 per cent of Africa’s total oil exports, much lower than that of the US and Europe. In its energy co-operation with Sudan, Chad and Niger, China has helped those countries put in place a complete oil industry system, which the west would never do for Africa.

All in all, China has been and always will be Africa’s good partner for development. China and Africa need to work together towards the same goal to bring more benefits to both sides.

The writer is president of the China Institute of International Studies Copyright The Financial Times Limited 2013.