A few months ago, a New York Times magazine cover was emblazoned with the question “Is China the World’s New Colonial Power?” The notion that China is a twenty-first-century colonizer is not new: commentators have been batting it around for a decade. But, to anyone who has experienced or even studied colonialism, the claim seems inappropriate, if not insulting.
The colonialism described in Joseph Conrad’s Heart of Darkness, Walter Rodney’s How Europe Underdeveloped Africa, and Franz Fanon’s Black Skin, White Maskswas insidious and potent. Yes, there were strong trade and investment relationships, but there was always explicit dominance, exemplified in imposed curricula, curfews, and movement restrictions based on skin color.
In the countries that experienced such colonialism – including my home country, Kenya – the effects can be felt to this day. To call China a colonial power is to diminish the true horrors that were faced by the colonized communities, including by my own relatives, who were detained by the British colonial authorities.
But, beyond the moral obtuseness of the comparison, this approach simply is not useful. To label China a “colonizer” or “benefactor” does little to help us understand the true nature of its relationship with the African continent, let alone other regions such as the Caribbean. And, given the potentially lopsided power dynamics, grasping that relationship is vitally important.
I recently worked with the boutique consultancy ChinaAfricaAdvisory to explore in depth how Chinese actors are operating within some key African countries, including by carrying out revealing cross-country comparisons. Three observations stand out.
First, we found that Chinese state-owned and private companies, government departments, and non-governmental organizations prefer to do business in African countries that have already formalized their ties with China. This is not the way colonialism usually works, for those still insisting on that comparison.
Such formalization often happens through memorandums of understanding, which seem to act as a kind of “gateway” for Chinese actors. For example, Kenya, which has at least 17 such memoranda with Chinese government actors, has attracted a large number of Chinese companies and NGOs for activities like managing special economic zones and spearheading large infrastructure and agricultural projects. Nearby Tanzania and Mozambique each have fewer than ten such agreements, and have attracted less Chinese activity.
The second observation is that Chinese actors do not avoid countries with governments that champion their own citizens’ interests (again, not a typical trait of colonizers). For example, in African countries with strong domestic labor laws, Chinese companies are not just willing to engage in infrastructure and other contracted projects; they also tend to hire more local workers, relative to Chinese labor. A recent McKinsey survey of over 1,000 firms in eight African countries found that almost 90% of their employees were locals.
This can have a powerful impact on the host country. Job creation resulting from construction projects and manufacturing investment is crucial, particularly in countries such as South Africa, Namibia, and St Lucia, where 40% or more of young people are unemployed. The shift toward hiring more local labor is particularly notable, because, as recently as 2015, almost 40% of all Chinese overseas workers were on the African continent.
The third insight revealed by our research relates to the true complexity of Chinese investment decisions. Like any investor, Chinese actors in Africa focus on maximizing returns – and that means seeking fast-growing economies. As a recent Johns Hopkins University briefing showed, the Chinese investment destinations of Tanzania, Ghana, and Kenya have been growing at annual rates above 6%.
But, unlike many other investors, Chinese actors have proved willing to take economic and political risks. Consider South Africa, which has a “comprehensive strategic partnership” with China. Since at least 2003, South Africa has regularly ranked in the top five African recipients of outward direct investment from China, with Chinese ODI continuing to rise, even as South Africa’s economic growth has declined.
Similarly, Angola, the Democratic Republic of Congo, and Zimbabwe – countries with notoriously difficult political environments that typically feature at the bottom of global competitiveness indices – have all been key destinations not just for loans, but also for significant non-financial Chinese investment over the last decade.
While China is no colonizer, African and other governments do have a responsibility to ensure that their relationships with China meet their own development interests and objectives. Given China’s growing global footprint, an ad hoc approach is no longer appropriate.
I would suggest four critical steps.
· First, each government should prepare an in-depth “China plan” that sets out explicitly what its citizens want from Chinese partnerships. Such plans can also support due diligence – for example, exploring China’s relationships with neighboring or other countries at a similar level of development.
· Second, each country should seek out Chinese actors that might help them carry out their China plan. Organizations such as the China-Africa Business Council and others can help facilitate such searches and introductory meetings.
· Third, countries should negotiate memorandums of understanding and contracts on the basis of established best practices. In pursuing such negotiations, African countries should be aware that they actually have a great deal of bargaining powervis-à-vis China, even more than many other developing countries.
· Finally, governments should enlist the help of domestic entities, such as NGOs, in monitoring and reviewing the outcomes of China’s activities, such as those concerning labor standards or environmental performance.
There are still an estimated 389 million Africans living below the poverty line – over half the world’s total. China’s engagement in Africa can help to reduce that number, but only if African countries work to manage their relationships with China strategically, protecting their own interests as they create mutually beneficial arrangements with the Asian giant. Though China is no colonizer, it would be a mistake to assume that its growing global footprint is purely benign.
July 2017