AFRICA LAGS BEHIND AS ITS RESOURCES POWER CHINA'S GROWTH
Hail to the chief? Chinese President Xi Jinping in Tanzania with President Kikwete with their spouses. China has committed billions to Africa as it seeks access to raw materials
The global economy is fueled by our demand for digital technology. To meet such a demand, developed economies scramble in Africa to secure precious minerals and metals.
In this Digital Age, China has become the world’s second largest economy due to this scramble. As the main source that fuels the global digital economy, Africa lags behind the rest of the world in digital production and consumption. China is a global leader in digital production and consumption – thus we see, China’s development and Africa’s underdevelopment.
According to Dr. Walter Rodney in his classic How Europe Underdeveloped Africa, Europe along with the United States became a global economic power by way of capturing Africa’s precious resources, especially gold, diamond, cooper, iron, coal, ivory, and oil through questionable means. Dr. Rodney accurately chronicles how Western nations since the 15th century moved hastily and with urgency to enslave Africans and to colonize Africa. This scramble for Africa ignited the Industrial Revolution and the development of Western nations. As a result, Dr. Rodney argues that this massive development of Europe and the United States ushered the underdevelopment of Africa. Rodney’s book is timeless, if one substitutes the word "Europe" with "China" in his original title.
In the 21st century, China is scrambling for Africa and the result is a Digital Revolution, which ignites China’s development and maintains Africa’s underdevelopment. Currently, the leading economic nation in Asia is China. And many argue that China became a global economic force due to the Confucius philosophy of industrious morale, entrepreneurial spirit, and focus on community and nation building. Others argue that China’s rapid economic growth is due to globalization, convergence, foreign aid, foreign investments, and political transitions as evident with the death of Mao’s communist China and the emergence of a capitalist system under the leadership of Deng Xiaoping during the 1970s.
The above factors definitely played a role in the economic development of China. However, the most significant factor in the development of China as an economic power is China’s ability to enter African markets and secure Africa’s precious resources, especially oil, tantalum, cooper, germanium, gold, manganese, and cobalt through questionable means.
By penetrating African markets and with one tenth of the per capita GDP of the United States, China has become the second largest economy in the world. China is also leading the aid effort in Africa by providing the continent with $10 billion in loans which has given China greater access to Africa’s natural resources and minerals. Perhaps, it is this aid along with China’s support of African revolutionary movements during the 1960s and 1970s and their previous non-aligned coalition, which has created a lax barrier of entry into African markets for China.
Unlike the West’s scramble for Africa, China is using economic inducement and peacekeepers instead of raw military force and missionary efforts to enter African markets. Moreover, in China unlike the United States, there is an absence of the Foreign Corrupt Practices Act or any legislation that targets corporate dealings regarding conflict minerals in Africa, which makes China’s market entry into Africa propitious for China’s industries, banks and investors.
However, what China and the West have in common in their scramble for Africa is not only their thimblerig and vulpine business practices, but their capitalist lust to earn huge profits despite the negative externalities. These negative externalities include the underdevelopment of Africa and lack of a competitive advantage in Africa by way of cheap labor, low African productivity, bloody conflicts, civil wars, unemployment, labor rights violations, unrefined crude oil, poor technology, corruption, and subpar infrastructure. Thus, African nations spend huge resources and capital importing consumer goods from China as African manufacturing companies along with value-added African owned industries, such as petrochemical industries are lacking.
In Africa, Chinese corporations are investing heavily in energy and raw materials to stimulate China's growth, but not the growth of Africa. China’s "no-strings" investment policy has re-introduced Africa to the Dutch Disease, the reference in a collapse in other sectors such as manufacturing when focus is exclusively on exploiting natural resources.
For example, Nigeria has exhausted its foreign exchange reserves despite its increased income dependency on its dwindling oil and manufacturing sectors. In his Financial Times opinion-editorial, “Africa Must Get Real about Chinese Ties,” the chief of Nigeria’s central bank Lamido Sanusi, states that China is “a significant contributor to Africa's deindustrialization and underdevelopment” and is “capable of the same forms of exploitation as the west.”
That exploitation is evident in Zambia, where China has invested heavily in capturing Zambia’s cooper and coal reserves along with its manufacturing and agricultural sectors, while violating the rights of workers from Zambia. According to Washington Post Bureau Chief Jon Jeter in Flat Broke in the Free Market, foreign penetration of African markets has created deindustrialization and a transnational underclass in Africa where a Zambian woman struggles to earn 75 cents a day selling her product at an outdoor market which is overflown with thousands of cashiered textile workers
Recently, the Zambian government seized a Chinese coal mine that has a long history of labor rights abuses and safety violations in Zambia. Moreover, since 1998 when China Non-Ferrous Metals Corporation acquired 85 per cent of the holdings to Zambia’s Chambishi copper mine, Zambian mine workers often complained about excessive abuses from their Chinese managers. In 2011, according to the Annual Survey of Violations of Trade Union Rights, two Chinese managers, Xiao Li Shan and Wu Jiu Hua, shot and wounded 11 African miners at the Chinese-owned Collum coal mine in Zambia’s Sinazongwe district. Xiao Li Shan and Wu Jiu Hua were later charged with attempted murder.
In their article for Asia Times -“Asia Strips Africa's Textile Industry,” Frank Phiri and Moyiga Nduru state that in South Africa, Chinese investments have led to South African textile workers losing their employment due to a large volume of Chinese imports. As a result, Phiri and Nduru report that Chinese clothing represents 86 per cent of the total garments imported into South Africa, and other items, such as towels, blankets and curtains made from China represent 60 per cent of South Africa’s imports. According to Frank Ching’s “China Courts Africa, Guerrilla Style,” in the Globe and Mail, Botswana President Ian Khama stated “we have had some bad experiences with Chinese companies,” where “we accept China’s goods. But they don’t have to export their population to sell us those goods.” President Khama was complaining about China bringing in Chinese workers rather than employing African workers.
Despite the brutal civil war that killed over two million people in the Sudan, China has heavily invested in the worn-torn region of Darfur --where International peacekeepers were sent-- as China purchased oil and sold arms to conflicting groups. China is the leading foreign investor in the Sudan, and for its economic benefit, played an enormous role in Sudan’s oil sector. In 1996, according to Geoff Dyer’s “Signals of a Shift,” in the Financial Times, “China National Petroleum Corporation, the parent company of Petro-China, acquired a 40 per cent stake in the country’s most lucrative oil concession.” Moreover, China created a pipeline that transports the oil of the Sudan up to Port Sudan on the north-east coast. As a result, Dyer states that China controls 40 per cent of Sudan’s oil, where 60 per cent of Sudan’s oil is sold to China – thus, making the Sudan one of its biggest oil suppliers. Dyer also points out that the development of a new nation, South Sudan will ultimately prove challenging to China’s interest and diplomacy in that region as 80 per cent of the oil in the Sudan is located in South Sudan, while the north, or Sudan, controls the pipelines and ports that ship the oil to the rest of the world.
During the Digital Revolution, China became the leading broadband economy. According to David Barboza’s New York Times article, “China’s Sprint for the Gold,” China has 650 million mobile phone users and the world's most innovative Internet companies, such as Baidu.com, Tencent and Alibaba.com, and more Web surfers – roughly 338 million than any place in the world. Despite the global economic recession, Barboza contends that sales in the world’s luxury brands are expanding in China, along with the development of the best airports and the building of five-star hotels in every city in China, while some nations in Africa remain impoverished and underdevelopment. Moreover, according to Barboza, China has also surpassed the United States as the world's largest auto market industry. China sold about 600,000 cars in 2000 and is on course to sell nearly 15 million vehicles.
The management of a digital economy proves challenging as digital technology continuously grows and changes in an extremely rapid pace. This ultimately creates an economic space where the unequal global distribution of digital access, tools, information, employment, and applications are not only kenspeckle, but also problematic - as evident in the digital divide discourse. Africa is the hub which provides the world with digital devices, but lags behind the rest of the world in digital development and consumption. Edward J. Malecki and Bruno Moriset, in the Digital Economy state that “only about 2.5 per cent of African residents are online, compared to the worldwide average of 16 per cent.” Furthermore, Malecki and Moriset contend that communication in Africa relies heavily on antiquated digital technology, such as satellites instead of fiber optics, where Africa pays 50 times more for bandwidth than the rest of the world. Nonetheless, there is a failure in western journalistic outlets and legislative bodies to fully explore the links between digital devices and the bloody conflicts in Africa.
The Democratic Republic of the Congo is a major source of essential industrial metals and minerals, such as tantalum, cooper, germanium, gold, manganese, and cobalt. According to Jean Eaglesham and Jeremy Lemer’s Financial Times article - “US Law to Squeeze Conflict Minerals,” these precious metals and minerals, such as tantalum, are responsible for the existence of key electronic components, such as the capacitors which are found in automobiles, personal computers, and mobile phones. Richard Lapper in his Financial Times piece, “Ideology is the Mortar for Brics’ Success,” states that the industries in China rely heavily on: iron ore from South Africa; cooper from Zambia; and, oil from Nigeria, Angola, and Sudan. Thus, for Lapper, to secure these metals and minerals, China plans to deliver tens of billions of dollars to Africa in loans and investments, leading to an estimated China-Africa trade worth $107 billion. Furthermore, following in the footsteps of Europe and the United States, Lapper contends that China has backed repressive governments and exasperated bloody conflicts in Africa, such as those in the Congo, Sudan and Zimbabwe.
As a result of China’s dealings with Africa, China is the fastest growing economy with the fastest-growing number of billionaires. According to the Hurun Report, “Hurun Global Rich List 2013,” Asia has more billionaires in the world with 608 billionaires, followed by the United States with 440 and 324 from Europe. The Hurun Report states that “the total wealth of the 1453 billionaires amounted to a staggering US$5.5 trillion, the equivalent of China’s GDP.” According to the World Wealth Report 2010, the number of millionaires in Asia Pacific exceeded that of Europe, whereas Africa has the lowest number of millionaires in the world – 100,000 (0.01 per cent).
Due to Africa, China is the global leader of energy, petroleum, public stock offerings, and broadband economy with the biggest automobile market, banks, and the fastest growing middle class in the world. China also ranks second globally in the luxury market and has accumulated $2.2 trillion in foreign exchange reserves - more than any other country. Since entering the African market, China has lifted 300 million of its people out of poverty and has more people using mobile phones and the internet than any other place in the world.
Yet, for Africa, income distribution along with social segmentation runs rampant and leads to poverty, bloody conflicts, civil war, and underdevelopment. According to Oxford University’s Multidimensional Poverty Index, the ten poorest countries in the world are located in Sub-Sahara Africa. For Dr. Leonard Jeffries Jr., the co-founder of the World African Diaspora Union, the economy of Africa centers around agriculture, trade, industry, and human resources where as a continent, Africa is land-rich and resource-rich, but people poor given the fact that Africa is the world's poorest inhabited continent as measured by GDP per capita.
In “The Largest Economies in Africa,” Ventures indicates that “no African nation has yet joined the ranks of the developed nations in the Organisation for Economic Co-operation and Development (OECD), but there are some sizeable economies on the continent, and economies that are gradually increasing in size.” Despite economic growth in countries like South Africa, Egypt, Nigeria, Algeria, and Morocco, the United Nations Development Programme Human Development Report 2013 indicates that Africa has 36.2 per cent of its population living less than US$1 per day. Thus, in the 21st century’s scramble for Africa, China along with the rest of the world fails to address how our avarice for wealth has exceeded our humanity. Like the West, China’s cacoethes for oil, metals, minerals, and digital materials has indeed eclipsed our humanity as evident in the development of one country at the expense of one continent.
Professor Patrick Delices is a political analyst/commentator for the Black Star News and the author of “The Digital Economy,” Journal of International Affairs. For nearly a decade, Prof. Delices has taught Africana Studies at Hunter College. He also served as a research fellow for the late Pulitzer Prize recipient, Dr. Manning Marable at Columbia University.