Building business: Chinese aid to Africa

There is a great deal of mystery surrounding the exact nature of China’s aid to Africa. However, China continues to dismiss the criticism that its aid programme supports repressive regimes, preferring to see aid arrangements as business, without a political agenda.

China pledged $10 billion in loans to Africa in 2009 without any political preconditions. Despite much optimism over Beijing’s efforts to support development and investment on the continent, critics have been quick to highlight the lack of transparency over the deal.

What is the nature of Chinese Aid to Africa?

In fact, it’s often unclear when China talks of “assistance,” whether it’s talking about development aid or soft loans for investment or other projects. A recent World Bank report (full report) claimed that “Chinese finance is on a scale large enough to make a material contribution toward meeting Africa’s vast infrastructure needs. As such, it offers an important development opportunity for the region.” However, the report also outlines that “Despite the importance of Chinese finance for African infrastructure, relatively little is known about its value.”

There is a tendency for Chinese aid to come with conditions, such as the need to use Chinese labour when aid is tied to infrastructure projects, which does nothing for developing the “human capacity” in these countries. On a recent visit to Ethiopia I heard clear disquiet among local people that construction projects had not resulted in more widespread economic opportunities. However, as Brian Atwood, dean of the Hubert H. Humphrey Institute of Public Affairs at the University of Minnesota, points out most donors attempt to link aid to foreign and trade policies to some level.

In defence of China

Zhang Xiaoying argues that “There is a western stereotype that sees China as a very aggressive newcomer, disregarding human rights and only being there for narrow national self-interest.” She goes onto point out that Africa has been actively involved in supporting the continent since the 1950’s, and has every right to feel aggrieved by western criticism, given their long standing investment in health, agriculture, education, electricity generation and engineering. Perhaps the most famous been the Tazara railway between Dar es Salaam, Tanzania and Kapiri Mposhi, Zambia. This was completed in July 1976 after six years of labour involving more than 50,000 Chinese workers, at a total cost of about £95million.

Nevertheless, China does not seem able to shake off its negative image in the West. The recent WikiLeaks debacle has reinforced the view that China’s interest in Africa is not driven by poverty concerns, but commercial objectives. Warning that the majority of Africans have no idea what land, minerals and other resources are being sold to the Chinese by their respective governments.

The true nature of Chinese-African relations could yet be unveiled through the current political wrangling taking place in the Ivory Coast. Here, President Laurent Gbagbo continues to dispute the result of a recent presidential election, which he is said to have lost to Alassane Ouattara. Gbagbo supporters optimistically believe China will come to his rescue, following their major investment in telecoms and construction across the country.

Two questions are left unanswered: (1) Will the Chinese allow politics to get in the way of business? And (2) Who said aid should be political anyway?

Want more  information?

GDN and the African Economic Research Consortium (AERC) have recently completed extensive research into China’s relationship with Zimbabwe, in particular the military assistance, aid, loans and trade.

You can view videos and find out all of the latest news from this study through the AERC Biannual Research Workshop page on GDNet, the Global Development Network’s online research resource.

GDNet also houses a number of other articles that explore the financial relationship between China and Africa, such as:

The Chinese Influence in Africa: A global trend by Valerie Paone, China’s export-import bank and Africa: New lending, new challenges by the Centre for Global Development (CGDEV), How does China’s growth affect poverty reduction in Asia, Africa and Latin America? by the Overseas Development Group at East Anglia University

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