[FBEC 2001] Chinese Investment in Africa Essay

Philip Hammer Leona Lam Leona Lam Cindy Lu

Duanrui (Gloria) Shi Eunice Wang

Jingbi (Marina) Ying

China’s Investment in Africa

The global rise of China has had an impact across the globe, restructuring the

international market, affecting every corner of the world. China’s growth has been

unprecedented, growing at an average of 10% every year, drastically changing the internal

dynamics of the Chinese economy and pulling millions of its citizens out of poverty. This

unheard of growth has been the result of market reforms and liberalizations that took place in the

early 1980s, which resulted in a massive influx of FDI into China from the rest of the world. As

China has risen as a global power, however, it has gained the capacity to invest its own wealth

abroad, and has done so on a monumental scale. Nearly every country, from Pakistan to Canada,

has been a target of the new Chinese global reach, as the middle kingdom’s desire for energy,

resources, safe investments, technology, and political connections, pushes it to invest abroad.

China’s interest in Africa raises eyebrows all over the world, maybe most pressingly,

from Western powers. Part of the problem of China’s involvement in Africa has been a

misunderstanding of goals and methods. China’s current hard interests on the continent have

been misunderstood for manipulation and neo-colonial motivations, but China’s involvement in

Africa has been about development, meaning, supporting forces that can create long-term,

sustainable growth in a country, leading to improved quality for life of citizens. For the most

part as we find that China’s interests are anchored by their policy of mutual benefit, respect and

non-intervention. Going over the leading assumptions by Western powers of Chinese

motivations, we find that Chinese interest in Africa have prominently been in African natural

resources. Rapid economic growth coupled with dwindling domestic Chinese petroleum and




mining deposits have encouraged Beijing to look abroad for such resources. China obtains one

third of its oil imports from African countries, and recently became the world’s second largest

consumer of petrol products. Africa is also a significant source of minerals and natural gas

imports to China, growing 20% annually1. In this regard it would be challenging for China to

meet all of its raw material needs from non-African resources. Secondly, Africa’s population of

nearly 1 billion people and a growing middle class provides a huge opportunity for China to

grow its export market. Between 2000 and 2010, China’s export to Africa grew by a factor of

13.2 To satisfy China’s population and prevent a crisis of legitimacy as their role as leaders,

those in Beijing need to keep economic growth rates high and continue to bring hundreds of

millions of people out of poverty. And to do so, China needs land, oil, minerals, as well as

export opportunities.

China’s involvement in multilateral institutions puts itself, as well as Africa in a prime

position when it comes to geo-political strategies. China welcomes African support in forums

such as the World Trade Organization (WTO), and it in turn often supports African position in

the UN Security Council. Although, this mutually beneficial relationship leads to such situations

such as: China and many African countries that are criticized for their human rights records tend

to support each other in the UN Human Rights Council, which replaced the UN Commission on

Human Rights, since China helped fill it with African worst human rights abusers, including

1 Cate, Wesley. "Africa's New Marketplace: From Donor Target to Investment Opportunity." Sagamore. N.p., 20 June 2011. Web. 10 July 2013. 2 SUB-SAHARAN AFRICA Trends in U.S. and Chinese Economic Engagement. Rep. Washington D.C.: United States Government Accountability Office, 2013. Print




Sudan and Eritrea. But Western countries have no moral high grounds on which they can judge

China, as these Western countries have also been engaged in mutually beneficial relationship

with a number of repressive leaders. The United States has had great interests in Saudi Arabia’s

massive oil wealth and its own ability to check Iran’s power in the region, making Saudi Arabia

an important ally. But Saudi Arabia’ human rights records is quite brutal, in that the country has

used a great deal of force and money to quickly silence the Arab Spring-inspired protests at

home. And all the while, the United States goes on to support Saudi Arabia through a massive

$60 billion weapons sale.3

The deployment of 90 peacemakers to Liberia in December of 2003 occurred two months

after Liberia switched its diplomatic recognition from Taiwan to China; this displays the

strategic importance that African nations hold in the struggle between Taiwan and China efforts

to gain recognition.4 Currently, only four African countries still recognize Taiwan. China’s

investment in Africa pays an added bonus in the diplomatic effort to deny Taiwan “international

space” through recognition by individual countries and their resulting support in multilateral

forums. But this is just a natural example of a nation attempting to establish a soft power sphere

of influence by providing economic benefits for countries and encouraging them to accept

policies friendly to Chinese interest. The Soviets were the primary competitor to the US, in

terms of soft power, throughout the Cold War. Attempts to attract Europe through its resistance 3Keiswetter, Allen L. "The Arab Spring: Implications for US Policy and Interests | Middle East Institute." The Arab Spring: Implications for US Policy and Interests | Middle East Institute. Middle East Institute, 13 Jan. 2012. Web. 2 July 2013. 4 Thompson, Drew. "China's Emerging Interests in Africa: Opportunities and Challenges for Africa and the United States." Center for Strategic and International Studies. Center for Strategic & International Studies, n.d. Web. 2 July 2013.




of Hitler, as well as colonized areas around the world because of its opposition to European

Imperialism, the goal was to convince the world of the attractiveness of the Communist system,

all of which were done through public diplomacy program. Despite their attempts, the Soviet

closed system and lack of popular culture were barriers that lead the US to come out on top in

the end of this. By establishing itself as a soft power, China makes itself an attractive partner to

do business with, a natural business strategy.

The above-described motives are dominant narratives when it comes to China’s

involvement in Africa. “It’s about diplomacy, to promote good relationships and the pattern is

clearly not linked to natural resources,” states Deborah Brautigam, an expert on Sino-African

Relations at John Hopkins University. China has committed $75 billion in aid and development

projects in Africa in the past decade.5 China has been investing in many aspects of African

development, infrastructure, agriculture and even manufacturing, areas that have traditionally

ignored by the West. By investing in these areas, China helps these African countries become

less reliant on foreign powers, and become self-sustaining. The Western foreign aid regime was

established after WWII, though successful in reconstructing Europe, wasn’t able to work

everywhere since it was used as a tool of containment rather than actual development. Villaya

Ramachandran, a senior fellow at the Washington D.C.-based think-tank, Center for Global

5 Provost, Claire, and Rich Harris. "China Commits Billions in Aid to Africa as Part of Charm Offensive." The Guardian. Guardian News and Media, 29 Apr. 2013. Web. 1 July 2013.




Development insists China is playing an important role in closing funding gaps in Africa, “China

is a major emerging player in development finance…”6

These investments have had a very favorable affect in Africa have both positive and

negative social effects. The infrastructure built— hospitals, universities, roads, etc—has

improved living conditions by providing the foundations for further effective programming, such

as an improved health system. Such long-term investment is extremely important because

traditional donors have been reluctant to provide this type of aid due to the slow rates of return.

Although some African officials have claimed China to be neo-colonizers through the removal

raw material from African land to use in their (China) manufacturing industries to sell back to

African, the Chinese have also claimed that, unlike their Western counterparts who only take but

do not return, they view Africa as an equal partner.

Furthermore, Chinese investments have been able to domestically boost Africa’s status.

For example, China’s investments in medical products have helped Africa build a better health

model. With China’s admirable record of delivering health service as well as its potential to

develop and produce useful products at international standards with significantly lower costs,

China’s foreign medical aid program in Africa has saved many lives.7 Another example is the

Chinese investments in the superhighway in Naobi. Approximately 353 million US dollars were

invested for the construction of this highway. Africa has experienced the efficiency brought by

the infrastructure that has been built. However, some argue that China is not taking responsibility 6 Ibid. 7 "China Seen as Model for African Health." |Cover Story |chinadaily.com.cn. N.p., n.d. Web. 21 July 2013.




of their investments in Africa. Since the 1950’s, China has used “non-interference” to guide its

foreign policy in aiding development, including Africa. 8 Compared to Western countries that

been involved in Africa, China does not require conditions with its investments. It is said that

these kinds of ineffective aid cannot benefit Africa’s wellbeing, which reflect that economic

cooperation happened as well as backdoor dealings. It also contributes to the fueling of poor

governance in areas like Zimbabwe, Angola, Ethiopia, and Sudan where there is continuing

suffering regardless of China’s aid. China has be continuously criticized for it non-interference

policy. 9China defends itself by claiming that they provide aid to help Africa benefit the people,

not for political purposes of showing off to the world. Overall, the social effects of Chinese

investments in Africa are positive.

In addition, China’s investment has strengthened Africa’s economy significantly., The

cumulative FDI investment is $14.7 billion.10 This has impacted the county in many different

ways. For example, as a direct result of the investment, Africa’s debt with the U.S. has been

reduced by $10 billion dollars, thus weakening Western influence in Africa.

8 "China’s ‘Image’ Problem in Africa." The Diplomat. N.p., n.d. Web. 2 July 2013. 9 Kapchanga, Mark. "China's Aid to Africa Needs Transparency - Globaltimes.cn."China's Aid to Africa Needs Transparency - Globaltimes.cn. Global Times, 27 Jan. 2013. Web. 21 July 2013.

10 Shinn, David H. "The Impact of China’s Growing Influence in Africa." European Financial Review. N.p., n.d.Web.




In fact, as the chart from McKinsey Global Institute illustrates, overall government debt has been

reduced by 28% GDP from 1990’s to 2000s. Inflation and budget balance has also improved

resulting in macroeconomic stability.

Next, the Economist states that China has also benefited Africa in the form of loans.

Currently, China gives Africans more loans than the World Bank. The largest type of these loans

comes from concessional loans provided by the China Ex-Im Bank. Concessional loans are

unique in that 50% of the value of these loans must be used for purchasing goods and services

from China—which not only benefits China but also helps to increase consumption in Africa,

raising overall GDP. Investments in China have also helped employment. On one hand, China

pays less than the minimum wage in Africa, on the other; China pays more than the labor cost in




China.11 Despite these circumstances, overall job opportunities have increased in Africa—a low

paying job is better than no job at all.12

Although jobs have increased, a counter argument is that China only employs laborers

from China. This in turn makes locals feel threatened; Sanou Mbaye, a former senior official at

the African Development Bank has stated that more Chinese has came to Africa in the past 10

years than Europeans in the past 400.13 And because of this tension and the large influx of

migrants, heated strikes have resulted from African workers, who are violently dispersed by

Chinese employers.14 Despite views of Chinese manufacturing employers only hiring Chinese

workers—statistics reveal that there is on average 2 Chinese workers for every 8 African

workers.15 Furthermore, grant related projects under the Chinese have a majority of African

workers—as required by the law.16 To further boost employment, the National Development and

Reform Commission (NDFC) in China has efforts to actively encourage Chinese enterprises that

are eligible to invest in Africa in effort to create jobs for locals. Some areas include: textiles,

mining, transportation, resource development and much more.17

Lastly, the cost of goods in Africa has been lowered because of cheap production costs

from China. This has benefited consumers as this matches domestic demand as more people

11 Zhou, Dillon. "PolicyMic." PolicyMic. N.p., n.d. Web. 10 July 2013. 12 "Chinese Businesses in Africa" Forum Held in Beijing." Fmprc.gov. N.p., n.d. Web. 17 July 2013. 13 "The Chinese Are Coming...to Africa." The Economist. The Economist Newspaper, 22 Apr. 2011. Web. 12 July 2013. 14 Zhou, Dillon. "PolicyMic." PolicyMic. N.p., n.d. Web. 10 July 2013. 15 Ibid. 16 Zhou, Dillon. "PolicyMic." PolicyMic. N.p., n.d. Web. 10 July 2013. 17 Shinn, David H. "The Impact of China’s Growing Influence in Africa." European Financial Review. N.p., n.d. Web




being able to affordable basic items. However, on the producers side, it has done more damage

than good. Local markets simply cannot compete with the cheap labor that the Chinese supply

and thus force many factories to go out of business. 80% of Nigerian’s textile industries have

been shut down as a result of direct competition. On the flip side, China has invested millions in

African factories helping African industries become self-sustainable.18 This long term of

investment is extremely important because traditional donors are reluctant to provide this type of

economic support promoting development due to a long period of return.

Overall, the views about China’s influence on Africa vary, depending on the perspective. It

seems to be that while on the local level, tensions are quite evident, but overall, China’s

investments has been benefiting the economy quite substantially. Chinese companies can

diversify investment by investing in African industry. China has been looking to invest in

different ways in Africa, instead of focusing only on building infrastructure projects.

Additionally, Africa's ambitions for urbanization, commodities, jobs, new overseas markets, and

improved manufacturing, trade, services and resource sectors, have presented unprecedented

business opportunities to foreign investors. To further strengthen cooperation with Africa, the

Chinese government has consistently encouraged state-owned and private companies to invest

there. Thus, in order to boost China's investment in Africa, the China-Africa Business Council

and the China-Africa Development Fund have decided to set up two new funds this year as well.

One fund is for commercial ventures, the other for mining activities. Zheng Yuewen, chairman

of CABC, which represents the interests of more than 550 Chinese companies in Africa, says

18 Zhou, Dillon. "PolicyMic." PolicyMic. N.p., n.d. Web. 10 July 2013.




each fund will raise $1 billion in its initial phase from member companies and the CADFund,

China's largest private equity fund focusing on African investments. Furthermore, China can

gain a lot of rich natural resources from Africa, which can help china’s economy develop

steadily. Ambassador David Shinn notes that China obtains about one third of its oil imports

from African countries and significant of mineral resources, for example about 90% of its cobalt,

35% of its manganese and 30% of its tantalum.19 Africa is of great importance for China because

it would be difficult for China to meet its entire mineral needs from non-African sources

However, there are also numerous risks of investing in Africa. First of all, challenges

from other countries makes it difficult for Chinese companies to survive in Africa. The changing

global investment environment and the lingering debt crisis in the Euro Zone have prompted

major economies such as the United States, the United Kingdom, France, India and Japan to shift

their investment focus from traditional markets in Europe and Asia to Africa. Secondly, political

environment is unstable in some African countries. Leadership transition can cause policy

change, which is not beneficial for long-term business operation. In addition, economic

environment is also volatile. Chinese companies may suffer losses because of fluctuating

currencies, with it pertinent that the RMB be changed into USD and then having the USD

changed into African currencies. Thus, fluctuation of these three currencies can have negative

effects when it comes to profit making. Furthermore, there are cultural differences between

19 Antwi-Danso, Vladimir. "Sino-Africa Relations: The Myth and Reality, the Conjectures and Refutations | Vladimir Antwi-Danso - Academia.edu." Sino-Africa Relations: The Myth and Reality, the Conjectures and Refutations | Vladimir Antwi-Danso - Academia.edu. N.p., n.d. Web. 10 July 2013.




African countries and China. To buy a land, companies do not only apply to the government but

must also gain the permission from the chief of a tribe. If businessmen cannot understand these

cultural differences, he may fail to run his business in Africa.

China’s investment in Africa continues to grow year over year. China is holding onto

over $2 trillion in foreign reserves and the US Treasury bonds are paying very low returns. In

hopes of diversifying its investment and profiting from greater potential returns, China has

invested in stable and unstable countries throughout the African continent.

South Africa is one of the relatively stable countries that have received Chinese

investments. The Global Heritage estimates that China invested $8.6 billion to date. This

investment, both public and private, is in a variety of sectors including Metals ($2.7B),

Transportation ($100M), and Finance ($5.9B).20

As a member of the BRICS, South Africa has many qualities that attract investors. South

Africa serves as a gateway for trade with much of the African continent and has adequate

infrastructure in place. The political environment in South Africa is more stable than that of

many other African countries. South Africa has a well-developed financial system and

restrictions on the areas of investment are minimal to none. It has a substantial domestic market

and has comparative advantage in primary sector commodities such as metal ores, gold, and coal.

20 "China Global Investment Tracker Interactive Map." The Heritage Foundation. N.p., n.d. Web. 2 July 2013.




Hisense, a Chinese technology manufacturer, has been relatively successful in conducting

business in South Africa. It has grown significantly since it first entered the country in 1996. In

June 2013, the company opened a 24,000 square meter factory that brings the total area of the

company to 100,000 square meters of space in Atlantis, South Africa. 6,000 square meters were

allotted for producing flat screen televisions and 18,000 square meters were for the company’s

refrigeration operation.21 In South Africa, the company currently has 30 percent of the market

share in televisions.22 Hisense also has an electronics technology research and development

training facility within the “industrial park” that is run by Chinese engineers and is developing

the skills of local technicians.23

Another Chinese company that has established its presence in South Africa is Huawei.

The mobile technology company announced in March 2013 that it was launching its first South

African call center. This call center will be responsible for dealing with inquiries and assisting

African customers with technical difficulties.24 The investment in this call center signifies the

size of Huawei’s penetration into the African market and the successful Huawei operations in

South Africa.

From this South African case study, we can see that the relative political stability in

South Africa gives investors a greater sense of trust in their South African investments. The

21"Hisense Keeps Expanding in South Africa." [1]|chinadaily.com.cn. N.p., n.d. Web. 2 July 2013. 22 Ibid. 23 "Chinese Electronics Manufacturer Opened Industrial Park in South Africa." - E & T Magazine. N.p., n.d. Web. 12 July 2013. 24 "Huawei Launches First Call Centre in SA." SouthAfrica.info. N.p., 26 Mar. 2013. Web. 21 July 2013.




development of the South African economy encourages Chinese investments and is a promising

channel for China’s capital diversification.

Ethiopia is another relatively stable country that has received Chinese investments. The

Global Heritage estimates that China invested $7.8 billion to date. China invested $2.4 billion in

technology, $2.4 billion in transportation and $2.9 billion in energy.25

Ethiopia is currently on its Growth and Transformation Plan under which the Ethiopian

government hopes to industrialize the economy as a way of eradicating poverty and driving

economic growth.26 Chinese investments are one of the main drivers that are enabling the

industrialization of Ethiopia. Ethiopia’s main exports to China are oilseeds and leather

products.27 Meles Zenawi, the Ethiopian prime minister, said that there are tax incentives such

as rebates that help to encourage foreign investment into the country.28 Ethiopia is a potential

consumer market for China with a population of 82 million.29 The Chinese investments that are

helping to strengthen the Ethiopian economy will eventually lead to greater demand for Chinese

manufactured goods.30

25 “ China Global Investment Tracker Interactive Map." The Heritage Foundation. N.p., n.d. Web. 2 July 2013. 26 Erdal, Zeynep. "Strengthening New Bonds: Chinese Investment’s Role in Boosting Ethiopian Industrialisation." Consultancy Africa Intelligence. N.p., 4 Feb. 2013. Web. 27 Ibid. 28 "Ethiopia Seeks More Investment." Chinese Business News. N.p., May 2011. Web. 2 July 2013. 29 Ibid. 30 Erdal, Zeynep. "Banner Strengthening New Bonds: Chinese Investment’s Role in Boosting Ethiopian Industrialisation." Consultancy Africa Intelligence. N.p., n.d. Web. 4 Feb. 2013




One of the largest Chinese shoe exporters, Huajian Group, announced in June 2013 that it

was planning a multimillion dollar factory expansion in Ethiopia.31 The company and the China-

African Development Fund are jointly investing $2 billion over the next 10 years to develop

shoemaking manufacturing clusters in Ethiopia.32 The labor costs in Ethiopia and tariffs for

African exports to the US and EU are relatively low.33 In addition to investing in physical

capital, Huajian also invested in human capital but sending 50 Ethiopian technical school

graduates to receive training in China.34 Chinese investments in the shoe industry in Ethiopia are

helping Ethiopia transition from an agriculture-based society to one that has a greater

manufacturing base.

Another issue that China is helping Ethiopia tackle is the limited access to electricity in

the country. While 86 percent of the Ethiopian urban population has access to electricity, only 2

percent of the Ethiopian rural population has access to electricity. This is a tremendous problem

that is hindering Ethiopian economic growth considering the fact that 17 out of 20 Ethiopians

live in rural areas.35 As a result, this offered China the opportunity to be involved in building

hydropower plants including the Tekeze Dam and the Amerti-Neshe Dam.36 Eventually, the

31 China Plans Multimillion Ethiopia Investment." Financial Times. N.p., n.d. Web. 21 July 2013. 32 Ibid. 33 Ibid. 34 Ibid.

35 Erdal, Zeynep. "Banner Strengthening New Bonds: Chinese Investment’s Role in Boosting Ethiopian Industrialisation." Consultancy Africa Intelligence. N.p., n.d. Web. 4 Feb. 2013. 36 Ibid.




generated electricity from all the dams may be exported to countries such as Djibouti, Sudan, and

Kenya.37

Unfortunately, the positive impacts of Chinese investments in Africa come with its

negative aspects. The Chinese-financed dam and railway construction projects are awarded to

Chinese construction companies.38 These companies import their labor from China and therefore,

these large-scale projects are not creating many jobs for the local Ethiopian population. Some

are arguing that in the short run, Chinese companies seem to be benefitting the most but in the

long run, Ethiopia will benefit from greater efficiency and a higher possible volume of trade.39

From this Ethiopian case study, we can see that Chinese investments in Ethiopia are

mutually beneficial because while increasing returns for Chinese investors, it helps to

industrialize Ethiopia and to drive economic growth. Even though China is clearly sourcing a

new market for its manufactured goods, China’s investments are helping to lift Ethiopia out of

poverty slowly. The relative stability of the Ethiopian government is once again conducive to

foreign investments. Investing in Ethiopia helps China to diversify its capital investments.

While China may not be the major investor of FDI in many countries, it is rapidly

spreading and deepening its influence on every continent, and unlike many of its western

competitors, China has not shied away from cutting deals with dictators or oppressive rulers, and

seems to cares very little about local negative externalities resulting from its investments. This

37 Ibid. 38 Ibid. 39 Ibid.




indifference to domestic consequences has led China to directly or indirectly support oppressive

and often genocidal regimes in Libya, Sudan, Zimbabwe, and others. China often shields these

governments from international condemnation and props up their economies with massive

infusions of capital, gaining them political influence and special access to the resources which

are critical to Chinese growth. China can invest in these less stable states because instead of a

cost-benefit analysis, that most free market corporations need to make, much of Chinese FDI is

undertaken by SOE’s, who will make the investments necessary if it fits the central government

strategy. These SOE’s are not necessarily profit-oriented but seek to realize the energy security

strategy of the Chinese government. China’s oil and infrastructure investments are part of a

broad emerging strategy based on soft power and strong bilateral relationships.

A good example of this phenomenon can be seen in the nearly $20 billion investment

China has made in Libya, mostly in real estate, transportation, and oil production, involving 75

companies and 50 projects.40 China has made deals with many African states, including Libya,

providing Chinese expertise and infrastructure in exchange for access to critical resources.

Because of political instability and a deterioration of security caused by the Libyan civil war, the

36,000 Chinese workers had to be evacuated, and all projects suspended indefinitely. Chinese

losses are difficult to determine, as there is limited access and the extent of property damage is

unknown, but it are likely to be in the billions of dollars, and the abandoned construction projects

have an uncertain future.41 Despite the risks in making deals with a new and still unstable

40 "China Global Investment Tracker Interactive Map." The Heritage Foundation. N.p., n.d. Web. 2 July 2013. 41 "China's Investment in Libya Is More than $20 Billion and the Amount of Loss Is Difficult to Estimate." HubPages. N.p., n.d. Web. 2 July 2013.




government, China seems determined to continue its economic relationship with Libya. The

president of the Electrical Association said that they would “Continue to explore overseas

markets and learn experiences in Libya to avoid potential risks.”42 Especially critical for China

is Libya’s oil reserves, which in 2010 made up 3% of its crude oil imports, approximately

150,000 barrels per day. China has sought to gain political favor with the new government and

increased access to Libya’s oil market by hosting several rebel leaders and sending envoys for

talks. This example exemplifies the problem of risk that is inherent in the Chinese investment

strategy, where investments are not made in accordance with the laws of supply and demand but

based on the decisions of the Chinese central government, which despite some losses, continues

to push its SOEs to expand abroad, capturing an ever-broader quantity of global resources to

power the Chinese economy.

Another recipient of Chinese foreign direct investment has been Sudan, which has a long

and established trade relationship with China. Sudanese-Sino relations were established after

Sudan’s successful independence from Great Britain in 1956. Chinese FDI was minimal in

Sudan for decades until the discovery of massive oil reserves, which spurred an infusion of

Chinese capital (approximately $7.6 billion over the last decade), technology, and industrial

expertise, offering a significant boon for the Sudanese economy. When Sudan initially began

exporting oil in 1999, its GDP growth more than doubled, from 3% in 1999 to 7% in 2000. Oil

currently accounts for 90% of Sudanese exports. Real GDP experienced strong growth from

42 Ibid.




1999-2008 with the rate of growth averaging 7.9%.43 The growth of Sudan’s oil industry has

made it a critical source of Chinese resources, currently contributing 10% of Chinese oil.44

Despite this, Sudan has been an unstable country for years, having fought two decades-

long civil wars with its south; The First Sudanese Civil War (1955-1972) and The Second

Sudanese Civil War (1983-2005) which has resulted in the deaths of two million people and the

displacement of 4 million. Both conflicts stemmed from major differences between the north

and south, including race, religion, and the perceived exploitation of periphery populations by

the central government. The government of Sudan has also been labeled a state sponsor of

terrorism by the united states, and its president, Omar al-Bashir, has been charged by the

International Criminal Court with genocide and other crimes, and been an international pariah for

decades.

China has continued to support the government in Khartoum, shielding them from the full

force of the international community, and providing critical investments for the oft-beleaguered

state. China has repeatedly blocked UN Security Council’s efforts to combat the conflict by

threatening to veto resolutions aimed at the issue. According to a report in Human Rights First,

“Between 2004 and 2007, the Security Council debated 14 substantive resolutions about Darfur,

and China used its power to weaken nine of them. On most occasions, China forced the removal

43 Suliman, Kabbashi M. "An Assessment of the Impact of China’s Investments in Sudan." Editorial. n.d.: n. pag. Print.

44 "Sudan." Wikipedia. Wikimedia Foundation, 20 July 2013. Web. 2 July 2013.




of tough language, including the threat or imposition of targeted economic sanctions.”45 Chinese

oil investments in the war-torn state, according to international rights activists, has “perpetuated

decades of violence in the Darfur region.”46 Chinese involvement may be even more critical than

just economic and political contributions. According to a former Sudan government minister,

China is the largest arms supplier to Sudan. “In violation of a UN embargo, $100 million worth

of aircraft and small arms were sold to Sudanese President Omar al-Bashir between

1996 and 2003. In response to these revelations, Chinese Deputy Foreign Minister Zhou

Wenzhong was quoted as saying, “Business is business. We try to separate politics from

business...I think the internal situation in the Sudan is an internal affair.” However, the Chinese

government has since changed this policy and has pressured Sudan into accepting some

concessions, including a joint African Union and United Nations peacekeeping force in Darfur in

2007. This case is a prime example of negative repercussions resulting from Chinese

investments and the devastating effect that China’s reach can have on unstable states, especially

those engaged in domestic conflicts.

The Chinese position has for decades been one of non-intervention, and respect for the

sovereignty of other states. China’s official policy statement on foreign trade and relationships

with African states is that China “respects African countries’ choice in political system and

development path suited to their own national conditions, does not interfere in internal affairs of

45 "CRIMES AGAINST HUMANITY»." Human Rights First Investing in Tragedy Chinas Money Arms and Politics in Sudan Comments. N.p., n.d. Web. 2 July 2013.

46 China Vows More Sudan Investment." Wall Street Journal, n.d. Web. 2 Jan. 2013.




African countries, and supports them in their just struggles for safeguarding their independence,

sovereignty and territorial integrity.” Whether this strategy is the best choice for the African

continent has been a topic of fierce debate among policy makers and academics, many arguing

that this investment supports dictators, worsens corruption, and undercuts Western efforts to

improve the region. While some Chinese choices have been extremely questionable and

certainly had negative effects, we must compare more than rhetoric. Despite western calls for

democracy, transparency, and economic growth, Africa has generally remained stagnant.

American strategies for African growth have shifted with the ever-changing ideological fashion

in Washington. Western academics and politicians have shifted their views and policies from

rural development, to industrial and manufacturing development, to emphasis on good

governance, to the privatization and liberalization efforts argued in the Washington Consensus.

None of these strategies have produced the desired effects, and some have gone as far as to make

the situation worse. While the Chinese model does not conform to traditional Western

conceptions of democracy promotion and the overarching powers of American hegemony, it

does have the potential to succeed, and pull millions in Africa out of poverty, and establish next

hundred years as The African Century.




WORK CITED

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Web. 10 July 2013.

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"China Global Investment Tracker Interactive Map." The Heritage Foundation. N.p., n.d. Web. 2

July 2013.

"China’s ‘Image’ Problem in Africa." The Diplomat. N.p., n.d. Web. 2 July 2013.

"China's Investment in Libya Is More than $20 Billion and the Amount of Loss Is Difficult to

Estimate." HubPages. N.p., n.d. Web. 2 July 2013.

"China Plans Multimillion Ethiopia Investment." Financial Times. N.p., n.d. Web. 21 July 2013.

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Documents

[FBEC 2001] Chinese Investment in Africa Essay