In recent years, the perception of Chinese investment in Africa has undergone a transformation. In the late 1990s and early 2000s, the countries and peoples at which China’s financial commitments were aimed often considered them as a tool to increase Beijing’s power in the region. Currently, however, China’s presence is increasingly seen as an opportunity for development. Africa has become the stage for the growing competition between overseas powers in terms of direct investment and development programs. The most important players are China, the U.S. and European countries, but also India and Japan, with other countries eyeing the region. How should we assess the current U.S. strategy in Africa? Has the previous U.S. administration’s "Power Africa" plan been replaced by another public/private action plan? And how does Washington perceive China’s growing influence there? In addition, how does energy play into China’s Africa strategy? We put these other questions to J. Peter Pham, Vice-President of the Atlantic Council and Director of its Africa Center.
J. Peter Pham
Vice-President for Research and Regional Initiatives at the Atlantic Council, where he is also Director of the Council's Africa Center. Has taught law, political science and African studies at James Madison University. Among other roles, he is former Vice-President of the Association for the Study of the Middle East and Africa (ASMEA).
In the last few years, the perception of Chinese investments in Africa has changed. During the late 1990s and early 2000s, recipient countries and populations viewed these investments as a tool to increase China's influence in the region and exploit its natural resources. More recently, Chinese presence is increasingly seen as a development opportunity. What is your assessment?
I would argue that it is not only the external perception of Chinese investments in Africa that has changed, but that the internal strategic motivation behind them has evolved over time. Under Jiang Zemin (president, 1993-2003), the People’s Republic of China launched a national strategy of "going out" (zouchuqu zhanlue), which encouraged investments abroad to secure access to stable supplies of natural resources for which the increasing demand could no longer be met by domestic production. Under Jiang’s successor, President Hu Jintao (president, 2003-2013), the policy concept became that of China’s "peaceful rise" (heping jueqi) to political and economic "great power" status which, of course, required not only natural resources, but also diplomatic and commercial access-the latter to export the goods which Chinese factories, using the imported energy and primary resources from Africa and elsewhere, turned out at ever-increasing volumes and speed. China’s demand for resources-it is the world’s second-largest consumer of petroleum (after the United States) and accounts for over 40 percent of the global demand for base metals-is reflected in the country’s investment portfolio in Africa. While Chinese companies have investments in virtually every corner of Africa, nearly 75 percent of that total is concentrated in just ten countries: Nigeria, Algeria, South Africa, Ethiopia, the Democratic Republic of the Congo, Chad, Angola, Niger, Sierra Leone, and Cameroon. Moreover, just under half of these investments are in either the energy or mining sectors. Since Xi Jinping took over as general secretary of the Chinese Communist Party in 2012 and president in the following year, Chinese grand strategy has been animated by the idea of the "China dream" (Zhongguo meng) of recovering what many Chinese believe to be their country’s rightful place in the world. In Africa, this has meant interests that go beyond access to natural resources and markets to what Chinese representatives will describe as a "new type" of relations, by which they mean they will engage across the continent on a wider spectrum of areas-on an equal footing with what Africa’s traditional partners, including the United States and European countries, have been doing for decades. This approach includes burgeoning developmental and military links: in addition to more than 2,500 development, public works, and other construction projects in all but a handful of Africa’s fifty-four countries, China’s first-ever overseas military base was opened last year in Djibouti. In short, China’s engagement with Africa has evolved as the country’s global strategy has shifted and one can say that it is an important element in that larger plan. For Africans, this presents a great opportunity-as well as some risks.
Africa is experiencing growing competition from external powers in terms of foreign direct investments and development programs. China, the United States and European countries are the most important players, but other countries (India and Japan, in particular) are looking to increase their presence. Do you consider this new "Scramble for Africa" will have a positive impact for the continent?
Increased trade and along with it, potentially greater diplomatic leverage can be good news for Africans if African states make the most of the opportunity. In theory, greater demand generates more attention and the latter can be exploited by statesmen with competence and vision to advance the interests of their countries. The question, however, is whether African leaders will rise to the occasion or whether they will settle for deals which may deliver short-term gains, but at significant long-term cost. For example, particularly concerning to many analysts is the trend among some of Africa’s newer partners, including China, to offer much-needed major infrastructure, but under terms that are not necessarily transparent, including mortgaging of natural resources, sometimes years, if not decades, into the future.
What is your view about the current U.S. strategy in Africa and, in particular, what is the U.S. perception of China's growing influence in the African continent? Will the "Power Africa" plan supported by the previous U.S. administration be replaced by any new public/private investment plan in the continent?
U.S. Secretary of State Rex Tillerson-whom, it should be noted, having come from his prior role in the private sector as chairman and chief executive officer of ExxonMobil, arguably has had more operational knowledge of doing business in Africa than any of his predecessors-recently articulated America’s strategy towards Africa in an address to a conference of ministers from across the continent which he hosted in Washington in November 2017. The strategy is built around three pillars: promoting trade and investment, encouraging good governance, and countering terrorism. The secretary rightly noted that each of those three pillars requires the other two in order to thrive. Thus, while the U.S. administration intends to refocus the economic relationship with African countries squarely on trade and investment, encouraging policies that increase openness and competition, economic growth will only occur where there is good governance and accountability-the presence of these last two, moreover, improves security. I do not think that policymakers in the administration have the view that there is or should be a zero-sum competition between the United States and China in Africa-and I am certain that African countries would not welcome such an approach in any case-that does not mean that there are not some legitimate questions about Chinese actions across the continent and their impact not only on America’s interests, but also the long-term social, economic and political development of our African friends. Since 2009, China has surpassed the United States as Africa’s largest trading partner. Since more than 80 percent of China’s imports from Africa are in the form of crude oil or other raw natural resources, part of the relative decline America’s trading position vis-à-vis Africa is attributable to the decline in demand for energy imports with the growth of domestic production, including the rapid growth of shale oil production. But there also is no denying that American firms-and those from other Western countries with robust anti-corruption laws-are at a comparative disadvantage when competing with players, including Chinese companies, who do not face similar constraints, a point underscored by the recent indictment by a court in New York of a former African minister and a former member of the Hong Kong government of bribery in connection with energy deals in two African countries. So, a level playing field for American (and other) firms is one concern. Another concern is the potential for China’s "no-strings-attached" approach to making deals in Africa propping up undemocratic or otherwise unaccountable regimes, to say nothing of undermining good governance. Beyond economic concerns, the United States should also be watchful of China’s pursuit of a more multipolar political and economic global order under the guise of its version of "democracy in international relations" (guoji guanzi minzhuhua) as well as the burgeoning military footprint that the Chinese have on the African continent, not only with the base in Djibouti, but with their participation in United Nations peacekeeping operations as well as their bilateral security ties with a number of African countries. The expansion of the Chinese Communist Party’s direct links with ruling political parties in several African countries and the impact these relations will have on good governance should also be monitored. The Obama administration’s "Power Africa" initiative focused attention on an extraordinarily important issue, the cost and reliability of electricity in Africa, which is one of the top barriers to business growth on the continent. Moreover, the United States has some major technological, commercial, and commercial capabilities that could be leveraged in the effort to increase Africa’s installed generation capacity by one-third by 2030, bringing online 30,000 megawatts of new power, the goal announced by the former U.S. president when he unveiled the program in 2013. That said, however, what has been delivered so far has been only a fraction of this target and it is fair to question whether some of the private-sector and non-U.S. public-sector commitments to the scheme truly represent new mobilization or were already in the pipeline when "Power Africa" was announced. Part of the difficulty with the program so far is that it is an ad hoc cooperation between a dozen different U.S. government agencies and more than one hundred partners of various kinds outside the U.S. government, making it somewhat unwieldy. One could see very easily where the Trump administration, as part of its overall reform of government in general and its reorganization of diplomatic and development efforts in particular, might want to revisit how to structure this effort.
What are the priorities of China's strategy in Africa with regard to energy, and what is its contribution to addressing the key challenge of access to energy in the continent?
Even as Africa is increasingly important to China in terms of that country’s energy security, accounting for a little less than one-fourth of oil supply, China is also growing in importance to the energy needs and infrastructure of African countries. This is a radical shift from just a little more than a decade and a half: before 2000, the three Chinese state-owned petroleum companies were active in just one African nation, Sudan, where CNPC held a major stake in Greater Nile Oil Project. Nowadays, CNPC, Sinopec, and CNOOC are active upstream in close to twenty countries. In addition, Chinese firms are increasingly active in downstream operations. They also account for roughly one-third of the new power capacity built in Sub-Saharan Africa in the last five years. For example, in July 2017, the South African state-owned utility, Eskom, secured a $1.5 billion loan from the China Development Bank for the Medupi power station that, when completed, will be the fourth-largest coal-fired plant in the southern hemisphere and the biggest dry-cooled power station in the world.
In light of China's growing role in Africa, could you assess China's contribution to countering piracy, in particular in East Africa?
In January 2009, two destroyers and a supply ship from the China’s People’s Liberation Army Navy (PLAN) began counter-piracy operations off the coast of Somalia. The mission of this modest task force was to offer protection to Chinese merchant vessels passing through what was, at the time, the pirate-infested waters of the Gulf of Aden. The unprecedented deployment also had the strategic effects of burnishing the international image of mainland China as a contributor to international security and giving the PLAN a platform to hone its expeditionary capacity, especially in Africa, where, as we have noted, the country has considerable political and economic interests. Since then, the Chinese have rotated nearly two dozen task forces as part of ongoing patrols. The broader strategic nature of the operation off the eastern coast of Africa was underscored when a warship taking part in the anti-piracy operations, the frigate Xuzhou, was subsequently sent through the Suez Canal during the Libyan crisis of early 2011 in what was the China’s first-ever wartime operational deployment in the Mediterranean Sea, when it was stationed off Tripoli to coordinate the evacuation of Chinese nationals working in the country. Thus, the PLAN’s counter-piracy operations can be interpreted as proof of China’s increasing willingness to bear its share of the burden for the maintenance of the freedom of the seas and other global commons. Of course, it is in China’s interest to do so, considering that almost three-quarters of its petroleum imports, along with similarly prodigious quantities of other raw materials and natural resources which country gets from Africa to sustain its industries-together with some 40 percent of all goods bound for China-had to pass through the pirate-infested waters of the Gulf of Aden and the western Indian Ocean. At the same time, the accelerated modernization of the PLAN, the resulting enhancement of its capabilities for operations in waters distant from its former coastal focus and the political willingness to project power abroad may also be indicative of a significant shift in regional and, indeed, global balances of power.
A significant proportion of the investments planned by China to boost its economy through the "Belt and Road" initiative will go to Africa. If African raw materials remain a strategic resource for Beijing, the Chinese presence in Africa has diversified and African leaders, worried by the increase in debt with their Asian partner, are pushing more and more for a real partnership. How do you view this situation?
I have always held that the more suitors African countries have, the more opportunities they have to strike the best deal for themselves and their peoples. So, China’s increased engagement with Africa-along with the renewed interest of the continent’s traditional partners like the United States and Europe, as well as attention from a host of emerging powers like Japan, India, Turkey, and others-can be a good thing, if African leaders manage it well. On the other hand, the Chinese preference for a "no-strings-attached" approach to doing business in Africa, in contrast to Western countries’ linkages to governance, human rights, and other criteria, may find favor in precisely the sorts of poorly-governed or conflict-plagued places where such conditionalities may be most needed for long-term sustainable development. In fact, it is an African leader, former Nigerian Central Bank Governor (and now Emir of Kano) Lamido Sanusi, whose father served as ambassador to China, who has labeled that China’s dealings with African countries a "new form of imperialism" because primary resources are extracted and manufactured goods sold back without much by way of technology and skills. One does not have to agree entirely with Sanusi’s dire analysis to realize that, if "win-win" is to be more than a clichéd slogan, it is incumbent on Africans themselves to ensure that it is so.