Friday, November 30, 2007

China and Africa, the interview

The Council on Foreign Relations recently published an often-interesting and fairly-ho-hum interview with Yang Guang, director of the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences.

Before we get to ho-hum, which admittedly is a little harsh of me, the interview did net a few interesting facts.

  • Guang called China a “relative latecomer” to investing in Africa. The country did not begin spending on the continent until the late 1980s, but by the end of 2006 the investments totaled $11.7 billion, which he claims in terms of all countries investing in Africa “is not a big number.”;
  • Chinese firms producing labor-intensive goods cannot be made cheaply enough for its domestic market, which is why many looked to manufacture those products in Africa;
  • China counts about 800 different enterprises investing in Africa, 100 of those are state owned;
  • Much of the push for African investment exists because much of the continent is now more open to investment;
  • Chinese investment has created 70,000 jobs in Africa;
  • He did not think African countries should look to China as a model of economic development because each country has its own national circumstances.
Now, the bad news
These tidbits aside, Guang danced around a lot of issues, including the question of oil-centric investing, the place of corporate responsibility in Chinese firms and the country’s arm sales to Sudan. Part of his evasion of these question may be due to the fact that I can’t see CFR asking American businessmen about corporate responsibility (and receiving an honest response), or pressing a U.S. government official on the scope and breadth of American arms sales to foreign countries.

Anyway, I found his answer regarding China’s relationship with the Sudanese government very illuminating.

There are different understandings about the issue of Sudan, but the Chinese understanding is for a country as poor as Sudan, the first priority is the basic needs of the people, and to see their living standards increase. Economic development is the top priority for this country. Therefore, if we want to help these people to resolve their problems, then we have to start by resolving their development problems.

It has been true, in my view, that in practice the Chinese understanding is correct, because during the past few years this country went from a net oil importer to a net oil exporter. The fiscal budget has improved significantly, the economic growth rate is also rapid and, interestingly, the oil income has also contributed to the resolution of domestic conflicts. If you look at the CPA [Comprehensive Peace Agreement], you may find that one of the components is the distribution of oil income. It is distributed on the basis of 50-50, so in other words the black people in the south can also benefit from this and poor people can also benefit from this result of oil development.

Chinese companies are very proud of this contribution to the Sudanese people. The United States argues that this is not a good regime, with a dictatorship and things like that, but Chinese foreign policy is non interference in domestic affairs and actually it is very hard to see whether a regime is a dictatorship or not. You have to find a commonly acceptable standard, so if this kind of standard does not exist, you cannot impose a one-sided view onto the others.

I believe that, due to the different cultural backgrounds, due to the different levels of economic development, it would be hard to find a uniform model of political development for the African countries. The best way is probably to observe and respect the efforts of the African countries in exploring their own way of political development. Otherwise, if you try to impose a model on them, there is little chance to succeed.

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