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Free «China’s investment in Africa» Essay Sample

Introduction

            For many years now, the growing and fast rising financial, social, and political and the position of the Republic of China in the region of Africa has been given considerations by many people as an influential thing. Africa is a very important place for china as the country considers positioning itself among the fast developing nations. Africa is a region full of resources that plays an important role in the area of economic growth in China. Investors from china believe that Africa is a region full of development to their economy.

            The cooperation between Africa and china dates back to many years, when studying and examining the current African relationship with the world order globally one recognizes the contradictions and the complexities in the fast changing and long period engagements between Africa and china. We can trace back the beginning of the relationship that started way back in 1955 when a conference was held in Bandung, Indonesia that was aimed at promoting cultural and economic cooperation. This became an identity and a center of cooperation between China and Africa, and it is also where china met movements of liberation from Africa (Berger, 2007).

            Chinas relationship with Africa was put in question in the 21st century as it became open that China’s pace of roaring economy was gaining grounds in Africa.  Chinese companies found their way in Africa utilizing the natural resources and increasing their strong hold on trade with the rest of the world. Chinas presence in Africa has not only been felt in the economic sector  but also in political and even military as china looks for partners that could back them during times of economic sanctions. China has also supported corrupt governments and regimes in Africa that endorse their policies of cooperation and allow them to invest in their countries. Debts have been cancelled and more aids and investments have found their way in the hands of corrupt regimes in Africa.

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Economic challenges and opportunities created by China's engagements

Looking at the view above one can easily tell the motive of China’s relationship with Africa is to gain access into the abundant resources that Africa offers. This is a good reason as Alden (2005) notes that the insistence by the Chinese government of recognition “One China” as a policy and an important requirement to the African countries. The need for energy and new market exploring opportunities are some of the major factors that the Chinese government has been keenly following. The Chinese government defines its cooperation with Africa as to strengthen the cooperation and solidarity in the international scene and continue with exchange of views. The principle of “one china” is one of the main basis of cooperation and development of the relationship that is enjoyed by African countries and it is being driven by China’s domestic strategy of development.

            Secondly, china wanted to establish market for the export for its communication offerings, apparel and light manufacturing services. The African markets are dominated by the low cost motorcycles that have been manufactured in China and exported to Africa. Consumer goods and many more electronics have also found there way in the African market from China.

            There are some factors that made china’s relationship with Africa distinctive from any other international relationships. Other than migration and aid policies, the model of          Chinese investment and giving out infrastructure loans that is normally known as the “Beijing Consensus” is an important approach that needs to be focused on.  In Ramos (2004), He terms it as a new attitude that is focused towards the global balance of development, power and politics. It actually values the international relations and political multilateralism concept. It gives first priority to peaceful and mutual co-existence that differs with the American style of Democracy, poverty eradication and good governance.

The essence of the Chinese investment in Africa brought about the social growth objectives and foreign policy that were guiding and creating room for investing without any strings attached. The Chinese competitively bid for resources and construction of projects in Africa using investment and loans for the infrastructure. The loans that they offered were advanced at no percent interest or sometimes the repayments were done by giving them the natural resources. The Chinese do not impose the neo-liberal reform package that is usually required as a conditionality provision by the World Bank. China has taken over a number of investments that were began by the western powers and left without being completed.

            There are many disadvantages of the involvement of China in the African market, one of them being the standard of their education. Many Africans who are sent to the Chinese colleges and universities do not easily find employment  in their native countries after completion of their degree and diploma courses as many African states are run and managed vastly by the education policies form the western powers like America and the European union. Many Africans joining the Chinese institutions have complained of discrimination from the Chinese people.

            Although the Chinese business in Africa in based on a non-interference policy and working with any government in place posed a great danger to the African people as the Chinese government ended up working and collaborating with illegitimate governments and ones which were highly contested. China increased its investments in Africa because some countries lacked legitimate governments and china only focused on its policies and principles of investment (African Development Bank Group ,2007).

China has found vacuum in states where foreign western powers have withdrawn their support to the governments because of poor governance. China saw this as a great opportunity to come in and increase its engagements and leverage in those countries.

The Chinese government made sure that the policies that existed before between the china government and the current regime are adhered to and approved by the government in place. China ended up pouring more money in the African market with hopes that one day it will generate profit back to china. To some extent it doesn’t care if the investments are paying off or are being mismanaged by the existing regimes.

The African governments have been faced by a huge task of choosing between what may be of interest to its people and what can also hurt its people. Some of the choices they make go against the national interest and how much they rely on china to meet some of the regimes needs.

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            Some African nations are also faced by challenges of identifying which states to cooperate with and they find none, so they have no choice but to only cooperate with the china government. As the Romans say you work with what you have been given, the African states found it easy to work with china than the other interested nations which offer infrastructural loans but with strings attached.

The scramble over African natural resources has left world economic powers fighting and battling it out to dominate the African markets. The commercial battles moved from the battle fields to well furnished offices with all the modern office requirements, where contracts are signed that give a nation permission to work in another country. The European Union and America have faced staunch competition from china and this has ended up dividing the African people.

            The divide and rule tactic took place hence setting in decline in growth of many African institutions.

The main country that gains from the divisions in the European Union among countries like France, Germany and Portugal is china. One can say that the division in the European Union has played to the benefit of china gaining more grounds in Africa as it continues to exploit more markets without question or policies to the regimes in place.

Before china came different European states had a tradition of communicating and collaborating with African states which was based on their history that was common. Many traded with their former colonial powers which worked to the advantage of the European powers (Whalley, 2006). The locals firms in Africa have failed to compete with the big Chinese firms that have finances and are not facing any stiff competition from the Africans as they have the full potential and good financial support.

              Having the advantage of being an occupier of a seat in the Security Council, China found an upper hand in dealing with the African regimes, as there was no country in place or no firms that would question the Chinese dominance of the African markets. Also it was difficult for the local firms to give china a stiff competition and a run for its money and resources. China operates without conditions by importing and also exporting goods into the African markets.

             With the Chinese goodies also comes in with the Chinese know how, many projects have been established by the Chinese themselves. Most of the industries in the African market are dominated by industries from china and managed by the Chinese people. Many Africans are faced with unemployment as most of the infrastructures in place were fitted with modern technological equipments that rendered the African man jobless.

              The use of Chinese manpower rather than the local people was a common thing in the projects sponsored by the China government. This is one of the areas that have faced opposition from the African local people. Unemployment is eating into the African countries that China dominated their markets.

               The Africans who have been employed by the Chinese firms also are faced with challenges of working for long hours without rest thereby exposing the Chinese firms to the local labour laws (Wang, 2007). The local communities argued that the Chinese are not bringing in anything good as they don’t play any positive role in promoting employment of the African people. They only weaken the markets and making the locally manufactured goods from the African people lack market in the native countries.

              The imported goods from china has caused local factories to close down, but the Chinese government has ignored all this as they are boasted by power of money and enough resources they have continued to invest in many African countries that invite them in or even countries that need help hence they come in with no conditions. We can say that the china’s investment in Africa has caused more harm to the local people. The external market of Africa has collapsed as he goods are manufactured by the Chinese people and they are still the same ones who take them back to there country of origin for sale.

                The flow of goods in the African market has gained regional importance as other investors have lost importance. China is gaining a positive trend in the market day by day. China has not put policies for the African countries to invest in its market  (United Nations Conference on Trade and Development), 2007).

 
 
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. The advantage has only remained in the hands of the Chinese companies as they have taken many companies and even caused merger of some small African industries and taken some partially.

               The Chinese have introduced new expertise and technology based advantages that have been a key success fro companies that compete globally. This includes specialized expertise and sustainable resources that has evaded the African firms.

China has built some industries that are posing environmental risks to the Africans, thereby exposing the Africans to harm. The gases produced from these industries have posed a great risk to the surroundings (South African Government, Department of Foreign Affairs, 2007). In collaborating with illegitimate African regimes the Chinese people have acquired the African firms illegally to establish their industries. These industries are perceived to be imitators rather than making their own successful products.

            Another factor that has affected the Africans is the language barrier as most of the Chinese managed institutions communicate in their own Chinese language thereby making it difficult for the Africans to easily understand them.

Medicines that are imitations have dominated the African hospitals; these medicines do not cure diseases as they are not effective, the result of these is fatal to the local people.                               

               The African governments have been corrupted by money brought in by cheap drugs from the Chinese markets not minding about there own people. The trend is recorded in many African nations. The low standard of education from china has hindered the education policies that were established by the former colonies in Africa.

More critical voices have been heard.  In fact the one which is facing stiff challenge is the Chinese business behavior, including institutional, organizational and cultural elements that may also work to the disadvantage of the Chinese firms in the market.  Chinese acquisition of other natural recourses like fishery, agricultural products and fishery. For example Huaguang Forest Company limited.

                 China has been accused of giving out money to the African states which already are in big debts to the western countries and posing a great danger of this countries falling into insurmountable debts (Sandrey, 2006). The continents overdependence on aid poses a risk of being manipulated by any other nation that has money.

Africa is a new and potential market place for Chinese products and excellent conditions that are in place have provided room for cheap utensils, clothes and textiles that have taken over the place of the African products(Sino-African Relations ,2008).. The previously promising rise in African industries has dropped down. The growth in the industrial sector has been left for the Chinese government to enjoy.

               Chinese arms have also found there way in the African market thereby causing instability in most of the African regions. China has exported firearms to fight the western imperialism and even supported African states during the cold war. China is still known to be exporting arms to different African countries. The arms fall in the hands of wrong people who end up destabilizing many African nations. One of the examples is the instability in Niger, whereby the western powers put in many sanctions to the regime in order to root it out the Chinese government continued to collaborate with it without any sanctions. In this country many people have lost there lives, women and children have been killed. Acts of lawless ness have followed such as rape, robbery and many deaths reported.

                Zimbabwe also acquired arms from China in the year 2000 in exchange to Zimbabwean ivory. More arms were sold to Zimbabwe in 2004 and the Zimbabwean President robber Mugabe shifted his allegiance from western powers to china. This led to Zimbabwe facing many sanctions from the United Nations that affected the economy of the entire state (Ministry of Commerce of the People’s Republic of China. August 2008)

. China has not cared a lot about this even when many Zimbabweans are faced with starvation and are unable to settle in homes because of fighting’s that has risen out of this.

                Human rights conditions has deteriorated, economy falling, children falling victims to child labor and women living their homes in search of food through sex business that has led to spread of  HIV/ AIDS.

Conclusion

               Relations with African countries have increased rapidly over the years, before 1990 the relationship of china and Africa was characterized by a common struggle against western dominance, with China helping Africa in many ways. China supported nationalist movements as it gave out arms to equip them to fight colonization. Large projects were established with projects initiated by the Chinese government like the Tazara Railway and china also sent medical experts to Africa to treat the African people and offered scholarships to the African people to send their students to study in the Chinese universities.

                  In conclusion, the china African trade has many implications to the African nations. The continent is believed to be the third market center from china and also the third largest trading partner. But on the other it is also noted that Africa is less important to the Chinese government. In spite of the increasing exports from Africa like oil, the continents trade with china is said to be only 2% of its trade internationally. China has established itself as a dominant player in African market.

   

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