China’s economic expansion in Africa

Abstract

In the recent years China has intensified its economic cooperation with the African countries in order to secure the new resource market. The trade between China and Africa has been expanding very quickly in the last few years and in September 2008, China's customs authorities released an estimate of the value of bilateral trade at more than 100 billion dollars. For comparison the value of bilateral trade between China and Africa was in 2001 only 10,8 billion dollars. There also has been an enormous inflow of the Chinese direct investment into Africa. The most spectacular case of such investment was the take-over in October 2007 by the Industrial and Commercial Bank of China, one of the "Big-Four" state owned banks, a 20% stake in South Africa's Standard Bank for 5,46 billion dollars. Earlier, in January 2006, state-controlled oil company China National Offshore Oil Corporation paid 2,3 billion dollars for a 45% stake in a Nigerian oil field. China's economic expansion in Africa in viewed as the desire of that country to increase its presence on the black continent. Chinese authorities use the "noninterference" approach and are willing to form close partnerships with governments in Africa, which are considered unsavoury in the West, such as those of Sudan and Zimbabwe. Additionally, China's aid and trade packages are not tied to any requirements for reform or government transparency and therefore undermine - mostly Western - efforts to encourage good governence. There are, however some fears that China will be a neocolonialist and simply use Africa as a resource market, taking away raw materials and selling fishined goods back to Africa, leaving Africans with depleted resources and no industry. There also are concerns that Chinese factories and mines in Africa will either use large numbers of Chinese workers instead of locals, or underpay and exploit local workers. The leaders of African states are learning from economic cooperation with China how to manage the relationship with China and adapt some elements of the Chinese economic model, different from the Western model, which in Africa has not yielded much fruit. However the African states should shape the common policy vis-a-vis cooperation with China in order to secure the best possible advantages from that cooperation.