Why Africa Must Understand China from the Great Wall -By Owei Lakemfa

I stand on the Great Wall of China. Not for the first time. This time on Monday, November 5, peering down at sprawling Beijing, and literarily, the whole of the country. I’m trying to understand this gigantic dam almost going burst; whose waters of overproduction, full financial rivers and fast rapids of technological leaps and knowledgeable labour, are being systematically released on the world.

The talk amongst some elites in Africa is about the need to be suspicious of China’s motives in the continent. Why would it offer us a total $120 billion if not to woo or even colonise us? They theorise, put on lanterns in the darkness of their thoughts, trying to work out solutions to questions whose answers were provided from the first day.

They are not alone. Out here also, some Chinese wonder why their country would be giving out so much when there are still parts of their country living below the poverty line. Why build railways in Africa when many parts of China still need them?

There is, of course, the Western World led by the United States (U.S.) warning Africans to be weary of the Chinese, even if they come with gifts. They warn us against Chinese loans, even as they themselves offer us more loans from their own countries and lending institutions. As if what matters is the skin of the lender, not the loan itself or what it is used for.

In interactions here with a Chinese scholar, she explained that China has $4 trillion in forex reserves. What does it do with such huge money; put it under the pillow? No, it has to invest it. Initially it bought U.S. bonds, then the bubble almost burst in the 2008/2009 financial crises, which showed that the country was quite vulnerable to the twists and turns of Western capitalism. The Americans debt to China alone is $1.17 trillion, so it made sense for China to move its funds elsewhere. China also realised that with its foreign exchange within reach of the U.S., that country can impose sanctions, as it is threatening to do today, with countries that continue to do business with Iran, with which it has picked quarrels over an already settled nuclear deal.

So China decided to diversify its investments, to use some of its resources to build infrastructure in parts of the world, partly as a gesture of friendship and, of course, to build influence, but primarily as pure investment. An analysis of the September 3, 2018 $60 billion Chinese pledge to Africa, shows that it is neither free money nor mere loans that will trap Africa in a debt peonage. One third of the money ($20 billion) is for credit lines. Chinese companies are encouraged to make at least $10 billion investment in Africa within the next three years. That is half the pledge. For the balance, $15 billion is for grants, interest-free loans and concessional loans, $10 billion special fund for development, while the balance of $5 billion is to finance imports from Africa.

Africa is not the only place or continent that China is investing in, so the talk that its investment is an attempt to recolonise Africa does not hold much water. Before moving to Africa, China had been investing in Asia. In 2013, it floated the idea of an Asia Infrastructure Investment Bank (AIIB), which was established on December 25, 2015, with a start-off capital of $100 billion. China invested $29,780.4 billion in that bank alone.

China was also instrumental in the establishment of the New Development Bank (NDB), formerly called the BRICS Development Bank, with headquarters in Shanghai. It is a multilateral development bank established by the BRICS States (Brazil, Russia, India, China and South Africa) with an authorised capital of $100 billion.

The country is also investing $40 billion in its Belt and Silk Road project, established in December 2014. Some of the initial funds for the Mombasa–Nairobi Standard Gauge Railway (SGR) in Kenya came from the Silk Road fund. That railway project hired 25,000 Kenyans.

The point about employment is one of the issues in Chinese investment in Africa, and elsewhere. China has a population of 1.3 billion and an obligation to provide jobs for its citizens. It makes common-sense that it hires some of its citizens to work in its projects abroad. On the other hand, it is logical for the partnering nations to frown at Chinese workers coming to their countries, and to push for their own citizens’ employment. Both reactions are logical and simple; in business, such details need to be worked out in a mutually beneficial manner.

China has no choice but to seek wider markets as its excess production cannot just sit in its warehouses. For instance, by 2016, it had exceeded its domestic steel requirements by 140 million metric tonnes. It choices were either to stop production, with its negative impact on jobs, or seek markets internationally. In a sense, China has become the world’s factory, churning out all manners of goods. So it seems in fulfilling a Chinese proverb that says: “The ocean is vast because it rejects no rivers”, it is investing in all parts of the world, including Africa. Chinese president, Xi Jinping explains his country’s philosophy: “No one who keeps himself in isolation on a single island will have a future.”

It is understandable that the Western powers are apprehensive about the ever closer cooperation and relations between the 1.2 billion Africans and the 1.3 billion Chinese, partly because for some 500 years, they have come to regard Africa as their backyard and sphere of influence. For centuries, they have dominated Africa, enslaved and colonised it; exploited its agriculture, natural and human resources; imposed their culture and ideology; dictated policies, imposed conditionalities for loans and decided what leaders we should have, and which we should not have. In some cases, they have gone so far as overthrowing African leaders like Kwame Nkrumah and Patrice Lumumba.

In contrast to the overbearing West, China appears to treat Africa not as a servant or houseboy, but as a friend. It has an official policy it calls the “Five–No”, which includes non-interference in the internal affairs of African countries, no imposition of its will and no attachment of political strings to assistance it offers African countries.

China’s expressed theory is that nobody will buy your products if others are poor, so it is in its interest to have a world prosperous enough to buy its products. Africa can take advantage of this by pushing for common infrastructure development like building a fast speed railway system linking all the fifty five countries in the continent. If we push this, we can get it done under favourable conditions.

Owei Lakemfa, former secretary general of African workers is a human rights activist, journalist and author.