Chinas Neomarcantilism PDF

Chinas New Mercantilism in
Central Africa
JONATHAN HOLSLAG*
ABSTRACT
The objective of this article is twofold. On one hand it elu-
cidates the goals and dynamics of Chinas foreign trade pol-
icy since the 1990s. On the other hand it assesses the impact
of this strategy on the development of the Central African
Region as a case for Chinas inuence on other developing
countries. We observe that China is pursuing a pragmatic
mercantilist policy that combines a wide array of diplomatic
and economic devices. As a result the Peoples Republic gains
ground slowly but surely. However, Chinas ascent does not
lift the Central African states to a more favourable position
in the global division of labour. We conclude that Chinas
rise conrms the current economic position of African coun-
tries: that of a commodity supplier and a modest consumers
market.
Introduction
In 1963 Deng Xiaoping stated that he wanted his country to be among
the advanced countries in the world through forty years of hard working.
1
African and Asian Studies, volume 5, no. 2 also available online
2006 Koninklijke Brill NV, Leiden see www.brill.nl
* Jonathan Holslag, Free University Brussels (VUB), specializes in Chinas foreign pol-
icy. His mailing address: Mechelsestraat 45, 3000 Leuven, Belgium, E-mail: jhol-
slag@vub.ac.be. Tel: ++32/477 63 82 61.
I would like to thank Jan Gorus and Gustaaf Geeraerts, both professors at the Free
University Brussels (VUB) for their advice. I am also grateful to the reviewers of this
journal (African and Asian) for their constructive comments.
1
Deng Xiaoping, Be Realistic, Look at the Future, Main points of a speech on indus-
trial development at the meeting held by the Industrial Decision Drafting Committee,
August 20, 1963.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 133
134 Jonathan Holslag
Four decades passed by, and China indeed has been growing spectacularly.
Since the mid-1990s however, Chinas economic transformation has
entered a new stadium. Ever since, the governments orientation shifted
from an obsession with growth rates to the ambition to make growth
sustainable. One of the key ambitions was to create direct links to over-
seas markets. It took only a short time before international attention was
drawn to blatant Chinese investments in pariah states such as Sudan and
Iran. Chinas economic engagement in Asia turned into a hot issue as
well. Though in several regions, commercial activities escaped attention
despite the Peoples Republic (PRC) and is gaining ground there as well.
In this article we assess the impact of Chinas go-out policy on one
particular region: Central Africa. The seven states mentioned in this sur-
vey constitute a rich sample of what the African continent has or has
not to oer.
2
They comprise resource-abundant states as well as com-
modity-poor markets, stable and war-rigged societies, countries that make
their income from the export of agricultural yields and small oil states,
etc. This pattern card also allows us to let a wider array of Chinas eco-
nomic interests and aspirations come into play. Consequently, it permits
us also to assess the impact of the Peoples Republics commercial oensive
from more perspectives. Thus, the objective of this article is twofold. On
one hand we try to explain the goals and dynamics of Chinas actual
foreign trade policy. On the other we assess the impact of this strategy
on the development of the Central African Region as a case for the
inuence on other developing countries.
To start with, Chinas go-out policy is contextualized concisely in
the theoretical perspective of neo-mercantilism. In the second and third sec-
tion we focus on the Peoples Republics trade policy toward the Central
African Region: what are its targets and what are the devices at its dis-
posal to materialize these aims? In this regard we will stress that Beijing
is pursuing a dynamic mercantilism, and that Chinas economic activity
in Central Africa arises out of a well-conceived political strategy. On
one hand the government stimulates companies to swarm out via diplo-
2
The 7 countries are: Burundi, the Central African Republic (CAR), the Republic
of Congo (ROC), and the Democratic Republic of Congo (DROC), Gabon, Rwanda,
and Uganda. It should be noted that within the geo-political morphology of Africa as
dened by formal colonial powers and accepted in the global international relations,
Uganda is not considered part of Central African region. It is located in East Africa
and it is also part of the Great Lakes Region of Africa. However, in terms of its
ethnic and cultural ramications, and within the current geo-political economy, it has
been playing an important role in the re-denition of politics in several Central African
countries.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 134
Chinas New Mercantilism in Central Africa 135
matic, nancial and logistical assistance. On the other, it is a direct
player too, given the fact that political ocials are the helm of several
strategic important state owned enterprises (SOE). Fourth, we try to mea-
sure to which extent this policy bears fruit.
Is China capable in hammering out a trade regime that is favourable
to its needs? In order to answer this question we analyze as well the
overall trade balance as the position and progress of Chinese compa-
nies, in particular key-sectors such as minerals, oil, infrastructure con-
struction, telecommunication, etc. The last section considers the inuence
of the Chinese economic involvement on the development of the Central
African Region. Here, we will argue that commercial relations do not
turn out to be that benecial to the local societies as the Chinese polit-
ical leaders promise in their well-known win-win discourse. We end
with the conclusion that the economic relations between the PRC and
the Central African countries can be considered as a case that demon-
strates the entry of a new era in the global division of labour. Whereas
the West, the respective core of our economic world system, out sources
a vast part of its industrial activity to China, the latter is obliged to keep
the ovens burning and to pursue an expansionist economic policy to
safeguard its surging interests. For African markets however, Chinas
ascent does not generate many new incentives to mature themselves.
Chinas New Mercantilism
The core thesis of mercantilism is that governments should maintain a
pivotal role in the development of a strong national economy: Strong
state, strong economy! Actually, that is about the only assumption
Table 1
A trade prole of the region. Source: World Bank (2005);
UNDP (2005); WTO (2005).
Value added as (% of GDP)
Agriculture Industry Services Exports Main export goods (goods
(% of GDP) and share in total export)
Burundi 49 19 32 7 Coee (65) and tea (16)
CAR 61 25 14 24 Minerals (60) and coee (4)
DROC 58 19 23 19 Minerals (70) and logs (10)
estimates
ROC 6 61 33 78 Oil (67) and cotton (6)
Gabon .. .. .. 62 Oil (55) and timber (16)
Rwanda 42 22 36 9 Coee (41) and manufactures
(33)
Uganda 33 22 45 51 Coee (15) and manufactures
(11)
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 135
mercantilists agree on. For the rest, numerous interpretations exist con-
cerning the dierent modi in which mercantilism materializes, the state
and non-state actors that inuence policy-making, the question whether
mercantilism is good, bad or both, etc. This plethora of discourses enticed
Terence W. Hutchinson to write that: Mercantilism is one of the most
unpleasant and obscure isms in our dictionary. Nonetheless, terms and
models are attempts to make conceptual continuity a bit more discrete,
not reality. The multitude of notions reects the unabated eorts to
match a strong paradigm to the intricate ows of reality. Among the
recent derivates of mercantilism, the so-called Asian developmental state
model is most prominent. This Asian blend of mercantilism aims at
developing strategies for national prosperity in a context of intensifying
trans-national competition and a highly uid globalized economy. It com-
prises two key features. On one hand it promotes openness and com-
pliance to international liberalist standards in order to lure in foreign
capital and to gain access to overseas consumer markets. On the other
hand the state plays a vital role in mooring the accumulated wealth and
creating a well-o society through guidance and redistribution. Asian
mercantilism suggests a compromise between two extremes of full inte-
gration in the globalized capitalist economy and economic autonomy.
3
With regard to the foreign trade policy of these states, economic-diplo-
matic activities therefore cannot be conceptualized as pure market-based
transactions.
4
Instead, they should be viewed as politically mediated inter-
actions between dierent nation-states that surpass prot maximization.
5
Which factors explain the emergence of this new wave of mercantilism?
Several scholars highlight the cultural fundaments of this policy. Confucian
and legalist values are common to many Asian nations. Both emphasize
the inferiority of individual prots to the general interest that is repre-
sented by a responsible and capable government.
6
Others point at the
internal constellation of economic interests. Jayasuriya Kanishka, for
instance, construes Asian mercantilism as embedded in a trade-o between
nationalist-internationalist interest groups.
7
Concluding, Asian develop-
3
Jackson Robert and Srensen Georg, 2003, p. 208.
4
See: Dong Qi and Ma Xiaoye, 2004; Wu Friedrich, 2005; Wang Xiaozu, Xu Lixin
Colin and Zhy Tian, 2004.
5
Yeung T.H., Strategic Governance and Economic Diplomacy in China in East
Asia, vol. 21 (1), 2004.
6
See for instance: Katayama, Seiichi and Heinrich W. Ursprung, 2000; Chu Ke
Young, 2001.
7
See: Jayasuriya Kanishka, 2004; Kennedy Scott, 2005; McGuire Martin C. and
Ohta Hiroshi, 2005.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 136
mentalism provides a potent alternative for the omnipresent monopoly cap-
italism.
8
Whereas monopoly capitalism implies giant corporations coax-
ing the state to prop their rush for the creation of surplus, neo-mercantilist
states set up their own big business in order to escape the vagaries of
unbound commerce.
9
Capitalism appears to be addressed only as a means,
not as an end. The nal goal of the new Asian mercantilism is to thrive
on globalization without seizing the capacity to steer and without falling
for the dependency trap.
Can China be categorized as a new mercantilist economy? Let us con-
cisely match up the two main features to the economic reality of this
particular country. On one hand the Peoples Republic did break through
its economic isolation. Nowadays we can observe that China is eager to
get rid of its import and export restrictions, and that it attempts to com-
ply with international norms and standards. Scott Kennedy, for instance,
explains that Chinas leaders underwent fundamental learning and
moved from protectionism to fair trade.
10
Alastair Iain Johnston argues
that the Peoples Republic gradually embraced the global capitalist insti-
tutions, their norms, open capital ows, and transparency.
11
Chen Zhimin
in turn stresses the ascent of a positive nationalism aiming at coop-
eration and integration in world economy.
12
On the other hand the cen-
tral government holds tenaciously to its gatekeeper position. It makes
itself indispensable by maintaining the monopoly over trade regulation,
the monetary policy, the redistribution of capital. In this regard Bhalla
Surjit, for example, refers to China manipulating its currency to pro-
mote exports.
13
Ross Lester and King Susan focus on the protectionist
measures to ease the external pressures on weak interest groups.
14
Numerous
8
On monopoly capital, see: Baran Paul A. and Sweezy Paul M., Monopoly Capital,
Monthly Review Press, New York/London, 1966. For a recent summary, see: Sweezy
Paul M., Monopoly Capitalism, Monthly Review, October 2004, pp. 78-85.
9
On this argument, see for instance the numerous country-by-country analyses in:
Hewison Kevin and Robison Richard ed., East Asia and the Trials of Neo-Liberalism, a spe-
cial issue of the Journal of Development Studies, vol. 41 (2), 2005.
10
Kennedy Scott, Chinas porous protectionism: the Changing political economy of
trade policy, in Political Science Quarterly, 2005, vol. 120 (3).
11
Johnston Alastair I., Is China a Status Quo Power? in International Security, 27 (4),
2003, pp. 5-56.
12
Chen Zhimin, Nationalism, Internationalism and Chinese Foreign policy, Journal
of Contemporary China, vol. 14 (42), 2005, pp. 35-53.
13
Surjit Bhalla, Chinese Mercantilism: Currency Wars and how the East was Lost,
ICRIER, New Delhi, 1998, pp. 4-12.
14
Ross Lester and King Susan, Modern Protectionism: Chinas Own Antidumping
Regulations, in China Business Review, vol. 26, 2005, pp. 30-33.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 137
publications also mention the state pursuing an ardent charm-oensive
toward overseas markets.
15
It is this issue that will form the point of
departure of this case study. Let us look at this issue from nearby, and
apply this go-out policy to the Central African Region.
Chinas Trade Policy toward the Central African Region
At rst sight, Chinas stake in Central Africa does not appear to be that
dierent from other economic powers: the PRCs commercial relations
with the region only amount to 0.15 percent of its total trade volume.
This is comparable to the European Union and the United States. But
here the comparison ends. Beyond the macro-gures China does have
some particular interests in Central Africa. First, China is still juvenile
when it comes to projection of economic power on overseas markets.
Hence, it is seductive to focus more on economies in which strong
Western rms are not much interested. Second, nowhere in the world
is the consumption of raw commodities raising as dramatically as in the
Peoples Republic: every opportunity to meet this demand is welcome.
While Chinas initial opening-up strategy mainly focused on the attrac-
tion of foreign investors, nowadays, it increasingly wants its own com-
panies to explore foreign markets. Hitherto, the corner stone of Chinas
development strategy was to spur domestic production output. Therefore
it counted on foreign enterprises not only to invest, but also to manage
the retail of the produced goods on overseas markets. Recently however,
the Peoples Republic appears to have entered a new stadium of foreign
trade policy in which it attempts to conquer foreign markets by itself.
In 2001, the Chinese Vice-Premier Wu Bangguo ocially announced
his two-way investment strategy. It was an explicit dictate of the Party
that the invite-in approach had to be complemented by a go-out
strategy. This shift can be explained from two important considerations.
First, the country is eager to diminish its over-dependence on foreign
concerns and to build an autonomous capacity to operate abroad. In
other terms, it wants to promote trade-ownership. In 2001, Chinas coastal
provinces started actively to establish a group of overseas production
bases to boost its transfer of matured industries to overseas and the
export of raw materials, equipment and spare parts. The state-con-
trolled newspaper, the Peoples Daily, explained this evolution as follows:
A batch of industry leaders with international brand competitiveness
15
See for instance: UNCTAD, 2003; Medeiros Evan and Fravel Taylor, 2003; Dong
Qi and Ma Xiaoye, 2004.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 138
have emerged from the light industry, textile, household appliance and
machinery sectors. These companies are able to go into the global mar-
ket to secure broader space for structural adjustment and optimal allo-
cation of resources.
16
Understandably, trade ownership can be approached
from an outward and an inward perspective.
The former implies Chinas eagerness to discover new consumer mar-
kets and lucrative markets for Chinese exporters. It is well known that
a substantial share of Chinas Gross Domestic Product (GDP), 34.4 per-
cent, consists of export; the largest part of its new jobs are provided by
industries whos main activity is to process consumption goods destined
for overseas markets. Nowadays, foreign or international corporations
manage 60 percent of Chinas export volume. In se this does not has to
be a problem. Nevertheless, on the long haul it is all but certain if these
Wal-Mart-type companies will also keep their production activity in China.
The PRC can only remain to be the worlds factory if it succeeds to
cement its own production capacity, and if it achieves to create its own
channels to make way into export markets. At rst sight, Central Africa
seems not to t in this aspiration: it concerns an impoverished region,
and thus, does not have that much purchasing power. Even though, it
remains a protable market to tap. First, China has a strong standing
as a supplier of aordable goods and services. Whereas China does not
have sucient branding capacity to penetrate the markets of industrial-
ized countries itself; cheap Chinese fabricates such as consumption prod-
ucts and inexpensive robust machines nd their way easily to African
countries, without having to resort on foreign retailers. Our textile com-
panies do not earn a cent more with a Nike logo, so, if they can sell
their fabricates themselves they are eager to do it, a Chinese diplomat
summarized.
17
Second, the Central African economies form a testing lab-
oratory for higher-standard rms. Whereas not yet competitive on Western
markets, Chinese companies can gain experience and reputation through
limited investments and undertakings in developing countries.
The latter, the inward perspective, mainly relates to the supply of
strategic important and often scarce goods: raw commodities to be specic.
Let us focus concisely on the evolution of Chinas need for raw mate-
rials; how Chinas demand for commodities translates into commercial
aspirations was already described supra. A recent CLSA report predicts
that Chinas consumption of steel, iron ore, nickel, copper, aluminium
16
Go Global investment strategy needed for Chinese enterprises, in Peoples Daily,
December 12, 2001.
17
Conversation with Chinese diplomat, Brussels, November 11, 2005.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 139
and oil will grow at double-digit annual rates for the next ve years,
taking an annual growth of the Chinese economy of 7 to 9 percent for
granted until 2010. Over the past twenty years, Chinas primary energy
consumption increased by 70 percent. Whereas it still possesses an abun-
dance of coal reserves, it is running out of oil and natural gas deposits.
By result the PRC has to rely more and more on foreign providers. In
1993, it became a net-importer of oil. For natural gas too, its surplus is
diminishing. Nowadays, 47 percent of the amount of the oil it consumes
originates from foreign wells; for 2020 the government estimates to have
to import 60 percent of its oil.
18
Annually 4 million new cars hit the
road; the gasoline consumption is expected to grow 6.3 percent each
year. Another cause for Chinas surging oil appetite concerns the pro-
duction of petroleum derivates in the chemical industry: still good for
as much as 70 percent of the average oil demand. Petroleum is also
replacing coal as an energy source for heating.
18
Development Research Center of the State Council, Chinas energy strategy, State
Council Beijing, 2003, p. 11.
16000
12000
8000
4000
0
1996 1997 1998 1999 2000 2001
10
9
8
7
6
5
4
3
Total (mio USD)
Share in world trade (%)
Figure 1
Chinas import of minerals. Source: UNCTAD (2004).
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 140
The industrial boom requires masses of other raw materials as well.
China is likely to overtake the U.S. as top consumer of aluminium within
two years. Demand for copper will also surge at annual rates of 10 per-
cent or above, due to Chinas growing power network and construction
boom. Experts assess that by 2010, China will have to import 57 per-
cent of its iron ore, 70 percent of its copper, and 80 percent of its alu-
minium and a substantial amount of other minerals such as cobalt and
niobium (tantalum) to sustain its production.
19
On the whole, Chinas
import of minerals annually grows 21.6 percent; previous decade, its
share in the worlds total mineral imports surged from 3.6 to 9.8 per-
cent (see graph supra).
20
According to the World Wildlife Fund (WWF),
Chinas demand for imported industrial wood, timber, paper and pulp,
will increase by at least 33 percent within the next ve years, from the
current 94 million cubic meters to 125 million cubic meters. China also
has an interest in promoting agricultural and horticultural cooperation.
First, Chinas fertile land is under increasing pressure due to overpopu-
lation and pollution. Second, the appetite for exclusive exotic products
is growing, given the fact that a new class of tasteful auents is devel-
oping. Third, many Chinese ocials and farmers think of investing in
Africa in order to cope with the challenges brought by the WTO entry.
21
On 28 September 2002, Chinas Vice-Minister of Foreign Aairs Li
Zhaoxing announced, China will make agricultural co-operation with
Africa a key area of co-operation in the coming years.
With regard to the import of primary goods, trade-ownership implies
that China is eager to take control of the foreign sources of these com-
modities by itself. Why is this propensity, and what does it mean? Beijing
opts for a control-over-the-well-strategy because it does not have condence
in the liberal approach of the commodity market. First, the up-stream
activity, the excavation of recourses, is seldom liable to the free-market
principles, but rather in the grip of monopolies and state control.
22
It is
still the hosting governments that have to grant concessions to foreign
companies eying at their resources. Often exploitation contracts require
much more than a strong market position: political and geostrategic rea-
sons as well play a predominant role. Second, China does not want to
be dependent on the dominant international concerns as its supplier. Third,
control over the up-stream processes also permits to keep down-stream
19
China to slow mineral imports, Peoples Daily, June 1, 2005.
20
UNCTAD, 2005, p. 5.
21
Muekalia D.J., 2004.
22
Fieldhouse D., 2000.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 141
prices in check. Whereas Beijing is aware of the fact that market-tied
prices of petrol, gas, iron, and other commodities are crucial to curb
over-consumption, the limiting of ination is even more imperative: ris-
ing prices and low wages are a dangerous cocktail for social unrest.
Fourth, Chinese companies involved in up-stream activities are often
quite recently, junior players on the international market. Hitherto, they
were chiey occupied with interior resources; since these domestic sources
are depleting fast, they have to make up lost ground very swiftly and
carve out their own part of foreign assets. Finally, a foot on the ground
in resource producing countries also permits to sketch out a long-term
policy and to anticipate on trends in the interior demand. Hence, the
aspiration to have a certain control of supply will spur China to stim-
ulate its companies to hunt for their share of the commodity market:
nevertheless, it will simultaneously open up its markets to foreign suppliers.
23
International concerns are stimulated to invest downstream activities such
as processing and distribution, as well as to participate in upstream activ-
ities. These investments ought to be benecial in terms of the infusion
of capital in expensive infrastructure projects such as the construction of
pipelines and reneries. They are also necessary to infuse know-how: for
instance, China has not much experience and skills in oshore excava-
tion. The UNCOAL aaire also made many policymakers in Beijing
aware of the fact that too much government control might raise suspi-
cion and restrain overseas activity.
24
To come to conclusion, China has
to balance between the long-term strategic objective to foster a certain
degree of trade ownership on one hand, and on the other hand the neces-
sity to involve foreign or international concerns with the purpose of mak-
ing swift headway to meet the immediate needs of its booming economy.
Cooperation cannot be shunned. Yet, on the long haul, the need is for
competitive devices with the purpose of pursuing an autonomous and
energetic foreign trade policy.
In this context too, Central Africa has not that much to oer. Even
though countries such as the DROC are dubbed as geological scan-
dals or natural treasures, the volumes of natural resources in this
region just constitute a limited share of the worlds total deposits. Take
oil for instance; Central African countries possess barely 0.6 percent of
the worldwide oil stock. Since 1999, the annual production in the ROC
23
See for instance: State Council, Chinas Policy on Mineral Resources, Information Oce
of the State Council of the Peoples Republic of China, Beijing, 1994, chapter 4.
24
The U.S. Congress barred a Chinese oil company to take over the American energy
rm UNCOAL.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 142
and Gabon declined by respectively 18.2 and 29.4 percent. Except for
cobalt (24.70 percent) and diamonds (18.00 percent), the regions min-
ing output contributes only very modestly to the worlds aggregate total:
copper 6.34 percent, tantalum 3.72 percent, and gold 0.02 percent.
25
Most of these commodities can be found much nearer, for instance in
Australia, Canada, Indonesia, Myanmar, and Russia. Nonetheless, these
limited assets remain to be an interesting investment for Chinese com-
panies. First, in this area they do not have to face that much competi-
tion from more potent international concerns: the big international players
are not prepared to invest as much in the less productive sources here
than in the bonanzas elsewhere, and are concerned having aected their
image in dealing with war-shattered and corruption mired countries.
Second, the impoverished governments of this region are easier to deal
with compared to larger suppliers in which their omnipotent monopo-
lies control most upstream activities. Lastly, China, as most other pow-
ers, attaches great importance to diversife its lines of supply and to limit
dependence on a limited number of countries.
The Devices of Chinas New Mercantilism
Before discussing the specic tools that China applies in foreign trade
oensive, let us rst pore briey over some institutional aspects of the
foreign economic policy. The governing regime of the PRC comprises
three institutional pillars: the Party, the government, and the military.
Even though all three actors have their say, the national foreign trade
policy remains to be nal responsibility of the National State Council,
the apex of the national government. The revised Foreign Trade Law
of 1994 iterates: The State Council is in charge of the administration
of the foreign trade of the entire country.
26
Under the aegis of the
Council, the Ministry of Foreign Aairs (MOFA) and the Ministry of
Foreign Trade and Economic Cooperation (MOFTEC) are in charge of
the execution of the national policy. However, China is not a monolith.
The constitution of 1982 formally divided the state in several sub-state
levels. Each unit is entitled with several authorities that permit it to set
its own agenda to promote local development. They are also permitted
to lobby at the national level to match the foreign trade policy in their
favour,
27
to participate in the implementation of the nations foreign
25
USG, Geological Mineral Survey Yearbook, USG, Washington, 2004, various pages.
26
Peoples Congress, Foreign trade law of the PRC, the Standing Committee of the Eight
National Peoples Congress, Beijing, 1994, art. 3.
27
For instance, provinces lobbied for preferential policies to attract foreign investments
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 143
policy, and to manage non-governmental activities to promote their mar-
ket abroad.
28
Still, at the end the central government remains the pri-
mary actor. Let us now move to the concrete instruments of Chinas
go-out policy. To start, we focus on the guiding and supportive role of
the government; how it takes the vanguard in the promotion of favourable
contacts, and how it conceives an ocial discourse to convince African
countries of its benevolent intentions. Subsequently, we concentrate on
the promotion of permanent contacts through the establishment of regional
forums: state owned companies, the nancial backing of Chinese invest-
ments abroad, the promotion of business exchanges, development coop-
eration, military cooperation, cultural bounds, etc.
Chinese top-politicians and senior ocials themselves are very vigor-
ous to pave the way for the extension of political and commercial rela-
tions with Africa. First, there are the numerous state-to-state visits from
which the signicance cannot be underestimated. High-level contacts
underline the importance a state attaches to its relations with another.
They promote business relations through the participation of extensive
trade delegations, certainly in state-to-state visits. They also form incen-
tives that can bolster mutual trust and good will, and add leverage to
attempts to get access to a given market. Despite the fact that President
Hu Jintao only paid three of its 32 state-to-state visits to African coun-
tries, the sequence of other high-level visits to the area is dense. Between
1990 and 2003, states of the Central African Region received 34 high-
level ocials such as ministers, vice-ministers and members of the core
national political bodies. From the other side, every actual state-leader
from the region who left for Beijing and paid tribute to China vowed
to the One-China Principle and oered or assented more economic coop-
eration. In November 2001, Rwandas President Paul Kagame visited
China. In July 2004, Ugandas President Museveni was hosted. He signed
an extensive Agreement of Economic and Technological Cooperation
and another one on the Mutual Promotion and Protection of Investment.
The consecutive month, CARs President Francois Bozize agreed to
strengthen bi-lateral cooperation in elds such as agriculture, infrastruc-
ture and energy. During his visit to China in July 2005, President Joseph
such as the development of transportation infrastructure, the establishment of Exclusive
Economic Zones (EEZ), credits, etc. See for instance: Cheung P.T. and Tang J.T., The
external relations of Chinas provinces, in Lampton D.M. ed., The making of Chinese for-
eign and security policy, Stanford University Press, Stanford, 2001, pp. 91-123; Yang D.,
Beyond Beijing: liberalization and the regions in China, Routledge, 1997, chapter 1; Saich T.,
Governance and politics of China, Palgrave Macmillan, New York, 2004, chapter 5.
28
See: Cheung P.T. and Tang J.T., op. cit., pp. 98-99.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 144
Kabila of the Democratic Republic of the Congo (DROC) signed an
agreement on technologic and economic cooperation and acquiesced to
further relations in the eld of human resources development, agricul-
ture, infrastructure construction, and cooperation between their militaries.
Hu Jintao from his side promised to encourage Chinese companies to
invest in the DROC and join the DROCs economic reconstruction.
29
In September 2005, President Denis Sassou-Nguesso from the ROC
called for Beijing and signed two concrete partnerships: one on the con-
struction of a 500 km-long road between the cities of Brazzaville and
Pointe-Noire, and another on the elaboration of the national electricity
transportation grid.
30
In addition to these particular events, Chinas
Foreign Aairs Ministry has established regular consulting mechanisms
with 24 African countrys corresponding ministries.
In 2004, delegations of diplomats from inter alia the Republic of Congo,
Burundi, Gabon, Rwanda and Central Africa were invited to discuss
further possibilities to advance political and economic cooperation.
31
Apart
from bilateral contacts, China is increasingly present in multilateral forums
such as the African Union, the South African Development Community
(SADC) and the Southern African Development Cooperation. Signicant
in this regard was the recent remark of SADC chair Paul Berenger: In
particularly, it is my intention during my tenure as chair to give a new
dimension to relations between SADC and India and China.
32
China
also provided itself with a permanent platform, the China-Africa
Cooperation Forum (FOCAC), on which I will elaborate later.
Apart from the contacts themselves, it is also striking how Beijing
adheres to a well-conceived ocial discourse that is carried out consis-
tently at every occasion. Jiang Zemin, then President, laid the founda-
tion of this discourse in 1996, when he summed up ve cornerstones of
Chinas Africa policy: sincere friendship, equality, unity and cooperation,
common development, and looking into the future. In 2003, this approach
was modied slightly by his successor who formulated six pillars that
can be summarized as: non-interference, African ownership in dealing
with problems, mutual trust and cooperation, the increase of economic
assistance without political conditions, to appeal the international com-
munity to pay more attention to Africa, and to promote a more friendly
29
China, Congo agree to further economic, trade cooperation, Peoples Daily, March
22, 2005.
30
Sassou Nguesso en Chine: place aux aaires, see: Congopage via: <www.con-
gopage.com>.
31
Chinese ocial stresses cooperation with Africa, Peoples Daily, July 8, 2004.
32
SADC to further boost relations with China, India, Peoples Daily, August 12, 2004.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 145
international environment for Africas development.
33
This approach can
also be discovered in earlier statements of Hu, such as in his key speech
he delivered in 1999:
China will, as always, adhere to the Five Principles of Peaceful Coexistence,
respecting independent choices of political system and development road by
African nations according to their realities; supporting the just struggle of
African nations to safeguard national independence, sovereignty and terri-
torial integrity; supporting these nations eorts to maintain domestic sta-
bility and unity, invigorate national economy and promote social progress.
In international aairs, China will actively support African nations partici-
pation in international aairs, strengthen bilateral consultations and coop-
eration, and make concerted eorts to safeguard the just rights of the
developing nations, trying to help establish a fair and reasonable interna-
tional political and economic order at an early date. China also urges the
international community, especially the developed countries, to respect and
show concern for Africa, pay attention to Africas peace and development,
and adopt eective measures to promote stability in Africa, help Africa
develop its economy, get rid of poverty at an early date, and narrow the
gap in development between Africa and the rest of the world.
34
The main points of this vision have been restated over and over again.
What is the signicance of this ocial view for Chinas commercial rela-
tions? A rst element to consider is the principle of non-interference.
Whereas Western governments and international concerns are under
strain to pay attention to human rights, the respect of democracy, and
environmental norms whenever they deal with third world countries,
Chinese actors do not have to conne themselves by these contempla-
tions and are permitted to operate freely. This gives them a leap in
countries and situations that are not in line with the common standards
of the international, read Western, community; cases in which Chinese
enterprises sneak between the meshes are rife.
35
The promise not to inter-
fere with internal aairs also sets local governments at ease, and makes
33
For the complete version of Hu Jintaos six pillars, see: Chinas Africa Policy, via:
<www.China.org.cn>.
34
Chinese Leaders on Sino-African Relations, December 10, 2003, see: <www.
china.org.cn>.
35
Even during the butcheries in Darfur, Sudan, Chinese companies continued to do
business with Sudan. Thanks to Europes and the U.S.s embargo to Iran, China suc-
ceeded to carve out lucrative oil concessions. Whereas Western companies are becom-
ing reclusive to invest in Saudi Arabias energy sources, Chinese companies are slipping
in. The same counts for countries such as Myanmar, Uzbekistan, North Korea, and
Kazakhstan.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 146
them more accommodating to grant concessions and public contracts.
Un-conditionality too contributes to this more unregimented way of
doing business. The discourse also implicitly alludes at the hostile char-
acter of the current international community and the actual political
and economic order; two structures created and dominated by the West.
When related to the frequent references Chinese ocials make to a
shared fate as developing countries and the revival of a Bandung spirit,
it is obvious that this line of reasoning aims at setting Africa apart from
the dominating West.
36
This common-destiny principle ties closely to
what is currently named as the Beijing Consensus, an alternative to
the well-known Washington Consensus that promotes a rigid policy of
liberalization and privatization as a panacea for development in devel-
oping countries.
37
Instead of this strategy, China stands for a gradual
process of development that departs from the internal conditions and
needs of a country. Complementarity, we already mentioned this before,
is another crucial element of Chinas policy toward its partners in Africa:
by working together, China and African countries have to endeavour a
mutual favourable specialization of their economies, or in other words,
have to take an active part in international division of labour and coop-
eration in order to realize their own development goals [emphasis
added].
38
Thus, Chinas vision on its economic relations with Africa
consists in the assertion of a common need to pursue a policy that dis-
tinguishes from the currently dominating Western approach. Instead of
prescribing bitter structural adaptation plans and wry requirements, Beijing
only beckons with sweet carrots: instead of forcing African countries to
adapt, the PRC adapts its own policy in such a way that it ts smoothly
to the demands of the African regimes. Whether or not this is com-
mercial pragmatism, a sincere ideology, or both; it is clear that this
approach will derive goodwill and permit to do business suavely.
The China-Africa Cooperation Forum (FOCAC) is another means for
bolstering commercial and political relations. Established in 2000, the
FOCAC forms an interface for ocials and business leaders through
ministerial conferences, senior ocials meetings, and the China-Africa
36
For instance, Hu referred to China and Africas shared faith in terms of both being
burdened with arduous tasks of development [Peoples Daily, September 13, 2005], . . .
Allusions made to Bandung are inter alia Hus pledge to carry on the Bandung spirit
and contribute to the continuous progress in Asia and Africa. [Peoples Daily, April 22,
2005]
37
Ramo J.C., 2004.
38
Full text of Hu Jintaos speech at Asian-African Business Summit reception, Peoples
Daily, April 22, 2005.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 147
Joint Business Council. Its current goals are stressed out in the Addis
Ababa Action Plan and entails issues related to peace and security, mul-
tilateral cooperation, economic development, and social development.
39
Let us go more into detail on the economic segment. A rst priority in
this regard is the development of Africas agriculture in order to strengthen
the food security of Africa and to increase its exports to China and other
markets.
40
China will also continue to support and encourage strong
and viable Chinese enterprises, through nancial and policy incentive
schemes, to develop agricultural cooperation projects in Africa.
41
Second,
and particularly emphasized, is the infrastructure development: China
will encourage its enterprises to take an active part in Africas infra-
structure projects and expand cooperation in transportation, telecom-
munication, energy, water supply, electricity and other elds.
42
Third
aim is to promote trade through import-tari reduction, initially on com-
modities; later on, other goods too might be included after bilateral nego-
tiations between China and each particular African state.
43
Fourthly, the
Action Plan addresses the facilitation of investments, focusing on
simplication of approval procedures for Chinese companies, which are
interested in investing in Africa.
44
African countries are also urged to
hold consultations with the China Council for the Promotion of
International Trade (CCPIT) with a view to establishing a China-Africa
Chamber of Industry and Commerce. Next comes the development of
tourism. In this regard China is expected to grant its Approved Destination
Status (ADS) to more African countries.
45
The sixth vow concerns Chinas
intention to take an active part in resources development projects in
African countries and increase its investment in this area.
46
In this eld,
African countries are insisted on to provide all necessary information
and to accord facilities for Chinese enterprises. Other elements of the
economic section of the Action Plan are debt relief and development aid.
State companies are still the main actors that are sought to imple-
ment the aspirations set by the government. However, several structural
39
FOCAC (2003), Addis Ababa Action Plan, Addis Ababa, December 26, 2003. See:
<www.iss.co.za/AF/au/chinaafrica03.htm >
40
Ibid. art. 4.1.1.
41
Ibid. art. 4.1.2.
42
Ibid. art. 4.2.2.
43
Ibid. art. 4.3.
44
Ibid. art. 4.4.
45
Approved Destination Status (ADS) is the permission for Chinese tourists to travel
to a particular country. The granting of an ADS often coincides with the promotion
and facilitation of voyages to these places.
46
Ibid. art. 4.8.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 148
shortcomings impede them to play a competitive role in overseas mar-
kets. None of the Chinas largest rms appears on the short-list of the
worlds most competitive corporations.
47
Without going into detail, Chinas
state-companies often lack technological innovation capacity, recogniz-
able brands and comparative advantage in niche markets.
48
In addition,
Chinas thousands of state-owned enterprises (SOE) often compete with
each other on the same terrain. Hence, parallel to what Japan and Korea
realized in the recent past, Beijing pursues an active policy to create an
elite corps of national champions: large, vertically integrated business
groups that encompass entire industries from upstream to down. According
to The Economist the government decided that 30 to 50 of its best state
rms had to turn into globally competitive multinationals by 2010.
49
At home these concerns would benet from favourable tax regimes and
administrative support; abroad they will be propped up with export cred-
its, loans and backed diplomatically. Thus, instead of letting its still frag-
ile companies be preyed by foreign competitors, Beijing prefers to endow
them with everything they need to mature to global champions. The
grip of the central government on these rms will remain to be assured
in several ways. First, Chinas law prescribes that the State Council rep-
resents the State in performing the responsibilities of investor in large
state-owned enterprises, state-owned holding enterprises and enterprises
with state-owned equity, which have a vital bearing on the lifeline of
the national economy and State security, and in large state-owned enter-
prises, state-owned holding enterprises and enterprises with state-owned
equity within such sectors as important infrastructure and natural re-
sources.
50
In practice it is the state-owned Assets Supervision and
Administration Commission of the State Council (SASAC) who is enti-
tled to advance the establishment of modern enterprise system in SOEs
and to manage the strategic adjustment of the structure and layout of
the state economy. The SASAC can assign so-called supervisory pan-
els to large enterprise on behalf of the state, and appoints and removes
top-executives of enterprises.
51
Second, the SOEs are only permitted for
limited auctions: often these public oers do not take place on Wall
Street or in London, but in Hong Kong.
52
As a result, several important
47
See: UNCTAD (2005), World Investment Report 2005, UN, New York/Geneva, Annex
A.1.9: The worlds top 100 non-nancial TNCs.
48
See for instance: Nolan P., China and the Global Economy, Palgrave, New York, 2001.
49
The struggle of the champions, The Economist, January 8, 2005, pp. 58-59.
50
State Council of the PRC, Interim Regulations on Supervision and Management, Decree
of the State Council, adopted on May 13, 2003.
51
See: <www.sasac.gov.cn>.
52
Financial Times, November 14, 2005.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 149
SOEs exhibit a dual corporate structure. On one hand they comprise
a segment that remains controlled by the state through the SASAC and
via the provision of support. On the other hand they include a division
that is more or less privatized via a joint-venture or auctions. The result
of this structure is that state and semi-state companies demonstrate an
appalling solvability. This enables them to realize the imposed long-term
goals even if these are not lucrative in terms of nancial prots.
Beijing nourishes its companys overseas activities nancially through
several institutions. First, there is the national Export and Import Bank
of China (Exim Bank). This institute, the worlds third largest export
credit agency, is entirely funded by the central government and has to
furnish exporting Chinese companies with export credits, and to provide
contracted governments with low-interest concessional loans. For instance,
in 2004 the Exim Bank wrote out 490 loans to enable other states to
aord services provided by Chinese construction companies.
53
Such gov-
ernment-to-government loans constitute the bulk of the banks funding,
and specically target developing countries. For the period from 2005
until 2008, Beijing has vowed to provide 10 billion USD in concessional
loans and preferential export buyers credit to developing countries. Aside
from the Exim Bank, the government-owned China Construction Bank
(CCB) too is active and provides services to stimulate investment and
trade between China and Africa nancially. In this perspective its recent
branch in Pretoria is expected to play a leading role. Particular support
is also allocated to the mining industry by means of special capitals and
tax reductions designated by the Ministry of Finance. A senior ocial
of the Ministry of Finance summarized the policy as follows: To pro-
mote the implementation of the strategy of going overseas, to encour-
age and to guide geological institutions and mining enterprises to explore
and utilize foreign mineral resources, the Ministry has arranged special
capitals for the work of general survey on foreign mineral resources, fea-
sibility studies and initial stage venture surveys. These funds initiated
and implemented a group of projects on oversea venture survey, reduc-
ing the initial exploration risks for mining enterprises to go overseas.
54
Chinas Ministry of Trade and Economic Cooperation (MOFTEC) as
well stimulates companies nancially to process and assemble products
with brought-in materials from overseas.
55
53
China Exim Bank puts foreign trade on sound footing, China Daily, May 17, 2005,
p. 31.
54
Li J., Chinas nancial and policy supports for mining industry, Address of the Deputy
Director General of Business Development Department, Ministry of Finance at the China
Mining Conference, Beijing, October 5, 2005.
55
Moftec Announcement on Releasing the Category of Products (the First Batch)
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 150
Next, there is the promotion of business-to-business contacts through
several agencies and events. China established multiple permanent trade
agencies in overseas countries. For instance, aside from the embassies,
the Ministry of Commerce keeps open a permanent trade representa-
tion in Rwanda and Uganda, and at the other side supplies African
trade agencies with accommodation to bolster their presence in China.
According to the China Council for the Promotion of International Trade
(CCPIT), Chinas largest non-ocial trade promotion organization, 27
Chinese business exhibitions were held in Africa in 2004 and 30 in
2003.
56
Government sponsored seminars have also been organized in
dierent provinces of China to brief farmers about conditions in Africa
and related government incentive policies for investment.
57
In December
2004, the Commercial Ministry and the Ministry of Information orga-
nized a 10-day conference for a group of 10 African telecom ministers;
the event e.g. comprised a visit to the ZTE Headquarters.
58
Even cultural cooperation is an essential part of Chinas foreign trade
policy. Cultural relations are a precondition to promote commercial
relations.
59
The former Chinese Premier Zhou Enlai on his turn described
diplomacy as an airplane with diplomacy as the body, economy and cul-
ture as the two wings.
60
In 2004, the Democratic Republic of Congo
was invited to participate in an African art festival. To date, China has
signed with 46 African countries a bilateral cultural agreement. Last year,
the Chinese government and governments of African countries mutually
sent 200 cultural delegations. In 2004, three artist delegations visited 12
African countries with exhibitions as well as the China Art Festival
held there.
Aid is a political ticket.
61
Development cooperation is a powerful lever
to inuence development countries. As from the nascence of the PRC,
Beijing paid much attention to maintain an image of China as a benev-
olent primus inter pares, a mecenas ready to share the fruits of its devel-
opment with other less fortunate peers. Since 2004, China became a
whose process and assembly with brought-in raw materials from overseas are encour-
aged by the Chinese Government, May 6, 1999.
56
Experts Optimistic About China-Africa Trade Prospect, Peoples Daily, January 5,
2005.
57
Muekalia D.J. 2004, p. 10.
58
African Telecom Ministers Visit ZTE Headquarters, via: <www.cellular.co.za>.
59
Statement of Chinas Ambassador to Belgium at the Royal Military Academy,
Brussels, November 3, 2005.
60
Cultural exchanges promote Sino-African co-operation, Peoples Daily, May 10,
2005.
61
Kindleberger C.P. 1970, p. 145.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 151
net-donor of development aid with a budget of 730 million USD.
62
This
development assistance materializes in several forms. First, China employs
dozens of medical specialists in overseas hospitals: in Central Africa,
Chinas medical sta amounts to 748 specialists. It is also planning to
deliver drugs and other medicine to several countries. In the eld of
education, the PRC annually oers 1,500 scholarships to African stu-
dents. Intercollegiate exchange and cooperation has been established
between 27 African universities and their Chinese counterparts. The
Chinese governments African Human Resources Development Fund
pays for 10,000 Africans to be trained in Beijing.
63
China provides tech-
nical assistance and delivers equipment to several educational institu-
tions.
64
Other terrains of development cooperation concern agriculture,
transportation and technological development. China showed itself gen-
erous when it decided to cancel the bilateral debts before 2004. The
PRC also exes its muscles as a supporter of regional security. Currently
it contributes 230 ocers to peacekeeping missions of the United Nations
in the region. From 1998 until 2003, the Peoples Liberation Army has
been training 89 military ocers from the DROC, and in 2004 it agreed
to train another batch of 60. China also provides military equipment to
the DROC, Uganda, and the CAR.
65
The Peoples Republic combines a wide array of instruments to enforce
its bounds with the Central African region. Many of these devices are
not that dierent from those other powers applied in order to gain
inuence in this region. However, what characterizes the Chinese pol-
icy particularly is its determinedness and its ability to operate its devises
in a tight and coherent way: the Chinese government still has much
more steering capacity than its Western competitors who rather try to facili-
tate their aliated companies instead of guiding them to operate when
and where it is the most suitable to the realization of the states interest.
Results
To assess the results of Chinas policy is a delicate exercise. To start
with, facts and gures are limited and inaccessible at large. Whereas one
can rely on the standard databases such as these of the UNCTAD and
the WTO for general gures spanning longer periods, more detailed
62
McGregor R., China becomes a net donor of aid, Financial Times, April 4, 2005.
63
See: <www.chinafrique.com>.
64
The technical cooperation between China and Uganda has achieved remarkable
achievements, Xinhua, December 5, 2003.
65
See: Sali B.H, China is 3.8 million richer, The Monitor, October 2, 2003.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 152
data provided by the Chinese agencies themselves are only available for
recent years. Second, there is the question of reliability: without going
into detail, we found ocial gures often contradicting with data result-
ing from expert calculations. Third, it is obvious that the direct trade
volumes do not necessarily cover all goods that arrive at the nal des-
tination: goods exported from China to South Africa, for instance, can
still nd their way to Uganda, and vice versa.
As mentioned later, many of Central Africas raw commodities, pre-
cious minerals in particular, are exported to China after a stopover in
South Africa, Thailand or Hong Kong. It is a fruitless task, and outside
the scope of this dossier to try to clear out all these hubs and transi-
tions; but even if we take the gures for what they are, they still pro-
vide us useful insights. Hence, how did we specify Chinas political
aspirations into measurable targets? In general terms the aim is to increase
exports of manufactured goods and the imports of strategically vital com-
modities. Here we will present the overall trade gures for the last ve
years aside from facts concerning the composition of these ows.
Consecutive to this quantitative overview, we will go more into detail
with regard to Chinas realizations in the eld of the dierent mineral
resources, but also vis--vis the construction of infrastructure and telecom-
munication.
A large number of facts in this part are drawn from numerous writ-
ten as well as oral sources. Open publications are mentioned in the foot-
notes. Oral sources, however, are kept anonymous, given the fact that
most of informants, kind of sharing their expertise, are aliated with
ocial institutions, gos, and companies who are present in the region.
1200
800
400
0
10
8
5
4
2
0
1999 2000 2001 2002 2003
Exports
Imports Share in exports Share in imports
Figure 2
The regions trade relations with China (mio USD and %).
Source: China customs (2005) and WTO (2005).
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 153
Every fact drawn from oral sources is at least double-checked in sepa-
rate conversations, interviews, or email queries.
Any kind of a graph, such as the one supra, might suggest that Chinese
policymakers should start to worry. While Central Africas imports from
China nearly rose, the exports from the particular region surged sig-
nicantly. Hence, between 2000 and 2003 Chinas trade decit grew
from 0 to 84 percent of the total trade volume. A mere two percent of
the areas imports originated from the PRC, which indicates that Chinese
companies do not succeed to gain much terrain on other competitors.
On the spot we did not nd any indication either that these Chinese
goods enter in substantial amounts via other states. Hence, Chinas rst
aim appears not to be achieved. Still, despite the decit, these graphs
do not exclude the PRC to accomplish its second objective: the import
of resources. Therefore, let us concentrate on the next graph that depicts
the composition of Central Africas export to China. The gures are
drawn from several data les provided by Chinas Customs Agency;
product categories were reduced to ve main groups: petroleum (petro-
leum and petroleum derivates), minerals (ores and scrap), logs (cork and
wood), food (coee, tea, fruits, meat, etc.), and manufactured goods. It
becomes obvious that except for some percentages of manufactured goods;
the entire trade ow from the region consists of raw materials. In 2003,
more than 64 percent of the value concerns petroleum, 25 percent logs,
and up to 8 percent minerals. Consider for instance the increase of
Central Africas exports between 2002 and 2003; 87.7 percent of this
upsurge was due to a new petroleum deal with Gabon and the ROC.
In 2003, China was able to buy 18.4 percent of the total petroleum
export of Gabon and the ROC, by far Central Africas two largest oil-
producing countries. Hitherto, Western consortia such as Total, Agip,
and Chevron dominated both markets: however, since 2004, Chinese
companies too are showing their ag. In 2004, Sinopec acquired the
permission to explore for oil in Gabon; besides, it was also put forward
the possibility to build a second oil renery. Even though, analysts doubt
whether this investment will turn out to be protable: since 1997, Gabons
oil output declined unabatedly from 370,000 barrels per day to just
250,000 last year: an evolution which made Total-Fina and Shell decide
to downsize their activity. In March 2005, the Congolese government
in its turn announced two oshore exploration and production agree-
ments with Sinopec for the Marine XII and High Sea C blocks. Several
other blocks may be awarded in the near future including Marine III,
Marine VII, and Haut Mer A and B.
66
66
EIA, Congo-Brazzaville, via: <www.eia.doe.gov/emeu/cabs/congo.html>.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 154
Figures 3 & 4
Composition of the regions imports froom China (mio USD).
Source: China Customs (2005).
1200
1000
800
600
400
200
0
2002 2003
Petrol
Minerals
Logs
Food
Manufactured
Composition of the regions exports to China (mio USD).
Source: China Customs (2005).
300
250
200
150
100
50
0
2002 2003
Textile
Electronics
Processed metals
Machinery
Chemicals
Rest
Primary
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 155
Chinas achievements in the eld of mineral extraction are much more
opaque. Apart from the large state-aliated companies, several private
entrepreneurs and individual agents enter the scene. What do we know
about the former category? Hitherto, Chinese state-owned or exclusively
Chinese enterprises do not have many projects on their account. Moreover,
the projects they did succeed to set o are limited in extension com-
pared to those of various European, American and South African enter-
prises.
67
The most signicant concessions were obtained in Gabon. In
May 2004, Minmetals, the largest supplier of raw materials for the steel-
making industries and industrial minerals, carved out an exploitation
licence for the excavation of iron ore in the Belinga-Mekambo pit in
Gabon.
68
In the same country Xuzhou Huayuan searches for Niobium
and Manganese in Ndjol.
69
In the DROC, Katanga is the area where most Chinese enterprises
are active: Jiaxing Mining Industry collects copper near to Lubumbashi,
and Feza in Likasi where it possesses a comptoir for copper and cobalt
ores.
70
China is also investing in the completion/upgrading of the Bangula
railway track between Katanga and the railway grid of Angola. Whether
there exists a specic strategic aim behind this investment is not sure,
but this connection might facilitate the transportation of materials from
the resource rich Katanga to the shores of Angola, a country were China
already has a strong foot on the ground. Moreover, an operational trans-
portation corridor in Southeastern Congo might also provide pass through
to the output of the mines China recently obtained in Zambia. But still,
this is just one possible explanation; we also have to remark that up
until now there has not been much progress made on the spot.
There are several reasons that can explain the limited advancement
of the regular Chinese companies. First, regular rms do not t that
well in the context of a predatory economy, such as that of the DROC.
This marauder economy shows us a mode of excavation, production,
and trade that deprives a society of its natural possessions by cultivat-
ing violence and disorder. The subsequent lack of stability, administrative
67
Various conversations with mining specialists during the expert meeting: Les tressors
de la RDC, Brussels, November 23-24, 2005. For accessible country-by-country reviews,
see also: USG, Geological Mineral Survey Yearbook, USG, Washington, 2004.
68
Quand la Chine rveille lAfrique, via: Gabon Flash, June 3, 2004.
69
Une socit chinoise autorise prospecter du manganse au Gabon, Panapress,
April 4, 2004.
70
Katende J.C., Rapport prliminaire sur lexploitation illgale des ressources naturelles en RD
Congo, ASADHO, Katanga, 2004, p. 21; Gorus J., Preparatory note and eld research
on the mining industry in Katanga, 2005.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 156
liability, and infrastructure hampers the establishment of streamlined and
ecient production activities. Second, compared to other players, Chinese
companies are not that long acquainted with the Central African envi-
ronment, its language, and its intricate administration. Third, there is
the experience gap: upstream production demands in the region often
dier from these in China, and Chinese rms are not yet able to meet
these exigencies technically. If state-companies do not make the head-
way in supplying the mineral recourses to China, who does? For instance,
a Chinese mineral analyst testies that in 2003 at least 30 percent of
Chinas cobalt originates from the DROC.
71
These gures are more or
less conrmed by a recent survey of the Cobalt Development Institute.
72
A Belgian expert with years of experience goes further and states that
even this calculation is a blatant underestimation.
73
Which players com-
pensate for the actual inability of Chinas big investors? To start with,
Chinese mineral processing companies purchase from established min-
ers; directly or indirectly via brokers and agents. For instance, Chinas
Nigncxia, a coltan-processing rm, buys its Congolese commodities via
trading posts in Rwanda. According to diplomatic sources, Chinese
ocials also paid a visit to another Kigali-based Rwandan company
involved in coltan export from its western neighbour.
74
Another impor-
tant mineral company, the Hong Kong based Pacic Ores Metals &
Chemicals, concluded a cooperation agreement with the South African
CAMEC; in turn, the latter holds a stake in Exploitations Artisanales
au Congo (EXACO), a rm active in the DROCs Katanga Province.
A recent report of Global Witness goes more into detail on the role of
South-Africa as transit country for the DROCs cobalt and copper ows
to China.
75
Jinchuan, Chinas most important cobalt group, recently
opened a bureau of the DROC from which it networks with local cop-
per and heterogenite excavators.
Besides these lires, there are several one-man private Chinese actors
involved in small-scale mining activities. Most of these kinds of busi-
nesses concern the collection of precious minerals that can be shipped
easily in small quantities, and thus do not demand extensive facilities.
Several interviews identied such individual purchasers in the DROCs
71
Interview via e-mail with Belgian mining expert in the DROC, October 22, 2005.
72
Cobalt News, The Cobalt Development Institute, October 2004.
73
Interview with mining expert, Brussels October 23, 2005.
74
Interview with diplomat, Brussels, November 25, 2004.
75
Global Witness (2004), Rush and Ruin The Devastating Mineral Trade in Southern Katanga,
Global Witness, Washington, 2004, pp. 18-24. See: <www.globalwitness.org>.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 157
Districts of Nord-Kivu (diamonds), Katanga (gold, diamonds, hetrogen-
ite) and Maniema (diamonds, gold, coltan); as well in Kigali-Rwanda
(unidentied minerals) and Uganda (unidentied minerals, but probably
diamonds).
76
Concluding, China is not yet successful in achieving its con-
trol-over-the-well strategy. Its mining companies still leap far behind so
that the Chinese processing industry has to rely on foreign mineral sup-
pliers. The presence of private Chinese actors, often individuals, appar-
ently does not emanate from any kind of ocial policy; it is not clear
yet in which extension they contribute to the realization of their home
countrys appetite for minerals.
Another sector that has to be taken into account concerns logging.
According to ocial gures logs constitute more than 25 percent of the
import from the region with a total value exceeding 200 million USD
in 2002 and 2003. Some concrete gures clarify Chinas increasing role
in the Central African logging industry. In 2003, half of the ROCs tim-
ber production was reported to have been shipped to China.
77
For Gabon
this gure amounts to 46 percent. According to Global Timber, an
NGO, Chinas share in the CARs log exports increased from one per-
cent in 2000 to eight percent in 2003; in Gabon seven percent in 1995
and 32 percent in 2003.
78
Chinese timber companies are reported to be
more and more active in Gabon and the ROC; recently it opened up
Huamao Forest & Timber Company in the DROC. But here too, China
is supplied as well by several foreign rms. For instance, Shanton President
Wood Supply Company was bashed in a report of the UN Security
Council for its relations with DARA Forest Company, an illicit logger
in Ituri.
79
The last category of Chinas imports from Central Africa concerns
agricultural products, which comprise 0.7 percent of the regions trade
ow to the PRC. In this eld, the Africa Agriculture Development Center
(AADC) is a vital player that invests in crops, livestock and shery pro-
jects in several states. In the DROC, China Import and Export Company
is active in agricultural production and animal husbandry, as well as
76
Conversation with Congolese mining industrialist in Brussels, November 23; con-
versation with Congolese human rights activist in Brussels, November 23; conversation
with Belgian army ocer, November 17; interview by telephone with Ugandan military
ocer, November, 15.
77
Oliver R. and Fripp E., Changing international markets for timber What can African coun-
tries do? TTF and IFIA, 2004.
78
See: <www.globaltimber.org.uk/congo.htm>.
79
UN Security Council, Report of the panel of experts on the illegal exploitation of natural
resources and other forms of wealth of DRCongo, UN, New York, April 2001.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 158
New Oasis Coee, and a sugar company in the outskirts of Kisangani.
In the CAR, the PRC is involved in fruit harvesting. In Ugandas cap-
ital, Heritage is investing in a cotton eld, the government went into a
partnership with a Chinese coee company, and a Chinese rm is involved
in sh capture in the Victoria Lake. Nevertheless, these undertakings
fade entirely away compared to the partnerships the PRC recently bro-
kered with agricultural giants such as Brazil and Argentina.
Besides the vending of manufactured goods and the import of natural
resources, another particular sector, and probably the one in which
Chinese companies were able to make the most signicant advance, con-
cerns the realization of infrastructure projects. Chinese rms are very
successful in reaping important public infrastructure contracts from Central
African governments. The state company China Roads and Bridges
(CRB), for instance, became a privileged contractor in several countries.
Recently it opened permanent commercial representations in Rwanda
and Burundi; during the past years CRB was entitled to eectuate all
important road construction projects in Rwanda. In Burundi it com-
pleted a highway section between Bujumbura and the Nile River.
In the DROC it accomplished a road between Bukavu and Kasongo.
80
In the ROC the company paved a road between Brazzaville and Pont-
Noire.
81
Another rm, the Companie d Eau et Electicit, completed sev-
eral transportation arteries in Bas-Congo, Nord-Kivu, Orientale and
Bandundu. Apart from roads, other infrastructure as well is built by
Chinese engineering enterprises. Examples are rife. Stadiums were erected
in Rwanda, the ROC and the DROC. In the latter two countries Chinese
also took care for the reconstruction of the national parliaments. In the
ROC China national Machinery Import end Export built the Imboulou
Dam and repaired the Moukoukou dam.
82
Other hydropower stations
were taken care of in Burundi (Mugere), the DROC (Bandindu) and
Uganda ( Jinja).
83
Interesting is also Chinas involvement in the re-estab-
lishment the DROCs port of Matadi, the paving between this harbour
and Pont Mpozo and a new commercial center near to the airport of
Ndjili.
84
Besides construction, the realization of telecommunication networks
80
La chine prsente par son ambassadeur en RDC, Le Potentiel, October 1, 2005.
81
Pkin va construire une route entre Brazzaville et Pointe-Noire, Jeune Afrique,
September 27, 2005.
82
Les travaux du barrage dImboulou vont bon train, via: Site Ociel dInformation et
de Conseil sur le Congo, October 25, 2005.
83
La chine prsente par son ambassadeur en RDC, Le Potentiel, October 1, 2005.
84
Interview via email with a development aid worker in the DROC, October 28,
2005.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 159
is another terrain of activity. In the ROC Chinas ZTE outbid the Israeli
RCI and the American Vertex to acquire a contract to develop the
countrys telecommunication network; consecutively, Congo Chine Tlcom
became a main operator.
85
In the same country China Beijing Construction
erected and equipped a new compound for the state radio and televi-
sion.
86
In the DROC China Telecommunications Company founded a
local subsidiary with a mobile telephone network that hitherto reaches
not farther than the area around Kinshasa but is expected to expand
in the near future. In other states too, Chinese operators are starting to
found new networks: Netcom in Uganda, Huawei-Onatel in Burundi,
and an up until now an anonymous applicant in Gabon.
How can one explain the progress of Chinese infrastructure projects?
First, whereas rms lack experience in the mining sector, this is not the
case for construction and telecommunication rms. Despite the fact they
do not deliver state-of the-art-products, their results are thought to be
quite solid and trustworthy.
87
Second, Chinese contractors succeed to
play out their price competitiveness. By employing cheap Chinese engi-
neers and labourers, and by making use of low-cost techniques, the men-
tioned rms are able to outbid competitors from inter alia the United
Arabian Emirates. A last, utmost important advantage concerns the huge
liquidity ow that the Chinese government put at the disposal of its bid-
ders. Lending institutions such as the Exim Bank and the Construction
Bank provide investing governments with millions of low-interest loans
to enable them to nance the work done by Chinese companies.
Time now to make up a preliminary balance of the progress China
made in the realization of its aspirations. Summed up, these achieve-
ments have been mixed. Relating to the vending of its own manufac-
tured products, it appears that it only takes a limited share of the market.
Despite Made in China visible in every household and in every shop,
the monetary value that these goods represent is still modest. Chinas
grip on the regions natural resources is still feeble as well. On one hand,
it is clear that it succeeds to appropriate an increasing share of the
exports of commodities. On the other hand, it does not reach down to
acquire trade ownership: the presence of Chinese companies in Central
Africas mining is still juvenile: there are no indications of a far-reaching
85
Gourmelon I., Gestion de la rente ptrolire au Congo Brazaville, FIDH, Paris, p. 55.
86
Prt chinois pour construire le nouveau sige de la radio-tlvision du Congo, Le
Potentiel, October 17, 2000.
87
Email queries addressed to 15 development aid workers in the region, November
21, 2005.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 160
take-over of important sources. The other Chinese players, active on the
edge between formal and informal trade in commodities, do merely con-
tribute to the overall export ows. However, an important question that
still has to be cleared out is the indirect export of precious Congolese
materials via transit countries such as Rwanda, Tanzania and South-
Africa. Concluding, the sector in which China turns out the most suc-
cessful concerns the contracting of infrastructure projects; obviously the
massive nancial support has a stake in this. Lastly, let us come back
now on the trade decit that China runs with the region: it is impor-
tant to ask whether this imbalance is a matter of aw or a matter of
economic exibility and buer capacity. What does a decit of one bil-
lion USD mean to the PRC if it amasses an overall trade surplus of 32
billion? Hence, China seems to have the exibility to recover its trade
decit with regions it depends on for their vital goods from the impres-
sive surplus it accumulates in general.
Impact
It is doubtful that the Central African population will prot much from
Chinas increasing presence. First, the quantitative trade surplus is coun-
terweighted by a qualitative trade decit: Chinas infusion of manufac-
tured goods, although rarely always state-of-the-art products, and its
technical expertise represent a larger added value than the regions export
of raw materials. Second, the control-over-the-well policy also impedes
Central African states to foster economic sovereignty. By emphasising
the need to seize ownership of local sources, China implicitly vows to
disown African societies of their potential ability to manage these them-
selves. Alien possession of sources of raw materials inhibits them also to
prot substantially from the rising trend in commodity prices. Third, it
is all but certain that the net-incomes originating from the favourable
trade balance come to the benet of the local populations. China, for
instance, does not pose any demand with regard to the tractability of
the revenues that governments reap out of concessions and taxes. Fourth,
the argument that cheap Chinese consumption goods are curbing ination
and consecutively engendering purchasing power is partly weakened by
the fact that governments levy high taxes on these imported products.
88
Fifth, Chinese products compete the scarce local manufactured goods
out of the market. For instance, the Kampala City Traders Association
recently has complained that their Chinese counterparts are sabotaging
88
Conversation with Rwandan ngo worker, Brussels, November 21, 2005.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 161
businesses by selling products too cheap.
89
In this regard, a newspaper
from the ROC accuses China for imposing a new imperialism:
A new phenomenon, the Avenue of Peace in the community of Poto-Poto
is transforming into a new China Town or into a Shanghai City Avenue.
Chinese have invested in various sectors of the commerce in such a way
that a visitor who comes here would have an impression of being in the
country of Mao Zedong. As a matter of fact, these advertisements in front
of boutiques and stores in rising sun: Chinese boutiques, Chinese stores,
Chinese beauty, Wan Wu, Ghua Hu, Shang Hai, Hou Li, Chen Pan,
or else Xin Tian . . . Specialized in retail, these Chinese of Brazzaville oer
products at low prices and start to gain terrain that was previously occu-
pied by West Africans, Indians or Pakistanis. On their shelves, they present
a wide assortment of articles: electronic apparels, shoes, leatherwear, deco-
ration, garments, pharmaceutical products, make-up, and others . . . One has
to conclude that this vast country with its more than one billion inhabitants
is imposing its economic imperialism all over the world.
90
Sixth, the increasing Chinese engagement merely generates new jobs.
Whereas Western companies are rather used to tapping the cheap local
labour market, for Chinese enterprises the principle aim is to employ
compatriots. Not only the higher skilled cadres, but the manual work-
ers as well are predominantly recruited in the homeland. Take China
Roads and Bridges for instance. This construction company that carved
out important contracts in Burundi and Rwanda exclusively employs
Chinese labourers for paving new ways.
91
Credits provided by Chinese
banks to African governments frequently contain clauses stipulating that
a substantial share of the project has to be carried out by Chinese work-
ers. Locals frequently lament the phenomenon of Chinese stealing jobs.
On radio trottoir in Kigali a rumour persists tenaciously that a cement
factory is now even employing Chinese prisoners who are barred or
unable to have any form of communication with the outside world.
92
In
Gabon, a newspaper wrote: Our Chinese friends bring us nothing but
their labor force for large construction projects.
93
Chinese girls are even
reported to take over the local prostitution quarters.
94
A Ugandan daily,
89
Interview via e-mail with development aid worker, October 13, 2005.
90
Brazzaville sous lemprise chinoise, in Afrique Echos, September 6, 2005.
91
Interview by email with 2 development aid workers, March 18, 2006.
92
Diplomatic source: Kigali, October, 2005.
93
Des prostitues chinoises Louis! via: Gabon Flash, August 18, 2005. <www.ash-
gabon.com>
94
Ibid.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 162
The Monitor, accused its government for allowing the Chinese and Asian
business people who come in the pretext of investors to deal in both
wholesale and retail trade. This hinders our operation because how
then shall we operate if someone from outside comes to deal in the same
commodities as we do.
95
The same paper also reports:
Residents and local leaders of Jinja district, especially in the Municipality,
are very discontented over the lack of benets to the local community from
the huge $70 million (Shs 70bn) Owen Falls Dam civil work being done by
the Chinese company Sichuan International Engineering and Technical
Corporation (SIETCO). They mainly complained that the project has not
employed signicant numbers of people from the area; has not consumed
food, and other goods and services. One resident of Jinja West, Isabirye
Ibrahim, said when the project commenced in 1993, he planned to supply
poultry products, fresh vegetables, sh, fruits and other foodstus to the pro-
ject. But I have been terribly disappointed by the Chinese. They go shing
into the Lake or river Nile, and allegedly grow vegetables or go to markets
in Jinja, where they bargain over vegetables, fruits and food stus in mar-
kets to the lowest prices, said a visibly disappointed Isabirye. He said many
large-scale commercial farmers in Jinja district, had gone into establishing
big farms ostensibly to market their produce to the dam contractors.
96
Seventh, China is replacing old debts it has remitted with new ones,
and stimulates Central African governments to buy its own services on
tick. As we already mentioned supra, the PRC uses cheap loans to con-
vince administrations to contract its companies for having paved new
roads, erected telecommunication networks, etc. The Imboulou Dam in
the ROC, mainly constructed by Chinese personnel, was nanced by a
loan of 200 million USD loan, repayable within 15 years with an inter-
est of 0.2 percent.
97
The same counts for the Moukoukou Dam, nanced
by a Chinese loan of 4.6 million USD. In 2000, the Exim Bank sup-
ported a joint venture between ZTE and the Congolese government with
a loan of approximately 10 million USD.
Eighth, there is the risk of creating new white elephants. For instance,
one can have doubts if construction projects are determined to fulll the
key needs of society, or to accede to the eagerness of Chinese compa-
nies to carve out new contracts. For instance, several ngo workers expressed
their frustration about huge investments in sports stadiums in Brazzaville
95
Harera P., Kampala traders say foreign counterparts unfair, in The Monitor, April
7, 2003.
96
Jinja mourns lack of crumbs from dam, The Monitor, May 10, 96.
97
Gourmelon I., 2003, op. cit., p. 56.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 163
and Kinshasa while the surrounding slums do not have access to clean
water.
98
In the ROC and in Rwanda, hospitals are reported not to t
the local demands.
99
Ninth, Chinas demand for recourses is directly and
indirectly nourishing the informal and criminal economy. On the one
hand, Chinese state-owned mining companies were already pointed at
to be involved in the war economy of the DROC.
100
On the other, as
an important customer Chinas lack of willingness and capacity to con-
trol the origin of its imported goods is indirectly stimulating illicit activ-
ities: via dire lires and via private Chinese undertakers. A survey of
Forest Trends for instance states that: China is one of the major des-
tinations for timber that is harvested unsustainably or illegally.
101
In this
respect, Global Timber Watch reports that the illegal timber exports
from Gabon to China have been estimated to be as high as 70 percent
of total timber exports.
102
A recent BBC report describes how Chinese
businessmen are involved in the illicit mining industry near to Lubumbashi
in the DROC.
The heterogenite is partly treated in furnaces either in DR Congo
or in neighboring Zambia and then exported mostly to China via South
African and Tanzanian ports. Truckloads of copper and cobalt leave the
country every day. But statistics of DR Congos exports are not accu-
rate. [. . .] Joseph Chama Mukinay, vice president representing the trans-
porters in Kasumbalesa, describes how between 18 and 25 thirty-tonne
trucks overloaded with copper and cobalt, raw and concentrate, leave
every day. About 65 percent of the trucks are loaded by Chinese busi-
nessmen and are feeding the Chinese market, he says.
103
To assess the profound impact of Chinas stronger presence on the
development of Central Africa we need to go more into detail: that is
certain. Nevertheless, the remarks and indications we sketched out in
this section cast a shadow over Beijings ocial discourse of win-win
cooperation. Sure, in general nancial terms, the intensifying trade rela-
tions appear to benet the region: beyond this macro-economic picture
however, the Beijing Consensus, aiming at complementarity and non-
98
E-mail queries addressed to 15 development aid workers in the region, November
21, 2005.
99
Ibid.
100
UN Security Council, 2001, op. cit.
101
Sun X. et al., Chinas Forest Product Import Trends 1997-2002: analysis of customs data
with emphasis on Asia-Pacic supplying countries, Forest Trends, January 2004.
102
Hewitt J., China: Illegal Imports and Exports, Global Timber Watch, July 2002.
103
Zajtman A., Chinese demand boosts DR Congo mines, via: <www.bbcworld.co.uk>,
2004.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 164
interference, appears to comfort the Central African elites in the rst
place. Chinas unconditional policy as well with regard to development
aid as relating to the nal destination of trade revenues (taxes, conces-
sions, etc.) comforts local regimes, but make it dicult to trace were the
cash ows end up. The majority of the Central African population does
not appear to benet much. Jobs generated by Chinese companies are
rare. The torrent of Chinese consumption goods is highly levied, which
make them more expensive, but still competitive with the scarce manu-
factured products African countries process themselves.
Conclusion
No state is pursuing its foreign trade policy more vigorously than China.
This diligence is not only a matter of the ambition to turn the country
into an important world power. It is as well a prerequisite for the sur-
vival of a party apparatus that embodies the direct interests of millions
of members and functionaries. Forty years ago, this regime embarked
on the dramatic transformation from a society anchored in agricultural
communism and personal cult to a new legitimacy based on the accom-
plishment of the integration of more than one billion Chinese in the
world economy. Whereas the initial steps to achieve these goals focused
on an inward opening up and liberalization, today, Beijing is more and
more conscious of the need to foster an outward-oriented economic pol-
icy as well. In order to make the impressive growth from the rst phase
sustainable, the Peoples Republic needs to gain direct access to foreign
markets.
To start with, it has to promote exports in a way that allows oper-
ating independently from alien distributors and brands. China already
has the factories; now it is time to run the shops as well. Besides, in
order to keep the factory operational, it needs to be certain of a sus-
tainable supply of raw materials. Hence, in sum, Chinas current mer-
cantilism aims at mitigating its dependence and to foster a certain degree
of trade ownership along the entire production chain. In this regard,
mercantilism and liberalism are operated in tandem. Thus, contrary to
the ubiquitous interpretation that China is still a status-quo power, it is
obvious that economic expansionism is imperative. The PRC is deter-
mined to expand its reach of operation and to conquer its share of for-
eign markets.
What makes the PRCs go-out policy particularly mercantilist is the
wide array of tools the state has still at its disposal, and its capacity to
make use of these in a coherent well-dened strategy that serves the
national interest, rather than the aspirations of individual corporate actors.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 165
We focused on this in the second section. However, despite this impres-
sive toolbox and despite its huge eorts, Chinas mercantilism turns out
to be rather one of weakness than one of strength. As we argued in the
third section, it experiences diculties to penetrate overseas markets.
Regions such as Central Africa in se do not have that much to oer,
and not that much to ask either, given their limited purchasing power
and the fact that even their precious resources can be excavated more
easily elsewhere. The fact that China does not save any eort to enter
this market rather demonstrates its desperateness to achieve progress,
even if it means a drop in the ocean. Moreover, even in the Central
African Region it is not that successful. China provides only a limited
share of the regions imports, and even though it is becoming an impor-
tant consumer of the local natural resources, it relies much on inter-
mediaries and independent actors. Its own companies often lack the
familiarity with the terrain, are not competitive enough, or lack the
capacity to run the exploitation of concessions autonomously. Consequently,
China squirms to circumvent or to compensate these impediments. First,
there is the vast liquidity supply of Beijing via export credits, grants, and
various types of loans. Second, there is the ocial discourse of non-
interference that enables companies to neglect ethical considerations, and
that makes local regimes comfortable. For the rest, we mentioned the
diplomatic charm oensive, the development cooperation and the promo-
tion of business-to-business contacts. Notwithstanding this rather skeptic
balance, it is crucial to stress that Chinas go-out policy is still very juve-
nile. The Coming from half a decade of seclusion, the achievements up
until now, are not negligible.
Albeit Chinas inuence on Central Africa is still limited compared to
the West, it becomes clear that it will exert a profound inuence on the
future of the region, as well as on the diplomatic course of other pow-
ers. First, it oers the countries new entries to the world economy. It
becomes an important customer on the formal market, but also links up
with the informal branches to which Chinese brokers are easily accessi-
ble. Chinas increasing appetite for resources can be considered as a cat-
alyst for informal trade and a new impetus for war economies to go on
with their activities. The latter thrive on the booming demand for com-
modities in overseas markets.
104
The new formal and informal links have
to be considered rather in terms of quantity than that something changes
qualitatively. China is neither interested in value-added goods, nor is it
intended to invest much in the establishment of new industry in the
104
Gorus J. en Doom R., 2000.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 166
region. Hence, the changing patterns in the global division of labor, in
which China becomes the world factory, does not automatically imply
that peripheral regions such as Central Africa will be lifted on a higher
echelon: their main utility will remain to be the supply of commodities.
Thus, complementarity in fact turns out to be a synonym for hierarchy,
a hierarchy in which China wants to be on top, controlling trade chan-
nels, recourses, etc. Second, the Peoples Republic sets new standards
for practicing economic diplomacy. Its pragmatism and its obvious con-
tempt for ethical standards undermine the leverage of other powers, even
if they are traditionally in a more advantageous position. To start with,
Central African elites will have more friends to talk with, and if neces-
sary to play o against each other. Albeit this has not been the case in
this particular region yet; examples such as Sudan, Iran, Kazakhstan,
Uzbekistan, and Myanmar demonstrate what the impact of this kind of
quandary can be. For the West, it will become more dicult to demand
countries to comply with its particular demands vis--vis human rights,
good governance, and transparency if another important partner is turn-
ing a blind eye to these issues. With the entrance of China, but as well
of other would-be powers, balances of power and spheres of inuence
will gradually modify. Central Africa does not escape the global re-
conguration of power. However, it is not likely that the inux of Chinese
inuence will coincide with a trickle down of prosperity and development.
References
Avix S.vin
1976 Unequal Development. An Essay on the Social Formations of Peripheral Capitalism,
Monthly Review Press, New York.
Bn.rr. Stni+
1998 Chinese Mercantilism: Currency Wars and how the East was Lost,
ICRIER, New Delhi: 4-12.
Cnt Kr Yotxo
2001 Collective Values, Behavioural Norms, and Rules: Building Institutions for Economic
Growth, World Institute for Development Economics Research (WIDER).
Doxo Qi .xr M. Xi.ovr
2004 From Going Out to Going Global: Past and Future of Chinas Overseas Investment
Policy, Center on Chinas Transnational Relations, Hong Kong University
of Science and Technology.
Girrix Ronrn+
1987 The Political Economy of International Relations, Princeton, Princeton University
Press.
Gonts J.x rx Doov Rtrrv
2000 Politics of Identity and Economics of Conict in the Great Lakes Region, VUB Press,
Brussels.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 167
H.nnis S+t.n+
2002 Globalization and Chinas Diplomacy: Structure and Process, National University,
Camberra.
J.cksox Ronrn+ .xr Sonrxsrx Grono
2003 International Relations: Theories and Approaches, Oxford University Press.
K.xisnk. J.
2004 Embedded mercantilism and open regionalism: the crisis of a regional pro-
ject, in Third World Quarterly, vol. 24 (2).
Joxrs B.nnv R.J.
1986 Conict and Control in the World Economy, Harvester Press, Sussex.
Kixrrrnrnorn C.P.
1970 Power and Money: The Politics of International Economics and the Economics of
International Politics, Basic, New York.
L.vr+ox D.\ir M. rr.
2001 The Making of Chinese Foreign and Security Policy, Stanford University Press,
Stanford.
McGtinr M.n+ix C. .xr On+. Hinosni
2005 Implicit Mercantilism, Oligopoly, and Trade, in Review of International
Economics, 13(1).
Firrrnotsr D.
2000 A new imperial system? The role of the multinational corporations recon-
sidered, in: Frieden J.A. and Lake D.A., IPE: Perspectives on Global Power
and Wealth, Bedford/St.Martins, Boston/New York, pp. 167-180.
I\.x S. Mrrrinos .xr M. T.vron Fn.\rr
2003 Chinas New Diplomacy, Foreign Aairs, June 2003.
Mtrk.ri. D.J.
2004 Africa and Chinas strategic partnership, African Security Review, vol. 13 (1):
10.
UNCTAD
2003 China: An Emerging Outward Investor, UN, New York/Geneva.
2005 Commodity Yearbook, UN, New York/Geneva.
2005 World Investment Report 2005, UN, New York, Annex A.1.9: The worlds
top 100 non-nancial TNCs.
R.vo J.C.
2004 The Beijing Consensus, Foreign Policy Center, London.
Sriicni K.+.v.v. .xr Unsrntxo Hrixnicn
2000 Commercial Culture, Political Culture, and the Political Economy of Trade Policy: the
Case of Japan, Institute for Economic Research.
Tovr J.
1987 Dilemmas of Development: Reections on the Counterrevolution in Development Theory,
Blackwell, Oxford.
W.rr R. .xr Wni+r G.
1985 Developmental States in East Asia, Brighton, IDS Research Reports, n
o
16.
W.rrrns+rix, Ivv.xtrr
1984 The Politics of the World-Economy: The States, Movements, and Civilizations, Cam-
bridge University Press, Cambridge.
W.xo Xi.ozt, Xt Lixix Corix .xr Znv Ti.x
2004 State-owned enterprises go public Economics of Transition, vol. 12 (3).
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 168
Wriss L.
1998 The Myth of the Powerless State, Cornell Press, New York.
Worr Cn.nrrs J.R.
1994 The New Mercantilism, The Public Interests (Summer): 96-106.
Wt Fnirrnicn
2005 The Globalization of Corporate China, The National Bureau of Asian Research,
Washington.
AAS5,2_f1_133-169 6/29/06 3:57 PM Page 169

Chinas Neomarcantilism PDF

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Chinas Neomarcantilism PDF

Transféré par

Droits d'auteur :

Formats disponibles

Chinas New Mercantilism in

Vous aimerez peut-être aussi