Track record

Updated: 2012-06-29 08:57

By Andrew Moody and Zhong Nan (China Daily)

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Track record

As China-Africa trade and investment soar, many see relationship as central to the continent

Li Xiaohai, head of one of many Chinese power stations in Africa, has been a victim of malaria himself and says Westerners would not put up with the conditions many of his workers endure.

The chairman of Sunon Asogli Power says Chinese companies are stealing an advantage in the developing continent over companies from the United States and Europe partly because they are prepared to rough it.

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Ninety of the 290 workers operating the natural gas-fired power station in an isolated, remote location some 30 kilometers from Accra, capital of Ghana, mostly live in dormitory accommodation on site and are exposed to the environment with little in the way of entertainment.

"Every day people get malaria. It is very tough. Right now we have two or three people with it and I have even had it myself," he says.

"Western companies have the technology and what we use is from the likes of GE and Alstom, but I think the harsh conditions and the threat of malaria makes them hesitant to come here."

The relationship between China and Africa will come under the spotlight once again when leaders of up to 50 African nations will descend on Beijing in July for the Forum on China-Africa Cooperation.

China is not just building power stations but much needed infrastructure such as roads, ports and railways as well as cellular and 3G networks.

China's stock of overseas direct investment on the continent has increased eight-fold from $1.6 billion (1.3 billion euros) in 2005 to $13.04 billion at the end of 2010, the last year for which figures are available, according to China's National Bureau of Statistics.

Trade has also seen a similar large increase with exports to Africa rising from $10.18 billion in 2003 to $59.95 billion in 2010.

In Africa itself the relationship is viewed as central. John Dramani Mahama, vice-president of Ghana, says dealing with China helps avoid the red tape linked to alternative sources of funding from the World Bank, the International Monetary Fund or various international aid agencies.

He recently signed up to a $3 billion loan from the China Development Bank to fund, among other things, a new gas pipeline.

"China has a growing economy and needs natural resources and Africa has these natural resources but also needs money for development so it becomes a win-win for them to come together and develop closer cooperation," he says.

With the waves from the Gulf of Guinea lapping outside the walls of his official residence Osu Castle, once a slave prison and a reminder of the country's colonial past, he says Africa is now looking beyond the West for financial assistance.

"The rise of BRICS countries like China, Brazil and India gives an alternative to African and other developing countries for much needed investment without having to go through the old rigmarole."

More than 4,300 km east of Accra, there can be no greater symbol of the relationship between China and Africa than the $124 million African Union Headquarters in Addis Ababa, which was not only built by Chinese workers but gifted to the people of Africa.

Some have criticized the gesture as a demonstration of the power that China now wields across the continent but Meles Zenawi, the prime minister of Ethiopia, dismisses suggestions it should have been built with African money.

 Track record

From left: Xie Xiaoyan, the Chinese ambassador to Ethiopia; Meles Zenawi, prime minister of Ethiopia. Photos by Feng Yongbin / China Daily

"I am sure if we had done that we would have been accused of going after 'white elephant' projects. When it comes to certain quarters in Africa, you are damned if you do and damned if you don't," he says.

"The fact of the matter is that it was the Africans who asked the Chinese to build this conference hall for Africa. It is not the Chinese who offered to build it. We asked them to build it and they agreed and they have delivered, and we have no reason to criticize this."

Soft-spoken and a renowned intellectual, Meles, who has been prime minister for 21 years, was speaking from his impressive offices in central Addis Ababa.

China's first invested in infrastructure in Ethiopia in 1972 when it financed a road across the Rift Valley. A Chinese State-owned company is now completing the 339-km railway line linking the capital to the Red Sea state of Djibouti. Other Chinese projects include a road over the same route, hydro power stations and mobile communication networks.

Meles says far from exploiting Africa, China was in the process of rescuing Africa from the so-called Washington Consensus of the past 30 years that dictated that the private sector was the best engine for development in Africa.

"The official doctrine among the international financial institutions which in the past determined policy in Africa was that infrastructure would be taken care of by the private sector. Well, we have waited 30 years and nothing much has happened," he says.

"When the Chinese companies came in and started building infrastructure in a big way they were filling this major gap in the development of Africa. We, in Africa, should feel very satisfied with it."

Only one dominant view of the China-Africa relationship seems to exist in the West - that it is an exploitative and neo-colonial one.

This is something that flies in the face of all the evidence, according to Xie Xiaoyan, the Chinese ambassador to Ethiopia, who arrived in Africa in November after his previous posting in Iran.

"Since my arrival I have been asked this question on many occasions. The basic answer is that the accusation is groundless. I think it reflects the jealousy of the Western media and some forces in the West," he says.

Xie was speaking from the embassy building in the landscaped gardens brimming with birdlife and that offer almost a green lung from the hustle and bustle of the highest-altitude city in Africa that makes walking just a few paces exhausting.

"China has been accused of practising neo-colonialism, the exploitation of energy resources and other minerals and also supporting tyranny and authoritarian regimes. I think none of this holds water. If you look at history, tell me when China has been a colonial power. If it hasn't been in the past, why should it be now?"

Although Chinese investment in Africa has increased dramatically in recent years, China began to build a strong relationship with Africa at a time when many of the countries were becoming independent in the late 1950s.

Major early projects included the 1,860-km Tanzania-Zambia railway, completed in 1975 and which was built and funded by the Chinese.

Kojo Amoo-Gottfried, now 78, was Ghana's ambassador to Beijing in the 1990s, and now is president of the Ghana China Friendship Association.

He first visited China in 1959 and says the bond between China and Africa goes beyond merely economic ties.

"We have been colonized and they themselves have been semi-colonized so we have been through similar experiences and it is easy for us to deal with each other on that basis," he says.

The retired diplomat also feels China offers a great role model for Africa in terms of showing what can be achieved with a commitment to develop.

"I can remember when Sanlitun (now the bustling entertainment district in Beijing) was just bush and Shenzhen was a small fishing port and now it is like Hong Kong. There is a feeling if they can do it, we can do it too," he says.

Over tea in the diplomatic residence in Accra bedecked with Chinese artifacts, Gong Jianzhong, China's ambassador to Ghana, says outsiders often misunderstand the China-African relationship because they forget China despite being the world's second-largest economy is also a developing country.

"In GDP per head terms China ranked until recently behind Angola and not far ahead of Ghana. Fifty years ago we faced the same challenges and today we face the same challenges," he says.

"If you go to the countryside in China, you see the same problems that are faced here in Ghana. In both there are issues of healthcare and infrastructure. We both have a strong desire to develop our economies."

Perhaps the biggest way China is assisting Africa is in building infrastructure. The lack of functional roads and unreliable power supply make it very difficult for many businesses to operate at all in many parts of Africa. Both transporting raw materials and finished goods to market is a major headache.

According to a 2010 World Bank report, Africa needed to spend $93 billion on infrastructure every year to sustain future growth. With current spending only around $45 billion, it cannot meet half that target.

Wale Shonibare, chief executive officer of UBA Capital, the investment bank subsidiary of UBA Group, one of the largest banks in Africa based in Nigeria, says Chinese companies are very efficient in building infrastructure.

"The Chinese just say we will come in and build this or that and also provide the funding. There are none of the problems of trying to attract foreign investment into particular projects, which takes a lot of time," he says.

"China spends about 12 percent of its GDP on infrastructure development, whereas a country like Nigeria spends just 3 percent the last time I checked. We need to spend more in order to sustain growth."

China will go and build infrastructure where others fear to tread. Chinese companies were the first into Liberia in 2006 after it had been wracked by civil war for a generation. The country has very limited power and because of the shortage some of the world's highest electricity costs.

Samuel B. Nagbe Jr, assistant minister in the Ministry of Public Works in the capital Monrovia, says Chinese involvement has made a difference.

"Chinese companies are the only actors in terms of infrastructure contracts. This is because they were prepared to take the risk when everyone else didn't feel secure to go there," he says.

Nagbe, however, says this also has drawbacks since there is a lack of competition when large infrastructure projects are offered for tender.

"It would be good for the government if there were more competitors so we could have more choice and as a result you would also have a cost reduction. But for now we don't have it," he says.

One of the charges made against Chinese companies is that they employ only Chinese workers and don't give enough employment opportunities to local people.

But Zhou Yongsheng, general manager of China Communications Construction in Addis Ababa, says it is just not true.

He is currently responsible for the new $612 million expressway in the Ethiopian capital and has been responsible for more road construction in the country than anyone in history.

"Right now we have around 400 Chinese workers and between 7,000 and 8,000 Ethiopian ones," he says.

Arthur Lau is financial controller of Akosombo Textiles, which makes high-quality wax print cloth in Akosombo in the eastern region of Ghana. Privately-owned and part of the Hong Kong-based Cha Group, it employs about 1,300 people, almost all Ghanaians.

"Labor rates are only about 30 percent cheaper here than in China but Chinese workers are two to three times more productive. Self discipline is not a huge concept here," he says.

The overall relationship between China and Africa will remain a subject of debate. Philip Nyinguro, associate professor of political science and international relations at the University of Nairobi, argues the weak state of some African countries makes them vulnerable when they are cutting deals with any country, whether it is China or a Western power.

"The onus has to be on African leaders themselves when they negotiate agreements that they create conditions that benefit themselves. They can't place this responsibility on China," he says.

James Shikwati, director of the Inter Region Economic Network, a leading think tank based in Nairobi, insists it is wrong to describe China as new colonialists in Africa.

He contrasts China to the European powers that carved up the continent in 1885 at a conference in Berlin without any Africans being present.

"The Chinese have brought Africans around the table for discussion. That is the clear difference. You are not going to negotiate with a guy you are going to colonize," he says.

He believes China might actually prove the catalyst in actually helping build the vision the founding fathers of the continent had immediately after independence - a $1 trillion free trade area from Cape Town to Cairo.

"That vision of Africa's leaders at independence got lost in the post Cold War squabbles but has become a reality again with China playing a unifying role," he says.

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Track record

(China Daily 06/29/2012 page1)