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Opinion: China's in Africa for business, not aid

New book makes provocative argument about Beijing's push into Africa.

Chinese construction of Africa pavilion
China's economic investment in Africa is growing at a rapid pace. A Chinese worker walks in front of the construction of the Africa pavilion at the 2010 World Expo site in Shanghai on Nov. 3, 2009. (China Daily/Reuters)

KIGALI, Rwanda — Next to the Sopetrade highway heading toward Kigali’s city center, construction workers are digging up the side of the road in preparation for adding an additional lane.

In and around Kigali’s city center, similar road projects are in process. The project financier? China Eximbank, to the tune of $30.7 million dollars.

Many say this project is part of an alarming trend, in which China builds infrastructure all over the African continent in order to lay claim to its natural resources. Though touted by many media outlets and some political analysts, this narrative of Chinese aid is tremendously flawed.

Take the Kigali roads project. Rwanda has little in the way of natural resources, unlike neighboring Democratic Republic of Congo. China has financed infrastructure in countries that are not commodity-rich, including Kenya, Senegal and Mauritius. What does China gain from these projects?

In a parallel development, India is also increasing its dealings in Africa.

As a superb new book by Deborah Brautigam argues, infrastructure projects are opportunities for Chinese construction firms to gain a foothold abroad, and to potentially win future contracts from the private sector or from the international donor community.

In "The Dragon’s Gift: The Real Story of China in Africa," Brautigam offers a trenchant analysis of how China views its engagement with Africa, drawing on decades of experience working in West and southern Africa and China. Rather than viewing the continent as a charity case, Brautigam suggests, China sees Africa as a younger version of itself.

In the 1970s, Japan extended aid to China that helped the country build transportation and energy infrastructure. This aid was repaid in barrels of Chinese oil. Now, across the African continent, China is extending concessional loans to African governments for roads, power plants, factories and hydro projects, in many cases using the same kind of financing arrangements it learned about from Japan.

Many analysts have interpreted these concessional loans as bids to lock in preferential access to China’s natural resources. Without a doubt, China benefits from access to Angolan oil, minerals from the Democratic Republic of Congo and Ghana's cocoa. But so do Angola, the Democratic Republic of Congo and Ghana, who have little to offer a potential lender as a payment guarantee other than these natural resources.

When China lends to Angola, it knows it will receive repayment if the loan is backed by oil. Angola knows it will receive the infrastructure it needs, because the loan funding flows directly to the Chinese contractors for individual projects, bypassing the African government (and avoiding a problem in many commodity-rich states: corruption).

http://www.globalpost.com/dispatch/africa/100625/opinion-chinas-africa-business-not-aid