Despite the current turmoil, China will remain a powerful player in Africa. But talk of imperialism is exaggerated
This weekend Weetabrics went to an exhibition called Beauté Congo. Held in Paris at the Fondation Cartier, the show is the largest ever dedicated to art produced in the African country. Among the paintings on display was the one above – a caricature of former Chinese president Hu Jintao, dressed as an African king from the pre-colonial times.
Part of a series called "It's my kings" by Kinshasa-based Pathy Tshindele, the picture featured alongside similar portraits of David Cameron and Nicolas Sarkozy, respectively UK Prime Minister and French President at the time when the paintings were made (in 2012). In the artist's words, the series denounces with a mocking eye the world powers’ continued interference in African affairs.
That a Chinese leader was included in the trio underlines both how prominent China's involvement in Africa has become and how, until recently, this presence was being perceived on the continent. But now that the country’s currency is falling and its economy slowing down some believe this involvement will decline. And people seem to think that this will deal a blow to Africa’s economic hopes. This raises a couple of questions: how big will China’s influence remain in Africa, and how good will it be?
In some sectors it’s well possible that a Chinese slowdown will be strongly felt. China is Africa’s biggest trading partner, with bilateral transactions totalling about $200 billion last year. A significant part of this was accounted for by commodities, which the country is likely to buy less of as its economy eases pace and shifts away from an investment-led model. Big resources exporters like Angola (oil), South Africa (gold) and Zambia (copper) will suffer, even more so as China’s troubles already hit them indirectly through lower commodity prices.
China is unlikely to stop buying the stuff overnight, not least because its construction sector, voracious for raw materials, doesn't seem under the threat of a property crash. But the impact of slower growth is real: a recent note by research firm Fathom Consulting says that Chinese imports from Africa were down 40 percent year-on-year in July.
There are also worries that China, hitherto a enthusiastic investor in African infrastructure, may retrench as its currency reserves diminish and a weaker yuan makes foreign assets more expensive. Indeed there are indications that state-backed institutions like sovereign wealth funds are raising hurdle rates – the minimum return on investment they want to make before considering a deal – in a bid to raise profitability.
All this is indeed possible. But arguing that China's heft in Africa is on the wane seems rather short-sighted. Take trade first. It's worth noting that a significant proportion of African countries are in fact energy importers, and as such benefit from lower commodity prices. And as China reorient its economy towards domestic consumption – and as its citizens get better off – it will likely seek to import more agricultural goods, fish and meat.
Perhaps more importantly, China’s impact on Africa’s growth story goes beyond commodities and state-sponsored projects: cheaper capital goods, consumer products and services will continue to play a part in boosting domestic economies.
Some fret that low-cost Chinese imports have and will undercut local producers, hindering the development of home-grown industries. In sectors like textile the assertion bears truth. But recent estimates of the export similarity index between Africa (excluding South Africa) and China, a measure of the extent to which their exports overlap, place it at only 7.3 percent. This suggests the number of industries in which they compete remains limited.
On the flipside, economies such as Ethiopia and Kenya will probably benefit from being able to import goods like heavy machinery more cheaply, helping their manufacturing sector.
Neither is Chinese capital in Africa about to dry up. Beijing's investment often follow strategic motives that are long-term in nature, like securing access to resources or farmland, and are therefore relatively immune to short-term shocks. State-backed firms and export credit agencies, which provide capital and cheap loans, have less of an immediate imperative to make money than private institutions, and can therefore take a longer view. And while China’s political ambitions in Africa remain puny, it sometimes favours trade and investment with nations that can later lend it friendly votes at the UN and other international forums (on issues such as Taiwan or territorial claims in the South China Sea, for instance).
Continued Chinese involvement in Africa may be a concern for critics like former Nigerian central banker Lamido Sanusi, who compared it to “a new form of imperialism”. But while trade will continue to be a big thing, observers point out that China is only but one nation vying to invest in the continent. It lags behind Britain, the US and Italy; Brazil, Turkey and India are also keen to make their mark.
Meanwhile unfair deals and environmental damage allegedly caused by Chinese ventures are causing increasing ructions among Africa’s thriving civil society. Zambia's president was last year elected on a largely anti-Chinese agenda, a direct consequence of this. That has pushed Xi Jinping, China’s president, to call for good conduct and restraint among state-sponsored firms (whether they will obey is another question).
China will remain a big player in Africa. But the country’s not alone in wanting to play a part on the continent, and its presence has helped fuel Africa’s fast – if uneven – growth story. Beijing's activism has its darker sides, but is also up to African leaders to negotiate a better deal for their country. Expect more Chinese portraits in the catalogue of African art retrospectives in years to come.