If you are not against us, you are with us. Abstract



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China in Africa

Examining Chinese foreign aid in Africa and implications for US interests




If you are not against us, you are with us.


Abstract: China’s engagement with Africa has drawn the attention of policy makers worldwide. While Chinese interests in the region appear relatively passive at present, there is the potential for either a detrimental or largely positive impact on US interests. I assert that the US should engage with Chinese to support both their interests while providing a quantum leap for African development.



Zachary DesJardins

Department of Political Science

Rockefeller College of Public Affairs and Policy

University at Albany, SUNY

Undergraduate Honors Thesis

Thesis Adviser: Mark Baskin, PhD.

Faculty Adviser: Victor Asal, PhD.



Introduction

This thesis will disprove the conventional wisdom that Chinese foreign aid policy in Africa is detrimental to US interests. By utilizing case studies on Zimbabwe, Sudan and the Democratic Republic of Congo and if properly engaged, the US and China can work together to resolve some of Africa’s intractable issues while providing a new pathway for increased economic development for Africa. To assist the reader in understanding the arguments made, an overview of China foreign aid policy is provided.

There are two major international relations theories for interpreting China’s foreign aid policy in Africa: realism and liberalism. A response based on the realist theory of international relations requires the US to respond with hostility. Such a response would include measures designed to negate Chinese foreign aid policies considered detrimental to US interests. A response within the liberalist theory of international relations sees Chinese foreign aid policy in Africa as being beneficial to US interests. This response would likely call for collaboration on joint, non-adversarial African interests, ultimately culminating for a largely positive development for US interests. My interpretation and subsequent policy suggestion will conform within the liberalist confines.

Research Design



Importance of Issue

From a policy perspective, this issue represents an opportunity to define the US-China relationship outside of direct country-to-country interests, meaning issues that are only between the US and China. Actions taken will define US-China foreign relations for years to come. It should provide the US with an important medium to include China for roles in solving some of Africa’s entrenched conflicts and problems in the Congo, Sudan and Zimbabwe while taking advantage of the investment opportunities in those developing economies.



Previous Research

Traditionally, academic research and mainstream media articles have largely portrayed Chinese foreign aid policy in Africa as little more than a grab for natural resources. This is reflected in conventional wisdom and the realist theory of international relations in that China is viewed as a competitive threat to US interests. However, recent research and a growing number of media articles have an updated viewpoint that better reflects the overall aim of current Chinese foreign aid policy. The Chinese appear to have softened their stance on the most blatant violators of human rights as they seem more attentive to their international image. This has been demonstrated through the nomination of a special envoy to Africa in additional to loans to Zimbabwe have been cut off due to lack of payment and to a lesser extent due to the reaction by the international community. The Chinese also seem more pro-active on promoting their views on human rights and are moving away from justifying their policies using the sovereignty arguments, an argument which helped to fuel the criticism from the research reflecting conventional wisdom. Thus, this opens the door for increased US cooperation in Africa with China.



Argument

Contrary to conventional wisdom, this thesis will disprove that Chinese foreign aid in Africa is detrimental to US interests in the region. Strictly viewing only the headlines, Chinese policy does seem detrimental to US interests. Chinese foreign aid policy of leveraging a country’s natural resources for economic development projects provides an attractive alternative to US foreign aid programs. Instead of dictating the terms of such assistance to include human rights, good governance and other soft power projects, China argues that attaching such policies to foreign aid projects is a violation of that country’s sovereignty, which is attractive to those countries who do not qualify for US aid on those bases. Those headlines make that argument that the Chinese expanded programs in Africa after Mao’s death, cut them in the 1980’s and revitalized them recently in order to develop Africa’s natural resource potential. However, there is much beyond that simplistic interpretation.

Through analysis of China’s official foreign aid policy, past and present, the following can be shown. The Chinese have been successful at utilizing foreign aid programs to build external support for their human rights agenda within international organizations, particularly at the UN General Assembly and Security Council. China’s foreign aid policy aims to better its international image, about which it cares very deeply, and which contradicts the conventional wisdom argument that China supports violators of human rights. Recent actions by senior Chinese officials denote this change of direction with support for Zimbabwe and Sudan. This shift in policy provides an opening for a US-China partnership for addressing fundamental African issues of interest to both countries.

Definition of Terms

Foreign aid is defined as the “annual subsides and subventions are a time-honored means of assuring the loyalty of client states (Dictionary, page 8).” Foreign aid is a means for wealthy countries use foreign aid to cultivate relationships with client countries where the donor anticipates that “the economic well-being of an indigent ally will strengthen both parties in their pursuit of common objectives (Dictionary, page 9).” The second part of the definition states that donors view foreign aid as a way to better the economies of recipients in order to strengthen the client-donor relationship towards pursuing common objectives. China foreign aid policy falls within that definition.

The definition of foreign aid was further broken down by the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee in 1969 and 1972. Officially Defined Aid (ODA) must be government concessional funding with a grant element of 25% or more and be given developing countries or through institutions who then distribute ODA less directly. ODA must promote economic and welfare development. Other Official Flows (OOF) is any assistance that does not meet ODA guidelines (Brautgam, 2010). OOF often includes loans with competitive or even interest free rates. The term foreign aid encompasses both OOF and ODA.

Data utilized towards disproving the hypothesis will include the amount of foreign aid to Africa compared in specific years, primarily OFA. However, direct comparisons with are difficult as OOF data are not widely available.



Data Utilized to Disprove Hypothesis

Case studies of three African countries will be utilized to disprove the thesis that China’s foreign aid policy to Africa is detrimental to US interests. China’s recent involvement in Sudan is a departure from previously stated official policy of non-interference within other countries’ internal affairs. China has suspended loans to Zimbabwe on the basis of non-payment and the reactions of the international community. In the Congo, China modified a foreign aid deal in response to criticism from the IMF and the international community that the deal unvalued Congo’s natural resource wealth (Marks, 2009). Chinese involvement with IGO’s such as African Union, development of Forum on China-Africa Cooperation (FOCAC) (Marks, 2009) highlights that they are willing to work within the framework of IGOs to advance their interests which proves their ability to compromise.



Significance of Research

Chinese engagement with Africa has the potential to be either detrimental to US interests or highly beneficial. Thus, it is important that US policy makers understand the nature of China-Africa engagement and develop a policy that promotes cooperation with China for Africa’s benefit, and the benefit of both US and China interests. Achieving a win-win-win for all parties will help define the US-China relationship well into the future. A lack of understanding on behalf of the US could lead to ineffective policy and a less than productive relationship with one of the world’s developing great powers, China. The China-US relationship will be a central part of future US foreign policy.

Literature Review

Introduction

There is a wide range of literature discussing China’s role in Africa, and implications for the US. Most begin by stating how quickly Chinese engagement in Africa has grown in recent years. Then, they either delve into the implications on whether Chinese engagement is advantageous for African countries or disadvantageous. Some literature discusses implications for US interests in Africa. Most literature can be organized into one of two groups: conventional wisdom and academic perspectives.



Conventional Wisdom

Numerous headlines and major media outlets typically describe China as an aggressive power seeking material resources in Africa in exchange for infrastructure projects and loans, occasionally portrayed as great disadvantage to the receiving African country. This viewpoint is the conventional wisdom as it is based in what people immediately think of when briefed on this topic. Also, major media outlets quickly make connections between the receiving country’s policies on human rights and China engagement as wholly supportive of those policies, essentially accusing China of propping up African strongmen and dictators. Assistant Secretary Johnnie Carson discussed China with oil companies Lagos in February 2010 stating that while the US does not consider China a threat from a security standpoint, “China is a very aggressive and pernicious economic competitor with no morals.” He also stated that “China is in Africa for China…(10LAGOS75).” It reflects the conversation as the Assistant Secretary appears to be attempting to ingrain some forewarning into the unnamed international oil companies that China is a significant competitor.

Hanson presents Chinese engagement as primarily fueled by natural resources, ignoring the larger implications of their aid policy on US interests. In writing for the Heritage Foundation, Brookes and Shin present Chinese foreign policy as an attempt to counter US and Western political and economic influence in Africa. Instead of working together with China to best develop Africa, Brookes and Shin suggest expanding US presence in the region. An increased diplomatic presence, additional discussions on human rights, democracy and good governance, expanded trade and larger investments in strategic commodities such as oil, and an expanded security presence would all help deter China.

Thus, this perspective portrays Chinese engagement in Africa largely negatively and not supportive of US interests. Instead of seeing a potential for cooperation, this literature largely suggests that the US counter the Chinese dollar for dollar. It best reflects the realist theory of international relations.



Academic Perspective

In contrast, most of the academic community’s literature portrays China more positively. It draws on deeper and broader research than media articles. Therefore, the evidence and methods used to acquire that evidence are more persuasive.



Bräutigam

Deborah Bräutigam discusses Chinese development projects in Africa through her 2010 book, The Dragon’s Gift. She focuses primarily on how Chinese aid projects typically work, including motivations by China, Chinese expectations of recipients, and specifically how foreign aid projects are funded and implemented. Bräutigam discusses the differences between Official Development Assistance (ODA) and Other Official Flows (OOF), stating that most Western aid is ODA while most Chinese aid is OOF. Bräutigam has done more research individual Chinese development projects in Africa than anyone else, including the Chinese government themselves.1 While her research is broadly objective, extensive cooperation with Chinese officials has slightly altered how China is portrayed in her work.



Center for Strategic and International Studies (CSIS) Africa Program

At a 2007 conference hosted by CSIS and others, the subsequent conference report, U.S. and Chinese Engagement in Africa: Prospects for Improving U.S.-China-Africa Cooperation discusses Chinese engagement in Kenya, Nigeria and Angola. Out of that discussion, themes on areas for cooperation between the US and China emerged. CSIS proposes that the US and China work together to further their interests in Africa, drawing on CSIS research and a CSIS delegation to China to support their notion that both countries have mutual interests. As with Bräutigam, CSIS has a slightly altered viewpoint due to extensive cooperation with Chinese officials.



Ambassador David Shinn

Ambassador David Shinn primarily compares US and Chinese interests in Africa. In Comparing Engagement with Africa by China and the United States, Shinn discusses the interests of the US and China in Africa, concluding that they are similar despite popular opinion that they are not. In China's relations with Zimbabwe, Sudan, and the Democratic Republic of the Congo, he presents each country and their specific relationship with China. He concludes that the human rights challenges faced by each country drive them closer to China and away from Western influence. Shinn suggests that the similarities between US and Chinese interests in Africa create a base for broader cooperation. As a Foreign Service Officer, Amb. Shinn has served in numerous African posts including Ambassador to Ethiopia. Thus, his viewpoint is rooted in his experiences in east African states.



Other Perspectives

Butts and Bankus argue that not only would engaging China on African issues augment US interests but that it would help to continue to build the US-China relationship. That engagement would prevent the situation from devolving into a zero-sum game which would likely be costly for the US. Pehnelt presents Chinese engagement with Africa using a critical, academic approach. He summarizes that the Group of Eight (G8) countries should acknowledge China’s foreign aid policy. He suggests that the G8 work with China to integrate their efforts within the broader context of development for Africa. Turin discusses Chinese foreign aid policy with the context of the “Beijing Consensus.” He concludes that China’s role as an alternative to traditional foreign aid will allow them to become more prominent within the international development community, particularly in Africa. The Congressional Research Service (CRS) compares the influence of the US and China in Africa. While no specific position is taken, the CRS summarizes US interests are similar to Chinese ones and thus are not directly harmed by Chinese actions.

Thus, there is a clear view amongst this literature that Chinese engagement with Africa is not detrimental to US interests. There are opportunities for cooperation between China and the US in Africa. This literature is reflective of the liberal theory of international relations as it views Chinese actions within the context of cooperation instead of a being direct threat to US interests.

Conclusion

Comparing both conventional wisdom and the academic perspective, the latter best supports the conclusions of the thesis. It draws upon broader information and best documents recent changes in Chinese policy.

Body of Thesis

Official Chinese Foreign Aid Policy

China officially outlined their foreign aid policy towards Africa in a 2006 policy paper, China’s African Policy. China bases much of its foreign policy on the Five Principles of Peaceful Coexistence: 1) mutual respect of sovereignty, 2) mutual non-aggression against other sovereigns, 3) mutual non-interfere in internal affairs, 4) mutual benefit and equality, and 5) peaceful co-existence (Jiabao, 2004). In African Policy, China expands further on those principles by stating that they respect their choices concerning development. They encourage sustainable development2 that produces benefits that are shared equally among everyone. Also, they encourage mutual support at the United Nations and in other inter-governmental organizations. On the political front, they state that they will continue the high level visits between African and Chinese leaders, expand exchanges between legislative bodies including the Pan-African Parliament of the African Union, encourage additional exchanges between political parties of Africa and the Chinese Communist Party (CPC), increase the links between local governments of China and Africa, and will develop the dialogue on foreign affairs cooperation between African governments and China. In terms of economics, China will remove trade impediments on African commodities entering the Chinese market and remove tariffs on exports from the least developed states. Beijing does not commit to Free Trade Agreements at the present but leaves the timeframe open-ended. China will continue to construct infrastructure projects through its private and state enterprises. Loan forgiveness is another major part of foreign aid policy. On the civil side, China’s foreign policy calls for expanding cultural, health, education and social linkages between the African and Chinese peoples. In terms of military relations, Beijing will continue to provide training for African militaries, joint exercises and exchanges, cooperation on rule of law and judicial projects, and for civilian policing practices. Finally, Beijing sees a prominent role for China-Africa Cooperation in terms of pursuing these goals and developments ("China's african policy," 2006). Overall, the policy paper takes a positive tone and represents what Beijing has communicated through official and public channels.



Defining Chinese Aid Policy

Chinese foreign aid to African countries is a combination of diplomacy, commerce and ODA and OOF aid. The Beijing Consensus provides a basis for Chinese foreign policy. It encourages innovation and equitable development (Turin, 2010) and principles of self-determination (CRS-9). It also measures progress with metrics other than GDP, in contrast to the Washington Consensus. By GDP alone, China ranks 102 out of 182 countries in the UNDP’s 2007 estimate. Accounting for other factors such as the Human Development Index, literacy and life expectancy, China jumps to 52 (Turin, 2010). Focusing on these additional factors helps China develop an assistance package for a particular country.

Officially, China gives very little traditional aid in the form of grants, preferring instead to give out loans. Therefore, much of Chinese aid is considered OOF instead of ODA. Chinese aid is often characterized as “win-win” (CRS-1), meaning that both the state giving the aid and the state receiving the aid acknowledge that the relationship is equitable, per the Beijing Consensus. “Win-win” is essentially copied from the Japanese model of foreign aid. First, China extends large amounts of credit at a competitive or even sub-market rate. They then require that much of the money be spent on Chinese goods such as construction equipment and services, machinery, and mass transportation. Repayment is often tied to natural resources such as oil or rare metals instead of coming directly from the recipient country’s treasury. The “win-win” approach is becoming increasingly popular in Africa and countries such as the Democratic Republic of Congo (D.R. Congo), Mozambique and Angola have taken advantage assistance offers structured this way (Bräutigam, page 307).

How Much Foreign Aid

The amount of foreign aid China gives to Africa is difficult to determine. Several agencies play an active role in determining and implementing aid policies. Private companies, provincial governments and state owned corporations are involved as well. Individual embassies and the Chinese diplomatic corps are included in the process in varying roles. Additionally, none of these organizations are transparent about their aid policies. In 2004, $731.2 million was China’s officially released aid statistic but they do not define what they consider aid. However, the official number conforms to ODA norms. Under OOF, the ExIm Bank lent 12.5 billion (USD) in 2006 and 17.5 billion (USD) in 2007 (Pehnelt, 2007). In a 2008 speech on the Millennium Development Goals, Chinese Premier Wen Jaibao disclosed that 31 billion (USD) in aid had been given to developing countries, which included 13.6 billion (USD) in “free aid (Jiabao, 2008).” Speeches by Chinese officials provide some light onto the amount of aid but fail to define when or what exactly is aid. Premier Jaibao used to term “free aid” but to include specifics of the nature of the aid According to official standards (ODA), China gives roughly 1.5-2 billion (USD) per year compared to the 19.5billion in ODA that the US gave in 2007. However, neither country includes the entire amount of OOF as the US excludes military assistance while the Chinese figure excludes loans that constitute their primary source of development aid (CRS-4). Thus, it is difficult to quantify the amount of foreign aid that both China and the US give.



History of China in Africa

The Chinese have maintained ties with Africa longer than is commonly thought. Admiral Zheng He visited what is now Somalia in the 15th century, bringing giraffes back to China for the emperor. In 1956, China gave Egypt aid, the first African recipient of Chinese foreign aid in the modern era. Swaziland is the only country that has never received Chinese assistance. In the 1970’s, China sponsored its biggest project ever, building the Tanzania-Zambia railway to connect Zambia’s copper mines to Tanzanian ports. Throughout the 1980’s and 1990’s, China awarded smaller infrastructure repair grants to many African governments. The only political condition of those grants and aid was that the recipient government recognized the People’s Republic of China as the only China and cut ties with the Republic of China (Taiwan) (Bräutigam, 2010).

The events of 1989 in Tiananmen Square prompted a broad change in Chinese foreign policy. Beijing was surprised by the international community’s outcry on its human rights policy, which included many countries that they thought were friendly to their interests. The policy that seems to have emerged from that era was a reengagement with countries whose support would count in international government organizations such as the UN in additional to regional alliances.

In the subsequent years of the 1990’s, China began to reach out once more to African countries. From 1989 to 1992, the Chinese Foreign Minister visited fourteen countries in Africa, resuming the high level visits that had subsided after Premier Zhao Ziyang’s 1982 trip to eleven countries. Many of those countries subsequently sent delegations to Beijing, signifying the positive impact of the high level of Chinese engagement. Through aid projects such as $12 million (USD) in assistance to Mozambique in the early 1990’s, China worked to retain and expand allies that would support Chinese human rights policy or support China’s position on sovereignty, namely their disinterest in a country’s internal affairs. China’s actions systematically built support in the UN as Western countries constitute an absolute minority. Additionally, it was in the early to mid 90’s that China began to dramatically (?) increase trade with Africa. From 1990, trade increased from $1.66 billion to more than $5.03 billion in 1997. Stability was the only political condition China required for aid, investment, and trade, thus allowing a place for countries with less than democratic governments to be included within Chinese foreign policy (Taylor, 1998).


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