Appealing to hearts and minds in Africa on his recent visit (May 2014), Chinese premier Li Keqiang pledged that his country would boost living standards in Africa with announcements of $12 billion for the region,[1] and help Africa to realize the dream of connecting all of its national capitals by rail.
While Li’s announcements grabbed the media headlines, students of foreign policy and global governance would have noticed that other important changes in China’s approach to Africa were signalled during the visit.
Amid the big money commitments, the Chinese gave new emphasis to promoting industrial development, creating jobs in labour-intensive and manufacturing sectors, financial cooperation, and environmental protection in Africa.
To the extent that these commitments are carried through, they could have a major impact on boosting living standards on the continent.
These pledges could be seen by skeptics as an effort by Beijing to deflect criticism, especially at a time when African leaders have become more vocal with their calls to recalibrate the economic relationship toward more balanced and “sustainable” trade relations. From the standpoint of international engagement and multilateralism, China’s latest promises mark a potential policy turn: China is starting to take a more proactive and programmatic approach to addressing the external impacts of its growth.
In my chapter on “The World Bank and China,” in the forthcoming volume, China and Developing Countries (edited by Carla Freeman, Executive Director of the FPI), I examine how the World Bank made it a priority to work with China in the areas of environment and financial stability from 2004 onwards, “given that how China handles these issues will have a major impact on the rest of the world”. [2] Some bilateral donors have been engaging China on its global environmental impacts since in the early 1990s,[3] and they kept at it despite the unchanging response from China’s leaders for more than a decade that China was “not in a position to exercise international leadership.”[4] In 2007, the UNDP Office in Beijing started to push Chinese authorities to give more attention to creating sustainable jobs in Africa, amid its growing trade and investment ties.[5]
Until recently, Chinese diplomats remained wedded to trying to counter what they perceived as Western or Northern misunderstandings about China’s role in Africa. Their stance was largely reactive.
During Li Keqiang’s recent visit, the Chinese authorities made a breakthrough of sorts, shifting toward a more proactive approach to addressing the external impacts of their country’s growth. Beijing also announced that it will direct more resources to working with Africa’s regional multilateral organizations.
China pledged more industrial cooperation projects, and to scale up “quantitatively and qualitatively” its trade with, and investment in Africa.
China promised to participate “actively” in Africa’s industrialization, promote “labor-intensive and manufacturing sectors” (textiles, garment and household appliances), upgrade energy and resource industries, support further infrastructure development (including basic infrastructure), and large scale cooperation in agricultural development.[6] The self-professed goal is to support Africa’s “capacity for self-development” and “people’s livelihood.”[7]
Beijing offered to facilitate projects for regional connectivity in Africa, including highways, railways, telecommunications, and electric power projects. In helping Africa build a region-wide high-speed railway network, the Chinese Premier said that Chinese companies would partner with African counterparts in engineering, equipment, standards and planning, R & D, and managerial and staff training.
Most eye opening, Beijing proposed a new China-African Regional Aviation Cooperation Plan, under which Chinese aviation companies would set up joint ventures with African counterparts to produce civilian regional jets and regional aviation across Africa.
China promised more financial cooperation, seeing it as “vital.” The Chinese Premier announced an additional U$10 billion credit line to African countries for mutually agreed projects, thereby reconfirming the $30 billion of credit, which was promised by Chinese President Xi Jinping, on his visit to Africa last year.. Beijing also announced that the remaining $2 billion would be allocated to the China-Africa Development Fund, bringing the total to the promised $ 5 billion.
China upped its role in regional multilateral cooperation, offering to co-finance a new $2 billion 10-Year African Development Fund, with the African Development Bank (AfDB), and to work with the AfDB to build a trilateral cooperation platform for infrastructure development across the continent, including the aforementioned regional aviation, and high-speed railway networks.
The Chinese offered to engage in bilateral international currency experimentation, including cross-border currency settlement, currency swaps, and “mutual establishment” of bank branches – which Chinese monetary and financial authorities would see as contributing to international monetary and financial stability.
Most heartening to this observer, the Chinese Premier acknowledged that environmental protection is “our shared responsibility,” and pledged to work “together on ecological and environmental protection projects. “ Beijing offered a $10 million grant for wildlife protection in Africa, where Chinese demand for ivory, rhino horns and other elicit trade of animal parts, have driven some species to the verge of extinction. Chinese authorities also promised to establish a China-Africa joint research center (in Kenya) to protect bio-diversity, fight desertification, and demonstrate modern agricultural methods. China pledged to cooperate with Africa on developing clean and renewable energy – to build a “green Africa.”
If these commitments are met, they would make a difference in Africa-- worth tracking, as the leading powers rethink their foreign policy, and as the global community debates the next round of global development goals, post-2015.
[1] See ”Full Text of Premier Li Keqiang’s Speech at African Union”, China Daily, May 6, 2014
http://www.chinadaily.com.cn/world/2014livisitafrica/2014-05/06/content_17531846_2.htm
[2] David Dollar, “China’s Economic Problems (and Ours)”, The Milken Institute Review, 2005 https://relooney.fatcow.com/SI_FAO-Asia/China_331.pdf
[3] The author’s notes from the annual meetings of the CCICED in 2002, 2003 (Beijing).
[4] The Canadian International Development Agency provided core funding for The China Council for International Cooperation on Environment and Development (CCICED), an international expert-led policy dialogue platform, starting from its inception in 1992. The CCICED has advised four Chinese Premiers, Li Peng, Zhu Rongji, Wen Jiabao and Li Keqiang, and China’s National and Development Reform Commission, Ministry of Environmental Protection, and Ministry of Commerce. CCICED was an earlier pioneer of public-private partnership, with British Petroleum Corporation (BP) and Royal Dutch Shell, as previous and current members of the Council. See: http://www.cciced.net/encciced/
[5] See Gregory Chin, “China, UN Reform, and the Shifting Global Order”, in ACUNS: Info Memo, Summer 2009, http://acuns.org/wp-content/uploads/2012/05/Summer_2009.pdf
[6] Quotes from Li Keqiang’s remarks at the African Union from ”Full Text of Premier Li Keqiang’s Speech at African Union”, China Daily, May 6, 2014
http://www.chinadaily.com.cn/world/2014livisitafrica/2014-05/06/content_17531846_2.htm
[7] See Assistant Minister Zhang Xiangchen’s comments. http://www.reuters.com/article/2014/04/30/us-china-africa-idUSBREA3T0B520140430
Gregory Chin is Associate Professor of political science at York University (Canada). He has published widely on the political economy of China, Asia, the BRICS, and global governance, and his current research is focused on Renminbi internationalization, and the financial politics of the BRICS. He is Co-Editor of the academic journal Review of International Political Economy. This blog draws on Greg’s chapter, “The World Bank and China: The Long Decade of Realignment", in Carla Freeman (ed.),China and Developing Countries (2015 forthcoming), a project of The FPI.
(Photo Credit: africafederation.net)