February 09, 2014

Chinese enterprises in Africa are changing the continent’s economies

Source: Journal Pioneer

Journalist: Henry Srebrnik

China is propelled abroad by the need to secure energy, metals and strategic minerals in order to support the rising living standards of its people. Being driven by economic survival, China is, in the words of author Robert Kaplan, “an uber-realist power” that “cares little about the type of regime with which it is engaged; it requires stability, not virtue as the West conceives of it.”

Leaders in Beijing need to keep economic growth rates high to continue to bring hundreds of millions of people out of poverty. And to do so, China needs the use of arable land, oil and minerals. Africa is rich in these.

This is a boon to African states whose governments may not live up to the liking of western countries. The Chinese don’t care how African governments run their affairs, nor do they make their investments contingent on government reform.

In 2009, China became Africa’s single largest trading partner, overtaking the United States. Annual trade now surpasses $200 billion. Chinese companies operate two thousand enterprises in more than 50 African countries and claim to employ at least 300,000 Africans. They have built 60,000 kilometres of roads and 3.5 million kilowatts worth of power stations there.

Since 1995 mineral products have dominated China’s imports from African countries with Angola and South Africa being China’s main African trading partners. Trade between China and South Africa has grown to $45 billion a year. Chinese companies are investing in oil exploration in Algeria, Angola, and Nigeria. They had invested some $20 billion in Sudan before it split into two countries in 2011 — and they now worry about the turmoil in South Sudan, which produces most of the oil.

Chinese firms are involved in mining enterprises in Gabon, Zambia and the Democratic Republic of Congo. They are also buying up land on which to build huge agribusinesses. In 2010 China signed a contract with Kinshasa to grow 2.8 million hectares of palm oil for biofuels. In Zimbabwe, Chinese investment has increased so much that Chinese-language signs greet visitors arriving at the international airport in Harare, the capital.

In January 2012, the 54-nation African Union held its summit in a $200-million headquarters financed and built by the Chinese government. “The people of China and Africa are good friends, good partners and good brothers,” a senior Chinese official, Jia Qinglin told the summit. “Our friendship is as solid as the towering Mount Kilimanjaro and as vibrant as the Yangtze River and the Yellow River.” (Soon afterward, Chinese investors opened a $27-million leather-goods factory in Ethiopia.)

In Zambia, a country of 14 million people with a GDP of $20 billion, the impact of China has been enormous. China is one of the world’s biggest users of copper, and Zambia has the second-largest reserves of raw copper in Africa, among other precious resources like coal, nickel, uranium, and gemstones.

In 2008, China and Zambia set up a zone in which Chinese investors didn’t have to pay taxes to the Zambian government and fifty companies invested a total of eight hundred million dollars. 

By the end of 2013, the Chinese government and private sector had together invested $2.5 billion in the nation. More than 500 Chinese companies are engaged in farming, retail trade, pharmacies, hospitals, information and communication technologies as well as road-building, and manufacturing. China is also helping Zambia overcome electricity shortages by building a $2 billion hydro-electric project.

But there have been problems between Chinese overseers and Zambian workers. In February 2010 a Chinese supervisor was murdered at the Collum Coal Mine, owned by private Chinese entrepreneurs. Later that year, two Chinese managers opened fire on African mine workers during a riot at the mine.

In early August 2012 a Chinese mine manager was killed during a protest against delays in implementing a new minimum wage. In February 2013 the Zambian government took over the mine, citing “gross abrogation of mining and environmental laws.”

As China continues to increase its economic footprint in Africa, are the Chinese starting to behave as badly as the Europeans did a century ago?


  • Robert D. Kaplan

    Adjunct Senior Fellow

    Robert D. Kaplan is an Adjunct Senior Fellow at the Center for a New American Security, originally joining the Center in March 2008. He is the bestselling author of eighteen b...