An impressive expo of Chinese high-tech rail with 3 Chinese locomotives, a high-speed train and 10 aircraft models launched Chinese premier Li Keqiang’s triumphant 4-nation tour of Africa. The premier, due to address the World Economic Forum in Abuja today (8 May), says he expects China’s trade to Africa will double from $200billion in 2013 to $400bn by 2020 and he also expects Chinese direct investment to climb four times to $100bn.
Can observers listening to his words find a shift in China’s emphasis in the continent they call “the land of hope”? Will there be less focus on natural resources and more on helping Africa’s industrialization, productive agriculture, and other steps to drive growth and jobs?
The tour began in Ethiopia on Monday, moved to Nigeria on 6 May, and continues to Angola (today and 9 May) and Kenya (9-11 May) are next. Li is China’s number 2, an economist and the leading figure behind China’s economic policy, which is trending towards increased domestic consumption and handling urbanization, both key trends in Africa. His first key foreign speech in 2010 saw him talking at the World Economic Forum about sustainable development and green energy in China.
Yesterday he met African presidents including Tanzania, Benin and Togo and the Prime Minister of Mali. The African Union headquarters in Addis Abeba, recently built by Chinese, hosted the expo.
Some 60 deals will be signed during the tour. China aims to be even more “actively involved” with key industries mentioned including textiles, home electronics and manufacturing. Li said: “The collaboration must not be limited to energy and infrastructure but expanded to industrialisation, urbanisation, the modernisation of agriculture, with more attention given to green, low-carbon development and environmental protection,” (quoted in South China Morning Post). He has also highlighted joint-venture airlines with Chinese partners and planes, high-speed rail linking African capitals, deeper partnerships in telecommunications and research and development.
Chinese firms have invested heavily in Ethiopia recently and official figures say the total is over $1bn by this year. The 16 deals signed in Ethiopia by ministers and company executives accompanying Li include loans and cooperation agreements to build roads and industrial zones, power grids and telecoms. China Railway Engineering Corporation is pushing ahead on the $475m Addis Abeba light railway transit, due to start carrying passengers on a trial basis next year. Railway plans for Ethiopia have been costed at $6bn and work is going fast, with India also competing for projects and to provide funding. On Monday (4 May) Li and Ethiopian Prime Minister Hailemariam Dessalegn inaugurated an 80-kilometre expressway to Addis Abeba to Adama (Nazreth), the first in the country. See this informative article on the $612m road, built by Chinese Communications Construction Company with $350m soft loan funding from the Export Import (Exim) Bank of China and remaining funds from the Ethiopian Government, and capable of carrying 15,000 vehicles a day, to ease congestion as the existing route carries 20,000.
China already dominates telecoms supply and Huawei Technologies Co Ltd and ZTE Corp are rolling out 4G broadband network in Addis Ababa and 3G throughout the country. According to International Telecommunications Union (ITU) statistics, the number of mobile lines grew from 6.9 million in 2010 to 14.1m in 2011 and 20.5m in 2012, although service can still be sporadic. The 2 firms have also signed an $80m deal to lay optical ground cables to form the national network.
Contrast with the welcome to John Kerry, US Secretary of State, who made a tour to Ethiopia, Democratic Republic of Congo and Angola a couple of days earlier. The State Department says it will promote democracy and human rights and Ethiopia upped the ante by arresting and jailing 9 journalists and bloggers, forcing Kerry to bring it up with PM Hailemariam on 1 May, reported by Reuters. The US has recently launched the $7bn Power Africa programme, a good move to help the crippling power deficit although cynical observers might say its also a bid to ensure the US is not left completely out of the continent’s economic development.
News agency Xinhua has reported that 2,500 Chinese firms already operate in Africa and China overtook the US as Africa’s main trading partner in 2009.
Chinese media write on China’s development impact
A report in China Daily interviews Ethiopian businesspeople hoping their country will gain. 41-year-old Assefa Michael said the infrastructure could change life and the industrial landscape: “Roads are the roots for the creation of real wealth for a nation.” He said the roads would promote health and make it easier for pregnant women to reach clinics, as well as for farmers to get their produce to market in nearby towns.
A Xinhua report cites He Wenping, a researcher with the Chinese Academy of Social Sciences, who said China’s had great success in poverty reduction and massive investment in infrastructure was a key factor. She added the Chinese see clearly the importance and necessity of improving infrastructure in Africa as well as the great business opportunities behind it.
According to SCMP, Li said: “The Chinese government proposes to establish joint venture airlines between Chinese companies and Africa and providing civilian aircrafts to develop the regional aviation industry. We will also set up a high-speed railway research and development centre.” Before he departed for his visit, on 3 May the premier addressed fears that Beijing was becoming a neocolonial power in Africa: “China will never pursue a colonial path like some countries did or allow colonialism, which belonged to the past, to reappear in Africa.”
Some Chinese companies have been accused of shoddy construction and failing to respect employment laws. SCMP reports Shu Yunguo, a professor at Shanghai Normal University’s Centre of African Studies, said: “Products in China have quality issues as well, and many companies fail to recognise the importance of environmental protection.”
The challenge for African leaders is to balance the power interests of East and West, to gain the most from competition from both while still ensuring the long-term interests of Africans come first.