China’s premier opens new chapter in China-Africa relations?

Li Keqiang and his wife Prof Cheng Hong arrive in Africa 4 May (photo: China News Service)

Li Keqiang and his wife Prof Cheng Hong arrive in Africa 4 May (photo: China News Service)

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.

2 Responses to “China’s premier opens new chapter in China-Africa relations?”

  1. Rachel Kasumba

    Thanks Tom for these updates on Sino-Africa relations. The PM’s current visit underscores the importance of the continued business relationship of China on the African continent.

    While there are a lot of naysayers both on the continent and foreign especially from the West, it is encouraging to note and indeed see that both China and Africa have continued to pursue investment opportunities. The fact that the number of sectors has increased from infrastructure and natural resources is also a sign that China is vested in the continent’s development for the long-term and also looking for both sides to prosper as a result.

    Many skeptics note that this is because China wants to plunder the continent and create a market and employment for her products and burgeoning population back home. While this cannot be disputed in its entirety, the results on the ground in Africa speak for themselves.

    I believe that continued investment in Africa in different industries as noted above will create a ripple effect and lift unemployment especially among Africa’s youth which is very high at the moment. This will in turn lift millions out of poverty and more importantly reduce the level of crime and insecurity thereby attract more foreign and domestic investment.

    China has continued to show that it is committed to working with Africa and these frequent visits by her President and PM and deals that follow are testament to that. In addition, the country has been inviting various players from Africa on sponsored trips to China to school them in ways of doing business and also offering scholarships to African students and internships for some of China’s African workers, etc

    The future of this relationship looks very bright!

  2. Tom Minney

    Hi Rachel, thanks for your insights on this. It will be so interesting how this relationship develops and how a partnership is built together for constructing infrastructure, jobs, manufacturing and growth. There are advantages for Africa in having so many places deeply interested, if they manage the relationships well and with a long-term view to get sufficient benefits for present and future Africans, including gaining from the Chinese emphasis on education and skills. See this blog The Afrizen for one informed view.