Friday, April 17, 2015

Chinese aid for South Africa?

Image Credit: Flickr/ GovernmentZA via The Diplomat
I was struck by an article today in The Diplomat on Chinese foreign minister Wang Yi's visit to South Africa, where Wang met with South African president Jacob Zuma. The article noted "In their meeting, both Wang and Zuma stressed the importance of Chinese aid for South African development."

I immediately wondered about this. South Africa, is, like China, an upper middle income country. China gives South Africa very minimal official development assistance [yes, this is true even if researchers relying on AidData mistakenly list South Africa as one of China's biggest aid recipients ... sigh...]. South Africa has received only scholarships, some Confucius Institutes, and a handful of "gift" projects that are basically symbolic; there is very little official aid. The relationship is all about business -- and politics -- and has its bumpy side. Consider the long standing concern with South Africa's industrial development and competition with Chinese imports, for example, or the ongoing kerfuffle over the inability of the Dali Lama to obtain a South Africa visa.

The article linked to a video of a CCTV clip with the title "Two sides vow to strengthen industrial cooperation". Listening to the clip, I found no mention of Chinese "aid", per se, although they did mention China's "consistent support and help" to South Africa while also emphasizing that Beijing sees the relationship as one of "mutual benefit".

Does anyone else wish that we could get away from the language of "aid" -- this notion that cooperation (or support or help) to an African country should be automatically termed foreign aid -- a one-way transfer of alms from richer to poorer countries?  Here's to more discussion about things like "industrial cooperation" or even "support and help" that poor countries provide to richer countries. After all, the West clearly receives support and help for its goals from the aid it gives, no? 

Monday, March 30, 2015

Chinese Agricultural Engagement in Africa: Policy Briefs


Our sister website, the SAIS China-Africa Research Initiative at Johns Hopkins University, has now published the latest (and last) in a series of policy briefs focused on Chinese agricultural investment and other engagement in Africa. These policy briefs provide original, fieldwork-based insights and information that is not available anywhere else. The papers on which they are based were presented at our 2014 SAIS-CARI conference on Chinese agricultural investment: 'Land Grabs' or 'Friendship Farms'?

  • Policy Brief 01/2014: The Political Ecology of Chinese Investment in Uganda: the Case of Hanhe Farm, Josh Maiyo.
  • Policy Brief 02/2014: Chinese Agricultural Investment in Mozambique: the Case of Wanbao Rice Farm, Sérgio Chichava.
  • Policy Brief 03/2014: Chinese Training Courses for African Officials: a “Win-Win” Engagement?, Henry Tugendhat.
  • Policy Brief 04/2015: Chinese Agricultural Engagement in Zambia: A Grassroots Analysis, Solange Guo Chatelard and Jessica M. Chu.
  • Policy Brief 05/2015: Chinese Agricultural Entrepreneurship in Africa: Case Studies in Ghana and Nigeria, Yang Jiao.
  • Policy Brief 06/2015: Assessing the Impact of Chinese Investment on Southeast Africa’s Cotton: Moving up the Value Chain?, Tang Xiaoyang.
  • Policy Brief 07/2015: Neither ‘Land Grab’ nor ‘Friendship Farm:’ Chinese Agricultural Engagement in Angola, Zhou Jinyan.
We appreciate support from the Smith Richardson Foundation and from Johns Hopkins University School of Advanced International Studies that made the conference and these policy briefs possible.

Tuesday, March 24, 2015

Mysteries of the China Africa Development Fund


The China Africa Development Fund (CAD-Fund) launched by China Development Bank (CDB) in 2007 remains poorly understood. For example, a 2012 statement by the Africa Finance Corporation outlining a strategic partnership being developed by the AFC and the CAD-Fund describes the CAD-Fund as having "US$50 billion" in funds under management.   Surprise: when fully mature several years from now, CAD-Fund will only be a $5 billion fund. In the past 3 years, no one has corrected that error at the AFC website.

Others have described the small CAD-Fund as a "sovereign wealth fund" -- this is not technically correct, as an adviser for China's sovereign wealth fund, China Investment Corporation (CIC) confirmed to me. Sovereign wealth funds are usually funded directly from central bank reserves arising from trade and budget surpluses (e.g. Korea Investment Corporation; China Investment Corporation) or natural resource exports (Kuwait Investment Authority, etc.). The CAD-Fund is a private equity fund, and was supposed to raise its own funds on the private market, after the initial infusion of $1 billion from CDB.

After two years of trying to raise the second $2 billion, CAD-Fund had to ask CDB for help. CDB arranged to provide CAD-Fund with a loan at LIBOR plus a margin, with an 8 to 10 year term. As noted in the financial newspaper Caixin in April 2012: "Development bank takes out loan after domestic institutions decline to invest" in CAD-Fund.

On another note, it is true that the CAD-Fund is not at all transparent. Its website gives no lists of the projects in which it invests, aside from a few paltry examples. Is this standard practice for other private equity funds, or something uniquely Chinese?

Wednesday, March 11, 2015

African Roads: Why So Many Chinese Contractors?


Thika Road, Nairobi      credit: theeastafrican.co.ke
Sitting in yet another airport, after yet another delayed flight, after yet another conference on China and Africa. Pondering this question: African governments routinely award road construction contracts to Chinese and other foreign companies: South African, Italian, and so on. Why is this the case? A recent discussion in the comments section of this blog addressed that issue. Readers' thoughts welcome.

@Anonymous: Africa needs more infrastructure, no one denies that. I just have one question. Why is it that it is only foreigners who can build this infrastructure? Why can't we Africans rise to the challenge of learning how to construct the infrastructure we need? Is constructing infrastructure too hard for us Africans?

@Margaret Lee: I agree with you. Africans have the capacity to build infrastructure. The problem is that the Chinese are sending many of their people out of China to get jobs because there are too many people in China. All over the continent you have well qualified African engineers who can design new infrastructure and people to actual do the construction. In addition, most African countries have the monetary resources to pay for the needed equipment and supplies. The real issue rest with African leaders who are not serious about African development and would rather allow foreigners, like the Chinese, to do the work. This has been the problem with Africa since independence. Noted brilliant African scholar, now deceased, Claude Ake in his book on Democracy in Africa says,"..the assumption so readily made that there has been a failure of development is misleading. The problem is not so much that development has failed as that it was never really on the agenda in the first place. By all indications, political conditions in Africa are the greatest impediment to development.."

Friday, January 30, 2015

China and Mozambique: Soft Power and Media

What I'm reading: a new paper by Sérgio Chichava, Lara Côrtes and Aslak Orre on the coverage of China in the Mozambican media, and what this says about the Chinese soft power strategy. From the conclusion: 
Where representatives of Western donor nations, so predominant in the Mozambican political landscape, actively attempt to mould the Frelimo-based elite into its own image, China’s politicians emphasise that it cooperates – and does business – with that elite no matter what it may privately may think about its virtues and conduct. This may well be a successful diplomatic strategy in the short run. The above findings go in the direction of suggesting that in the long run, the close association – diplomatically, in business and in people’s minds – of China with Mozambique’s elite, could become an obstacle, in particular [when it] concerns the question of Chinese soft power. At least if Mozambique’s newspaper reports on China are anything to go by, China’s soft power builders need to give some thought on how to make more of its positive image (“the bankroller”) and that which could potentially be positive but has not yet made a considerable mark on the Mozambican media, Chinese culture and language. Similarly, how can it play down what seems to affects it negatively the most: Illicit resource extraction and corruption in Mozambique, and authoritarian governance in China.

Thanks to Sérgio for sending me a copy of the paper and to Henry Tugendhat at IDS Sussex for circulating a link to the online version in the Future Agricultures blog.

















Tuesday, January 27, 2015

China and Industrial Policy in the South

The Huajian factory outside Addis Ababa [The Economist]
What I'm reading:  A new paper by Daniel Poon at UNCTAD: China's Development Trajectory: a Strategic Opening for Industrial Policy in the South, UNCTAD, December 2014.

Poon points out that China is at a crucial crossroad, serving at the same time as the world's low-end workshop and its most prominent proponent of industrial policy. China wants to move up the value chain, and Poon says: "The gap between China’s industrial ambitions and its current capabilities provides a strategic opening for other developing countries to bargain for enhanced opportunities for domestic investment, learning, technical change and structural transformation."

This paper helps frame the work on Chinese industrial investment in Ethiopia that we are doing at SAIS-CARI. I am just back from Addis-Ababa where we interviewed a number of firms in the leather sector with some kind of skill-building or technology-transfer linkage with China. Fascinating.

Thursday, January 15, 2015

China Africa Research Manager Position available at SAIS-CARI

Our new center, the China Africa Research Initiative (CARI) at Johns Hopkins University School of Advanced International Studies (SAIS), has been awarded a Carnegie Corporation grant to build CARI's capacity to bridge scholarship and policy. We are seeking a full-time research manager, who will take a leading role in organizing the center's work and programs. We are looking for someone with a master's degree (or equivalent experience), excellent organizational skills, and familiarity with communications, including social media and website management. Field research experience and Chinese language skills would be a plus. Deadline for applications is January 31, 2015 with a mid-February start date (negotiable). This is a 2 year, fixed-term position, although there is some possibility of renewal, depending on funding.

For detailed information on the post and how to apply please see the Johns Hopkins University HR website, requisition number 64680: http://jobs.jhu.edu/