Monday, October 28, 2013

China's Environmental Impact in Africa: New Evidence

Curious about China's environmental impact in Africa? See this new piece by Daniel Compagnon and Audrey Alejandro, "China's External Environmental Policy: Understanding China's Environmental Impact in Africa* and How It Is Addressed", Environmental Practice, 15(3), 2013.  While we still lack systematic, cross-national evidence on this impact, this article is a good example of the growing trend of scholars doing fieldwork and subjecting the conventional wisdom on Chinese external engagement to the test of evidence. The authors' research suggests that in South Africa, "Chinese companies are as compliant as the Western ones—and perhaps more than Indian companies—when it comes to local law, be it on labor or environmental issues." They emphasize the importance of local African agency in determining environmental outcomes. It also contains a helpful overview of changing policies on the environment and going global, in China.

Article abstract: "Many Chinese economic actors in Africa have come under harsh criticism for the alleged environmental impact of their activities. This impact is not always documented, is uneven across the continent, and should be compared to that of business actors from other countries—in particular
from the OECD. One major factor accounts for the recorded differences: the policy and regulatory framework within which these business actors operate. The African weak state is not conducive to the adoption of robust standards and their subsequent implementation. However, the shift in Chinese policy at home on environmental issues is already producing some changes for the state-owned companies, and there is a growing concern in China’s leading circles about the international image of the nation and its companies turning global."

h/t to Yoon Jung Park. *Update: when I wrote this, the article was accessible free, online. That's apparently no longer the case. Apologies. Thanks to @krizcpec for pointing this out.

Tuesday, October 22, 2013

TI: Chinese Multinationals Score Low on Transparency

A new report from Transparency International rated Chinese companies lowest among 100 companies from the emerging market countries for levels of transparency. This has implications for African countries and civil societies. 

Beijing has required little of its firms. Yet what is also interesting is that two Chinese firms were among the five best performers, with regard to transparency (below). Unfortunately for Africa, two of the firms that operate on a large scale across the continent, Huawei and CNOOC, are also among the firms that scored 0 on TI's scale (below). Add to this the zero rating of Brazil's huge engineering firm, Odebrecht Group, and the challenges for transparency in Africa are apparent. It would be interesting to study the "best" and "worst" Chinese firms on this list to discover why some have chosen to adhere to a growing international norm, while others choose to remain opaque.

Emirates Airlines (UAE)Anshan Iron and Steel Group (China)
Johnson Electric (China)Chery Automobile (China)
Petronas (Malaysia)China National Offshore Oil Corporation (China)
Shanghai Electric (China)China Shipbuilding Industry Corporation (China)
United Company Rusal (Russia)Chint Group (China)
 Galanz Group (China)
 Geely – Zhejiang Geely Holding Group (China)
 Huawei Technologies (China)
 Mabe (Mexico)
 Odebrecht Group (Brazil)
 Wanxiang Group (China)
 Source: Transparency International. 100 = most transparent. 0 = least transparent. 

Friday, October 18, 2013

Guest Post: A Kenyan's Tales from the Beijing Subway

This guest post is courtesy of Bob Wekesa, Kenyan journalist and Ph.D. candidate at China Communications University.
When I first came to China in the autumn of 2011, it was with feelings clear as mud. On the optimistic expectations continuum, I was all upbeat about imbibing a new culture framed as mystical and mysterious. On the opposite end of the spectrum, I was wary of China’s reputation as a communist state. My mind raced hither and thither even as the Emirates Airways taxied on the runways of Jomo Kenyatta International Airport in Nairobi bound due East.

Arriving at Beijing Capital Airport on the evening of September 8, I and would be classmates at Communication University of China were received by volunteer students. I was mesmerized by the sheer smoothness and neatness of the roads as a courtesy bus conveyed us to China and Asia’s foremost media and journalist school. The more distance we covered away from the airport toward the university, the more I was charmed by the complexity of the road network: underpasses here, flyovers there; endless road safety rails that would long have been vandalized were it in Nairobi; service roads aplenty, name it? 

Something else struck me – the absence of pedestrians on the airport highway! Wasn’t this the capital of the world’s most populous nation? Hadn’t I read that Beijing itself was on course to top 20 million residents in short order? Where are the Chinese ‘commoners’, I mused!

The answer to my bewilderment over the absence of Chinese pedestrians would come to me powerfully once I settled down on campus and started venturing out. My very first encounter with throngs of Chinese was within days of arrival when colleagues from Tanzania, Belarus and Nigeria went to the Sanilitun diplomatic enclave to register our presence with our embassies. 

Two young Chinese students offered to help us reach our embassies. At the Communication University of China station on the Batong Line, we were baptized into the Beijing subway culture. Although we left for the diplomatic district mid afternoon that bright October day, we found the trains packed to the brim. Drive on Mbagathi Road in Nairobi any working day morning and what strikes you is the great number of manual laborers walking to Industrial Area work from Africa’s largest slum - Kibera. Aha, when you don’t see the Chinese on Beijing highways, they are commuting underground in their millions! 

It was evident that some of the Chinese passengers were encountering black people for the first time, judging from the glances and gazes we were attracting. I am not too sure if I am less conscious today than I was two years ago but it appears there are fewer darts directed at me nowadays when on board the subway. The number of Africans (or blacks for that matter) coming to Beijing has shot up over the past two years. New African students mingling with Chinese people must have helped break cultural barriers in a way that a television feature can never do.  

The Beijing subway is a study in convenience if one gets the hang of navigating it. Peak hours are to be avoided like the plague on account of the jam-packed crowding, and cramming in Beijing takes on a particularly buffeting quality! Five pm is particularly rough as commuters often stampede into the trains where one has to reckon with being squeezed as well as the resulting odors. This is when you come face to face with the foibles of living in a populous nation, notwithstanding the many positives of ‘strength in numbers’. Off peak however, the subway is less packed. Thus, unless absolutely necessary, many foreign students plan their sojourns away from universities between 9.00 am and 4.00 pm or any time after 7.30 pm. 

A journalist colleague has pointed out that the number of skyscrapers in Beijing could be as many as the number of high rise buildings in all the African cities together. This claim is rather hyperbolic. But the fact remains that locating a building on your own in Beijing is a complex affair on account of the many buildings in the sprawling city. Here, the subway comes in handy in that it serves as a location marker. I have found it convenient to be directed to any rendezvous by for instance arranging to meet a contact at the entrance/exit of a subway station. It’s not uncommon for one to pose: “well, this building is near which subway station?”

Quite apart from the fact that I get fewer quizzical looks when I use Beijing subways nowadays, I have gained other sociological-cum-psychological insights, albeit neophyte. As a rule of thumb, when a fellow Chinese subway commuter fixes me with a glance, I look back straight and he or she will surely avert his or her gaze. Better still, if someone looks at me a little bit intensely and we are within short distance, I will offer a greeting. Often ‘ni hao’ leads to some conversation; in once case, I have developed a long term relationship on the basis of a mere subway greeting. However, if I am not up to any of these strategies, I opt to whip out my phone and delve into any online engagement.

Chinese kids are particularly flummoxed when they meet an African, on the subway, in a public park or elsewhere. The trick, I have learned is to be playful with the kid and even make faces and the kid is your buddy (often the parent as well). I have also learned that older folk are likely to give you that quizzical look than are the middle aged Chinese – I propose the younger people have witnessed China’s opening up relative to older folk. I also now know that most of the subway commuters who seem so mesmerized by Africans would be new to Beijing, visiting from other Chinese provinces or the outskirts of the city where exposure to Africans is less. 

Just so that we could test our thesis that ‘Beijingers’ in the outer districts are less exposed to Africans, a colleague from Lesotho and I recently commuted to Tuqiao, the terminal of the Batong line in East Beijing. There we went into a restaurant and ordered a drink but the surprise written on ‘fuyuwuan’ the waiter’s face as well as other patrons at the bar served to confirm our suppositions.    
In a nutshell, the Beijing subway has countless tales to tell.

The author is a Kenyan journalist and PhD in communication candidate at Communication University of China. He is also a fellow of the China-Africa Reporting Project at University of the Witwatersrand, South Africa. Contact:                              

Monday, October 14, 2013

Chinese Aid: How Much?

We anticipate the publication this month of a new report from China on its foreign aid program. In the meantime, we have yet another media-report based study with outlandish numbers. In a recent op-ed in the Wall Street Journal researchers at Rand gave the highlights of their two year "research project" on "Chinese aid". I hoped this would not attract much attention, but people are starting to send it to me for comment ... so here goes.

There are so many things wrong in the WSJ op-ed that I hardly know where to begin. Most importantly, the study followed the same deeply flawed methodology (and indeed, used the data from) the notorious 2009 Congressional Research Service study that relied on a group of students at the NYU Warner School to collect media reports on any story of direct investment, mergers and acquisitions, trade finance, bank loans, equity funds, and so on, that appeared to have anything to do with the Chinese government. Adding all of this together, and without apparently investing much in checking the media reports for accuracy, or thinking much about why the purchase of an oil well should be counted as "aid", Rand has come up with some truly preposterous figures. According to Rand, China is budgeting more than twice as much on aid as on defense: $189 billion in 2011 alone. Can these researchers be serious?

This report was done, in part, for the US Department of Defense. I have to wonder what they will do with these ridiculous figures. Will DOD relax, because a generous China appears to be spreading aid around the world rather than building its military? Or will they demand a bigger share of our own aid budget in order to counter all of this nefarious "Chinese aid"?

For the record, China does have "official development assistance" that looks much like ours, as I've tried to explain across several chapters of The Dragon's Gift (apparently it's not in the library at Rand...). Below are the actual external assistance expenditure budgets for the last decade (source: China Statistical Yearbook). This includes grants and zero-interest loans, and any subsidy provided to make the relatively small set of concessional foreign aid loans [优惠贷款] provided by China Eximbank as one of its many loan instruments, concessional enough to qualify as official development assistance (ODA). In recent years, however, China Eximbank has apparently done all of the subsidies through its own profits, cross-subsidizing these loans and not drawing on the budget.

So in 2011, China allocated direct expenditures of about $2.5 billion on official aid (grants and zero-interest loans; see Table 1 below). These figures cover all the short term training courses, the youth volunteer program, military aid, some turn-key projects funded by grants and zero-interest loans (like stadiums, hospitals, schools, agro-technical demonstration centers, government buildings) but does not include the concessional loans. According to official figures from the State Council, between 1960 and the end of 2009, "China had provided a total of 256.29 billion yuan ($37.7 billion) in aid to foreign countries, including 106.2 billion yuan ($15.6 billion) in grants, 76.54 billion yuan ($11.3 billion) in interest-free loans and 73.55 billion yuan ($10.8 billion) in concessional loans" [exchange rate is for 2009]." 

Concessional foreign aid loans have been growing rapidly. However, in 2011, by my estimates, China Eximbank committed no more than $8 billion in concessional foreign aid loans, and disbursed much less . (We'll see how close I was when the official figures are released). This would mean at most, a total of $10.5 billion in official development aid commitments in 2011, not $189 billion. Preferential export credits are not official development aid, and would be additional to this, but they are unlikely to be higher than $8 billion in 2011. Finally, most of China Eximbank's export credits -- the bulk of their funding flows -- are not subsidized and not concessional.

For more on this, see The Dragon's Gift, my book on Chinese aid, or two papers I wrote in 2011: "Aid with Chinese Characteristics" and "Chinese Development Aid to Africa: What Where Why and How Much?".

Table 1: China's External Assistance Expenditures, Annual (billion)
(exchange rate is the IMF annual rate) 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
RMB   4.6   4.7   5.0   5.2   6.1   7.4   8.2  11.2  12.6    13.3   13.6  16.0
US$        .55   .57   .60   .63   .73   .91 1.03  1.47  1.87  1.95   2.00  2.46

Friday, October 11, 2013

The Dragon's Gift: Translated into Complex Chinese

I am pleased to announce that The Dragon's Gift has now been translated into complex Chinese and published in Taiwan (it was published in a simplified Chinese translation in 2012 with the Chinese Academy of Social Sciences).

Looks like the publishers in Taiwan did a much better job with the cover than CASS (below). It actually looks like something someone might pick up. On the other hand, they took some liberties with the title. Guess I don't get to approve those changes...

Here are links to the book on the website of Eslite and Hope it will be available in Hong Kong, too.

Cover of the simplified Chinese translation.
Thanks to Jyhjong Hwang for tracking down the links.

Thursday, October 10, 2013

Vulnerable Chinese Employers? New Ghana Research

Fascinating new fieldwork research based on approximately 100 interviews with small-scale Chinese trading companies and their Ghanaian employees: "The Vulnerable Other -- Distorted Equity in Chinese-Ghanaian Employment Relations," by Karsten Giese and Alena Theil.

From the abstract: "Central to the frictions of mutual equity expectations is the feeling of existential vulnerability that -- although particular for each group -- is shared by both Chinese migrant employers taking high financial risks in an unfamiliar and potentially hostile environment and their local employees recruited almost exclusively from economically marginalized groups."

Available in a free version online from Ethnic and Racial Studies 2012: 1-20. Thanks to Karsten Giese for the link.