Monday, December 12, 2016

China, the DRC, and the Sicomines Project: new from Johanna Malm

Johanna Malm is our foremost analyst of the huge Sicomines project in which China Eximbank agreed to finance an infrastructure package, while a consortium of Chinese companies were to develop a mine, which would repay the infrastructure loans. This project, first conceived about a decade ago, has been very slow to unfold. 

Johanna began doing research on this project in 2008, under her maiden name Johanna Jansson. With her Ph.D. dissertation approved, she has produced a policy brief on her dissertation, published by the Swedish Expert Group for Aid Studies, available here. As Johanna notes, this was not an aid arrangement: 
"The key argument is that Chinese commercial loans do challenge the IMF's power in Africa, at least to the extent that they materialise. The brief starts out with a two-page summary that I have worked hard on to make it accessible to a target group broad enough to include my own aunt as well as American policy makers! Feel free to spread the brief to those who might be interested!"
Johanna's dissertation is available here. She recommends that those interested in her fieldwork and the IMF's role should read chapter 5 (sections 1 and 4) and chapters 6 and 7.

Friday, November 18, 2016

UN Report confirms Chinese peacekeepers abandoned posts in South Sudan during July fighting

photo: UNMISS/JC McIlwaine
In September, the Center for Civilians in Conflict charged that Chinese peacekeepers had abandoned their posts during a vicious outbreak of violence involving government and rebel troops, July 2016. This was denied by the Chinese defense ministry.

On November 1, the UN released the summary of their special investigation of the UN mission's role in this violent outbreak. Major General (retired) Patrick Cammaert headed up the team. Here is the section of the executive summary that addresses the role of the Chinese battalion (the entire report has not been released).
"On the uniformed side, the Force did not operate under a unified command, resulting in multiple and sometimes conflicting orders to the four troop contingents from China, Ethiopia, Nepal and India, and ultimately underusing the more than 1,800 infantry troops at UN House. The Force Commander appointed the Chinese Battalion Commander as the Incident Commander, commanding all the forces at the UN House in addition to his own battalion. Furthermore, the Force Commander ordered the Incident Commander to retain an explicit and ultimately confusing command link to Sector South headquarters in Tomping, which was physically cut off from the UN House for the duration of the fighting. 
This confused arrangement, in combination with the lack of leadership on the ground, contributed to incidents of poor performance among the military and police contingents at UN House. This included at least two instances in which the Chinese battalion abandoned some of its defensive positions at POC [Protection of Civilians site] 1 on 10 and 11 July. The Nepalese Formed Police Unit’s performance to stop looting by some IDPs inside UN House and control the crowd was inadequate." 
Clearly there was a significant breakdown within the UN force command, which hampered the Chinese role. The Kenyan Force Commander in charge of the UN military mission was dismissed. Yet this does not fully explain why the Chinese soldiers abandoned their posts. I haven't looked into this further, but if someone has, please comment and I will update this post. 

Monday, October 31, 2016

Afrobarometer: China wins favorable reviews in new Africa survey

How do Africans view China's economic presence on the continent? The latest Afrobarometer survey reports that on average, 63% of Africans surveyed believed China to be a "somewhat" or "very positive" influence in their countries while "only 15% see it as somewhat/very negative." As Afrobarometer summarized:  
Findings from Afrobarometer’s 2014/2015 surveys in 36 African countries, which included a special series of questions on China, suggest that the public holds generally favourable views of economic and assistance activities by China. Africans rank the United States and China No. 1 and 2, respectively, as development models for their own countries. Remarkably, in three of five African regions, China either matches or surpasses the United States in popularity as a development model. In terms of their current influence, the two countries are outpaced only by Africa’s former colonial powers. 
Public perceptions not only confirm China’s important economic and political role in Africa but also generally portray its influence as beneficial. China’s infrastructure/ development and business investments are seen as reasons for China’s positive image in Africa, though that image is tainted by perceptions of poor-quality Chinese products.
While media reports may describe this as something new, in fact it is quite close to previous public opinion surveys on this issue. For data and links, see my past posts on China and public opinion in 2014 and 2010. For my comments on a poorly designed public opinion survey that came to the opposite conclusion from Afrobarometer's rigorous methodology, see here.

The full Afrobarometer report can be downloaded here.

photo source: Afrobarometer.org

Thursday, October 20, 2016

Are Africans negative about Chinese business impact? Good folks, Bad research

In February 2014, the Ethics Institute of South Africa (EthicsSA) released the results of an opinion survey on Chinese business in Africa. "Africans are generally negative about the impact of Chinese business on the continent," EthicsSA announced. "This is the key finding."

Even though the findings surprisingly contradict other public opinion surveys, which are generally positive about China's impact in Africa, they have been cited multiple times by reporters and researchers. Yet I have never seen any critique of the selection and confirmation biases in their (pretty flawed) methodology.

In the past week I have seen this study cited yet again by two papers, including a draft working paper by one of our SAIS-CARI research teams -- which reminded me that this blog post -- which I see I've started and abandoned four times (!) is way overdue.

The EthicsSA team are no doubt good folks, but their report has severe methodological weaknesses that should lead any researcher to treat it not as a proper public opinion survey, but as an excellent example of selection and confirmation bias.

Of course, as a researcher, when I got my first alert about this survey, I went to the full report. It is immediately obvious that it is a bit hard to say something like "Africans are generally negative" on the basis of data primarily from three countries (the online survey had 1056 respondents, mainly from South Africa, Nigeria, and Kenya).  But this may be the least of the significant flaws of the study.

1. Selection Bias

"Selection bias is the selection of individuals, groups or data for analysis in such a way that proper randomization is not achieved, thereby ensuring that the sample obtained is not representative of the population intended to be analyzed (Wikipedia)." 

Is this a representative sample of "Africans" or even the population of the three countries where the survey mainly took place?

Hardly. The full report notes that the researchers elicited responses from 15 African countries -- via the internet -- but received low response rates. Here's how they did it:
"Invitations to participate in the survey were extended to contacts of the Ethics Institute of South Africa (EthicsSA) and of Globethics.net in the respective countries. ... The initial objective was to achieve a representative sample for each of the participating countries. However, reliance on only the networks of EthicsSA and Globethics.net in the participating countries and on the media to encourage participation were insufficient to attract the required response. Thus, the data collected was not representative of the populations of the participating countries. The only countries that produced sizable samples were South Africa (299 respondents), Nigeria (197 respondents) and Kenya (204 respondents). 
So how did this method of attracting respondents bias the sample?

The report notes that the "low response rate can partly be attributed to the online format of the questionnaire. In many African countries, internet access still remains a luxury rather than the norm."

And in keeping with the fact that internet access is "a luxury," the report notes that 54% of the respondents had post-graduate degrees, while another 27% had university degrees. For Nigeria, this bias was even more pronounced with 74.5% of the respondents having post-graduate degrees, and 24% graduate degrees: i.e. 98.5% of the Nigerian respondents were very highly educated. So now we know that very highly educated Nigerians, South Africans, and Kenyans -- and perhaps foreigners living in these countries who are on their contact lists -- do not think positively of the Chinese presence.

But there's more: who are these highly educated respondents?

Recall that the Ethics SA sent invitations to participate to their (highly educated, internet-savvy, deeply concerned with ethics) contacts and those of Globethics.net in the respective countries. This creates even more bias. One might call it confirmation bias.

2. Confirmation Bias

"The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities (Wikipedia). 

To see how confirmation bias worked in this survey, imagine the US Chamber of Commerce doing a survey on free trade by sending it out only to its subscriber list.

And imagine the same survey sent to the subscriber list of an important trade union group, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

Then imagine either organization issuing a press release saying: "Americans are generally ... [negative/positive] ... about free trade."

Now you can see how providing a questionnaire to one's own contact list is likely to reach a biased sample -- of people who are likely to confirm your own beliefs, rather than alternative beliefs.

3. Other Problems

The report had other problems. Let me mention two. There was no effort to find out if those surveyed actually had direct experience of a Chinese company in their country, or had direct experience of Chinese-built infrastructure. Yet they were asked questions that presumed some prior knowledge. This led to some strange responses.
  • Chinese worker myth. More than half of the respondents -- 53% -- agreed or strongly agreed with a pervasive myth: that Chinese companies only use Chinese citizens as employees. On the other hand, 59% agreed that "Chinese companies create employment opportunities for Africans." Go figure.
  • Quality of Chinese construction. In South Africa, only 10% are happy with [Chinese-built] infrastructural projects." Yet due to protections of local services in South Africa and the strength of local contractors, Chinese builders do a very small amount of business in that country: annually the South Africa market is less than 1% of Chinese companies' African construction business. How many South African respondents would actually know anything about a Chinese-built infrastructure project? On the other hand, in Kenya 88% were satisfied with their Chinese construction projects. Given the large visibility of Chinese-built roads in Nairobi, this is more likely to reflect actual experience. But how do we know?
Ultimately, what we have in this survey is a sample of the prejudices and beliefs of a small group of highly educated people in three African countries who are deeply concerned with issues of ethics -- but may not actually know that much about China in their country. 

For the most part, these beliefs of the highly educated classes in three African countries echo what we might expect to find in Europe or the US. This is not unexpected. At the end of the day, given that much about these respondents is held constant (education level almost uniformly high, value system probably quite consistent), it might be only in the variance among them that we can find something useful for analysis.

----
Ethics Institute of South Africa. (2014) “Africans’ Perception of Chinese Business in Africa: A Survey,” (February), pp. 1-41. 

Friday, September 30, 2016

Orient Express: Chinese Infrastructure Engagement in Africa


Save the date for our 3rd Annual China-Africa Research Initiative (CARI) Conference, which will be held on October 13 & 14, 2016 at the Johns Hopkins University School of Advanced International Studies (SAIS) in Washington DC. 
This year’s theme is “Orient Express: Chinese Infrastructure Engagement in Africa,” and we are pleased to have Dr. Jamie Monson, Professor of History and Director of African Studies at Michigan State University, as our keynote speaker. 
The full agenda can be viewed here.To secure your spot at our conference, please sign up here.

Monday, September 5, 2016

Chinese Private Security Companies Go to Africa

Trainee in Beijing bodyguard training camp.  photo credit CFP
China's "going out" policy has landed Chinese firms in many high risk environments. Not surprisingly, this has stimulated the growth of private security companies (PSC) "with Chinese characteristics." The first private Chinese security firm to operate overseas was, apparently, a Ningbo company, in 2004. Although most of these companies operate in truly high risk areas such as Iraq or Afghanistan, they are also increasingly present in places like Kenya.
"The demand is huge especially as more Chinese enterprises will go abroad inspired by the Belt and Road initiative. We are now trying to expand our business to more countries, including Pakistan and Bhutan," one company told the Global Times.
Apparently, however, Chinese law prohibits citizens from having weapons overseas. As Global Times notes, "the biggest obstacle to Chinese PSCs going abroad is the fact that the government does not support their efforts."
According to China's Criminal Law, those who possess weapons overseas - even if they are doing so according to a foreign nation's laws - may face a maximum sentence of seven years in prison. As Chinese PSCs are banned from sending staff abroad, PSCs' security guards are technically employees of clients, rather than PSCs, once they are sent abroad.
Several short articles provide overviews: for Karthie Lee, click here. And for Andrew Erickson and Gabe Collins, here.

h/t to Ying Xia.

Saturday, August 27, 2016

Thoughts on China, Africa, Per Capita Income, and the Environment

Ivindo Nat'l. Park, Gabon. Michael Nichols, Nat'l Geographic
The environmental impact of China-Africa engagement is one of the top concerns of many who are critical of a rising China in Africa. Others acknowledge the issue as important, but maintain that some from wealthy countries want to impose "Volvo" standards in "Volkswagen" countries.

I sometimes think about how these issues emerged in importance in our own country, the USA. This morning, I read a NYT review of a new book about President Franklin D. Roosevelt, who was the architect of so much of our government's institutional structure. Following in the footsteps of his presidential cousin Teddy Roosevelt, Franklin "created 140 national wildlife refuges, established 29 national forests and 29 national parks and monuments" but he also built many "habitat-destroying hydroelectric dams" and put in place the foundation of our national highway system.

Roosevelt was a visionary. In 1940, he made a speech at Great Smoky Mountains National Park:
We slashed our forests, we used our soils, we encouraged floods ... all of this so greatly that we were brought rather suddenly to face the fact that unless we gave thought to the lives of our children and grandchildren, they would no longer be able to live and to improve upon our American way of life.
In 1940, our income per capita (in 2008 dollars adjusted for inflation) was approximately $7,446. China's income per capita in 2015 (in constant 2010 dollars, according to the World Bank) was about $6,416.  For Sub-Saharan Africa (excluding high income countries), inflation-adjusted per capita income was about $1,651 in 2015.

If environmental concerns rise along with income, as many social scientists believe, China should be approaching a time when sustainability becomes a real, genuine, and public concern for its leaders. Indeed, there is some evidence that over the past decade with the green credit movement and the establishment of a Ministry of the Environment, this is happening. Yet in Africa, it's far more likely that slashed forests, depleted soils, and the encouraging of floods will continue to plague the lives of parents, their children, and their grandchildren, for many years to come. And Chinese companies seeking business will continue to be part of this.

Tuesday, July 26, 2016

Policy Briefs: Cutting Edge China-Africa Research from SAIS-CARI

check out these china-africa publications from the SAIS China africa research initiative (sais-cari):

POLICY BRIEFS

  • Policy Brief 01/2014The Political Ecology of Chinese Investment in Uganda: the Case of Hanhe Farm, Josh Maiyo.
  • Policy Brief 02/2014Chinese Agricultural Investment in Mozambique: the Case of Wanbao Rice Farm, Sérgio Chichava.
  • Policy Brief 03/2014Chinese Training Courses for African Officials: a “Win-Win” Engagement?, Henry Tugendhat.
  • Policy Brief 04/2015Chinese Agricultural Engagement in Zambia: A Grassroots Analysis, Solange Guo Chatelard and Jessica M. Chu.
  • Policy Brief 05/2015Chinese Agricultural Entrepreneurship in Africa: Case Studies in Ghana and Nigeria, Yang Jiao.
  • Policy Brief 06/2015Assessing 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.
  • Policy Brief 08/2015: Chinese Financed Hydropower Projects in Sub-Saharian AfricaDeborah Brautigam, Jyhjong Hwang, and Lu Wang.
  • Policy Brief 09/2016Looking Back and Moving Forward: An Analysis of China-Africa Economic Trends and the Outcomes of the 2015 Forum on China Africa Cooperation, Janet Eom, Jyhjong Hwang, Ying Xia, and Deborah Brautigam.
  • Policy Brief 10/2016: What Happened to China Development Bank’s $3 Billion Loan to Ghana?, Thomas Chen.
  • Policy Brief 11/2016: How Chinese Money is Transforming Africa: It's Not What You Think, Jyhjong Hwang, Deborah Brautigam, and Janet Eom. (Updated April 31, 2016).
  • Policy Brief 12/2016Media Training for Africa: Is China Exporting its Journalism?, Jákup Emil Hansen.
  • Policy Brief 13/2016Technology Transfer in Telecommunications: Barriers and Opportunities in the Case of Huawei and ZTE in South Africa, June Sun.
  • Policy Brief 14/2016Do Huawei's Training Programs and Centers Transfer Skills to Africa?, Benjamin Tsui.

WORKING PAPERS

  • Working Paper 01/December 2015Chinese Engagement in Hydropower Infrastructure in Sub-Saharan Africa, Jyhjong Hwang, Deborah Brautigam, and Nancy Wang.
  • Working Paper 02/January 2016: Learning from China? Manufacturing Investment and Technology Transfer in Nigeria, Yunnan Chen, Irene Yuan Sun, Rex Uzonna Ukaejiofo, Tang Xiaoyang, and Deborah Brautigam.

Thursday, July 7, 2016

Shout Out: Policy Studies on China-Africa Engagement

SAIS-CARI has been publishing a great policy brief series, if I do say so myself, but we are pleased to be part of a growing trend of interesting work by people with hard-earned and very useful knowledge about China-Africa relations. A few things that have come across my desk (or, more accurately, my email inbox) in recent months:


  • While it's not specific to Africa, colleague Dr. Naohira Kitano at JICA has just published an update of his careful, ground-breaking work on China's overseas official development assistance. Kitano estimates that "China’s net foreign aid increased from US$5.2 billion in 2012 to US$5.4 billion in 2013, but dropped to US$4.9 billion in 2014." 
  • Richard Carey and Jing Gu at the Institute of Development Studies in the UK. I've known both for many years now. Richard was a key figure in the China-DAC Study Group headquartered at the OECD Development Assistance Committee; I attended several of their meetings in the early days of attempts to forge contacts and connections between DAC members and China. Richard and Jing Gu have published a great policy brief on China's Development Finance, focusing helpfully and constructively on the transparency issue.
  • Yuan Wang, Simon Zadek, and a team of people at The International Institute for Sustainable Development has published a very detailed literature review (384 papers!) of the Sustainability Impacts of Chinese Overseas Foreign Investment.This should be the starting point for anyone doing research on this important issue.

Friday, June 24, 2016

China and Africa: Venus and Mars

After the meeting with Mugabe: credit Xinhua
Do you remember the book: "Women are from Venus, Men are From Mars"? It described two very different communication styles. Sometimes I think Chinese and Africans are also speaking past each other. Take this recent headline story from the Herald, the state-controlled Zimbabwe paper: "Zimbabwe: China Envoy Meets President On Deals." The reporter says that China dispatched a special envoy to update President Mugabe on "progress made in the implementation of mega-deals that were signed when the two leaders paid each other reciprocal State visits," noting that "Beijing pledged to bankroll a number of infrastructural projects."

But what kind of new deals did the Chinese really agree to do? And what progress did they report? They agreed to build a new parliamentary building. (Perhaps they are getting ready for a political transition that can't be too far off). The envoy gave fulsome details:  "I reported to President Mugabe that China has already completed the design of the Parliament building and submitted three design plans to the Zimbabwe side and we are waiting for the confirmation from the Zimbabwean side for the early launch of this project." The Chinese also donated 20,000 tons of rice to help Zimbabwe weather its drought. The envoy talked about three projects financed several years ago (Victoria Falls airport and Harare water system, and a power project). No other projects were mentioned.

(In a similar move, after Nigeria's president visited China recently, the Nigerian press was full of stories about an alleged $6 billion loan pledge for infrastructure. Yet there has never been any confirmation of a loan package from the Chinese, who have so far said only that they are prepared to provide a grant of $15 million to help agricultural development in Nigeria. I doubt very much that there was ever a loan pledge -- but I also wouldn't be surprised to see this enter the databases as a commitment of "Chinese aid".)

Some in Zimbabwe understand that their state media is required to trumpet the "success" of Harare's "Look East" policy. Yet most understand that China is not providing much assistance to their troubled country. As Brett Chulu wrote in the Zimbabwe Independent recently about the lack of Chinese support: "There must be something fundamentally amiss when as a country we are failing to access meaningful finance from our supposedly all-weather friend's sea of cash."

So, on the official African side: China is supporting us, big time! On the official Chinese side, the announcement of a donation and a prestige aid project. Venus and Mars?

Saturday, June 18, 2016

Guest Post: Is China taking control of Zambia's national broadcaster? No, it is not.

This guest post is by Dani Madrid Morales  | 马诞宁 
PhD Fellow - Department of Media and Communication  | 博士研究员-媒体与传播系
City University of Hong Kong


Is China taking control of Zambia's national broadcaster? No, it is not.

On September 19, 2015, Zambia's Ministry of Information and Broadcasting Services (MIBS) signed a contract worth US $ 273 million with China's Star Software Technology, a subsidiary of Star Times, to implement phases 2 and 3 of Zambia's migration to digital terrestrial television after successfully winning a public tender . The story which reported at the time by well-established local news outlets,: such as the Zambia's Daily Mail , and international media: such as Reuters . Now, fast-forward to May 2016 When the story resurfaced on a Zambian blog called Zambia Watchdog , but with a very different spin and at alarming headline: ". Startimes cheats PF, signs contract to take over ZNBC operations"

It does not take one long to notice did Zambia Watchdog is a dubious source of information, with a very strong negative bias towards the ruling party, the Patriotic Front (PF) and, by extension, towards China, Which enjoys cordial relationships with the PF , The blog presents itself as a source of "Breaking and Investigative Journalism on Zambia," but reads more like an infuriated collection of difficult-to-believe stories. Here are two representative posts of how China is framed in the blog: " Chinese assassins hired to kill HH, GBM arrive " (June 14, 2016) and " Another minister in China to admire buildings and thank China " (May 29, 2012) , All the stories in the blog are anonymous.

Despite the obvious bias, the May 2016 post on Zambia Watchdog about the takeover of ZNBC, Zambia's National Broadcasting Corporation by Star Times, which soon picked up Nigeria's Leadership newspaper and Several industry blogs, like the one curated by South African journalist Thinus Ferreira , a regular contributor in South African media on television-related stories. None of the two reached out to Star Times for comment. Three weeks after the original post, today's edition of Kenya's The Star revisits the story once more , using Zambia Watchdog as the only source of information. Even if we ignore the factthat republishing a story three weeks after it allegedly occurred does not leave The Star in a very good position, the real trouble in this case is did the original Zambia Watchdog post what plagued with inaccuracies, omitted information and sought no other objective than presenting a distorted view on Startimes operations in Zambia, and criticizing the PF. Here are three of the many inaccurate / incomplete claims in the blog post, Which all Subsequent reports cite.

# 1 - "[T] he deal hands over control of public broadcasting in Zambia to the Chinese for 25 years."
Even though the details of the 2015 agreement were not made public, the takeover of the public broadcaster by a foreign entity would require the amendment of the Zambia National Broadcasting Corporation Act, something Which would Not Easily pass through Parliament without a lot of publicity.

# 2 - ". In the tender process" "In September 2013, Zambia's government canceled a digital terrestrial TV tender Awarded in 2011 to China-backed Star Times Group subsidiary Star Software Technology, due to" Irregularities

In 2013, Zambia's government indeed canceled the tender Awarded to Star Times for phase I of the digital migration, after complaints by two of the other four bidding companies, all of Which, by the way were Chinese (Huawei, ZTE, Gospel Digital Tech and King Tai Investments). HOWEVER, in 2014 Star Times which again Awarded the tender for phase 1, Which what completed in 2015, and then what Awarded tenders for phases 2 and. 3

# 3 - "Under the terms of the deal, Star Times Appears To Be Determined to exclude all other players from the market."

The contract not only does not give Startimes a monopoly over the provision of terrestrial television digital services, but the government has Introduced specific quotas for local content on new stations created after the opening up of frequencies.


There are probably two takeaways from this story, All which is neither the first nor will it be the last in the Which Chinese companies' investments in Africa are misreported. First, Chinese deals in the information and telecommunication sectors in Africa are Usually opaque, Which Means They are difficult to be Subjected to public scrutiny. This sometimes leads to Increased suspicion. A more transparent and open communication strategy by companies like Star Times, Huawei or ZTE Could Certainly reduce examined public skepticism. Second, the ease at Which inaccurate information can be circulated and Reproduced online these days makes it more important for journalists to follow basic professional standards: such as using multiple sources, checking for accuracy of statements and presenting all possible views on a story. Unfortunately, as this blog can testify, thesis are too oft forgotten. 

Friday, June 17, 2016

China's "$10 billion industrial park" in Morocco

Did you see the one about the "$10 billion industrial park" to be built by a Chinese company in Morocco? Don't hold your breath on this one actually happening, but you can be pretty sure that it will enter some of the "Chinese investment" databases as a real investment.

Here's why I have my doubts. The story I saw, circulated by the Center for Chinese Studies in Stellenbosch -- "Morocco, China to Build Industrial Park with $10 bn Investment" -- comes from an official Chinese media source, Xinhua. You might think this would make it more reliable, but read closely. Xinhua is simply repeating a story they picked up from a Moroccan newsite, Medias24.com.  And the so-called investment is simply a memorandum of understanding -- a record of talks.

A quick search reveals that Morocco does hope to set up an industrial park where Chinese firms can manufacture for the European market. An MOU to this effect was signed during Moroccan king Mohammed IV's state visit to China:
"Moreover, Morocco would specially establish a 10 square kilometers industrial zone in the Tangier port in the north Morocco, which is only about 15 miles from Europe, so companies in the industrial zone will be able to send its products to any place in Europe. [Morocco's Minister of Foreign Affairs and Cooperation] says that they welcome Chinese companies, especially who are in automobile, textile and astronautics sectors."
 But there is a long way between a discussion and an investment. One African analyst I quoted said that fewer than 5 percent of MOUs ever result in a project. So, as I said, don't hold your breath.

Saturday, June 11, 2016

China's Humanitarian Aid: Why Is it So Low?

Chinese humanitarian aid is growing, but it's still low compared with the country's wealth. My Google Alert picked up an IRIN article on China's humanitarian aid: "Africa: When Disaster Strikes, Should China Do More?" In The Dragon's Gift, I outlined how the Chinese provide humanitarian aid, and how it had been "greatly increased," from a very low starting point. This began with the Indian Ocean tsunami disaster in early 2005. These increases seemed to have generally been sustained. China's official foreign aid white paper published in 2014 noted that China had provided "1.5 billion yuan ($238 million) worth of materials and cash assistance in emergency humanitarian aid to more than 30 countries" between 2010 and 2012, or an average of nearly $80 million annually.

Humanitarian assistance, according to one definition, means "aid and action designed to save lives, alleviate suffering and maintain and protect human dignity during and in the aftermath of man-made crises and natural disasters, as well as to prevent and strengthen preparedness for the occurrence of such situations." Given the increase reported above, I was surprised to read in the IRIN article that Chinese humanitarian aid for 2014 amounted to "only $54 million" with a source cited as "Development Initiatives." Wasn't 2014 the year of the ebola epidemic, when the Chinese were being praised for their quick and fulsome response?

In January 2016, the Chinese provide a summary of their assistance to the ebola epidemic: "As of November 2014, China offered humanitarian aid worth 750 million yuan (about 113.77 million dollars) and sent thousands of medical personnel to Ebola-hit countries in four rounds of campaigns." (The costs of the medical personnel were not included in the aid figure).

The Chinese are not used to being part of the global donor community, and are not savvy about reporting the value of all of their contributions (i.e. what was the value of the time of the medical personnel? What did it cost to send and house and equip them? They didn't make this calculation). In addition to this figure which is more than double the one cited in the IRIN article, China's contributions in 2014 included sending over 2000 UN Peacekeepers to locations around the world, including Haiti, and posting 55 medical teams on two year assignments, treating patients in 54 countries (this might not be seen as humanitarian aid, but some of these teams are operating in conflict-affected countries).

Yet it's clear that China could do more. Let's take what seems to be the highest annual figure ($113.77 in 2014). With a population of 1.3 billion, this comes to about 9 US cents per person.

The IRIN reporter wrote that China's humanitarian aid is administered by the Ministry of Commerce (which declined to answer their request for an interview). MOFCOM does administer China's official development assistance program, but that's different from humanitarian aid, where MOFCOM is only one part of the foreign emergency response mechanism. It also involves the Ministry of Foreign Affairs, the Foreign Affairs office of the Ministry of National Defense and the Ministry of Civil Affairs.

For two, rather more useful overviews of Chinese humanitarian aid policy, see the ODI policy brief and related ODI blog post by Hannah Krebs, and a UNDP policy brief on this topic.


Friday, May 27, 2016

New Essays: China-Africa, A Maturing Relationship?


c. UNIDO/FlickrJust in time for Memorial Day Weekend: "New policy essays: China-Africa: a maturing relationship? Growth, change and resilience"   DEGRP has just published its latest set of policy essays based on discussion at a DEGRP event held in Johannesburg last December, in parallel with the second summit of the Forum on China-Africa Cooperation Summit.  Featuring contributions from DEGRP China-Africa researchers, as well as a keynote speech from ex-World Bank Chief Economist Justin Yifu Lin, it addresses issues such as industrialisation, employment dynamics, conservation, governance, and peace and security, all in the context of changing China-Africa relations. Download the set of essays here.


Monday, May 23, 2016

Seeking China-Africa Practicum Clients for 2016-2017

Zhongfu Practicum Team in Nigeria, January 2016
Dear Colleagues,

With generous funding from Carnegie Corporation of New York, the Johns Hopkins University School of Advanced International Studies (SAIS) China Africa Research Initiative is sponsoring one or two student practicum groups in the International Development Program (IDEV) to do practicums on a China-Africa related topic in the 2016-2017 academic year. (Click here for a story by one of our 2015-2016 China-Africa practicum teams). We are currently seeking practicum clients.

The practicum class is a capstone option for second year master’s degree students at SAIS. Four person teams work under faculty supervision for a client, on a development-related problem. We have funding for teams to do fieldwork during the 4 week January intersession. The practicum class gives students the opportunity to use their incredible analytical, research and management skills and it gives prospective employers a chance to work with our students as free consultants. Practicum terms of reference or contracts are determined in collaboration with the client. The students do not receive a stipend.

In past years our students have worked with the Zhongfu Free Trade Zone in Nigeria, Sino-African Center of Excellence in Nairobi, ASER Center in India, FEMSA Foundation in Mexico, Mercy Corps in the Philippines, PFAN (Deloitte) in Cambodia, the World Bank Water and Sanitation program (Cambodia), and World Resource Institute (China and the Philippines) and other clients.  They have worked on a range of tasks from designing and conducting impact evaluations, stakeholder analysis, and communication and outreach tools, to a learning manual for decision-makers in rural sanitation. Here’s a link to past year’s projects and presentations: click here.

If you have ideas about a practicum project on China-Africa (normally NOT a research project per se but something that would involve something more applied: an evaluation, design, survey, strategic plan, etc.) please contact me directly by June 15. You may find out more about the IDEV program on the SAIS webpage.

Best,

Deborah Bräutigam
Director, SAIS China Africa Research Initiative
Director, SAIS International Development Program

Friday, May 6, 2016

Guest Post: Report from Yiwu: Made in Africa, By China?

Photo credit: Yunnan Chen
This guest post is by SAIS Ph.D. student Yunnan Chen, who recently attended the fifth China Africa Think Tank Forum, held this year in the city of Yiwu, Zhejiang: 

The forum, organized by Zhejiang Normal University with the support of the Ministry of Foreign Affairs (MOFA), China Development Bank (CDB), and, this year, the Yiwu Municipal Government, brought together representatives from these institutions, Chinese and international scholars, officials from African embassies, and representatives from the Chinese and African business communities, to discuss the theme of African industrialization—and the role of Chinese policy and investment.

The forum served as a follow up from the 6th Forum on China Africa Cooperation (FOCAC) held in Johannesburg in late 2015, where Xi Jinping pledged $60bn USD of finance for Africa, some of which would be channelled into fostering African industry—continuing to build and transform the China-Africa commercial relationship. Representatives from Yiwu were also keen to showcase the city’s brand as the small commodities capital of China (and therefore the world). Tying into this broader theme, our recently published SAIS-CARI working paper, “Learning from China? Manufacturing Investment and Technology Transfer in Nigeria”, was one of many presentations and talks discussing aspects of China-Africa cooperation in industry. A number of themes emerged at the Forum:

Structural transformation and opportunities to industrialize: Ethiopia and Rwanda came up again and again:  their representatives highlighted the key role that China was playing in their industrial sectors. H.E. Arkebe Oqubay, the economic advisor to the PM of Ethiopia, outlined the growing importance of manufacturing to Ethiopia’s structural transformation and China’s role as a model, as well as a source of FDI. Many emphasized the critical timing: Helen Hai, the CEO of Made in Africa and UNIDO Goodwill Ambassador, told her story of leading the successful entry of Chinese shoe factories into Ethiopia, positing that as China’s economy restructures away from manufacturing, Africa can capture some of the these 85m labor-intensive jobs that will need to relocate.

Infrastructure development and regional integration: A number of speakers, including Charles Kayonda, the Rwandan ambassador to China, discussed the need for infrastructure “corridors” and regional integration, noting that China is already actively building telecommunications and railway networks. Lin Songtian, director of African Affairs at MOFA, promised further cooperation with key partners including Egypt, Angola, Ethiopia, Kenya, and Tanzania, among others, in the construction of “industrial corridors” and “demonstration sites.”

China as a responsible partner: Whilst most participants were relentlessly positive on the outcomes of China-Africa cooperation, some also addressed the flip side of China’s African engagement. MOFA’s Lin Songtian emphasized the need for a more responsible approach to debt sustainability and the financial burdens created by Chinese loans. He also acknowledged that Chinese companies need to respect local laws. One interesting presentation from a Chinese risk management firm discussed some of the growing security issues that Chinese enterprises faced abroad, and his company’s role in addressing these, indicating a growing awareness (and demand) from Chinese businesses for information and insurance in going out. (He dryly described much of their work as “wiping bottoms”, i.e. clearing up messes that Chinese themselves had caused.)

Human capital and soft infrastructure: Hard infrastructure is not enough—a number of Chinese and African participants voiced the need for greater investment in human capital, a means for Chinese firms to ‘give back’ to local communities. As one Chinese firm, Touchroad International, argued, localization would be a necessary trend for Chinese firms going abroad, using the firm’s activities in Djibouti as an example of emerging Chinese Corporate Social Responsibility (CSR). Takyiwaa Manuh, director of the UN Economic Commission for Africa (UNECA), commented that Chinese firms needed to do more in technical education and training initiatives (such as agricultural training and other vocational centres) as part of the necessary soft infrastructure to support economic modernization and industrialization.

Policy alignment between China and Africa: at the policy level, H.E. Liu Guijin, former ambassador and currently dean at Zhejiang Normal University, argued the need to align the AU’s Agenda 2063 with China’s Five Year Plans—to embed China into African development strategies. Representatives of the host city of Yiwu also stressed the significance of the Belt and Road policy, for Africa, and for Yiwu city itself, which portrayed itself as the final link of the Belt and Road in China. Commenters such as CDB’s Xu Yingqiu emphasised that places like Yiwu could play a role in integrating Africa into these global supply chains. Still, there is not a little irony for a city like Yiwu—as a trading hub and capital of small commodities and wholesale—to be championing African manufacturing and industry that would compete against the types of light manufacturing goods that the city currently exports.

Though the forum was a rather grandiose--as the photo shows--means for China, and Yiwu in particular, to showcase its achievements and reinforce the positive political message of China-Africa cooperation at the elite level, the wider inclusion of business representatives and emphasis on commercial engagement indicates a growing significance for firm-level initiatives and firm-level responsibility in the evolving China-Africa economic relationship.

Monday, May 2, 2016

New Signs of Chinese Efforts to Improve Labor Relations in Africa?

Tanzanians working on Chinese-built road (2011) photo: DB
May 1 is International Labor Day almost everywhere except the USA. Today I noticed media reports from several African countries such as Uganda and Tanzania that local Chinese Chambers of Commerce were giving awards for the best workers in Chinese companies, and to Chinese companies for being the best employers. Chinese ambassadors spoke at several of these award ceremonies.

Interesting to see that Chinese embassies are urging Chinese employers to do more to train their African workforce, investing in their skill development; boost incomes (pay higher wages?); and deliver benefits in accordance with local laws.

Although some African countries (South Africa, Mauritius, possibly others) have longstanding Chinese Chambers of Commerce, I noticed around 2006 and 2007 that Chinese embassies were pushing leading state-owned enterprises in African countries to take on the role of heads of these Chambers and to use them as ways to help socialize Chinese companies into local laws and regulations. The evolving role of these business associations would be an interesting research topic.

Saturday, April 30, 2016

China-Zimbabwe Conflict Heats Up

Photo credit: xinhuanet.com
Great analysis by SAIS Ph.D. student Yun Sun, non-resident analyst at Brookings: "China’s pains over Zimbabwe’s indigenization plan,"April 26, 2016.

The announcement that Zimbabwe would require 51 percent indigenous ownership for all foreign investments was made some time ago, and since then, the issue has been debated in the courts and policy circles. As I noted in a 2014 story in this blog: "China: Exempt from Zimbabwe's Indigenization Policy?" many believed that Chinese companies were exempt but this was never the case, as I pointed out then, and as we are seeing now.

One Chinese company, Tian Ze, active in the tobacco sector working with local black tobacco farmers, was exempted from the requirement due to its extensive involvement in propping up the local farming effort.

Yun Sun makes another important observation:
Zimbabwe’s indigenization is yet another case of China’s lack of preparedness toward local sovereign risks and a lesson in how to operate in less developed, authoritarian countries with poor investment environment. 
I would add to this that Zimbabwe (like Sudan/South Sudan) remains an important case where we continue to clearly see multiple examples of diplomatic efforts aimed at changing/influencing domestic policies (and politics). As these cases suggest, just what "non-interference in internal affairs" means continues to change, and Africa may be where we can see this most clearly.  

Friday, April 29, 2016

The Economist on our New China-Africa Loan Data

Our new China Africa Research Initiative (CARI) data on Chinese loans in Africa was featured in an article in The Economist today. I'm pleased that they featured our findings that China Eximbank is not (as widely believed) a bigger lender to Africa than the World Bank:

In 2011 Fitch, a rating agency, reported that over the previous decade the China Export-Import Bank had lent more than the World Bank to sub-Saharan Africa*. In fact, say the CARI team, the World Bank has been the bigger lender every year in the past decade bar two, although Chinese lending is catching up.

The graph above shows our data for lending by both banks to all of Africa (north and sub-Saharan). If you only focus on SSA, World Bank figures drop below China Eximbank in 2008 and 2013.

We will be reporting more highlights from our data in subsequent posts.

Tuesday, April 26, 2016

Surprises from our CARI Working Paper on Chinese Manufacturing Investment in Nigeria

photo credit: Irene Sun
The SAIS China Africa Research Initiative (CARI) has published a new working paper on Chinese Manufacturing Investment in Nigeria: "Learning from China? Manufacturing Investment, and Technology Transfer in Nigeria." This paper builds on our Center for Economic Policy Research grant, "The Role of Asian Investment in Manufacturing in Catalyzing Economic Development in Africa," which is intended to study linkages and FDI spillovers from Asian/Chinese investment in four countries: Nigeria, Ghana, Tanzania and Ethiopia.

We gathered data from 20 Chinese and 21 Nigerian manufacturers, looking for linkages between Chinese and Nigerian firms and institutions. Our research in Nigeria found some surprising things:

Private firms. Most of the factory investors we interviewed were private investors or single entrepreneurs without state support; most have relocated directly from the coastal regions of the mainland such as Zhejiang, Shandong and Jiangsu.

Political backing from Nigerians. Instrumental actors such as the former governor of Ogun State, Daniel Gbenga, a staunch advocate of Chinese investment in Nigeria, played a role in attracting Chinese FDI, telling one of the authors: "the Ogun-Guangdong FTZ (Free Trade Zone) is my baby."

Local distributors, not Chinese shops. Nearly all Chinese factories in Nigeria relied on local distributors for their goods. According to Hong Kong businessmen with longtime investments in Nigeria, there is an "unwritten rule that Chinese business stops at the factory door," at which point local distributors take over.

No investment in supplier upgrading. None of the Chinese factories we interviewed had actively invested in upgrading the technology or skills of their local suppliers. Chinese firms still import the majority of their raw materials from China; only low-value and bulky materials such as rock for ceramics, scrap metal, and wood for furniture are purchased locally. Many entrepreneurs complained about the poor quality of local materials.

Learning is happening. The Chinese firms we sampled employ over 80 percent of their workforce locally. In Calabar, the Baoyao steel mill uses ship wreckages as raw material. This requires a higher level of technical ability; as such, its welders have become renowned for their skill and speed. "It's like we opened a school!" said Mr. Zhang.

A growing role of "agent suppliers," Chinese traders and businessmen living in Nigeria whose business it is to serve as middlemen between Nigerian manufacturing firms (generally in the south-east) and Chinese suppliers. They arrange contacts between factories in China that specialize in the required area and often earn commissions.

Training Nigerians in China. The Nigerian manufacturers had robust linkages to Chinese equipment suppliers, their "technical partners," who sent engineers and technicians to install machinery and train Nigerians. Some Nigerian firms have also sent staff for training in China.

The mystery of Yumei solved: The only intentional experiment of industrial clustering appears to have been the so-called Yuemei Fabric Industrial Zone (YFIZ), which Shen (2013) discusses as a successful case of a private industrial estate. Shen reported that twenty firms had invested in the zone, which was said to have been built by a Zhejiang company, Yuemei. We actually visited the so-called Yuemei cluster in Calabar, which was renting space in the Calabar Free Trade Zone. The Zone operators reported that only two firms ever came to invest in this cluster: Mawa, which specialized in textile dying and printing, and Jinmei, which specialized in embroidery. Both were evicted in early 2014.

Thursday, April 14, 2016

Join me in launching a NEW database of China's Africa loans

In 2009, I published The Dragon’s Gift: The Real Story of China in Africa. And in 2010, I wrote my first post on my blog, China in Africa: The Real Story. Since then, I have continued searching for and telling you the “real story”: what China is really doing in Africa, instead of rumors of what it might do. In 2014, I launched the China-Africa Research Initiative at Johns Hopkins SAIS to continue busting myths and getting the facts right. And at SAIS-CARI, I have made tracking down Chinese loans to Africa our main research project, after years of doing it on my own.

Now, I am proud to be launching SAIS-CARI’s NEW database of Chinese loans to Africa. Next week at SAIS in Washington, Thursday, April 21, 10:30 to 1:30 at Policy Roundtable: How Chinese Money is Transforming Africa: It’s Not What You Think, we will unveil our exclusive insights into Chinese loan finance. SAIS-CARI’s core team of 14 researchers has been collecting, cleaning, and analyzing China’s Africa loans, and now we are providing our work to the public for the first time. In coming months, we will expand ways for the public to engage with our database. But for next week, we will explore some surprising insights: 


  • Who gets the Lion's share of the Dragon's loans?  Angola received 25% of all Chinese loans to Africa between 2000 and 2015, almost all of them backed by Angolan oil.
  • Bloomberg and Fitch, take note: Did China Eximbank really lend more than the World Bank in Africa? SAIS-CARI data shows cumulative 2001 to 2010 China Eximbank loan to Africa amount to only US$27.2 billion, not your figure of US$67.2 billion. The World Bank is still a larger lender than China Eximbank.
  • What do Chinese loans pay for in Africa? Transportation. Between 2000 and 2014, transportation received the largest share: US$23.6 billion worth.
  • What are the biggest Chinese loan-financed infrastructure projects in Africa? No. 1: Kenya's Mombasa-Nairobi Standard Gauge Railway Phase I, funded by US$3.6 billion worth of Chinese loans; No.2: Ethiopia's Addis-Djibouti Railway, funded at US$2.5 billion. Both were signed in 2013.

I hope you will join us next week in understanding how Chinese money is actually impacting the African continent. Please make sure to RSVP in advance.