Confronting criticisms in Sino-African ties
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E-mail China Daily, May 18, 2012
Granted, the Chinese state plays a far greater role in China's affairs than do the states in many advanced economies. However, deregulation, privatisation of state-owned enterprise, the incorporation of capitalist ideals and the extension of property rights have advanced dramatically. In fact, the Global Entrepreneurship Monitor, which indexes the level of entrepreneurial activity across countries, scores China at 16.2, far ahead of peer-emerging markets Brazil (11.7), Malaysia (11.2), South Africa (5.2) and Thailand (15.2) (Pottinger, 2008).
China's experience suggests that, at this juncture, economic reforms that enable the private sector to flourish in Africa, underscored by competitive market forces, will go a long way in growing African economies. Recent developments confirm that Africa's improved economic performance since 2000 has been underpinned by a number of internal structural improvements, including: responsible macroeconomic management; improved agricultural output and industrial management; relatively stable political frameworks; support in the form of aid; and debt relief. The many macroeconomic and microeconomic reforms Africa has undertaken over the past decade even enabled the continent to avoid falling into the recessionary spell of the mature economies during 2009. Moreover, Africa becomes more attractive for commercial partnership for all potential suitors as stronger, larger and more stable markets develop.
The notion of a contradiction between China's success and the Washington Consensus is, in large part, simplistic and misleading. Furthermore, the idea that African governments are predisposed to prefer strong state-involvement is an over-generalisation. The New African (2008:14) reports that "the fact that China has come up with an economic and political development model that seems to have produced tangible results in terms of poverty alleviation and national control of assets makes the country more appealing to most African countries." In a similar vein, Kurlantzick (2006b:3) notes that China offers a development model to the developing world, in which the state controls development from the top. The tendency to view African policy choices through the prism of West and East has overplayed the ideological underpinnings of reform choices made by governments across the continent.
China is offering a different style of engagement rather than a different economic model to the Washington Consensus. China's bilateral, investment and trade with Africa should be seen as an enabler for African governments to further their own economies and develop their own brand of development ideology that builds on the current development discourse and empirical evidence.
Twin trade-related challenges to China's Africa strategy
At the turn of the century, Africa was struggling to participate fully in the fast moving globalised world. Fortunately, China-Africa trade increased from USD8 bn in 1990 to USD106 bn in 2008, doubling in nominal terms every three years.3 Today, China accounts for more than one-tenth of Africa's trade, playing a critical role in doubling Africa's share of world trade from 1.7% in 2001 to 3% in 2008. Impressively, China-Africa trade has proven resilient to the global recession, declining by 14% y/y from USD106.8 bn in 2008 to US90.5bn in 2009. Furthermore, excluding China's bilateral trade with Angola, which declined from USD26 bn to USD14 bn over the last year, Sino-African trade declined by a mere 8%, amidst great global macroeconomic uncertainty. In contrast, Africa's trade with the more mature partnerships of Japan, US and France declined by 45% y/y, 39% y/y and 22% y/y, respectively. Promisingly, the decline in international trade reached an inflection point towards the tail end of 2009, which has infiltrated industrial production and economic activity across the globe that will, in time, support income. However, a few important concerns regarding China-Africa trade exist.
Africa only exports minerals and energy to China
Challenge: Many argue that Africa's exports to China reflect a disproportionately large share of raw material minerals, implying that Sino-African trade has limited meaningful positive domestic multipliers for Africa.
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