With every passing generation, the hope remains. This is going to be the time that Africa finally breaks out of its seemingly endless spate of poverty, and starts enjoying a standard of living approaching if not comparable to that enjoyed everywhere else, with the possible exception of Micronesia.
A Long Slog to Self-Sufficiency
Since the colonial era ended in the 1960s, Africa’s growth has been steady but not spectacular. Nor has it been uniform. Take Botswana, which is teeming with diamonds and has a government that’s largely honest. The nation enjoys a relatively high standard of living, but even then you have to ignore the poignant fact that a quarter of the nation is HIV positive. Meanwhile, Niger is generally regarded as the poorest nation on Earth, with a life expectancy of 58 years, although that number has risen dramatically since independence.
Oil, Gas and China
Petrochemicals can make any nation wealthy, or wealthier, although exploiting the riches typically requires help from a more developed nation. For much of Africa, that nation is China. Sum the entire continent, from Tangier to the Cape of Good Hope, and China is its largest trading partner.
Why China and not the United States? For one thing, the question is misleading. It’s odd to speak of a continent’s largest trading partner, especially since any given country’s largest trading partner is likely going to be another country on that continent. For instance, what country is North America’s largest trading partner? Also China, but that reinforces the point: North America-China trade is dwarfed by Canada-U.S. trade and Mexico-U.S. trade alike. For the sake of completion, Europe’s largest trading partner is the United States. So is Asia’s. Australia’s largest trading partner is China, and South America’s is either China or the United States. It looks like we’ll have two nations dominating world trade until further notice.
Relatively Speaking
China-Africa trade surpassed $200 billion last year, which is about the size of the United States’ trade with Japan. But like most superlatives involving China, the raw number isn’t as meaningful as either the direction or the acceleration. For the mathematically inclined, we’re talking about a vector, not a scalar. China-Africa trade has increased 20-fold this century.
Why?
From China’s perspective, the reasons are primarily political. More development should mean greater alliances. And allegiances. If you want to argue that every part of the world now falls either in the Sinosphere or under American influence, in a 21st century version of the Russo-British Great Game, the logical question should be: “Why isn’t it the United States that’s dominating trade with Africa instead?” U.S.-Africa trade was about $85 billion last year. There are several explanations, not least of which is that these days the American public has little taste for economic annexation of foreign lands. Meanwhile, the Chinese government doesn’t gauge its citizens’ opinions before committing. Also, take criteria such as environmental concerns – how many Congolese dwarf frogs will be put out if we build this dam? Such topics are second nature in the regulated Western world, and are of almost no interest to decision-makers in China and/or Africa.
A Finger on the Future
One ominous rationale for China’s sudden interest in the poorest continent is that it enables China to buy sovereignty at discount prices. Chinese investment makes up double-digit percentages of several African nations’ gross domestic products. Give the Zambian government a lifeline, the thinking goes, and they’ll be indebted to you forever. Purely coincidentally, Zambia produces more cobalt and copper than any other country in Africa.
Unfortunately for China, a country needs something productive to do with all those metals. Chinese growth was “only” 7% last quarter, which is significantly down from earlier in the decade. The increase in aggregate demand is slowing, which could depress both the prices and quantities sold of those raw materials. But again, the growth in China’s formerly turbo charged economy remains positive. A reduction in the rate of growth still means growth, and the Chinese economy continues to develop faster than the country’s population increases.
For your average Kenyan or Tanzanian, Chinese investment is awesome. For one thing, it means new infrastructure: the Nairobi-Thika Superhighway, built largely with Chinese funds, is of a quality that rivals many North American limited-access roads.
Still, the long-term prognosis for Sino-African trade is contingent on the corruption or lack thereof in the countries in question. Equatorial Guinea has lots of oil and one of the 30 highest per capita incomes in the world. Equatorial Guinea also has a brazenly crooked government, and a median income that’s a tiny fraction of its ballyhooed per capita income. But that doesn’t stop China from supporting Teodoro Mbasogo’s dirty regime, which is now in its 37th year. Or take Zimbabwe, home of the world’s last old-school dictator, the reprehensible Robert Mugabe. He, like Mbasogo, has outlasted six U.S. presidents. Mugabe won the Chinese Confucius Peace Prize last year, proving that the Nobel Society isn’t alone in honoring politically leaden and objectively nonsensical laureates. Previous Confucius Peace Prize winners include Vladimir Putin and Fidel Castro.
For economies with uneducated work forces, the extractive industries often represent the only hope at building a foundation of wealth. Nigeria isn’t going to develop its own electric cars or relaunch able rockets anytime soon, but it can supply oil and diamonds on the world market. Sometimes, all it can do is award leases. Chinese companies are notorious for not even bothering to hire African workers for their megaprojects, instead bringing in employees from home and leaving the local workforce underutilized. There could well be legitimate reasons for this, but China importing its own labor doesn’t do anything to reduce the sometimes gigantic sub-Saharan unemployment.
The Bottom Line
China might indeed have colonial designs of a sort on Africa. You can learn Mandarin in the schools in relatively developed countries such as South Africa. As far as African colonialism goes, what China is doing is extremely benign compared to what brutes like King Leopold were perpetrating in the late 19th and early 20th centuries. Increased trade should mean a more prosperous world for everyone. All the better if the United States’ big economic rival is borrowing from its own citizens to pay for it.