Infrastructure

China in Africa podcast: The Sino-U.S. Soft Power Showdown

Nov 192010

China in Africa Podcast: The Sino-U.S. Soft Power Showdown by ChinaTalkingPoints

Travel to almost any African capital and there is a high likelihood that even before you make it downtown from the airport you will pass a Chinese construction project. From the new terminal at Jomo Kenyatta Airport in Nairobi to the main road connecting Kinshasa’s N’Djili Airport to the city center, the Chinese construction boom is immediately evident.

Simply put, the magnitude of China’s construction drive in Africa is so vast that only the rapid industrialization of the Chinese economy itself and the U.S.-funded Marshall Plan that rebuilt Europe after World War II can compare in scale.

All this construction is a central component of Beijing’s foreign policy agenda where it builds roads, dams, hospitals and other badly needed infrastructure in developing countries in exchange for vital natural resources. On the surface, this arrangement has all the hallmarks of pure mercantilism, but to leave it at that overlooks critical subtleties that are now beginning to sway the balance of international influence across the continent. Continue reading »

Who’s teaching whom?

Posted by Tom Rafferty at 11:18 am China vs. India, China vs. the West, The Beijing Consensus No Responses »

Sep 242010

A conference was held in Beijing earlier this week between representatives from China, African states and members of the OECD – the “rich man’s club” – to promote “mutual learning” on development and aid policy. Its focus was on the role of infrastructure in stimulating economic growth, looking particularly at the relevance for Africa of China’s experience in building effective transport, telecommunications, energy and water systems. The conference forms part of the effort made by the OECD’s Development Assistance Committee, the body through which the “established” donors coordinate their aid, to engage with “emerging” donors – primarily China – whose approach to overseas development is seen as posing a possible challenge to existing norms.

Choosing infrastructure as the subject of discussion was significant because it has been an area notoriously neglected in international development. From the 1970s, Western donors and the international financial institutions cut funding for “hard” infrastructure projects in favor of policies aimed at building the “soft” infrastructure of good governance, environmental sustainability and civil society. Those “hard” infrastructure projects that were commissioned were often farmed out to private corporations, with typically disastrous results. This reflected the ideological biases of this era, when the ascendance of market economics and “structural adjustment” packages led to deep antagonism to anything that smacked of statism.

As was pointed out at the conference, although China has privatized swaths of its economy over the past 30 years, it has also not exactly conformed to “neo-liberal” prescriptions because the state has retained a key role for itself within the national economy. It has allowed the Chinese government to pursue a program of intense infrastructure development, often against the advice of the World Bank. Initially facilitated by oil-backed loans and technical assistance from Japan, it has since been funded through China’s own considerable reserves. The chief economist of China’s ExIm Bank said at the conference that infrastructure development had been vital to enhancing agricultural production in China as well as giving it “comparative advantage” as a site for FDI. China’s dense network of modern roads, railways and ports are widely seen as central components in its “model” of economic growth, often contrasted, for example, with India. Continue reading »

China and India: Strategic competition in Africa

Posted by Eric Olander at 11:38 pm China vs. India No Responses »

Aug 262010

Africa is now the latest front in an increasingly global competition between India and China for new markets, arable land and access to natural resources. While Western media and politicians have reacted with varying degrees of alarm to the surge of Chinese trade and investment in Africa, Indian companies have been quietly building their presence on the continent.

As China drives deeper into what many Indians consider their sphere of influence in South Asia, Africa offers an ideal opportunity for Indian firms to challenge China’s growing influence in the region. For many Indians, particularly in certain political circles and in the blogosphere, competition with China is often presented in a classical real politik paradigm. The headlines misleadingly frame the issue in terms of win/lose or even as a “race” between the two countries. Although it may be compelling, even somewhat entertaining, to draw on 19th century colonial clichés (e.g. the Scramble for Africa or the Great Game) it is entirely misleading as both Indian and Chinese strategies are radically different to strategies employed by earlier European powers.

Ironically, the enhanced competition among Chinese and Indian companies will most directly affect European and American firms, which are rapidly being shut out of Africa’s emerging markets. “We just can’t compete when both Chinese and Indian [construction] companies are undercutting us by 50 to 60 percent,” complained a senior executive of General Electric’s infrastructure systems group. He requested anonymity because of ongoing negotiations with North African and Middle Eastern governments, where he is competing directly with Chinese contractors. “Our cost structure and profit requirements are simply too high compared to the Chinese and Indians,” he added. General Electric is not alone. Continue reading »