Sunday, March 24, 2013

Economic ties with Africa top agenda of China’s new president

Chinese President Xi Jinping. Photo/AFP

Chinese President Xi Jinping. Photo/AFP  NATION MEDIA GROUP

By MUTHOKI MUMO [email protected]

China’s new president Xi Jinping lands in Dar es Salaam on Sunday at the beginning of a three-country tour of Africa.

Following his recent election, Mr Xi’s visit is a sign of an ongoing fundamental shift in the global balance of economic and political power.

Mr Xi assumed his post 10 days ago following a rubber-stamp election by the National People’s Congress that confirmed him as leader of the 1.3 billion-strong nation.

On his first foreign visit, Mr Xi, who some say can now legitimately compete for the post of the most powerful man on the globe, chose to visit four countries – Russia, Tanzania, the Republic of Congo and South Africa.

The choice of these four countries, commentators say, points to China’s historical alliances, its current friendships and the future of its economic interests.

“The decision to visit these countries was obviously very well considered. If one analyses the strategic advantage of these countries to China, it is possible to paint a near-accurate image of the global community in the coming decades,” said Foreign Service Institute director Dr Philip Mwanzia.

China and Russia share a 2,600-mile border. Therefore, it would behoove both countries to cement their relationship. Further, both countries have historically viewed each other as a bulwark against the advance of the West and its influence.

Further, there is a growing market in Russia for Chinese products while Beijing covets the vast oil and gas resources that Moscow has under its control.

In Africa, China has close historical ties with Tanzania. The country completed construction of the Tazara railway, which snakes its way from Dar es Salaam to central Zambia, in 1975.

The two countries developed a relationship born of common ideology and nurtured with investments in infrastructure.

Now, at the height of China’s engagement with Africa, Tanzania is a strategic partner that is further endowed with the mineral wealth that Beijing hungers after.

But questions have been raised about the perceived snub to Kenya by yet another world leader. After all, Kenya has over the last few years built a strong relationship with China despite ideological differences. Kenya has also fashioned itself as a regional economic powerhouse and the gateway to East and Central Africa.

“I would not necessarily view it as a snub. Kenya is still technically going through a political transition period, and that may have informed the decision to veer south,” said United States International University international relations scholar Prof Macharia Munene.

China has already made overtures to Kenya’s president-elect Uhuru Kenyatta who, in turn, has promised to turn more to towards the East as Kenya pursues economic development.

While Mr Xi’s visit to Tanzania tells of historical associations, his foray into the Republic of Congo (ROC) is reflective of the fact that China’s engagement with Africa is fundamentally different from the path the West has adopted.

A small country on the Atlantic, the ROC has not always ranked highly in the priorities of the Europeans or the Americans. However, the ROC has a 50-year relationship with China that Mr Xi seems keen to nurture.

In South Africa, Mr Xi’s tour will culminate at the fifth summit of the BRICS bloc of emerging economies – Brazil, Russia, India, China and South Africa.

The BRICS states, some with booming growth, are expected to have a significant influence in the shape of the world economy over the coming decades. Africa, with its vast natural resources, could fuel the engine that drives this century’s economy.

The rise of the BRICS is seen by some as the symbolic death knell to the post-Cold War unipolar global power system with the United States at the helm.

“We have been steadily moving away from the unipolar system, but we are now seeing the actual realisation of a multipolar system. There is an economic reconfiguration that may transmit itself into other areas of international engagement,” Prof Munene said.

But in an article published in the Financial Times earlier this month, Nigeria’s central bank governor Lamido Sanusi warned that Africa’s relationship with China carried a “whiff of colonialism.”

He argued that China is pursuing extractive policies that are undermining local manufacturing and “deindustrialising” Africa.

The continent, he says, is carrying a torch for the romance of the Non-Aligned Movement that united China and Africa. China has since ceased to be an underdeveloped state and has as much capacity to carry out mass exploitation as any Western power.

“Africa must recognise that China – like the US, Russia, Britain, Brazil and the rest – is in Africa not for African interests but its own. The romance must be replaced by hard-nosed economic thinking,” he wrote.

The potential for dependency is already visible in the trade imbalances between the two regions. China is Africa’s largest trading partner and Kenya’s second-largest trading partner. However, while Kenya imported goods worth Sh169 billion ($1.979 billion) from China in 2012, that country did not even rank among the top destinations for Kenyan exports.

Tellingly, the Kenya Investment Authority (KenInvest) reports that there is “no domination of Foreign Direct Investment [in Kenya] from the Chinese”.

The authority says that it is pursuing amendments to existing legislation that would allow for greater vetting of investors in the country while protecting certain industries from foreigners.

“Through the reviews we are proposing to develop a negative list that will preclude some investment areas for local investors only,” said KenInvest managing director, Mr Moses Ikiara, in a statement to the Sunday Nation.

He added that concerns about questionable investment practices in Kenya by the Chinese will be raised and addressed during the annual Sino-African forum.

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