China challenge for African prosperity
By Stephanie Nieuwoudt
CAPE TOWN - With its recent history of tremendous economic growth, China has a
few lessons to teach Africans, but African governments should be vigilant in
ensuring that their countries also reap benefits from their relations with
China, according to participants at a business summit last week.
The China-Africa business summit last Friday and Saturday was sponsored partly
by Corporate Africa, a publication of the British-based Times Media Group, and
the China-Africa Business Council, a non-governmental organization promoting
private investments in Africa.
Surprisingly, given China's ever-growing presence on the continent, the
attendance figure at the summit was far below the
expected 1,000, with only about 100 delegates arriving, forcing a last-minute
change of venue.
But some fascinating inputs were nevertheless made. Professor Festus Fajana, a
trade policy expert at the African Union, said that "equal partnerships are
important to ensure sustainable development". He urged African governments to
be vigilant in ensuring that bilateral agreements with China were of mutual
benefit.
"Africa wants sustainable economic growth and the continent wants diversified
economies in order to reduce dependence on its traditional [Western] trade
partners," said Fajana. "Africa exports 80% of its oil and minerals to China.
But Africa should not just be seen as a source of raw materials.
"Its economies should be diversified to take advantage of the huge Chinese
market with its need for other products as well. There is, for example, great
potential for agricultural products to be exported to China," he said.
The world is seeing a new "coupling" of southern countries and China, with the
latter's demand for minerals underpinning the growth of Sub-Saharan African
economies, said Martyn Davies, executive director at the Center for Chinese
Studies attached to the University of Stellenbosch near Cape Town.
He believes that, "China's growth will depend on Africa's ability to supply
those goods." Likewise, Africa's advancement is related to the well-being of
China.
Trade between China and Africa in 2008 was worth US$107 billion, a 45% increase
from 2007.
China has been under intermittent fire over its alleged bad human-rights and
environmental records and its disregard for democratic practices. It was
recently slated for closing a $7 billion deal with Guinea, a country that
suffered a military coup at the end of 2008. Several audience members found an
echo in Africans' experience of China on the continent.
"Ordinary citizens get very little in return," one delegate said. "Government
officials sign deals and pocket huge sums of money. The Chinese come to Africa
and take our riches away. But the Chinese markets are closed to African
entrepreneurs."
Rita Cooma, chief executive officer of a New York-based management consulting
firm, presented an investment model that could maximize value and investor
returns with mutual pay-offs benefiting both Africans and Chinese.
The model focuses on government practices and social equity (which recognizes
the rights and needs of citizens), economic prosperity (maintaining stable
levels of economic growth and employment) and environmental sustainability (the
prudent use of natural resources and effective protection of the environment).
Cooma emphasized the need for the training and development of African
entrepreneurs by Chinese organizations.
The Chinese are highly skilled in disciplines like engineering and in
industries such as telecommunications, skills that are severely lacking in
Africa. Chinese investors should employ African citizens and not use an
imported Chinese workforce; this was one of the main gripes with Chinese
business practices on the continent.
"Investing in schools and healthcare facilities strengthen the labor supply and
contribute to economic social development," said Cooma.
To ensure accountability and transparency, Cooma recommended the development
and global ratification of disclosure standards that have to be adhered to by
investor and host countries. These standards pertain to labor and environmental
practices.
There should also be a global reporting initiative that collects data and
reports on specific social, economic and environmental impacts.
"The question is: what will China's legacy in Africa be by 2049?" Cooma said.
"The proof of the pudding lies in the eating. Hundreds of millions of Chinese
citizens have been removed from poverty. I have great faith that the Chinese
can help Africa to the benefit of all."
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