Perspectives on the Future of China’s Africa Policy—— New Factors and its Roles

2010/09/30

abstract

This essay assesses the factors and their impacts on the decision-making process of China’s Africa foreign affairs. There are four emerging factors shaping China’s aid policy in recent years, especially since the current financial crisis began. They are grouped as T 3 F factors. T stands for Taiwan. 3F factors are Forum on China-Africa Cooperation (FOCAC), China’s huge foreign reserve and the current global financial crisis. Among the four factors, three of them are new to China and the world. One (Taiwan factor) is old but with new changes.

T factor: Taiwan

The year of 1949 divided China into mainland China (Beijing authority) and island China (Taipei authority). Beijing and Taipei refuses to recognize the other’s legitimacy. Both of them develop individual diplomatic relations with the world. When Beijing restored the permanent seat of the UN Security Council, Taiwan lost its most significant source of international legitimacy. Up to now, Beijing has established formal diplomatic relations with 171 countries;[1] while Taipei has only 23 (most of them are in Africa, Asia Pacific and Latin America). [2]

Taipei was very eager to keep its friends because it would be a diplomatic disaster for the administration if no countries recognize Taiwan. That is why Taipei seldom hesitated to offer large sums of ‘foreign’ aids to secure its foreign relations. In Africa, Taiwan’s all-dimension activities were active and effective. In 1992, Beijing invited Mandela, then African National Congress (ANC) leader, to visit China. Beijing offered ANC aid valued at US$ 10 million. When Taipei heard the news, it offered US$ 25 million to ANC at once. After ANC won the election in 1994 and Mandela became the President of South Africa, Taiwan was nervous about the possible establishment of diplomatic relation between South Africa and China. Lee Teng-hui, then Taiwan Leader, promised South Africa to provide US$ 500 million aids annually. As a result, aid from Taiwan side made Beijing spend three more years to establish a formal diplomatic relation with South Africa until 1997. [3] Such kind of competition in both Africa and elsewhere in the world is clearly not economic and smart to both sides.

Taiwan’s such kind of diplomacy is often labeled as ‘Dollar Diplomacy’ or even ‘Checkbook Diplomacy’. There are growing discontents in Taiwan. Some Taiwanese complaint that money could not buy international respect and such kind of dollar foreign offense is Fool’s Diplomacy. [4]
These voices are mainly from the KMT, which wants to adjust this wasteful and meaningless way. It was not impossible during DPP (Democratic Progress Party) administration, which advocated for Taiwan independence, from 2000 to 2008.

But the success of Ma Ying-jeou, Kuomingtang (KMT) candidate in the ‘President Election’ 2008 offers a new opportunity of a suspension or even an end for such competition. Ma proposed the idea of diplomatic ceasefire in 2006. He also mentioned cross-strait “reconciliation and ceasefire” in his inaugural address. [5] Beijing responds quickly and seizes this opportunity. Through multiple channels, the mutual trust between Beijing and Taipei has been enhanced in a steady pace. Beijing also promised Taipei bigger international space than before, such as participation in the World Health Assembly. This favorable situation makes Taipei feel confident to cut its foreign affairs budget while increasing cross-straits exchanges. According to a news report, ‘foreign affairs’ budget will be cut by 30 million new Taiwan dollars (TWD). Consequently, the department responsible for mainland China affairs will get extra more budget of 230 million TWD. [6]

There are also signs signifying that some sort of rapport has already been in place. It is reported that Malawi swift from Taipei to Beijing because Malawi was not satisfied with the amount of aids from the Taiwanese side. [7] But soon, Malawi was not satisfied with the amount of Chinese aid too. When Malawi secretly asked Taipei whether it was possible to swift back from Beijing to Taipei, the reply was “No”. In this way, it is harder or even impossible for some African leaders to play Taiwan card with China and visa versa.

But would aid competition between China and Taiwan in the future or not? I am reserved on this point. It is still too early to say it. A newly released Taiwan Defense Paper in October 2009 states that cross-straits hostility will not disappear in the short term.[8] The aid competition is only a suspension not for a long-term termination. Yet, it seems good for Beijing and Taipei because they could save a lot of financial resources.

F factor: FOCAC and three kinds of Public Opinion    
    
FOCAC is held every three years. Nine years after its establishment, FOCAC has attracted more and more attention from the world. Praises and outside criticisms of the FOCAC are intertwined. Reforms are needed from both Africa and the Western side and so does Beijing. Voices about FOCAC or Sino-Africa relations from different corners in the world are important.

The high-level Chinese officials made frequent visits to the continent. In February 2009, President HU Jintao visited four African countries. Shortly after, Minister of Commerce Chen Deming and Foreign Minister Yang Jiechi made separate trips to Africa. Their common goal is to listen and collect first-hand feedbacks on Sino-Africa relations.

FOCAC plays a bigger role in guiding Sino-African relations. On every summit, Beijing published its Africa policy principles and a 3-year Action Plan in details. Being a multilateral policy platform, FOCAC and Beijing’s bilateral relations with Africa nations make Beijing’s Africa policy more flexible and focused.

As for public opinion, this paper groups it into three categories: opinions from African countries, domestic opinions from China and responses from the West. It is argued that they play influential roles in China’s Africa diplomacy.

In order to promote China-Africa relations in a sustainable way, voices from the public attract attentions from China. Beijing realizes that it is quite different from the Cold War that leaders’ friendship are the most important, the African public is also vital to bilateral relations now. Just before the Beijing FOCAC Summit in 2006, Xinhua News Agency did a public opinion survey of 16 African nations on how to improve China-Africa relations. [9] This is the first of such kind because Beijing rarely did such opinion survey about its foreign policy, let alone abroad. Thus, it is a milestone for the role of public opinion in Beijing’s Africa policy decision-making process.

A report[10] published recently by Shanghai Institutes for International Studies (SIIS) in 2008, argues that responses from Africa and non-Africans about FOCAC are also very important, it also warns that the Western powers, mainly U.S., the European countries and Japan, maintain traditional relations with Africa. They are sensitive to the fast-growing development of China-Africa relations and soon realize that FOCAC is most significant to the development of China-Africa relations, as well as to Africa in a sense to seek an alternative partner to the West. They believe that the rapid development of China-Africa relations has already ‘squeezed’ their interests in Africa. Thus, in the early stage of FOCAC, Western powers commented that China is playing a new colonial role in Africa, although there were voices that FOCAC did bring benefits to Africa. [11]

During the preparation of the Fourth FOCAC official documents, the voice from African side was so strong that Beijing had to adjust the statement of “promotion Beijing’s Africa relations with the third part” into one relatively conservative one. [12] It is not difficult to see that opinions from the African elites and the public strongly shape the agenda and development of FOCAC.

As for public responses in China, its role is growing fast but not powerful yet. In the West, the pubic as taxpayer are quite sensitive to the use of national budget including foreign aid. Without enough consensuses, domestic or foreign policies would face difficulties. For example, the European Union has a solid public opinion basis of aid policy, and 37 percent of respondents in one poll say that there are still too small European Commission budget to help the developing countries, while 41 percent says "about right".[13]

The Chinese general public has a good impression of Africa, viewing it as one of the friendliest country/regions to China. A poll held in China in 2006 showed that Chinese elites rank African countries as the second mostly friendly in the world with China, only after Russia.[14] But to the public, Africa was not in the top 5 choices.

There is a clear gap between those of Chinese elites and general public. Results from other polls support this fact. According to an annual opinion survey by Global Times from 2006 to 2008, the opinion data of Sino – Africa relations change. In 2006, Beijing hosted the first China-Africa Summit (FOCAC), during which more than 40 African leaders came to Beijing. The data in 2006 indicates that only 6.2 percent interviewed Chinese view Sino-Africa relation as the most bilateral relations to China. In 2007, it declined to 3.3 percent but rebounded to 7.3 percent in 2008. Most Chinese view Europe, USA and Japan as China’s top partners. [15] In other words, China’s Africa policy has not gained enough attention and support at the grassroots level. Its internal dynamic is still mostly elite-driven.

In the addition to the public opinions from China and Africa, it is also clear that the voice from the West is very important to Beijing because the Western media are the mainstream in the world. And maintaining good relations with the West is significant to both China and Africa because the West is the key trade partner and the main source of FDI in the world. With the growing ties between China and Africa, criticism about China’s role in Africa also grows. Some argues that the Chinese aid is ‘rogue development aid’ and China’s relations with some African countries like Sudan and Zimbabwe based on non-interference principles is ‘dictatorship diplomacy’.[16]

In order to better respond to the voice from the international community, Beijing has adjusted some of its policies to Africa. In 2007, Beijing appointed LIU Guijin as the Chinese Special Representative on the Darfur Issue. Under the minerals for infrastructure deal in Congo, initially valued at US$ 9 billion, a consortium of state-owned Chinese companies agreed to build roads, railways and hospitals in return for the right to develop a copper and cobalt mine. But ignoring Chinese opposition, the IMF and the Paris Club of creditors urged Congo to make adjustments to ensure the deal should be consistent with Congo's management of its existing $11bn external debt. In August 2009, the IMF said that Congo and China agreed to: eliminate a state guarantee on the US$ 3 billion mining project and reduce the overall size of the deal to US $6 billion by removing one of two US$ 3 billion tranches of infrastructure funding.[17] This change occurred because the international pressure is from the West mainly.

The SIIS report timely highlights this point of public opinion and argues that the successes of Beijing Olympics and Beijing Para-Olympics have boosted China’s position in international politics from three aspects. The developing countries cherish a greater ‘great power expectation’ over China. The developed countries have increased ‘the great power demand’ over China as well. Notwithstanding, the ‘great power responsibility’ is growing even within China per se. [18] The World Expo 2010 will strengthen and consolidate China’s international position further. The international community will accept the fact of a rising China to a larger extent. Thereby, the African countries would have higher expectations on China-Africa relations. The expectation will be reinforced once the commitments made on Beijing Summit are delivered in time, or even ahead of time and over-fulfilled.
                         
2 F factors: China’s Foreign Reserve and Current Global Financial Crisis

Although China’s huge foreign reserve and the current financial crisis are two separate issues, I prefer to analysis them together here because they are intertwined and closely related to China.

According to State Administration of Foreign Exchange of China, China’s foreign reserve is already totaled at US $ 2.27 trillion until September 2009. [19] Managing such a huge asset is an unprecedented challenge for China. It has never occurred to the world before. Especially during the ongoing financial crisis, the large share of China’s foreign reserve in the form of U.S. bond is devaluing, so is China’s foreign trade. According to the IMF, the number of U.S. bond holding by Beijing is US $ 801.5 billion, and around 23.5percent of China’s foreign reserve is in U.S. bond.[20] America, with growing budget deficits and a huge national debt, depends on China as the main holder of U.S. Treasury securities, with Beijing's stockpile officially estimated to be nearly $800 billion until December 2009. [21]

Managing the foreign reserve has already been not only a tough task for Beijing, but also has its worldwide implications.” The Americans get the toys, the Chinese get the Treasuries and we get screwed.” An European Union official once characterised the pattern of Beijing accumulating US assets by selling Renminbis for dollars, while nothing stood in the way of a rapid and destabilising appreciation of the euro. [22] Many Chinese scholars argue that Beijing could invest more abroad or anywhere else in order to take full use of foreign reserve instead of the past laissez-faire policy.

Since September 2008, the financial crisis has turned into a full-fledged recession affecting virtually all markets and countries either through direct financial contagion or through falling export earnings and lower migrants´ remittances. [23] Fighting against this crisis together has already been the international consensus and the common goal. It consequently becomes a new theme of Sino-Africa cooperation.

At the end of 2008, the Chinese government announced a RMB 4 trillion yuan (an equivalence of US$586 billion or £355 billion) stimulus plan to boost the domestic economy. Now this economy stimulus plan produces effective outcomes. According to the preliminary estimation, China’s GDP in the first three quarters of 2009 reached to RMB 21781.7 billion yuan, a year-on-year increase of 7.7 percent. It was 0.6 percentage points higher than that in the first half of this year. In terms of quarterly growth, it was up 6.1 percent for the first quarter, 7.9 percent for the second, and 8.9 percent for the third quarter. [24] In November, the World Bank has increased its 2009 growth forecast for China from 7.2 percent to 8.4 percent. But, it states that the nation needs to encourage more consumer-spending. [25] The above data demonstrate that it is possible for Beijing to keep its GDP growth rate of 2009 at 8 percent, the highest among the major economic powers in the world.

Compared with China, Africa is among the developing regions hit by the global financial crisis the most. According to the UNCTAD report, Africa’s output growth is expected to slow sharply in 2009, but remain positive, with anticipated growth of 3 percent in North Africa and 1 percent in sub-Saharan Africa. In the latter region it has now become virtually impossible to achieve the United Nations Millennium Development Goals by 2015. [26]

The dire situation of Africa and other developing countries in the global crisis triggers a new wave of foreign aid from China. Not only Africa but also other developing countries turn to Beijing for help. The earliest voice from the public that China should increase its Official Development Assistance (ODA) to help the developing countries to respond to the financial crisis could be traced to as early as January 2009. CHENG Yawen said in Global Times that the poor countries suffer while the developed countries fail to honor their aid promises. Assisting others and self-assistance are in the interest of China. China at least is able to lend a hand abroad in the field of food crisis.[27] Yet, Mr. CHENG is not an influential figure and his idea is not eye-catching enough.

On 4 March 2009, LI Zhaoxing, the former Foreign Minister of China and the spokesman of the National People´s Congress (NPC), said that Beijing would not cut aid to the developing countries. On the contrary, it has increased aid to its capabilities even though China itself suffered in this financial crisis. He added that a friend in need is a friend indeed.[28] But there is still no information that how much growth Beijing’s aid would be. Currently, it is XU Shanda’s plan catching domestic and international attention. In the past months, a number of Chinese academics have proposed to use the country’s foreign-exchange reserves to finance infrastructure projects in the developing world. XU Shanda, a senior member of Chinese People's Political Consultative Conference (CPPCC)[29], has called for a Chinese Marshall Plan to boost demand for Chinese goods. His ambitious proposal said that Beijing should establish a sizable aid project as large as US $ 500 billion and its name could be The Harmonious World Plan, which aims to help the developing countries and China itself too.[30]

Writing for Lianhe Zaobao of Singapore, PANG Zhongying, Professor at Renmin University of China, is strongly against this plan. [31] He notes that the Western response to this Plan should be taken into consideration. Even though Beijing’s aid is still small compared to the developed countries, there are already fast growing criticism and complaints about Chinese aid. [32] He adds that if Beijing expanded its aid budget as large as US $500 billion, how the West would react?

Just as PANG has pointed out, some international news coverage has paid attention to XU Shanda’s great aid proposal. [33] It also proves that pubic opinions are taken into account when making China’s Africa policy today.

Conclusion

To summarize, there are four factors shaping China’s Africa policy, Taiwan, FOCAC, China’s huge foreign reserve and current financial crisis. The possible uses of China’s huge foreign reserve include more FDIs and ODAs. But the big ODA plan is quite controversial in China, it should be careful of domestic and international responses about. A nation’s policy is based on its material capacity or hard power. But it is not a voluntary process. Without the relevant domestic policy consensus or willingness, any good ideas would be still on paper instead of actions. It is found that simplistic judgment should be avoided in China’s diplomacy studies.

China's decision-making process is already beyond Chairman Mao's era, during which period the policy-making was concentrated to the few top leaders. Since then, there have been some democratic and internal negotiations before decision is made. Media, interests group, local governments etc. all begin to have their own fast-growing influence on China’s domestic and foreign policy.[34] In other words, the factors currently influencing China’s Africa policy is already far beyond national or business interests as observers often cited. New factors are emerging; even some old factors like Taiwan factor are changing too.

 

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