Our arguments are threefold: 1) given the world system, it is difficult to assess the pluses and minuses of China-in-Africa as a single phenomenon; 2) as a player in the world system, China in Africa has more in common with the West than is usually acknowledged; 3) there are nevertheless notable differences between Western and Chinese presences in Africa; many derive from China’s experience as a semi-colony, its socialist legacy, and its developing country status, features which together make PRC policies presumptively less injurious to African sensibilities about rights than those of Western states.6 In what follows, we focus on PRC activities in Africa often denounced as harming African interests, particularly trade and investment. We also examine why the China-in-Africa discourse has emerged as it has and African responses to its main tenets.Worth your time.
Westerners think they know what Africa needs to do in order to develop: liberalize markets, get prices right, promote democracy. And they think they know what China is doing there: offering huge no-strings-attached aid packages to resource-rich countries that prop up pariah regimes.I think this speaks to codswallop's point about the apparently binary codependency of the US and Chinese economies - it's something strategists in Beijing are well aware of and they have a wider scheme to help promote a 'multipolar' world that will mitigate the risks of such a relationship (for China).
But a closer look reveals a somewhat different story. Over the past few decades, China has managed to move hundreds of millions of its people out of poverty by combining state intervention with economic incentives to attract private investment -- the kind of experimentation that the Chinese leader Deng Xiaoping once described as "crossing the river by feeling the stones." Today, China is feeling the stones again but this time in its economic engagement across Africa. Its current experiment in Africa mixes a hard-nosed but clear-eyed self-interest with the lessons of China's own successful development and of decades of its failed aid projects in Africa...
...Why would the Chinese government push some of its labor- and energy-intensive industries to move to special economic zones in Africa, even as the U.S. Congress bans the U.S. Agency for International Development from financing any activities that could relocate the jobs of Americans overseas? Because Chinese planners want industrialists at home to move up the value chain. Polluting industries such as leather tanneries and metal smelters are no longer tolerated in many Chinese cities. And as the world economy recovers from the recent economic recession, wages and benefits will resume rising in China's coastal belt, as they had been before the crisis. Some factories will move further inland, but others will go offshore, closer to both the sources of and the markets for raw materials.
The early stages of industrialization might bring pollution, low wages, and long workdays, especially if the Chinese zones are successful. But like China's resource-backed loans, the planned economic zones promise to provide African countries with some things they very much want: employment opportunities, new technologies, and badly needed infrastructure. This is an opportunity for African states to ride into the global economy on China's shirttails rather than remain natural-resource suppliers to the world.
China's massive monetary expansion has led to a boom in property prices, stoking fears of a property bubble. Bubbles burst and when that happens, the impact on the property market and output growth can be vicious. But a bubble is underpinned by an excessive accumulation of debt, while a boom is brought on by a mismatch between demand and supply. With a large part of Chinese investment in property being financed with savings, not borrowed money, and mortgage debt being a low share of output, it is more difficult to argue that China's property market is a bubble...cf. China Real Estate
Putting aside the huge resource investments China has made in Africa this past decade, it is now establishing special economic zones (SEZ) in Africa. Seven are currently planned, similar to those earlier ones in China from the 1980s. These zones may indeed follow more along the lines of the larger special economic development regions like the Yangtze and Pearl River Delta's. China has the opportunity, and I would say vision, to act in the role of rich industrial foreigner that moves into the host country for export-processing relations (at first), and eventually capitalizing with small-and-medium private and wholly-owned ventures, servicing both their own needs and that of the respective African host economy.judging by howard french's article tho, this seems like it's a bit overly optimistic, if not wishful thinking. perhaps however, as hinted in the 'commercial contracts signed' link -- "there is no reason why others cannot compete on the same terms" -- maybe african countries can play the US and others against china to negotiate better terms to their 'colonisation' (like a reversal of how some states and municipalities get corporations to locate to their districts), e.g. to actually demand the benefits of what pistorius calls "agglomeration economies."
Exactly like China's own experience between 1984 and 1994, the roles can reverse, with Africa as the industrial backwards and poverty-laden host country, ready and willing to transform. We see that China is today uniquely positioned and equipped to assist the Africans in building up their countries, not just through infrastructure projects, but with non-colonial proactive cooperation.
[...]
I would postulate that if China moves its heavy polluting industries - tanneries and smelters for instance - abroad to Africa, as well as subsidizing heavy state-owned industries and other over-capacity manufacturers to move their businesses into these African SEZ, and if they adopt an export-processing relationship, whereby low wage local (African) workers are utilized in assembling the goods which are then in turn sent back to their Chinese parent companies, and gets re-exported as final goods, [then all this will form] part of China's external trade balance.
At a quick glance I'd say that this scenario benefits China greatly - locally they release pressure on their controversial environment costs... as well as reducing pressure on domestic industry by spurring manufacturing competition... In all, this has positive effects in keeping China's domestic productivity and unit labour costs in check, and the knock on economic effects (which is a thesis in itself) is overall good for the Chinese economy.
The fact that China can extend its arm to Africa, transferring the skills, workers, technologies and capital from both the agricultural and industrial sector, should allow [the Communist Party of China] to stay put on its current growth path, and earn itself more mercantilist-time to gradually advance the education and consumption capabilities of their citizenry.
For Africa, the yields are immense; in short, Chinese producers working out of Africa will inject the benefits of agglomeration economies - knowledge and technical spillovers, technological and capital investments, opportunities for local firms to form joint-venture partnerships and build their capacity in capturing a regional African economy of scale; and as the firms increasingly locate within the development zones, local labour migration and massive employment opportunities will follow - raising the subsistence level of the poor and hopefully out of severe poverty is Africa's most tangible and immediate gain!
If China takes a sustainable equity interest in the development of Africa via these SEZ, the corruption and mismanagement that African nations have been prone to, can be subverted. And what of the "green-tech" impetus? Could this relationship be a platform for China to assist Africa in undergoing industrialization and development at discounted environmental costs, and possibly via a eco-friendlier path...
A charter city starts with a vacant and voluntarily provided piece of land large enough to hold a city, a charter which specifies the rules that will apply in this new region, and a commitment that potential residents can freely move in to or out of the city. The people, employers, and investors will follow, attracted by the chance to work together under the rules that the charter specifies.also btw...
There are three distinct roles for participating nations: host, source, and guarantor. The land is provided by a host country. The people who choose to live in a charter city come from a source country. The guarantee that a charter will be respected and enforced for decades into the future comes from a guarantor country...
Kenya could fill the roles of host and source. Given the recent political turmoil there, they might opt to partner with other governments that could act as guarantors. One good partner might be the government of Mauritius—an African country with experience managing special export zones of its own. Another might be a respected developed country like Germany, which could act alone or in conjunction with Mauritius. The guarantor country or countries would provide credible assurance to investors that the charter and the rule of law will be respected for decades to come. With this assurance, Kenyans could immediately attract private investment that provides the urban infrastructure that they lack. Countries that do not serve as guarantors could supply services as well. For example, Kenyans could draw on Singaporean expertise in ports and airports or British expertise in common law.
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posted by orthogonality at 9:36 PM on April 26, 2010