Lucy Hornby in Beijing and David Pilling in London
African leaders will step up their quest for more manufacturing investment from China next week as they converge on Beijing for a summit at which both sides will seek to extricate their relationship from charges of debt and dependency.
The triennial Forum on China Africa Cooperation has in the past been a catalyst for deepening ties, which a decade ago hinged on Beijing’s efforts to secure commodities such as oil and copper in return for infrastructure investment in African nations.
But African governments, partly under pressure from their own citizens, are planning to use this year’s meeting to push for deals that create domestic jobs and transfer skills and technology.
“We want a strategic relationship. Not just ‘you build us a bridge and we’ll give you money’,” said Kamissa Camara, a foreign policy adviser to Ibrahim Boubacar Keita, Mali’s recently re-elected president.
Ahead of the summit, African diplomats have mounted a co-ordinated push for Chinese commitments for fresh loans and, crucially, for manufacturing investment that could help employ a rising generation of urban youth.
Africa’s population, set to double by 2050, is the youngest and fastest-growing in the world. At the last FOCAC meeting in 2015, Chinese President Xi Jinping pledged $60bn in grants and loans.
Attracting low-end manufacturing jobs being priced out of China could redress Africa’s trade deficits with Beijing, which has been a source of friction. Recovering oil and commodity prices have taken some of the sting out of the dispute, but African businesses blame Chinese imports for wiping out swaths of domestic manufacturing.
China’s African push lends it clout in a continent that has a love-hate relationship with former colonial powers. Dealing with China can improve an African nation’s bargaining position with Europe, the US and even other developing countries such as India or Turkey.
“A relationship with China rebalances our unbalanced relationship,” said Ms Camara. “We hope that when others see China getting involved in Mali, they too will be interested in investing.”
About 13 per cent of Chinese investment into Africa goes to manufacturing, according to the China Africa Research Initiative at Johns Hopkins School of Advanced International Studies.
Africa has become a testing ground for China’s external initiatives from peacekeeping and debt negotiations to building consumer brands. Beijing has also wooed countries without commodities, especially Ethiopia, a fast-growing nation with a similar centrally controlled economy that is positioning itself as a manufacturing hub.
While Chinese investment in Africa has grown, reaching $2.4bn in 2016, it is dwarfed by a trade relationship worth $170bn last year.
China became Africa’s largest trading partner in 2009, as Chinese companies imported more African commodities. Meanwhile, Chinese manufactured goods make up more than 80 per cent of China’s exports to Africa. But as demand for commodities slowed, Africa’s trade deficit with China widened. In 2016, it was equivalent to Africa’s trade deficit with the rest of the world.
We want a strategic relationship. Not just ‘you build us a bridge and we'll give you money’
Kamissa Camara, Mali presidential foreign policy adviser
Chinese bureaucrats complain that African markets are too small and fragmented for the big projects that state planners love. They grouse that African nations refuse to come up with regional plans for integrated development.
“The two sides have shared interests; for example some of the overcapacity China has is the capacity Africa needs,” said Shen Xiaolei, a researcher from the Chinese Academy of Social Sciences. “The African market is far from mature in most cities because the lack of middle class, but potentially it’s a very big market.”
Chinese state-owned groups do well at building debt-financed infrastructure, but have performed poorly in manufacturing. Their engagement has led to the rising debt levels have been the main factor in loan distress in Zambia and Brazzaville, according to the China Africa Research Initiative.
“In some aspects all of this looks good for Africa. It would appear there are new jobs being created and noticeable infrastructure improvements,” said David Alexander, whose Florida-based company, Baysource Global, advises businesses on offshoring. But the terms of infrastructure-focused financing could mean revenues accrue to Chinese investors, he warned.
As Chinese manufacturing gets more expensive or more difficult, many foreign-invested manufacturers are shifting out of coastal China to south-east Asia and Bangladesh. A few looked to Africa, particularly leather processors and glove manufacturers, said Deborah Brautigam, director of the China-Africa Research Initiative. “There’s room for Africa too.”
Additional reporting by Joseph Cotterill in Johannesburg and Xinning Liu and Archie Zhang in Beijing
China T-shirt makers back Africa elections
A rainbow of flags, posters, T-shirts and scarves emblazoned with the names and faces of dozens of African politicians on display in the windows of more than a dozen shops make for a startling sight in the middle of the southern Chinese city of Guangzhou, writes Tom Hancock.
From presidential contenders from the Republic of Congo and Ghana to Nigerian senators and Kenyan members of parliament, Guangzhou’s Tongxin Road has found a niche in the global economy: exporting campaign products to candidates on the continent seeking an edge over their rivals.
The vibrant picture of democracy on display is evidence of Africa’s reliance on Chinese manufacturing: something that African leaders want to change.
The sheer volume of the voting — this year will see at least 30 regional or national polls in 24 African countries, according to the Electoral Institute for Sustainable Democracy in Africa — and their demand for products makes for a booming business for Chinese factories selling paraphernalia for African elections.
“Usually for an election we will have tens of thousands of items,” said Amy Zhang of Xu Yang Advertising and Printing, which supplied candidates in Kenya and the Republic of Congo.
“Customers don’t choose high-end products. For a normal election we will sell T-shirts for less than Rmb12 [$1.90] each” she added, picking up a 2016 election scarf bearing the name of Gabonese President Ali Bongo Ondimba.
Posters for politicians such as Nigeria’s former president Goodluck Jonathan comprise further markers of a trade that is more than a decade old.
Tongxin Road stores are shopfronts for factories in central China, where labour costs are cheaper. Even so, margins were thin for producers, said Chen Sheng of Hongyu Advertisements. His desk is overlooked by a portrait of Nana Akufo-Addo, President of Ghana, and a calendar promoting Congolese politician Patrick Muyaya.
China’s African election business is not limited to clothing. The infrastructure of elections is also profitable. Guangzhou’s Smart Dragon Group exports ballot boxes, seals, indelible ink and election pens to nearly a dozen African countries.
Chu Feng Advertising, also based in Guangzhou makes 2m products a month, from T-shirts to hats and bracelets, at three factories. Africa accounts for 60 per cent of its sales, according to company literature.
Although Chinese vendors say they have no idea about the views of the politicians they serve, Ms Zhang of Xu Yang Advertising is a fan of African democracy. “I hope there can be more elections,” she said. “The more elections there are, the more orders we’ll have.”