The Sino-African Relationship:
The Miracle Story of the New Century
By: Daniel Gizaw
Nov 13, 2006
The news emerging from Beijing and Africa– bold, ambitious, promising and colossal – can be heard in the heavens. Like a giant tsunami, the China-Africa connection is exciting and powerful. Here is why.
The last 28 years have been a thrilling roller-coaster ride for China ever since it began its economic reforms. Liberalizing its market, opening up to foreign trade and investment, and now, hear this, becoming a global economic powerhouse on an almost even keel with the United States, is mind boggling.
The amazing success story is a “miracle” to a nation that only three decades ago was written off as a doomed communist regime known more for its bankrupt ideologies than for its innovational skills. It was believed then that the Chinese leadership resembled the Mafia and had no acumen to extricate itself from its totalitarian mentality. A few pundits at the start of this miracle journey, however, knew that China was serious. In fact, those few feared that the Chinese would eventually tilt the global trade and technological balances in their favor.
Well, well, well.
That fear wasn’t completely unfounded. Chinese intellectuals, who were familiar with Deng Xiaoping, ever since he started distancing the party from Mao Zedong’s revolution in 1978, knew that the change was real. China was ready to move forward, but the world was skeptical.
What did China do right to be able to jump on the bandwagon in order to get to where it is today?
First and foremost, by dramatically changing its labor-intensive manufacturing, it brought development, thereby making, on a large-scale, massive employment opportunities. This, of course, simultaneously began to eradicate poverty in a huge way. Between 1981 and 2001, the proportion of the Chinese population suffering from abject poverty fell from almost 55 percent to just 8 percent, bringing more than 400 million people to self-dependence and off the poverty line. It must be noted that the agricultural reforms, preceding the manufacturing boom, gave rise to a new economic sector: the township and village enterprises that made China strong.
Secondly, China opened its economy to foreign direct investment, joined the World Trade Organization (WTO) and allowed large-scale imports, unrestricted. Connecting with the global economy with such unprecedented enthusiasm, and making the 1.5 billion Chinese consumers ready for goods imported from the rest of the world, was music to the ears of the Japanese and the South Korean investors. Chinese import for domestic consumption in 2003 was therefore $187 billion dollars, compared to only 40 billion dollars in the mid 1990s. This consumption, estimated to double by the next decade, makes the market open not only to Japan, South Korea, Taiwan and the members of the Association of Southeast Asian Nations (ASEAN), but also to the rest of the world.
And now enters Africa.
China’s embrace of Africa has been a well-calculated, almost scientific approach. The burgeoning Chinese economy, with its voracious appetite for raw materials, has to find a supplier on a larger-scale market. For China to sustain its economy and continue its stride toward the future, African partnership is as vital as America’s partnership with Europe was after the Second World War. The mineral-rich Africa, with the potential of its abundant oil resources in several countries (not to mention the Nigeria, Libya, and Sudan oil outputs) will be, in the future, the lifeline for China.
The recent Sino-Africa summit held in Beijing with its 1.9 billion dollars largess to African nations is actually an investment for the Chinese, whose brilliant minds are eyeing the future with optimism and high hope. Africa watchers must see the opening of this purse as the tip of the iceberg, since more is on the way. China will reward Africa as never before by building infrastructures (schools, hospitals, roads, etc) while at the same time training African students in various fields. As open trade continues, more and more Chinese investors will also find Africa to be the best place to do business. While Chinese textiles, shoes, toys, household goods, even computers and other tech products find ardent buyers in the African market, so will African goods enter into every Chinese home. Nearly 3 billion consumers in the next two decades will devour African products and there is no telling where this partnership will lead.
This is an exciting time for Africa. Make no mistake that China isn’t limited to only selling its products. It’s also a huge consumer. In 2003, it had trade deficits of $15 billion with Japan, $23 billion with South Korea, $40 billion with Taiwan and $16 billion with the ASEAN countries.
In addition, China has now a dynamic opportunity to redefine its global role by employing its soft powers to bring change in Africa. Using its newfound muscles, China can defuse tensions among bitter enemies in Africa (better yet, stop the fratricides among brothers and sisters), and change the continent for the better. After all, what good is it to pour billions of dollars and waste an immeasurable amount of energy if China’s new partners continue to squabble and fight? Ignoring the existing chaos by pretending the turmoil will somehow evaporate will only bring this wonderful marriage to a screeching halt. China shouldn’t only approach her global role as a sugar daddy, arriving only when things are rosy, but vigorously engage in finding solutions for some troubled regions. True partnership with Africa must come from a meaningful commitment. Africa is volatile, uncertain and full of challenges. Understanding the defining characteristics of the African dilemma, its fragmentation and diffusion, is equally important to China in order to build a strong and durable friendship.
China should also encourage its neighbors – Japan, South Korea, India and the rest of the ASEAN nations – to be active competitors in developing Africa. Globalization, or “mutual interdependence” or a “borderless world,” can only materialize when all nations realize that we all come from a troubled past, but can now face our vicissitudes collectively. Additionally, the true success for China vis-à-vis its African engagement can be measured by its ability and willingness to open its market more unilaterally while providing liquidity and technology. The tenet must adhere to the concept that trade is a positive sum game; one country shouldn’t gain at the expense of another. China, in its dealing with Africa, shouldn’t be obsessed by trade alone and dismiss the peripheral factors as insignificant. It must therefore associate commerce with open markets, open markets with political freedom (for itself as well as for its allies), political freedom with democracy (for itself as well as for its allies), and democracy with peace.
President Hu Jintao and Premier Wen Jiabao, in hosting the African forum in Beijing, are actually doing what nearly sixty years ago, George Marshall, chief of staff of the US Army during World War Two and then the civilian secretary of state during the Truman administration, had done for the then dismantled and devastated Europe.
The Marshall Plan, known for its altruism and benevolent largess, as Will Clayton, a businessman-diplomat, credited with the idea, had said, "…to meet the needs and interests of the people of the United States – we need markets, big markets in which to buy and sell.”
Obviously, the brilliance of President Jinato and Premier Jiabao, with their new doctrine on Africa, is equal to the inspiration of the Marshall Plan for Europe.
While the Chinese connection is therefore the best thing that ever happened to Africa, I highly recommend that countries like Ethiopia fashion their reform plans after those of South Korea or Botswana. A little over a decade ago I wrote a piece on the Ethiopian Herald in regards to this subject. Here is the condensed version of that article as it appeared in the paper and I believe it’s still useful.
“This peninsula (South Korea), which was formerly an independent monarchy before 1905, was a primitive, agrarian society. Japanese forces invaded it in 1905 and when the emperor was deposed, Japan annexed the country in 1910. Following the Japanese surrender ending the Second World War, in 1945, the peninsula entered another phase of political turmoil and dissension. After three years of bitter war, in July 1953, the country was formally divided by the armistice agreement, North and South, creating a new chapter in the country’s history.
South Korea, which espoused democratic principles from the beginning, had very little technological know-how up until the 1960s. In fact, it was going through an interminable political chaos, restraining its ambitions from the very start. It wasn’t a smooth sail for South Korea even after the 1960s. In 1972, opposition to General Park’s regime precipitated martial law. In 1979, General Park, who himself got the power by deposing Chang Myon, was assassinated in an alleged coup. Martial law ended in 1981, but in 1984 student unrest throughout the campuses in South Korea made the life of the nation a nightmare.
Despite all these disturbances the country was moving forward, showing an incredible economic resurgence. By 1992, South Korea’s Gross National product (GNP) was equivalent to us $6790.00 per head, at an annual growth rate of 9.6 %, one of the highest in the world, next to Botswana.
Botswana is another miracle spot. For more than 20 years, Botswana has shown a brilliant economic development and its government has maintained, in post-colonial Africa, a democracy that has remained unaffected by the inferno of its surroundings.
Botswana’s annual growth rate in GDP between 1980 to1991 was 9.8%, the highest of any country in the world. Certainly Botswana’s discovery of diamonds in the late 1960s can be attributed to its economic success, but Nigeria too has found huge oil resources and yet it is now economically bankrupt, debt-ridden and one of the most corrupt countries in the world. Botswana’s and South Korea’s success story is not in what they have found, but how they have used what they found. In fact, in the case of South Korea, with no oil or other rich natural resources, with the total output of mining amounting to only 0.3% of the employed labor force, its growth rate is not in its rich resources but in its human resources, the hard working, diligent people that have galvanized the economy
Agriculture contributed 7.5% of the GDP for South Korea. Rice, maize, barley, potatoes and the raising of livestock, created 14.8% of the employed labor force in this sector. Receipts from tourism, earnings from overseas construction works, mostly in the Middle East, and its industrial base (44.1% of GDP) are its greatest assets.
In the case of Botswana, if we look into its economy today, its Ministry of Finance, protected by the executive branch, designed ambitious policies that oversee the economic growth of the country through several branches and these have shown wonderful results. Its vigorous implementation of sound macroeconomic management has made this country an African Cinderella. Today, beyond the production of diamonds, copper and nickel, Botswana is branching out into tourism, regional banking services and manufactured exports. The development in its social objectives is also impressive. 90 percent of children of primary school age attend school, and post offices, police stations, agricultural offices and livestock advisory stations reach even the most impenetrable regions thereby making modern means and facilities accessible to all the people.
If Botswana and South Korea can do it, why can’t Ethiopia?”
Having said that, Ethiopia now needs to focus on how to capitalize on her newfound prestige vis-à-vis her connection to the Orient. Mind you, not only with the Chinese, but with the Indians, the Taiwanese, the Japanese, the South Koreans, etc.
The prerequisites essential toward this goal are therefore important to note. Dealing with the Chinese, the Taiwanese, the Japanese, the South Koreans and the Indians will require sophistication. Ethiopian embassy staff abroad and the few employees at the Ministry of Foreign Affairs will not cut it. Expecting Mr. Seyoum Mesfin alone to seal the deal with every partner in the world is absurd. Both intellectuals and experts should come forward toward this metamorphosis. Now is the time to change Ethiopia. China is offering her hand and Ethiopia should grab it.
In the short term, which is the honeymoon stage of this marriage, all the right things must be in place: Language, creativity, ambition, energy and etiquette. In the long term, Ethiopians can venture into the Chinese market just as the Japanese have. The doors are open. What is required in Beijing isn’t only found in the computer and high tech markets.
The recent news coming from the World Bank is encouraging as well for Ethiopia. Read the following excerpt: "The ADI 2006 confirmed that 16 African countries have sustained annual GDP growth rates in excess of 4.5 percent since the mid-1990s. Ethiopia’s recent progress in this domain was underrepresented as the country has shown a rate of growth of about 9 percent for the past three years and was on course to increase this into double figures in the coming few years. Ethiopia was in the top category for “policies of social inclusion and equity” and also in the domain of “economic management”.
The report also stated that Ethiopia did exceptionally well in the domain of “structural policies” and “public sector management and institutions”. In the section on “improving public sector management” the report stated that “the public sector is critical for good governance and development. To address existing dysfunction in the civil service, countries are reforming the civil service with differing emphases”. The report added that this included decentralization and capacity development programs.
Regarding setting up a business in Ethiopia, the report stated that it took about 30 days to set up shop, but that there have been vast improvements in the past two years since the report’s research was concluded. Land for a business, for example, now took hours to acquire rather than days or weeks as was previously the case. "
This is a great time for Ethiopian farmers. A great time for exporters. A bonanza for Ethiopian artists. It’s time to move forward!