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STRATEGIC

STUDIES

INSTITUTE

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Strategic Studies Institute Monograph

HIDDEN DRAGON, CROUCHING LION:

HOW CHINA’S ADVANCE IN AFRICA 

IS UNDERESTIMATED AND AFRICA’S 

POTENTIAL UNDERAPPRECIATED

David E. Brown

September 2012

The views expressed in this report are those of the author and do 

not necessarily reflect the official policy or position of the Department of the Army, the Department of Defense, or the U.S. Government. Authors of Strategic Studies Institute (SSI) publications 

enjoy full academic freedom, provided they do not disclose classified information, jeopardize operations security, or misrepresent official U.S. policy. Such academic freedom empowers them 

to offer new and sometimes controversial perspectives in the interest of furthering debate on key issues. This report is cleared for 

public release; distribution is unlimited.

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This publication is subject to Title 17, United States Code, Sections 101 and 105. It is in the public domain and may not be copyrighted.
ii

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be forwarded to: Director, Strategic Studies Institute, U.S. Army 

War College, 47 Ashburn Drive, Carlisle, PA 17013-5010. 

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ISBN 1-58487-542-9
iii

FOREWORD

The Strategic Studies Institute (SSI) has maintained close and positive professional ties with our 

colleagues at the Africa Center for Strategic Studies 

(ACSS) in Washington, DC, since ACSS’s founding 

in 1999. The Africa Center is the preeminent U.S. Department of Defense (DoD) institution for strategic 

security studies, research, and outreach in Africa. I am 

pleased that SSI and ACSS are once more able to collaborate in the publication of this monograph, entitled 

Hidden Dragon, Crouching Lion: How China’s Advance in 

Africa is Underestimated and Africa’s Potential Underappreciated. Its author, David E. Brown, is currently the 

Senior Diplomatic Advisor at ACSS. He brings unique 

perspectives to the important foreign policy issue of 

China’s rapid commercial and political advance in Africa, having served eight times in China and Africa as 

a Foreign Service Officer at U.S. Embassies, U.S. Consulates, and the American Institute in Taiwan.

This monograph is part of our Advancing Strategic 

Thought Series precisely because its topic is so important. As Mr. Brown stresses, the explosive growth of 

China’s economic interests in Africa is arguably the 

most important trend in the continent’s foreign relations since the end of the Cold War. China-Africa 

trade passed the $1 billion mark in 1990, jumped to 

$10 billion in 2000, and accelerated again, increasing 

15-fold in a little over a decade to $150 billion in 2011. 

China’s rapidly expanding ties with Africa catapulted 

China past the United States in 2010 as Africa’s top 

trading partner. Mr. Brown predicts that by 2020, 

China’s projected expansion of trade, investment, and 

development assistance is likely to secure economic 

and political influence for Beijing in Africa that at least 
rivals, if not surpasses, that enjoyed by Europe and 

the United States over the last 150 years.

Moreover, as the monograph emphasizes, China’s 

quest to build a strategic partnership with Africa must 

also be seen in the broader context of the central strategic objective of Beijing’s foreign policy: promoting the 

peaceful rise of the People's Republic of China (PRC) 

as a global superpower. What China is now consolidating in Africa is just one part of a broader network 

of global alliances that support not only Beijing’s putative leadership in the developing world, but its emerging role as a global power rivaling the United States. 

A cornerstone of China’s strategy is also the recognition that its national security ultimately depends on 

a strong, internationally competitive economy. With 

this in mind, China increasingly turns to Africa not 

only for resources to fuel its development, but also for 

markets to sustain its growing economy and ultimately support its longer-term aspirations to surpass the 

United States as the world’s preeminent power. 

An important but secondary theme of this monograph is that Africa has become an attractive trading 

partner for China not only for its natural resources, 

but as a growing market. Africa’s rapid growth since 

2000 has occurred not just because of higher commodity prices, but, more importantly, because of other factors, including improved political governance, macroeconomic stability, microeconomic reforms, increased 

globalization, urbanization, an expanding labor force, 

and a rising middle class. Mr. Brown argues that 

China has been at least 10 years ahead of American 

firms in strategic perceptions and thinking about Africa’s economic promise. While many in the West remain Afro-pessimists, he says, the Chinese have been 

guarded Afro-optimists or, perhaps more accurately, 

iv
v

Afro-realists who recognize both the continent’s great 

promise and significant risk. 

SSI is pleased to offer this monograph in fulfillment of its mission to assist U.S. Army and DoD senior leaders and strategic thinkers in understanding 

the key issues of the day.

 

DOUGLAS C. LOVELACE, JR.

Director

Strategic Studies Institute 

vii

ABOUT THE AUTHOR

DAVID E. BROWN is a career member of the Senior 

Foreign Service, who joined the Africa Center for 

Strategic Studies (ACSS) as Senior Diplomatic Advisor in August 2011. His prior Africa experience includes serving as the Senior Advisor to the J-5 (Strategy, Plans, and Programs) Director of the U.S. Africa 

Command (AFRICOM) in Stuttgart, Germany; three 

times as Deputy Chief of Mission at U.S. Embassies in 

Cotonou, Benin; Nouakchott, Mauritania; and Ouagadougou, Burkina Faso; and as Economic Officer at the 

U.S. Consulate-General in Lubumbashi, Democratic 

Republic of the Congo. Mr. Brown’s non-Africa overseas tours have been as Consul General in Chengdu, 

China, and Economic Officer in Beijing; Tokyo, Japan; 

and Moscow, Russia. He has also served in Washington, DC, as the Director of the Office of Environmental 

Policy; as Economic Officer in the Bureau of Economic, Energy, and Business Affairs (EEB) responsible for 

trade policy with developing countries, including Africa; and on the Canada desk, with responsibilities for 

economic, consular, and law enforcement issues. Prior 

to joining the U.S. Department of State, he worked in 

Miami as the business manager of the Latin American 

Bureau of CBS News. Mr. Brown holds a B.A. in government (political science) from Cornell University; 

an MBA from the University of Chicago, specializing 

in finance; and an MBA from the University of Louvain, Belgium, with majors in econometrics and international business.

ix

INTRODUCTION

The first part of the title of this monograph is arguably a misnomer. How can China—the Dragon—be 

hidden, if its presence in Africa is so obvious to Africans? Africans see evidence of the new China everywhere, from Chinese traders who have appeared 

in their markets, to Chinese construction or mining 

firms, and to even the Chinese consumer products 

found everywhere. Yet, for most Americans, China 

in Africa is a hidden dragon. They remain unaware 

that a rising China—the greatest partner and rival of 

the United States in the 21st century—has already arrived in a big way on a continent that is the ancestral 

home of so many Americans as well as the cradle of all 

mankind. Americans also remain stuck in old images 

of Africa: famine, poverty, and desperation, instead 

of the continent’s new reality of progress, prosperity, 

and hope.

Two members of the Africa Center for Strategic 

Studies in Washington, DC, recently exchanged emails about China, Africa, and the West. The first, 

based in the Center’s regional office in Addis Ababa, 

Ethiopia, recounted news that Chinese President Hu 

Jintao would visit the Ethiopian capital in January 

2012 to inaugurate a new $200 million headquarters 

of the African Union paid for by Beijing—China’s 

greatest ever gift to Africa and a soft power tour de 

force. The second colleague’s response to this e-mail 

was brief, but wise: “China rises . . . while the West 

sleeps.” China is indeed rising, and the extraordinary 

increase over the last 20 years in the breadth, depth, 

and complexity of its economic interests and presence 

in Africa mirrors its rise in other parts of the world. 
x

This monograph is divided into four parts: Part 1

describes how China is leading other developing 

countries—including the other three “BRIC” countries 

(Brazil, Russia, and India)—in expanding aid, trade, 

and investment with Africa, defined here as North 

and Sub-Saharan Africa. Part 2 answers five major 

questions regarding the China-Africa economic relationship: Why China chose to expand its economic ties 

to Africa; why it has been so successful in expanding 

rapidly; whether new trade credits and development 

loans are creating a new African debt burden; whether 

African industrialization will be aided or hindered by 

China; and what the impact of new, nonstate Chinese 

actors (companies and individuals) will be on Africa. 

Part 3 addresses the strategic importance to China of 

its oil, minerals, and agriculture trade with and investments in Africa, while Part 4 discusses U.S. responses 

to China’s advance into Africa. 
1

HIDDEN DRAGON, CROUCHING LION:

HOW CHINA’S ADVANCE IN AFRICA 

IS UNDERESTIMATED AND AFRICA’S 

POTENTIAL UNDERAPPRECIATED

SUMMARY

The explosive growth of China’s economic interests in Africa is arguably the most important trend in 

the continent’s foreign relations arena since the end 

of the Cold War. China-Africa trade passed the $1 billion mark in 1990, jumped to $10 billion in 2000, and 

accelerated again, increasing 15-fold in a little over a 

decade to $150 billion in 2011. China’s rapidly expanding ties with Africa catapulted China past the United 

States in 2010 as Africa’s top trading partner. China’s 

projected expansion of trade, investment, and development assistance is likely by 2020 to secure economic 

and political influence for Beijing in Africa that at least 

rivals, if not surpasses, that enjoyed by Europe and 

the United States over the last 150 years.

China’s advance in Africa is 10 years ahead of 

similar moves by the other BRIC (Brazil, Russia, and 

India) emerging market leaders. Other developing 

countries in the Middle East and Asia are also entering 

African markets. With the important exception of the 

petroleum sector, China already has largely displaced 

traditional colonial powers and the United States as 

the predominant economic power in Africa. This displacement also mirrors Beijing’s ongoing rapid expansion in Latin America and exemplifies China’s rise in 

the early-21st century as a second great power rivaling the United States. 

China’s four main interests in Africa are: securing 

natural resources, including petroleum and strategic 
2

minerals; tapping an emerging market that has great 

long-term potential and is underestimated by the 

West; securing political support from African nations 

in the United Nations (UN); and ensuring Taiwan’s 

diplomatic isolation. The first two economic interests 

now dominate the latter two political interests—a role 

reversal from the Maoist and immediate post-Maoist 

periods ending in 1978—and reflect Beijing’s recognition that national security ultimately comes from economic strength. 

Africa has become an attractive trading partner 

for China, not only for its natural resources, but as a 

growing market. Africa’s rapid growth since 2000—

averaging 4.5 percent annually—has been due in part 

to a commodities “super cycle,”1 but more importantly to other factors, including improved political 

governance, macroeconomic stability, microeconomic 

reforms, increased globalization, urbanization, an expanding labor force, and a rising middle class. 

The key milestones influencing the recent history of 

China’s relations with Africa are: 1978, when Beijing’s 

“reform and opening” policies started; 1993, when 

China became an oil-importing country; 1995, when 

China’s State Council ordered that aid, trade credits, 

and development finance to Africa be tied to Chinese 

commercial interests; 2000, when China started its 

triennial Heads of State summitry with Africa; and 

2001, when China joined the World Trade Organization (WTO) and also launched its “going-out” policy 

to support the development of Chinese multinational 

firms, including those in Africa. 

China’s rapid and successful expansion in Africa 

is due to a multiplicity of factors, including economic 

diplomacy that is clearly superior to that of the United 

States, which cut back on support for U.S. business in 
3

Africa just as China surged ahead. Beijing skillfully 

supports its economic diplomacy in Africa through 

triennial heads of state summits; sustained high-level bilateral visits; a universal diplomatic presence in 

Africa (except for four small countries where Taipei 

makes its last stand)2; symbolic diplomacy exemplified 

by the new Chinese-built African Union headquarters 

opened in Addis Ababa, Ethiopia, in January 2012; 

bilateral trade, investment, and tax agreements; and 

vastly expanded “soft power” diplomacy—cultural 

centers, a volunteer corps, and international visitor 

programs—lifted from the U.S. diplomatic playbook. 

Another factor in China’s success has been its aggressive, integrated, and mercantilist policies for official 

aid, preferential trade credits, and development finance—all of which draw upon China’s own development experience and an Asian-style, state-led growth 

model. 

China, aided by its mercantilist policy of undervaluing its currency, has been successful in the Africa 

market because of the lower cost of its goods and services, but is also moving up the value-added chain for 

goods and becoming more competitive in services, 

especially engineering and construction. China has 

hurt African industrialization in textiles, negating the 

positive effects of the Africa Growth and Opportunity 

Act (AGAO) after the phaseout of the WTO Multifiber Agreement in 2005. At the same time, China has 

aided nontextile industrialization by: 1) restructuring 

its industry to “sunset” to Africa some of its low-tech, 

labor-intensive, and/or environmentally problematic 

industries such as shoes and leather; 2) adding backward and forward integration to its mining investments, and upstream goods used in construction; and, 

3) supporting infrastructure improvements, including 
4

those in new Special Economic Zones (SEZs) now under construction. 

Western donors are concerned that China’s “no 

strings attached” approach to development risks undoing decades of Western efforts to promote good 

governance, revenue transparency, and responsible 

natural resource development in Africa; corrupts 

African elites; unfairly promotes China’s interests at 

the expense of other non-African nations by violating 

Organization for Economic Cooperation and Development (OECD) norms for aid and trade credits; freerides on Highly Indebted Poor Country (HIPC) debt 

relief; and risks new unsustainable debts for African 

nations. China denies these charges, arguing that the 

commodity offtake agreements that are part of some 

new loans mitigate risk for China and ensure that 

African countries use resource revenues in ways that 

invest in development instead of being squandered by 

elites. Beijing is filling an important gap in Western 

aid—and doing well commercially—by focusing on 

improving Africa’s infrastructure. 

While China’s engagement with Africa has up to 

now been primarily led by the Chinese governmentand state-owned enterprises, nonstate actors, including privatized Chinese corporations and citizens, are 

increasingly important. These nonstate actors are 

making a contribution to the diversity and depth of 

Chinese trade and investment with Africa, but are also 

aggravating a host of problems, including rampant 

corruption, the flouting of labor and environmental 

laws, and the sale of counterfeit goods. Large-scale 

immigration by Chinese to Africa—by some estimates, 

totaling over 1 million people—is creating tensions, 

particularly with African retail traders. Some African 

politicians and the continent’s civil society are starting 
5

to debate the costs and benefits of China’s growing 

economic ties with the continent. 

China, more than the United States, needs Africa 

as a source of oil to fuel its rapid industrialization 

and diversify supplies away from the volatile Middle 

East. One-third of China’s oil imports come from the 

continent, versus 18-19 percent for the United States. 

China’s “oil diplomacy” has been most successful in 

Angola (due to corruption and financing deals linked 

to infrastructure needs) and in other African countries 

with smaller fields—ignored as marginal or politically 

sensitive by major Western companies. China’s use of 

rare-earth metals to threaten Japan over a territorial issue and the United States over Taiwan arms sales suggests that the United States should carefully monitor 

China’s mining investments in strategic defense-critical minerals in southern Africa. The U.S. Department 

of Defense (DoD) may ultimately choose to replenish 

stockpiles sold off after the end of the Cold War. Food 

security is a major issue for China, but Africa is not 

seen as an important source of future food imports. 

While Africa has 60 percent of the world’s total uncultivated arable land, the Chinese have not been largescale buyers or lessees of African land, in part because 

Beijing fears being accused of a land grab. 

The official U.S. rhetoric is that China’s rise in Africa should not be seen as a zero-sum game with the 

West, but areas for real U.S.-China cooperation to help 

Africa will remain elusive. The fundamental problem 

is China’s domestic politics, in which many actors 

benefit from China’s current modus operandi in Africa 

and, in any event, are hyper-mistrustful of the United 

States. The United States could help itself, however, 

by improving its economic diplomacy and statecraft, 

including, initiating a presidential summit with Afri-
6

can heads of state; better funding of U.S. Government 

agencies providing trade advocacy, export credits, 

and investment insurance; and reforming the U.S. 

Foreign Commercial Service and how U.S. diplomats 

are trained and rewarded for commercial advocacy. 

The United States should also adequately fund its 

own soft power efforts, focusing on public diplomacy. 

U.S. policymakers should also continue to seek areas 

where cooperation with China regarding Africa may 

be possible. In light of African-led efforts in the UN, 

one area worth exploring is cooperation with Beijing 

to improve maritime security in the Gulf of Guinea 

by training and equipping West and Central African 

navies and coast guards. 
7

PART I

CHINA LEADS THE DEVELOPING WORLD

IN FOSTERING ECONOMIC TIES TO AFRICA

THE HIDDEN DRAGON: CHINA’S MAIN 

INTERESTS IN AFRICA AND PLACE 

IN THE WORLD 

The People’s Republic of China (PRC), founded in 

1949, started providing aid to African nations in the 

early 1950s, first to Egypt. China’s supreme leader, 

Mao Zedong, aided Africa’s newly independent nations in the late 1950s and early 1960s, in competition with Moscow and Washington. After a period 

of retrenchment in the 1970s, China’s involvement in 

Africa, both diplomatic and commercial, came alive 

again in the 1980s as an international extension of 

Deng Xiaoping’s policies of “reform and opening,” 

which were initiated in 1978. China-Africa economic 

ties gained further momentum in the early 1990s, due 

most importantly to China’s search for natural resources. Today, 20 years later, China has the same four 

core interests in Africa, albeit with a shift in priorities:

1. Securing Natural Resources: China’s number one 

interest in Africa is to increase access to energy, minerals, and raw materials to fuel China’s rapid industrialization and emerging consumer society. China’s 

National Oil Companies (NOCs) are developing oil 

fields in Africa, and hope one day to compete as technological equals with Western companies. Chinese 

firms are already working hyperactively in African 

mines, from Guinea’s bauxite to Niger’s uranium to 

Zambia’s copper.3
8

2. Tapping an Emerging Market: For China, Africa is 

a growing, one billion-person market, with increasing 

disposable income and an expanding middle class. 

Africa’s collective gross domestic product (GDP) will 

grow by $1 trillion by 2020, taking it to a total of $2.6 

trillion.4 Investment in Africa can also potentially facilitate Beijing’s efforts to restructure China’s own 

economy away from low-cost, labor-intensive, and/

or heavily polluting industries.

3. United Nation Votes: African countries account 

for more than one-quarter of UN member-states and 

votes. By cultivating African nations, China seeks to 

win their support in international forums and secure 

its status as a rising power. For example, when the 

neuralgic issue of Tibet became an issue in 2008 in 

the UN Human Rights Council, China leaned on African nations to remain silent or even make supportive 

statements.5

4. Isolating Taiwan: The PRC seeks to end Taipei’s 

official diplomatic presence in Africa and replace it 

with recognition of Beijing. Some observers believe 

that since Taiwan’s election in 2008 of President Ma 

Yingjiu (who was re-elected in January 2012), there 

has been an informal truce between Beijing and Taipei 

concerning competition for diplomatic recognition.6

Others argue, however, that the countries worldwide 

that still recognize Taipei are so few in number (23), 

and that the contest is essentially over. 

While China’s interests in Africa until the end of 

the Mao era in 1976 were mainly political, they are 

now predominantly economic, with 1) and 2) replacing the current 3) and 4) as China’s top priorities. 
9

AFRICA: AIDING CHINA’S PEACEFUL 

RISE AS A SUPERPOWER

China’s quest to build a strategic partnership with 

Africa must also be seen in the broader context of the 

central strategic objective of Beijing’s foreign policy: 

promoting the PRC’s peaceful rise as a global superpower.7

 What China is now consolidating in Africa is 

just one part of a broader network of global alliances 

that support not only Beijing’s putative leadership in 

the developing world, but also its emerging role as 

a global power rivaling the United States. A cornerstone of China’s strategy is also the recognition that 

its national security ultimately depends on a strong, 

internationally competitive economy. With this in 

mind, China increasingly turns to Africa not only for 

resources to fuel its development, but also for markets 

to sustain its growing economy and ultimately support its longer-term aspirations to surpass the United 

States as the world’s preeminent power. Many of the 

trends described in this monograph are also clearly 

visible in Latin America, a traditional zone of influence of the United States and a relatively new region 

for China. 

The tactics that China is using in Africa to realize 

its strategic ambitions include: offering powerful economic incentives in the form of vastly expanded trade, 

investment, and development assistance; expanded 

soft power diplomatic instruments; and peacekeeping and military cooperation (currently limited, but 

expanding, e.g., through Chinese offers to support the 

African Union Mission in Somalia (AMISOM) and the 

December 2011 talks with the Seychelles to establish 

a resupply facility, ostensibly to fight piracy). Beijing 

also tries to distinguish its relations with Africa from 
10

those of Western powers by framing relations in terms 

of Third World solidarity, of its historical ties to Africa starting under Mao, and of calls for expanded ties 

based on “mutual respect,” “noninterference in internal affairs,” and “win-win” outcomes.8

Some observers say that Beijing’s moves have been 

so rapid, momentous, and successful that they have already put China on par with long-established Western 

powers regarding Africa. China-Africa trade passed 

the $1 billion level in 1980, jumped to $10 billion in 

2000,9 and again increased 15-fold in a little more than 

a decade to $150 billion in 2011.China’s projected rapid expansion of trade, investment, and development 

assistance is likely in the second decade of the 21st 

century to succeed in securing economic and political 

ties to African nations that at least rival, if not surpass, 

the relations and influence that European nations and 

the United States have enjoyed in Africa over the last 

150 years.10

OTHER BRICS AND THE DEVELOPING 

WORLD ALSO INTERESTED IN AFRICA

While China’s increased presence in Africa is the 

single most important foreign policy development 

for the continent since the end of the Cold War, it is 

also an important component of two broader megatrends in Africa in the new millennium. It is not possible to compare China’s expanding presence in Africa 

with that of the West without also appreciating these 

broader trends: 

1. Increased involvement in Africa by BRICs other 

than China, i.e., the emerging powers of Brazil, India, and Russia. The BRICs’ combined foreign direct 

investment (FDI) in Africa has already surpassed the 
11

U.S. total for the continent. Growing interest in African resource investments by other BRICs has granted 

African commodity exporters a stronger hand in bargaining with the Chinese. In May 2011, India’s Prime 

Minister announced $5 billion in credits for African 

governments over the next 3 years—a move widely 

seen as an attempt by New Delhi to present itself as a 

rival partner to China in Africa.11

2. Expansion in Africa’s South-South trade with 

the developing world is eclipsing traditional NorthSouth trade with the European Union (EU), the United 

States, and Japan. The International Monetary Fund 

(IMF) reports that for Sub-Saharan Africa (and for 

North Africa as well), there has been a significant and 

rapid reorientation of exports toward China, India, 

and other developing countries over the past decade. 

More than half of the region’s trade (both exports and 

imports) is now with nontraditional partners, and 

investment flows are moving along a similar course. 

Between 1990 and 2010, the share of Sub-Saharan Africa’s exports to advanced economies declined from 

78 percent to 52 percent, and the share of Sub-Saharan 

Africa’s imports from those countries declined from 

73 percent to 43 percent. Most of this reorientation has 

occurred during the past 10 years. By 2010, the share of 

Sub-Saharan Africa trade with China, India, and Brazil reached approximately 17 percent, 6 percent, and 3 

percent, respectively, rising from negligible shares in 

1990. Very importantly, this reorientation has largely 

occurred through trade creation rather than trade diversion, as engagement with traditional Western partners has continued to grow in recent years, though at a 

much slower pace than that with new partners.12 This 

trend was accelerated by the global financial crisis 

starting in 2008, which hit developed countries harder 
12

than emerging economies. As World Bank President 

Robert Zoellick said in September 2010: “China’s 

South-South partnership with Africa in trade, investment, and exchange of know-how can become an important source of growth in the post-crisis era.”13

Africa’s key South-South partners other than China are:

• India. This country is a distant second behind 

China in terms of its expanding engagement on 

the continent, but is striving to catch up. This 

new Sino-Indo scramble for Africa also reflects 

a broader, more intense global competition 

between these two emerging Asian powers. 

China’s trade with Africa in 2010 totaled $126.9 

billion, or two-and-a-half times India’s $51 billion. At the same time, India’s trade with Africa 

in 2010 had increased more than 50-fold (from 

$967 million in 1990),14 and is expected to rise 

to $70 billion by 2015.15 China has almost twice 

as many embassies in Africa as India, and its 

investment, loans, and aid flows to Africa are 

much higher.16 Recognizing China’s lead in Africa, India has stepped up its efforts to gain an 

economic foothold on the continent. New Delhi 

sponsored the second India-Africa Summit in 

Addis Ababa in May 2011. At least in its early 

stages, the competition between Beijing and 

New Delhi focuses most importantly on Africa’s 

natural resources. India’s state Oil and Natural 

Gas Corporation (ONGC) signed an agreement 

for joint exploration and refining projects with 

Angola, which is seen as a precursor to future 

rounds of licensing in which ONGC hopes to 

win oil blocks. Toward this end, India has al-
13

ready offered to invest billions in building and 

refurbishing refineries in Angola. Beijing, however, has a huge head start. China has already 

granted Luanda an estimated $10 billion in 

loans, compared to only $70 million in Indian 

loans, and has a larger physical presence in Angola—with than 40,000 workers compared to 

India’s 1,500.17

• Brazil. Although well behind China and India, 

Brazil has made its presence felt throughout 

much of Africa, and not just in Portuguesespeaking countries. The sharply upwardgrowth trajectory of Brazil’s trade with Africa 

has been similar to that of China and India, with 

the trade of $3.1 billion in 2000 leaping to $27.6 

billion in 2011.18 From 2003 to 2010, Brazilian 

President Lula da Silva made 11 trips to 25 African nations and doubled the number of Brazilian embassies in Africa.19 Current Brazilian 

President Dilma Rousseff announced in April 

2012 the plan of her government to establish a 

special fund for Africa to finance development 

projects together with the African Development Bank (ADB) and World Bank. During the 

same month, the private Brazilian bank, BTG 

Pactual, announced the launch of a $1 billion 

fund for investment in Africa.20

• Russia. Meanwhile, Russia is attempting a 

comeback in Africa. It had retreated from the 

continent after the breakup of the Soviet Union, 

closing nine embassies in Sub-Saharan Africa 

in 1992. Russian President Dmitry Medvedev 

traveled in 2009 to Egypt, Nigeria, Angola, 

and Namibia to shore up Russian energy, mining, and telecommunication deals.21 However, 
14

Russia’s trade with Africa was a distant fourth 

behind China, India, and Brazil, reaching $3.5 

billion in 2009.22 Russia organized a meeting in 

December 2011 in Addis Ababa, Ethiopia, with 

250 African businessmen along with Russian 

representatives of Gasprombank, Lukoil, and 

the Russian Railroad Company interested in 

gas and oil exploration and railroad development.23

• Non-BRICS Developing Countries. There are 

also growing trade and investment flows into 

Africa from the Middle East and elsewhere in 

Asia. Turkey stepped up its engagement in 

Africa beginning in 2005, and is an important 

player in North Africa and the Horn of Africa. 

Iran has focused its attention on northeastern 

Africa, but is expanding its relations throughout the continent in part as an effort to escape 

political and economic isolation. Government 

ministers from 35 African countries attended 

the third biennial Korea-Africa Economic Cooperation Ministerial Conference in 2010.24

Other emerging countries that are either reengaging in Africa or arriving for the first time 

include Saudi Arabia, the United Arab Emirates, 

Malaysia, Thailand, Singapore, Indonesia, and 

Vietnam.25 Reflecting this shift, Asia’s share of 

African trade doubled from 1990 through 2008 

to 28 percent, while Western Europe’s portion 

shrank from 51 percent to 28 percent.26
15

TEN YEARS OF SUCCESSFUL AFRICA-CHINA 

TRADE: THE DRAGON FLIES MORE SWIFTLY 

THAN THE EAGLE 

If a June 2010 report by the McKinsey Global Institute is an accurate reflection of renewed U.S. business interest in Africa, then China has been at least 10 

years ahead of American firms in strategic perceptions 

and thinking about Africa’s economic promise. While 

many in the West remain Afro-pessimists, the Chinese 

have been guarded Afro-optimists or, perhaps more 

accurately, Afro-realists who recognize both the continent’s great promise and significant risk. 

 China’s confidence in Africa is paying dividends. 

While Chinese trade (exports and imports) with the 

world rose eightfold from 2000 to 2010, it rose more 

than 11-fold with Africa during this same period27

(and 15-fold from 2000 to 2011).28 China, Africa’s largest trading partner, accounted for 10.4 percent of the 

continent’s total trade in 2010 (up from about 4 percent in 2000), while Africa accounted for about 4 percent of China’s global trade—up from about 2 percent 

in 2000.29 By comparison, the United States, which was 

dethroned by China as Africa’s top trading partner 

in 2010, had $113 billion in trade in Africa that year, 

a 3-fold increase from the $39 billion in trade with 

Africa in 2000.30

China’s top trade partners in Africa in 2010 (see 

Figure 1) were mainly countries indicated with an 

asterisk in Figure 1, from which it purchases oil and 

minerals (in $ billions)31: 
16

1. South Africa ($25.7)* 11. Kenya ($1.8)

2. Angola ($24.8)* 12. Tanzania ($1.7)

3. Nigeria ($7.8)* 13. Ethiopia ($1.5)

4. Egypt ($7.0) 14. Mauritania ($1.3)*

5. Libya ($6.6)* 15. Gabon ($1.2)*

6. Algeria ($5.2)* 16. Tunisia ($1.1)

7. Congo ($3.5)* 17. Equatorial Guinea ($1.1)*

8. Morocco ($2.9) 18. Cameroon ($1.0)*

9. Zambia ($2.9)* 19. Chad ($0.8)*

10. Ghana ($2.1) 20. Botswana ($.04)*

*Indicates country from which China purchased oil and minerals.

Figure 1. China’s Top Trade Partners 

in Africa in 2010 (in $ billions).

China’s strong exports to Africa also reflect its increased global competitiveness in a broader range of 

products. In 2000, China’s exports to Africa consisted 

largely of textiles and clothing (28 percent), machinery 

and transportation equipment (27 percent), and other 

manufactured goods (26 percent). By 2009, however, 

Chinese exports to Africa had shifted to high-end 

capital goods, especially communications equipment 

(20 percent), road-transport vehicles (19 percent), and 

electronic machinery (18 percent). Put differently, 

electro-mechanical products such as machinery, automobiles, and electronics accounted for almost 60 percent of China’s exports to Africa—a dramatic increase 

since 2000. 

By contrast, 90 percent of Africa’s exports to China 

in 2010 were oil, minerals, base metals, stone products, 

and raw logs.32 About 80 percent of Africa’s exports to 

China come from only five oil- and mineral-exporting 
17

nations. Primary products such as cotton and phosphate were formerly the main products exported by 

Africa to China. In recent years, however, Africa’s 

finished industrial products, such as steel and copper 

materials, chemical fertilizers, and electronic products, have started to enter the Chinese market. Meanwhile, Africa’s exports of farm produce to China have 

also increased rapidly, albeit from a low base.33 (See 

the section on agriculture below.) 

Similar to unilateral trade preferences granted by 

the United States and the EU to Africa, China gives 

zero-tariff preferences to certain goods exported to 

China from selected African countries. By July 2010, 

the number of commodities entitled to the preferential policy increased to more than 4,700 tariff lines,34

and in the future will include up to 95 percent of the 

commodities listed in China’s customs database. Africa’s exports of commodities entitled to preferences 

have increased rapidly, but still represent only a small 

fraction of its total imports: in 2009, China imported 

only $4.5 billion of such products from Africa, including farm produce, leather, stone materials, textiles and 

garments, machinery parts, base metals, and wood 

products.35

CHINA’S FOREIGN DIRECT INVESTMENT 

IN AFRICA—LARGE, BUT ESTIMATES DIFFER

Chinese FDI in Africa quadrupled between 2005 

and 2009, reaching a cumulative stock of $9.3 billion, 

according to the PRC Minister of Commerce figures. 

Renaissance Capital predicts this could soar to $40 billion by 2015 (based on a conservative estimate of $5 

billion in annual Chinese FDI).36 China’s investments 

in Africa at the end of 2009 were increasingly diversi-
18

fied, falling in the following sectors: mining/industry 

(29.2 percent); manufacturing (22.0 percent); construction (15.8 percent); finance (13.9 percent); business 

services (5.4 percent); wholesale/retail trade (4.0 percent); scientific research, technical services, and geological prospecting (3.2 percent); farming, forestry, 

fishing, and animal husbandry (3.1 percent); and others (3.4 percent).37 The IMF estimated in October 2011 

that China accounted for 16 percent of FDI flows to 

Sub-Saharan Africa, up exponentially from less than 1 

percent as recently as 2003.38

Chinese official figures for FDI in Africa for the period 2007-10 show an average increase of about $1.5 

billion per year if one discounts the exceptional year 

of 2008, when Industrial and Commercial Bank of 

China (ICBC) purchased 20 percent of South Africa’s 

Standard Bank for $5.5 billion. In the year 2010, FDI 

was reported to be $2.1 billion.39 The Bank of China 

reported that China’s cumulative FDI in Africa was 

over $10 billion by the end of 2010, about 20 times that 

in 2003. This being said, there is considerable confusion surrounding this figure and China’s definition 

of direct investment. Some official Chinese figures 

for investment totals in Africa likely understate the 

real amount. Even PRC sources cannot agree on the 

amount of China’s FDI that has gone into Africa. For 

example, the official Xinhua News Agency reported 

that, by the end of 2010, China had invested about $40 

billion in more than 2,000 enterprises in 50 African 

countries—a figure roughly 400 percent at variance 

with that of the Bank of China. 

While the correct total FDI figure is probably closer 

to $40 billion than to $10 billion, Western countries collectively have invested much more in Africa, primarily because they started earlier. By the end of 2008, for 
19

example, the United States had invested a cumulative 

total of $37 billion in Sub-Saharan Africa. It is possible 

that today China is investing more in Africa than any 

other single country. The primary recipients of Chinese FDI in Africa have been South Africa, Nigeria, 

Zambia, Sudan, Algeria, and Egypt—all major oil or 

mineral exporters except Egypt.40 (The IMF also lists 

Niger, the Democratic Republic of the Congo [DRC], 

and Ethiopia as major recipients of Chinese FDI; the 

first two are major mineral exporters.41) Data from the 

Heritage Foundation suggest that China was responsible for nearly all FDI into the DRC over the period 

2005 to 2009, nearly 50 percent into Nigeria, and 20 

percent into South Africa.42 Part of the reason for the 

wide discrepancies in FDI statistics is that Chinese investments are often channeled through off-shore entities registered in places such as Hong Kong, the Cayman Islands, and others.43 Hong Kong FDI into Africa 

was estimated at $5.3 billion in 2008, which helps explain part of the discrepancy. 

China’s strategic investments in South Africa’s 

financial sector merit particular mention. First, Chinese banks in South Africa are serving their Chinese 

customers, for whom South Africa has grown into a 

regional hub where Chinese investors can venture 

further into the continent.44 South Africa accounts for 

fully one-quarter of Chinese FDI in Africa. Second, 

Chinese banks are taking equity stakes in South African banks in part to gain market intelligence and business in other African countries. For example, ICBC’s 

investment will allow it access to Standard Bank’s 

activities in more than 17 countries. A substantial increase in financing for African infrastructure projects 

was expected as a result of this investment. This has 

become evident as an increasing number of joint proj-
20

ects between ICBC and Standard Bank are announced, 

recently including financing of $825 million for a coalfired power station in Botswana.45 The China Development Bank also paid $3 billion for a 3.1 percent stake 

in Barclays, which has a strong presence in Africa.46
21

PART II:

MAJOR QUESTIONS IN THE 

CHINA-AFRICA ECONOMIC RELATIONSHIP

As noted above, the rapid expansion of China’s 

economic interests in Africa is arguably the most important trend in the continent’s foreign relations arena 

since the end of the Cold War. To illuminate this trend, 

this section addresses several key questions about the 

nature of the China-Africa economic relationship: 

1. Why did China choose to expand its economic 

ties to Africa?

2. Why has China been so successful in expanding 

these ties?

3. Are China’s trade credits and development loans 

creating a new debt burden for Africa? 

4. Will Africa be able to industrialize in part because of, or despite, China?

5. What are the impacts on new nonstate Chinese 

actors on Africa? 

WHY DID CHINA CHOOSE TO EXPAND ITS 

ECONOMIC TIES TO AFRICA?

The first major question addressed is: “Why did 

China choose to expand its economic ties to Africa? “ 

Broadly speaking, there are two reasons: 

1. The “pull’ of Africa as an increasingly attractive trade and investment destination, initially as an 

indispensable supplier of natural resources, but increasingly as an attractive export market and investment target; and,

2. The “push” of domestic factors within China itself, including the burgeoning demand for inputs to 
22

feed rapidly rising industrial production, and China’s 2001 accession to the WTO. Along with Beijing’s 

mercantilist economic policies, these factors laid the 

groundwork for China’s huge trade surpluses, emerging multinationals, and massive capital reserves.

The Pull of Africa: Turning a Corner toward 

Sustainable Growth. 

Not Just Riding the Latest Commodities Boom. As to 

Africa’s “pull” or attractiveness to China, let us first 

admit that the beauty of Africa as a trade and investment partner lies in the eye of the beholder. Optimists 

rightly see the continent as the last emerging market 

frontier—a risky, but extraordinary, opportunity. 

They recognize that Africa will continue to take one 

step backward, but then two forward. These optimists 

recognize that long gone is the continent’s dystopian, 

gloom-and-doom, “Out of Africa” era of the 1990s 

during which foreign investors fled.47

The Chinese government recognized earlier than 

others that Africa had made a fundamental shift. By 

the late 1990s, Beijing officials began to believe that 

the macroeconomic situation in Africa was taking a 

favorable turn: the increasing momentum of Africa’s 

economic reform programs was resulting in greater 

opportunities for Chinese commerce.48 With 20/20 

hindsight, China’s early conversion to a believer may 

have also reflected lessons learned from the success of 

Beijing’s own reform and opening policies, thus providing the Chinese with confidence that Africa’s own 

efforts at economic reform would eventually pay off. 

There are still naysayers about Africa’s future, 

of course, but they are fewer than in the past. These 

naysayers dismiss Africa’s recent economic success as 
23

primarily the result of an extended supercycle of high 

commodity prices, and predict a regression to Africa’s 

historical economic underperformance once prices 

fall. In the view of these pessimists, Africa, the home 

of one-third of the world’s resource-dependent economies, has been mired in a high degree of corruption 

and dependence on resource rent from which it has 

yet to escape. They still consider Africa as a target for 

aid, rather than trade and investment. Consequently, 

they still view Africa more as a social responsibility 

investment, rather than a real opportunity for yield.49

While this point about the cost of corruption is 

partly valid, most of the statistical evidence supports 

the optimists’ view that relative progress has been 

made and that the importance of high commodity 

prices has been overstated. It is undeniably true that 

soaring prices for oil, minerals, and other commodities 

have helped lift Africa’s GDP since 2000. However, 

the McKinsey Global Institute estimated in 2010 that 

natural resources directly accounted for just 24 percent of the continent’s GDP growth from 2000 through 

2008. By another estimate, natural resources—and the 

related government spending they financed—generated just 32 percent of Africa’s GDP growth from 2000 

through 2008, with the remaining two-thirds-plus 

coming from other sectors. 

From 2000 to 2010, Africa’s real GDP grew by 

4.7 percent a year, on average—twice the pace of its 

growth in the 1980s and 1990s. By 2009, Africa’s collective GDP of $1.6 trillion was roughly equal to Brazil’s 

or Russia’s. Today, the continent remains among the 

world’s fastest-expanding economic regions. In fact, 

Africa and Asia (excluding Japan) were the only continents that grew during the recent global recession that 

started in 2008.50 Though GDP growth in Sub-Saharan 
24

Africa slowed to 2.8 percent in 2009 after averaging 

6.6 percent from 2004 to 2008, it bounced back to 5.3 

percent in 2010.51 In 2011, GDP growth rose to 5.1 percent and will be 5.4 percent in 2012 and 5.3 percent in 

2013, the IMF predicted.52 GDP growth is expected to 

average 5 percent through 2015.53

Moreover, Africa’s economic growth since 2000 

has been widespread, with 27 of its 30 largest economies expanding rapidly. Indeed, countries with and 

without significant resource exports had similar GDP 

growth rates. All sectors within African economies 

also contributed to growth, including natural resources, finance, retail, agriculture, transportation, and telecommunications. 

Drivers of Growth within Africa. We will likely never 

know the thought processes that transpired in 1995 in 

Chinese ministries, think tanks, and even Zhongnanhai—the residences and offices of China’s top leadership—in reformulating China’s foreign policy toward 

Africa during that pivotal year. We can, however, observe what Africa has accomplished over the last 25-

plus years as a starting point to understand why China 

has piled into Africa with such abandon. Understanding why Africa has great potential also has important 

implications for whether U.S. companies should take 

a new—or perhaps first—look at the continent. 

This monograph argues that the continent’s improved political governance, macroeconomic stability, 

microeconomic reforms, and increased globalization 

have been more important to Africa’s growth surge 

since 2000 than have higher commodity prices: 

• Improved Political Governance: Greater accountability from democratically elected governments brings the hope of longer-term stability 

and economic growth less impeded by the sys-
25

temic corruption of the past. African countries 

were freed from the clientilism of the Cold 

War period after the Berlin Wall fell in 1989 

and the Soviet Union collapsed in 1991, setting 

off a multiyear wave of political liberalization 

that started with Benin’s national conference 

in 1990.54 Since then, there has been a peace 

dividend in Africa, since the average number 

of serious conflicts recorded each year has 

nearly halved, from 4.8 in the 1990s to 2.6 in 

the 2000s.55 The Arab Spring of popular demonstrations in Tunisia, Egypt, and Libya led in 

2011 to the overturning of decades of autocratic 

rule in North Africa. While events in Somalia 

have, to greater and lesser degrees, destabilized much of the Horn of Africa, the political 

situation in Sub-Saharan Africa on the whole 

has improved, with several regional conflicts 

being gradually resolved. In West Africa, for 

example, civil wars in Liberia and Sierra Leone ended in recent years, and security sector 

reform has been undertaken. In 2010, Guinea 

and Cote d’Ivoire held democratic elections, 

followed sooner or later by the victors’ ascent 

to the Presidency. 

• Improved Macroeconomic Performance: Africa’s 

economies grew healthier as governments reduced the average inflation rate from 22 percent in the 1990s to 8 percent after 2000. They 

shrank their budget deficits by two-thirds, and, 

helped by the Highly Indebted Poor Countries 

(HIPC) initiative and Paris Club reschedulings, 

trimmed their foreign debt by one-quarter. Average government debt as a percentage of GDP 

was 59 percent in the 2000s, compared with 
26

81.9 percent in the 1990s—which means lower 

debt ratios than the United States and most European nations. Between 2001 and 2010, six of 

the 10 fastest growing economies in the world 

were in Africa.56

• Successful Microeconomic Reforms: Many African 

countries have privatized state-owned enterprises, lowered corporate taxes, strengthened 

regulatory and legal systems, and provided critical physical and social infrastructure. Nigeria 

privatized more than 116 enterprises between 

1999 and 2006. It also reformed its banking sector, which went from a peak of 90 banks in the 

mid-2000s to 24 by the end of the decade—and 

a stronger sector overall.57 Morocco and Egypt 

struck free-trade agreements with major export 

partners. 

• Increased Globalization: Increased foreign trade 

has expanded welfare through greater export 

earnings and employment and also contributed 

to higher standards of living via lower-cost imports. Africa is gaining greater access to international capital: total foreign-capital flows into 

Africa rose from $15 billion in 2000 to a peak of 

$87 billion in 2007.58Capital inflows are forecast 

to reach $150 billion by 2015.59

Interrelated demographic and social changes are 

also important drivers for Africa’s long-term growth. 

Key among these will be a growing labor force, urbanization, and the rise of the middle-class African 

consumer: 

• Expanding Labor Force: In contrast with much 

of the world, Africa’s labor force is expanding and youthful. At present, the continent has 
27

more than 500 million people of working age. 

By 2040, Africa will be home to one in five of 

the planet’s young people and will have the 

world’s largest working-age population: over 

1.1 billion, more than China or India. By 2050, 

Africa will have one of four workers on the 

planet. Already, Africa’s median age of 19.7 

years (18.6 in Sub-Saharan Africa) is considerably younger than the 29.2 years in Asia, 36.8 

years in the United States, and 40.1 years in Europe.60 This youth bulge—whose productivity 

has also been aided by improvements in health 

and education—will also lift GDP growth. Over 

the last 20 years, three-quarters of the continent’s increase in GDP per capita came from 

an expanding workforce, the rest from higher 

labor productivity. 

• Urbanization: In many African countries, urbanization—with its economies of scale—is 

boosting productivity. In 1980, just 28 percent 

of Africans lived in cities. Today, this figure is 

40 percent, and is projected to rise to 50 percent 

by 2030. Already, Africa has 52 cities with at 

least 1 million people.61 Urbanization is spurring the construction of more roads, buildings, 

water systems, and similar projects. Since 2000, 

Africa’s annual private infrastructure investments have tripled, averaging $19 billion from 

2006 to 2008. By 2030, the continent’s top 18 

cities could have a combined annual spending 

power of $1.3 trillion. 

• Rise of the Middle Class: Many Africans are joining the ranks of the world’s consumers. In 2000, 

roughly 59 million households on the continent had $5,000 or more in income. By 2014, 
28

the number of such households could reach 

106 million. By one measure, the number of 

middle-class Africans rose by 27 percent from 

2000.62 The number of households with discretionary income is projected to rise by 50 percent 

over the next 10 years, reaching 128 million.63 If 

Africa maintains its current growth trajectory, 

consumers will buy $1.4 trillion worth of goods 

and services in 2020, which will be a little less 

than India’s projected $1.7 trillion but more 

than Russia’s $960 billion.64

THE PUSH WITHIN CHINA: 1993 SHIFT TO 

OIL IMPORTER LEADS TO LINKAGE OF AID/

TRADE; 2001 WTO ACCESSION LEADS TO 

“GOING-OUT” POLICY

China’s trade and aid in Africa from the 1950s to 

the late 1970s was in support of the PRC’s communist, anti-colonial ideology. Since then, however, there 

have been four watershed events that have shifted 

Beijing’s approach to the African continent from the 

economy serving diplomacy to diplomacy serving the 

economy:

• 1978: Deng Xiaoping Launches “Reform and 

Opening Policy.” Since 1978, China has moved 

much closer to a market economy, in which 

profits, not political agendas, have driven most 

of the economic and trade activities. Over the 

course of time, China’s relations with African 

countries have also been restructured from being anti-colonial brothers-in-arms to economic 

and trade partners based on market principles.65

• 1993: Faced with declining domestic oil production and skyrocketing demand spurred by 
29

rapid industrialization, China became a net importer of oil and began to seek diversified suppliers, including African. 

• 1995: Reflecting China’s need for greater natural resource inputs for industrialization, the 

State Council mandated that the Ministry of 

Commerce combine African aid, trade, and 

investment.66 The State Council also directed 

China’s state-owned companies to launch a 

number of trade, investment, and development centers across Africa. Each center was 

to be built and operated independently by an 

experienced Chinese company with extensive 

business interests in that country. In December 

1995, Complant, a state-owned enterprise newly independent from the Ministry, opened the 

first trade, investment, and development center 

in Guinea. At least 10 other centers followed. 

Consistent with the State Council’s mandate, 

the Ministry also directed its municipal and 

provincial branches to organize delegations of 

outstanding enterprises to travel to Africa. 

• 2001: China was admitted to the WTO—a 

turning point in its nominal acceptance of the 

Western, rules-based international economic 

system.67 That same year, and under the leadership of Premier and economic czar Zhu Rongji, 

China’s 10th 5-year plan formalized the directive for Chinese companies to go global, expand into new markets, build up the country’s 

fledgling multinational corporations, and aid 

its domestic restructuring by pushing mature 

sunset industries offshore.68
30

Another push factor has been the desire to seek 

higher returns on China’s huge savings. In terms of 

portfolio theory, China has been looking for the lowestrisk, highest-return options for the recycling of China 

dollars that represent its huge trade surplus, much as 

Middle East oil producers recycled petrodollars into 

the world economy in the 1970s. In a certain sense, the 

aggressive lending by Chinese state banks in Africa, 

following the Chinese government’s foreign policy 

decisions to expand commercial relations with Africa, 

could also be seen as a higher-risk, higher-return bet 

on the future of Africa, as well as part of an effort to 

diversify a global portfolio away from shorter-term, 

dollar-based financial instruments into longer-term, 

non-U.S. assets. 

This may prove to be a smart bet for China: McKinsey Global Institute has calculated that foreign investments in Africa have yielded, on average, the highest 

rates of return on investment of any region—returns 

that are accruing increasingly to Chinese firms while 

U.S. firms sit on the sidelines. Furthermore, China 

smartly expanded its own lending and investment, 

continuing it during the global economic downturn in 

2008—thus allowing China even better terms on new 

deals.

FACTORS IN CHINA’S SUCCESS IN RAPIDLY 

EXPANDING ECONOMIC TIES WITH AFRICA

The second “big picture” question posed about the 

China-Africa economic relationship is, “Why has China been so successful in expanding its economic relations with Africa?” We preview the following reasons 

here and then offer a more-detailed discussion below. 
31

1. Chinese firms are becoming more globally competitive; in Africa, they offer good value for goods and 

services adapted to African needs and income levels.

2. China has carried out superior economic diplomacy in Africa, characterized by heads-of-state summits; high-level bilateral visits; a universal diplomatic 

presence; strong advocacy for bilateral trade, investment, and tax agreements; and symbolic diplomacy.

3. China has vastly expanded its soft power in Africa, including expanded scholarships and training, 

an international visitor program, cultural centers, and 

a new volunteer corps.

4. China’s development assistance programs—official aid, preferential trade credits, and development 

finance—are all tied to China’s commercial interests, 

but divorced from political/governance issues (with 

the exception of supporting Beijing’s “One China” 

policy). China’s assistance is consistent with its mercantilist, state-led development model, but it runs 

contrary to international/OECD aid norms and free 

rides on HIPC and Paris Club debt relief. 

5. China’s already internationally competitive construction sector has benefited greatly from a renewed 

emphasis among donors and African governments 

on building infrastructure, winning international and 

national tenders, as well as associated aid contracts 

from its own government—the significant majority of 

which are infrastructure-related. 

6. Chinese firms, both large and small, come from 

a business culture in China where bribery is endemic. 

Combined with African countries where corruption 

is rampant, and not constrained by the OECD’s antibribery convention, Chinese firms have been hypershrewd at deal making. 
32

Chinese Firms Are Becoming Globally Competitive. 

China is not the “world’s factory” for nothing. Before a discussion of a series of what may appear to 

be harsh criticisms of Chinese government policies 

and business practices, it is important to recognize 

that Chinese firms are becoming better and better at 

what they do. Just over 10 years after Beijing started 

its “going-out” policy, more and more Chinese companies are competing successfully in Africa and have 

established the distribution and service channels that 

will poise them for further success. When I arrived in 

Lubumbashi in 1987 to start my Foreign Service career 

at the U.S. Consulate-General there, I was told that 

the last Chinese restaurant in town had closed a few 

months before—a sure sign that the region’s mining 

industry had hit hard times. The relatively few Chinese products visible in the marketplace were decidedly low tech: cheap enamelware for food products 

and household plastic products. Today, the Chinese 

have returned to Lubumbashi in force, as Chinese 

firms have invested heavily in mining operations in 

Katanga Province, while Chinese consumer products, 

from electronics to cars, are everywhere.

The main competitive advantage of most Chinese 

companies vis-à-vis Western and other Asian producers is their lower costs, aided by the core of Beijing’s 

mercantilist policies: a deliberately undervalued currency. For manufactured goods, this cost advantage 

also often comes from huge economies of scale at factories in China. For service providers in Africa, the 

cost advantage comes from lower labor costs. Chinese 

managers and engineers, for example, have lower 

salaries and live in more modest conditions compared 
33

with their highly compensated Western counterparts. 

Some Chinese companies, such as in the telecommunication and construction sectors, deliver goods and 

services at attractive prices because they have adapted 

(and in some cases stolen) technology from elsewhere 

and/or become experienced at what they do. Western 

electronic giants such as Hewlett-Packard, Motorola, 

Siemens, and Ericsson are increasingly losing business to Chinese telecommunication companies such 

as Huawei and ZTE, which were active in 2010 in 50 

African countries—providing more third-generation 

or better networks in over 30 African countries, and 

fiber-optic networks and e-government networks in 

over 20 African countries.69

The days when U.S. firms could win large construction contracts in Africa—such as Morrison-Knudsen’s 

contract to build the Inga-Shaba dam in the DRC in the 

1970s—now seem like a distant memory. So successful 

have Chinese firms become in African infrastructure 

development that, prior to the publication of guidelines prohibiting government-owned enterprises of 

any nationality competing for U.S. taxpayer-funded 

Millennium Challenge Corporation (MCC) contracts, 

a Chinese state-owned engineering and construction 

company, Sinohydro, was awarded the two largest 

projects in the MCC compact with Mali: $71.6 million for improvements to the Bamako International 

Airport and $46.3 million for expansion of irrigation 

canals along the Niger River.70

The bottom line is that Chinese products and services have crowded out Western firms in all but the 

small upper-end luxury market in Africa.71 Mthuli 

Ncube, Chief Economist at the African Development 

Bank Group, estimated that Chinese firms accounted 

for 40 percent of the corporate contracts signed in Af-
34

rica in 2010, versus only 2 percent for U.S. firms.72 Not 

surprisingly, the lightning-fast expansion of Chinese 

interests in Africa has led to strong criticism, particularly in Western venues where the loss of the continent as a private “chasse gardée” is eyed jealously.73

China’s Superior Economic Diplomacy with Africa.

A second competitive advantage of Chinese companies is that Beijing’s official assistance to its companies in Africa has been multifaceted and, taken together, clearly superior to that provided by Western 

governments. As noted, in 1995, China’s State Council 

directed its Commerce Ministry to revamp its Africa 

policy, emphasizing the linkage between aid and 

trade. By the late 1990s, the most senior leadership in 

China’s government and Communist party began to 

involve itself directly in the country’s economic diplomacy with Africa. Five key characteristics of Chinese 

economic diplomacy in Africa include: 

a. Heads-of-State Summits: The Forum on ChinaAfrica Cooperation (FOCAC) is the embodiment of 

China’s new, higher-level political engagement with 

Africa. This heads-of-state forum, which was modeled along the lines of the Franco-African summit 

process, started with an initial conference in Beijing 

in 2000. The second, third, fourth, and fifth triennial 

FOCACs were held in 2003, 2006, 2009, and 2012 respectively, in Addis Ababa (Ethiopia), Beijing, Sharm 

El Sheikh (Egypt), and again in Beijing. Through FOCAC, Beijing has set out 3-year engagement plans 

toward the continent in the form of strategic initiatives and commitments—”deliverables” amounting 

to multi-billions of dollars in aid and investment. The 

PRC’s “state capitalism” approach is unique in that 

the government is able to make sweeping pronounce-
35

ments often on behalf of its business sector to invest 

and commit capital to Africa. This is possible only because of the political economy of China, wherein the 

government is still able to maintain direct control over 

key sectors of its economy and leading state-owned 

companies.74

One African minister responsible for economic affairs told me in November 2011 that the United States 

should stop complaining about China’s commercial 

successes in Africa and start promoting its own business interests more effectively.75 One reason for China’s success, he explained, was that Beijing’s leaders 

were far more attentive to the need to court African 

leaders. At FOCAC Summits, China’s leaders spend 

2 full days with all African heads of state. The Indians have also started inviting African heads of state to 

their own summits (in New Delhi in April 2008, and 

Addis Ababa in May 2011), the minister noted, so why 

not the United States?

b. Personal Diplomacy with African Elites through 

High-Level Bilateral Visits: China has also based its 

foreign diplomacy in Africa principally, but not exclusively, on establishing personal relationships with 

African elites. Again, the PRC’s modus operandi is 

similar to that of France, in that foreign policymakers 

in Paris have built relations with former colonies in 

Africa around a network of personal ties with individual African leaders, bolstered by a web of bilateral 

agreements in trade, finance, development assistance, 

and defense.76 The style of PRC diplomacy with Africa 

reflects Chinese culture, with its emphasis on rank, 

personal connections, and “face” and gift-giving. This 

style is also particularly effective in Africa because of 

its similarity to African cultural norms, including, unfortunately, baksheesh—the willingness to give and 

insistence on receiving bribes as “gifts.” 
36

The Chinese leadership has been politically dexterous in the way it courts African leaders. China’s 

President, Hu Jintao, has made six trips to multiple 

African countries—two as vice president and four as 

president. President Hu Jintao and Prime Minister 

Wen Jiabao have visited more than two dozen African countries, and made visits to Africa as least three 

times as often as Presidents Bush and Obama.77 Each 

year since 1991, China’s foreign minister has made 

his first visit abroad to an African country. Consistent 

with this, in January 2012, Foreign Minister Yang Jiechi visited Cote d’Ivoire, Niger, and Namibia. In their 

interactions with African leaders, Chinese officials repeatedly stress the “win-win” rhetoric of a partnership 

with “mutual respect, equality, and mutual benefit.”78

By holding political and business summits such as the 

various Sino-African forums and arranging state visits by high-ranking Chinese political officials, Beijing 

symbolically accords Africa equal diplomatic status 

with the dominant world powers. For their part, African elites are deeply appreciative of being given the 

red carpet treatment whenever they turn up in Beijing.79

Moreover, China has another layer of high-level 

contacts—senior Communist Party of China officials—that frequently visit Africa to expand relations 

with African party and executive branch officials. The 

United States has no similar counterpart, nor does it 

rely as heavily on presidential and vice presidential 

visits to Africa. If you exclude annual visits to UN 

headquarters in New York by African leaders, where 

some do have meetings with the American President, 

Chinese leaders extend far more invitations to African 

leaders to visit China than the United States does to 

visit Washington. Additionally, the Communist Party 
37

of China frequently invites leaders of African political 

parties to visit China.80 In the March 2012 testimony 

before Congress, the President of the Corporate Council on Africa put it this way:

China understands the importance of Africa to its 

future. . . . The most important Chinese government 

officials visit Africa annually and they send many delegations of Chinese leaders to Africa every year. One 

need only note that the last visit of a U.S. Secretary 

of Commerce to Africa was in 2002 to understand the 

implications of this.81

PRC national Yun Sun, Visiting Fellow at the 

Brookings Institution’s Northeast Asia Policy Studies 

program, asserted at a November 2011 conference that 

Africa was not important to Chinese national interests. 

One clear indicator of this, she stated, was the fact 

that the Chinese Communist Party’s Politburo Standing Committee (of nine members) had held only two 

meetings in the last 4 years specifically about Africa: 

one related to Darfur, and the second about the evacuation of some 30,000 Chinese nationals from Libya 

in March 2011.82 Comments like this should be taken 

with a grain of salt: senior Chinese leaders regularly 

travel to Africa, and receive African leaders in Beijing. 

African nations may be relatively less high profile to 

Beijing, but they are important to China nonetheless—

and increasingly so. 

c. PRC’s “Universal” Diplomatic Presence in Africa; Taiwan Loses Battle of “Dollar Diplomacy”: China has diplomatic relations with 50 of the 54 African 

countries. Only four smaller nations—Burkina Faso, 

Swaziland, Gambia, and São Tomé and Principe—recognize Taipei. Beijing has an embassy in all but one 

of these 50 countries. The exception is Somalia, where 
38

the security situation in Mogadishu precludes a physical presence. All 50 African countries that recognize 

China, except the Comoros and the recently independent South Sudan, also have embassies in Beijing, 83

often in chanceries provided by the Chinese government. China’s “universal” presence in Africa—and the 

support to Chinese business that flows from them—is 

one more reason why the United States should not be 

tempted to close any embassies in Africa, regardless 

of current budgetary difficulties. 

d. Protecting China’s Trade, Investment, and Tax 

Interests in Africa: China has carried out active economic diplomacy in Africa to protect its commercial 

interests. The Chinese government has established 11 

Trade Promotion Centers.84 This expansion contrasts 

sharply with the U.S. Department of Commerce, which 

has closed some of its offices in Africa in recent years. 

Beijing has also signed bilateral trade agreements with 

45 African countries, bilateral investment treaties with 

33 African countries, and double taxation agreements 

with 11 African countries.85 According to the 12th 

Five-Year Plan, China will continue to promote agreements with African governments for the protection of 

investments and the avoidance of double taxation.86

e. Symbolic Diplomacy: Prestige projects have also 

played an important part in securing agreements with 

African governments, and African capitals throughout the continent are filled with stadiums and government buildings built by China. This form of symbolic 

diplomacy has great appeal to African elites, who welcome the opportunity to replace colonial-era buildings.87 As the African Union (AU) matured and grew 

in importance as an institution following its founding 

in 2002, Beijing cleverly exercised the ultimate act of 

symbolic diplomacy: the donation to the AU of a new, 
39

800-million-renminbi (RMB) ($124 million) headquarters building, which was inaugurated in January 2012. 

How should the U.S. Government respond to China’s superior economic diplomacy? One option would 

be to raise the level of its engagement with Africa, 

making it less episodic and more sustained. This could 

start at the top. For example, the next U.S. President 

could personally host a U.S.-Africa Summit for Heads 

of State, much as is done already by France, China, 

and India. U.S. Cabinet members, such as the Commerce, Energy, and Treasury Secretaries, could make 

more frequent visits to the continent, accompanied by 

U.S. business delegations. Better funding for the U.S. 

Export-Import Bank, the Overseas Private Insurance 

Corporation (OPIC), and the Trade Development Administration (TDA) is another obvious answer. The 

United States could better fund the Department of 

Commerce’s Foreign Commercial Service (FCS), or 

even return it to the State Department, where it was 

originally located until 1979.88 The State Department, 

through its embassies in Africa, has an on-the-ground 

presence in virtually all African capitals and a handful of constituent posts, and thus, has a far greater 

network of offices on the continent than does FCS. 

(The United States has embassies in every country in 

Africa except for the two island nations of Comoros 

and Seychelles, narco-state Guinea-Bissau, and wartorn Somalia; China has embassies in every country 

where it has diplomatic relations [four still maintain 

ties with Taiwan] except Somalia.) However, the U.S. 

Department of Commerce maintains U.S. Commercial 

Service Offices in only eight African countries, three 

of which are in North Africa, while the Chinese Ministry of Commerce has Commercial Counselors in 48 of 

its Embassies in Africa.89
40

Commercial diplomacy should be made an explicit part of the promotion criteria for all State Department Foreign Service Officers (FSOs), with mandatory 

training in commercial advocacy provided to all Ambassadors, Deputy Chiefs of Missions, and Economic/

Commercial officers before they arrive at Post. U.S. 

Secretary of State Hillary Clinton’s October 14, 2011, 

speech was an excellent statement of the importance 

of economic statecraft to the United States, but the key 

will be action, including a fundamental change in the 

mindset of the U.S. Foreign Service—it must come to 

understand, like the Chinese—that national strength 

ultimately depends on economic strength and that 

commercial advocacy is thus central to the work of 

U.S. diplomats. As Secretary Clinton put it: 

Our foreign and economic relations remain indivisible. Only now, our great challenge is not deterring 

any single military foe, but advancing our global leadership at a time when power is more often measured 

and exercised in economic terms.

China Boosting Its Soft Power in Africa.

A third reason for China’s newly found success 

in Africa is its expanded development and use of soft 

power. Since the first FOCAC Summit in 2000, China 

has made a systematic effort to expand its soft power 

policies in Africa.90 This soft power builds goodwill 

and minimizes possible negative reactions on the continent to the growing influence of its corporations and 

citizens. If China’s summit- and relationship-based 

diplomacy in Africa was learned from France, several 

elements of its soft power diplomacy are lifted from 

the U.S. diplomatic playbook: 
41

• Scholarships, Training: China’s training of Africans, including diplomats and journalists, is 

a part of its soft power diplomacy. At the 2009 

FOCAC Summit, China announced its intention 

to increase to 4,000 the number of full scholarships it offers to African students each year.91

Beijing even funds sports teams and provides 

equipment for aspiring African Olympians.92

• Cultural Centers: In 2001, China had only four 

cultural centers attached to its embassies in Africa, including one in Cotonou, Benin. Ten years 

later, there are at least 22 Confucius Institutes 

in 19 countries in Africa that focus on teaching 

Chinese language, culture, and history, and the 

number continues to grow.

• News Media Influence: China is increasing its 

radio transmissions to Africa in various languages, has set up a transmitting facility in 

Kenya, and has rebroadcast arrangements with 

countries around the continent. In January 2012, 

China Central TV (CCTV) started English-language news broadcasts to Africa from its new 

studios in Nairobi, Kenya, with programs such 

as “Africa Live,” “Talk Africa,” and “Faces of 

Africa.” CCTV hopes to build a network of 14 

news bureaus in Africa and, by 2015, broadcast 

24 hours a day to the continent.93 The Xinhua 

news service has more than 20 bureaus in Africa and regional offices in Cairo and Nairobi. 

Xinhua competes directly with Reuters, AP, 

and Bloomberg for reporting on events in Africa. A number of sources for this monograph 

were based on Xinhua reporting.

• Volunteer Corps: More recently, Beijing has expanded its foreign assistance program in Africa 
42

to include a Chinese volunteer youth corps, 

mirroring services of the U.S. Peace Corps.94

• International Visitor Programs: Historically, 

the United States has identified young emerging African leaders, both political and economic, for exchange programs in the United States 

under the “International Visitors Program.” 

China is now doing the same thing—identifying members of parliament, local entrepreneurs, and well-placed government officials in 

such key ministries as Foreign Affairs, Internal 

Affairs, and Trade and Commerce for training 

and exchange programs in Beijing.95

Beijing’s Development Assistance: Mercantilist, 

Governance Neutral, and a Tool for China’s Economic and Political Diplomacy.

A fourth factor in China’s economic success in 

Africa is that Beijing’s official aid, preferential trade 

credits, and development finance have been both mercantilist, i.e., tied to Chinese commercial interests, and 

governance neutral—not tied to specific African government policies (except the “One China” policy). As 

such, these policies pose a fundamental challenge to 

existing norms governing international aid architecture. Existing international norms are embodied in the 

OECD Development Assistance Committee (DAC) 

guidelines, which have emphasized transparency, 

with conditionality tied only to good governance (and 

not to the providing nation’s goods and services).96

In sharp contrast, China’s aid, export credit, and development finance policies are opaque and tied to the 

purchase of Chinese goods and services.97 One American scholar defended China’s aid policies, writing 
43

that “China may wind up supporting some dictatorial 

and corrupt regimes, but—and this is an inconvenient 

truth—the West also supports such regimes when it 

advances its interests.”98 But this view ignores the fact 

that the United States also raises human rights issues 

with all regimes, including China and all nations of 

Africa, admittedly more discreetly with oil-rich countries such as Equatorial Guinea, but also very publicly 

in a blunt annual human rights report for each country. Obviously, China does not do this.

China’s export-promotion policies have come under fire for allegedly using cheap credit to provide its 

goods and services exporters with an unfair advantage in staking out a dominant position in Africa.99 

Critics assert that Beijing’s zero- or low-interest export credits violate OECD rules—an accusation that 

would be valid, except that China is not a member of 

that organization and thus has no obligation to follow 

its rules. Under the voluntary 1978 Arrangement on 

Officially Supported Export Credits, concessional export credits from OECD governments were supposed 

to be limited to projects that were not commercially 

viable: the construction of public goods like primary 

schools or health clinics.100 China EXIM Bank’s website stresses that its export buyer’s credits generally 

follow the Arrangement, even though China is not an 

OECD member. 

Whether fair or not, China has vastly expanded the 

amount of export credit and development finance targeting Africa, and this is helping to fuel Chinese firms’ 

success on the continent. China’s cumulative foreign 

aid of $11.5 billion since the 1950s has already been 

surpassed by loans from China EXIM Bank to Africa, 

which were $5 billion from 2007 to 2009 alone. China 

EXIM’s cumulative loans to Africa are expected to to-
44

tal $20 billion by 2012. For its part, China Development Bank said in September 2010 that it had already 

disbursed $5.6 billion to 35 projects in more than 30 

African countries, and made cumulative commitments of over $10 billion.101

China announced at the Fourth FOCAC Ministerial Conference, held in November 2009 in Egypt, that 

it would provide $10 billion of preferential loans to 

Africa from 2010 to 2012. According to a 2010 State 

Council White Paper, this will be composed of $3 billion in preferential loans, $2 billion in preferential 

export buyer’s credits, and $5 billion toward the establishment of the China-Africa Development Fund, 

which is designed to encourage and support Chinese 

companies investing in projects in Africa. The White 

Paper said that examples of major projects that will 

receive preferential credits include an airport in Mauritius, housing in Equatorial Guinea, and the Bui Hydropower Station in Ghana. The White Paper also 

indicated that China would provide credits of up to 

$1 billion to Chinese financial institutions for the development of small and medium enterprises (SMEs) 

in Africa.102

China’s Aid Positive As Well: Emphasis on 

Infrastructure Investments Fills Important 

Development Gap.

A fifth factor in China’s success in Africa has been 

its emphasis on building infrastructure, which has 

been a boon to China’s already internationally competitive construction industry. The World Bank has estimated that Africa needs $20 billion in infrastructure 

investments annually, and has a shortfall of about $10 

billion a year.103 Some academics, and some African 
45

leaders such as former President of Mozambique Joaquim Chissano, have blamed the West for worsening 

this gap in African infrastructure needs by singularly 

focusing on social development needs, as exemplified by UN Millennium Development Goals (MDGs) 

negotiated in 2000. Whatever the case, Africans themselves recognized the need for more infrastructure in 

formulating their New Partnership for Africa’s Development (NEPAD) in 2001, and China—which kicked 

off its “going-out” policy that same year—was ready 

to help fill Africa’s infrastructure shortfall. 

Over the last 10 years, China has become the major 

builder in Africa, winning international contracts and 

dedicating much of its own aid to infrastructure projects. “China is able to build a railway before the World 

Bank would get around to doing a cost-benefit analysis,” one Western diplomat said.104 After Liberia’s war 

ended, President Johnson Sirleaf repeatedly said that 

her number one priority was getting roads financed. 

According to adviser Steven Radelet, “No one was doing it. They all said ‘we don’t do roads’. But the Chinese ambassador said: ‘We’ll do roads’.” 

Worldwide, over 60 percent of China EXIM Bank’s 

concessional loans have been committed to infrastructure projects, and this percentage is likely similar or 

higher for its credits to Africa.105 U.S. Senator Chris 

Coons, who chairs the Senate Foreign Relations Subcommittee on African Affairs, estimated in November 2011 that about 70 percent of Chinese assistance 

to Africa comes in the form of roads, stadiums, and 

government buildings—often built with Chinese material and labor—while 70 percent of U.S. Government 

spending there goes on crucial but less visible support 

for people, particularly to fight HIV/AIDS, malaria, 

tuberculosis, and other diseases.106
46

 According to China’s State Council, by the end of 

2009, Beijing had provided assistance for the construction of over 500 infrastructure projects in Africa.107 In 

recent years, China has signed loan agreements with 

Angola for about $14.5 billion (2004 and later) and 

the DRC for $6.5 billion (2009)—many of which were 

infrastructure-related. In September 2010, China and 

Ghana signed loans valued at about $15 billion. Most 

of this money will be used to finance roads, dams, refineries, buildings, railways, etc., by Chinese construction companies, and some will be repaid in oil or minerals.108 The China-Africa Development Fund (CADF) 

provided a $100 million loan to assist Ethiopia to complete a railway networking system that links Addis 

Ababa to various regions of the country.109 The China 

Development Bank (CDB) is to fund construction of 

a cement factory in Mozambique’s Maputo Province, 

costing $100 million. 

China’s emphasis on infrastructure has paid huge 

dividends. China has become the hydropower, road, 

rail, and bridge builder of Africa. In 2008, Chinese 

companies had nearly 3,000 engineering contracts in 

Africa, valued at close to $40 billion.110 Some 187,396 

Chinese were officially working in Africa in 2009, most 

on the large engineering contracts in Algeria, Libya, 

and Angola. Although there are exceptions, such as 

Angola, most of China’s engineering business in Africa is not actually financed by the Chinese government, 

but by African governments, development banks, bilateral banks, and private companies contracting with 

Chinese firms. Including contracts for the private 

sector and international community, Chinese companies now earn revenues of over $20 billion annually 

from construction and engineering contracts on the 

continent. 
47

In other words, the Chinese not only believe in integrating aid and trade into their own development 

assistance policy, but also in taking advantage as 

much as possible of the untied aid provided by other 

countries and the international financial institutions. 

Since China does not accede to OECD DAC rules, it 

enjoys the free ride of taking advantage of the West’s 

negotiated policies of untying aid without providing 

reciprocal access to Western construction companies 

to Beijing’s aid contracts. In fairness, the Chinese are 

also strong at providing internationally competitive 

construction and engineering services, and win a significant share of open tenders carried out according 

to international norms. The Africans themselves win 

both from China’s tied aid, and from Chinese construction companies providing badly needed infrastructure with the least amount of development aid. 

Corruption, Flouting of Labor, Environmental 

Laws: China’s Illicit Competitive Advantages 

in Africa.

In a sense, the sixth factor in China’s success in Africa is its most corrosive: illegal behavior such as the 

use of bribery and corruption to advance its political 

and economic interests, and the flouting of labor and 

environmental laws to lower its cost of doing business. Chinese state-owned enterprises, private corporations, and individual citizens are systematically 

using corruption, a form of cumshaw, to win business 

deals in Africa, and are not subject to restrictions such 

as Washington’s Foreign Corrupt Practices Act. Since 

under-the-table transactions are inherently hard to 

prove, we can only assert that:
48

• Corruption is endemic at all levels in China, a 

societal problem against which the Communist 

Party inveighs regularly because it represents 

a serious source of social discontent and thus a 

threat to the Party’s continued hold on power;

• Chinese companies transfer their corrupt practices abroad, including a gift-giving culture of 

corruption that is ingrained in China’s business 

culture.

Not surprisingly, Chinese companies are the second most likely (after India) to use payola abroad, 

according to Transparency International’s Bribe Payers Index. In terms of African partners, a World Bank 

survey of 68 countries in 2007 found that Sub-Saharan 

Africa leads in the “percentage of firms expected to 

give gifts” to secure government contracts. This corrupt meeting of the minds has facilitated China’s “hyper-efficient deal making in Africa,” as one observer 

put it.111

The poster child for questionable Chinese business 

practices in Africa may belong to a firm dubbed the 

“Queensway Syndicate,” which was founded by wellconnected Cantonese entrepreneurs.112 This syndicate, 

with its African partners, has signed contracts worth 

billions of dollars for oil, minerals, and diamonds 

from Africa. Operating out of offices in Hong Kong’s 

Queensway, the syndicate calls itself China International Fund, or China Sonangol. Almost all of China’s 

imports of oil from Angola—worth more than $20 billion last year—come from China Sonagol. The son of 

Angolan President Dos Santos is said to be a director 

of China Sonangol. According to the IMF and World 

Bank, billions of dollars have disappeared from Sonangol’s accounts. In Guinea, the syndicate came to 
49

the rescue of the military junta then in power, with a 

reported transfer of funds of $100 million. The junta 

eventually fell, however, and following the first democratic elections in Guinea’s 50-year history in 2010, the 

syndicate’s $7 billion minerals deal is now in limbo. 

Sometimes a corruption problem becomes so high 

profile that Beijing’s Foreign Ministry officials feel 

compelled to repudiate actions that China’s increasingly independent public and private enterprises take, 

such as the Queensway minerals deal in 2007 with the 

increasingly isolated military regime in Guinea.113

There were news reports in 2011 of similar problems, 

with arms sales by Chinese state-owned enterprises 

(SOEs) to the failing Qaddafi regime in Libya. 

Many Africans assert that the practices of Chinese 

companies are not all that different from the practices 

of European investors.114 While this may have been 

true in the past for Europeans, it is certainly less so 

now. Most European nations have signed on to the 

OECD anti-bribery agreement that was championed 

in the 1990s by the United States. This agreement, as 

implemented by each member-state, provides for fines 

and even criminal penalties for firms that pay bribes 

abroad. While bribery by some Western firms undoubtedly continues, the OECD anti-bribery convention has likely reduced corruption by Western firms, 

thereby serving up another competitive advantage for 

Chinese companies that are not bound by this convention and feel no compunction over giving bribes, especially in Africa, where the chances of being caught and 

punished are almost nonexistent.

Without improved governance at home, China, 

its companies, and its citizens will continue to be opportunistic, exploiting weaker African nation-states 

in their quest for markets and profits.115 Former South 
50

African President Thabo Mbeki, whose country is 

both a strategic competitor and partner of China, felt 

compelled to publicly state just after a FOCAC summit that the continent should beware of trading traditional Western modes of dominance for a Chinese version.116 Africa’s elites must thus act wisely on behalf 

of their citizenry, with an eye toward mutual benefit 

that defends their own countries’ interests with fairness to China. Zambian President Michael Sata, who 

was elected in September 2011, will hopefully be one 

such wise leader. He used anti-Chinese slogans in 

two presidential campaigns, and was elected on his 

second try. While calling for a rise in the minimum 

wage in an attempt to resolve a strike against Chinese firms that occurred shortly after his taking office, 

President Sata also moved quickly to reassure some 

investors about previous campaign slogans. His first 

meeting with a foreign official after being elected was 

with the Chinese Ambassador in Lusaka—whom Sata 

reportedly reassured about his welcoming of Chinese 

investment.117

ARE AFRICA’S NEW DEBTS TO CHINA 

SUSTAINABLE?

A third “big-picture” question posed is whether 

China is creating a new debt burden for Africa. China’s massive trade surpluses and capital reserves 

provided Africa with a new ability to offer largescale finance, just as African countries were finally 

successful in getting multilateral debt relief through 

the HIPC program.118 While most Africans welcome 

China’s emergence as a major creditor, many Western 

observers warn that Chinese banks—consistent with 

Beijing’s mercantilist philosophy—are “free-riding” 
51

on the debt-reduction generosity of Western donors 

by extending new loans to low-income countries. 

These observers assert that Beijing has created a wave 

of new debt that is only minimally offset by the debts 

that China has forgiven in some African countries.119

Moreover, since Chinese loans lack transparency, it is 

impossible for outsiders to understand how they fit 

into the African borrower’s debt sustainability frameworks developed with the IMF and World Bank.120

Chinese Premier Wen Jiabao announced in November 

2009 that China planned to cancel 168 debts owed by 

33 African countries, but did not announce the total 

amount of this proposed debt relief.121

China EXIM Bank President and CEO Li Ruogu 

has argued that his bank takes into consideration both 

debt and development sustainability in making lending decisions in Africa.122 As the EXIM Bank’s chief 

economist told an audience at a World Bank retreat: 

“It’s the new lenders’ problem if countries can’t repay, 

not the Paris Club. We know we need a good, strong 

balance sheet.” 

One important way that China mitigates the risk 

of its loans is by tying its provision of credit to a commodity offtake agreement in the contracting African 

country—a technique commonly referred to as the 

“Angola Model.” Under this technique, the borrowing country agrees to pay back the loan in the form of 

the sale of commodities, such as oil, that it produces. 

China’s EXIM Bank has pledged oil-backed financing 

of some $14.5 billion for the Angolan government’s 

ambitious post-war reconstruction program, including over 100 projects in the areas of energy, water, 

health, education, telecommunications, fisheries, and 

public works.123 These projects are predominantly (70 

percent) undertaken by Chinese contractors.124 There 
52

are signs that the limits of this model may have been 

reached, however, at least within Angola. Some Angolans have complained that the infrastructure-for-oil 

deals with China have shackled their oil revenues to 

repaying Chinese loans. As a result, the government 

is looking to limit its exposure to further oil-backed 

loans with the Chinese.125

It appears that China’s trade credits and development loans are being used productively in most countries, which suggests that these new debts will not 

create an unsustainable burden. One such country is 

Ghana. Ghana’s fortunes changed when Tullow Oil 

struck oil in June 2007. Not coincidentally, 2 months 

later, the China Export Bank (CEB) signed an agreement with Ghana extending a hybrid package of $270 

million in concessional loans and $292 million in export buyers’ credits to fund the Bui Dam, a hydroelectric project with an anticipated capacity of 400 MW. 

The loan was arranged to be paid back over a period of 

20 years with cocoa exports.126 During President John 

Atta Mills’s state visit to China in September 2010, an 

agreement was signed with Chinese financial institutions for almost $13 billion more in loans to Ghana. 

Some $3 billion in loans extended by CDB will be used 

to develop the country’s oil and gas infrastructure, 

and $9.77 billion channeled toward roads, railways, 

schools, and hospitals.

One way that China is providing capital to Africa without adding to the continent’s debt load is by 

making equity investments. For example, the China 

Africa Development Fund is an equity investor with 

the Government of Ghana and Bosai Minerals Group 

in a Sekondi industrial estate that will be anchored by 

a proposed aluminum refinery. Ghana has long been 

a producer of bauxite, mined by large Western firms. 
53

As Ghana’s Minister of Trade and Industry put it, 

the Chinese project “will allow our country to finally 

achieve our long-term objective of establishing an integrated aluminium industry and make the most of 

our resources.”127

Ghana may also be an example of how infrastructure loans such as those offered by China can act as an 

agency of restraint in poor, resource-rich countries by 

ensuring that at least some of these countries’ natural resource wealth is spent on development investments.128 In other words, African countries opt to invest 

in their infrastructure—usually a good investment in 

the productivity of an economy—and make sure that 

it can pay back this debt by committing itself to offtake 

agreements involving its exportable commodities. (As 

discussed below, these offtake agreements can raise 

special economic and security concerns when they involve strategic minerals.) 

At the same time, Chinese loans can also subvert 

the discipline that African countries might accept 

under their own country development plans worked 

out with the assistance of the IMF and World Bank. In 

2004, Angola suddenly broke off negotiations with the 

IMF, characterizing its conditions as “humiliating” 

and announced that China’s EXIM Bank had agreed 

to give Angola a $2 billion line of credit to be repaid 

over 12 years.129 Paul Wolfowitz, former head of the 

World Bank, was strongly critical of the Chinese role 

in Chad, where a carefully negotiated loan by the Bank 

aimed at ensuring that a portion of resources would 

be diverted to poverty reduction had been summarily 

scrapped by the government after promises of Chinese credit.130

China’s new trade credits and development loans 

could allow Africans to make wise investments in their 
54

future, or be diverted to questionable projects that allow elites to abandon efforts to improve governance. 

Which choice to make ultimately falls to African leaders. 

WILL AFRICA BE ABLE TO INDUSTRIALIZE 

BECAUSE OF OR DESPITE CHINA?

One of the key issues surrounding China’s rapidly 

expanding economic footprint in Africa is whether the 

Chinese will ultimately help—or hurt—chances for 

Africa to lift incomes through industrialization. Will 

Africa’s modest progress in industrialization be gutted by competition from China, e.g., in textiles; or will 

Africa become more competitive, perhaps with the 

help of FDI, including Chinese companies relocated 

from the PRC to lower-cost locations in Africa? 

The impediments to African industrialization are 

mainly within Africa itself. While the image of Africa 

is of extremely low wages, Africa’s diversified economies actually have higher unit-labor costs—defined as 

wages divided by labor productivity—than do China 

or India. Even when factories in certain countries in 

Africa are as productive as those in China and India, 

overall costs tend to be higher because of corruption, 

burdensome regulation, and poor infrastructure.131 Africa’s share of labor-intensive manufacturing is actually shrinking, according to a July 2011 UN report. The 

World Bank has talked with Chinese trade officials on 

how to move more factories to Africa from China. The 

Bank estimates that there are now 85 million manufacturing jobs suitable for unskilled workers in China, 

out of a population of 1.3 billion, but only 10 million in 

all of Africa, with a population of 1 billion.132

Despite Africa’s higher costs, there is increasing 

anecdotal evidence that China is a net boon to African 
55

industrialization. A PRC government survey of 1,600 

Chinese companies indicated that they were increasingly using Africa as an industrial base, sometimes 

because countries have made industrial investment 

a precondition for resource deals. Manufacturing’s 

share of total Chinese investment in Africa (22 percent) is catching up fast with mining’s (29 percent). 

In some parts of Africa—notably Nigeria and East 

Africa—manufacturing has become a key sector for 

Chinese investment.133 Chinese home appliance giant, 

Haier, joined with a firm linked to the Greek diaspora 

in West Africa in a joint venture in Lagos, Nigeria, to 

assemble ozone-friendly refrigerators. Chinese investment is helping to rejuvenate plastics manufacturing 

in the northern Nigerian city of Kano.134 In East Africa, 

Chery Automobile is to become the second Chinese 

vehicle maker to build an assembly plant in Kenya, 

joining truck manufacturer Beiqi Foton Motors.135 The 

firm is discussing $50 million in loans with the Chinese 

government to invest in Kenya through an assembly 

plant. The new assemblers are looking to use Kenya 

as the launching pad for entry into the regional common market, the East African Community (EAC). The 

fragmented economies of the five East African countries had discouraged auto producers from setting up 

assembly plants, but the common market has made it 

possible for the producers to capture a regional market of more than 130 million residents. The firm sold 

a modest 120 cars last year, but aims to produce 1,000 

units in 2013. In Ethiopia, two out of three resident 

Chinese firms are manufacturers.136 One of China’s 

leaders in telecom, ZTE, announced a joint venture in 

mobile phone assembly in Ethiopia, where Chinese 

companies are also investing in pharmaceuticals.137
56

Backward/Forward Integration of Mining Sector.

New evidence suggests that China’s investments 

in extractive industries could enable African businesses to develop more sophisticated backward and 

forward integration so as to extract more value from 

processing.138 Chinese investments in extractive industries in Africa are profitable, and have led to downstream processing, such as refining of copper ore in 

Zambia. Some African manufactured products, such 

as aluminum, could become a viable export to China 

and third markets. 

Upstream Factors for Construction Sector.

Many Chinese companies initially came to Africa 

to win and carry out construction contracts offered 

by African governments, bilateral donors, and international financial institutions such as the World Bank 

and ADB. Beyond building infrastructure, some Chinese construction companies have promoted African 

industrialization through the building of upstream 

factories to produce cement, bricks, glass, steel rods, 

and other building materials. 

Infrastructure Improvements Aid Industrialization.

Recently, many African countries, particularly in 

the EAC, have taken new steps to advance regional 

economic integration. China has also contributed indirectly to regional integration in Africa, and thus, the 

continent’s prospects for industrialization, through 

its heavy investment in infrastructure—often made in 

conjunction with natural resource investments in mining sectors. 
57

Restructuring of the Chinese Economy 

May Benefit Africa.

Africa may already be benefitting modestly from 

China’s own economic restructuring. China, “the 

world’s factory,” would like to move up the valueadded chain to higher-technology products, and shift 

away from labor-intensive, low-tech, and high-pollution industries. Rapidly rising labor costs in China’s 

coastal provinces have already led to a massive shift 

in manufacturing to inland provinces such as Sichuan. 

However, wages have also been rising in inland provinces, and China is reaching a tipping point, where it 

is no longer competitive globally for certain labor-intensive goods. World Bank President Robert Zoellick 

advised China to ship some manufacturing abroad—

something that some Chinese businesses have already 

started to do out of economic necessity and tightening 

environmental rules. Since 2005, for example, Beijing 

and prosperous local municipalities have progressively tightened the structure of taxes, tariffs, prohibitions, and incentives to force restructuring in the 

heavily polluting leather industry. One of Wenzhou’s 

most prominent private companies, Hazan Shoes, invested $6 million in 2004 to set up a factory in Nigeria. 

“Our boss wants to set up a shoe production cluster, 

to bring the entire value chain to Nigeria,” one Chinese businessman said.139

About the same time that China’s government 

ramped up policies to encourage its emerging manufacturing phenoms to expand overseas, it also began 

encouraging less competitive, labor-intensive “mature” industries (such as textiles and leather goods) 

to relocate to other countries.140 In July 2006, the Min-
58

istries of Finance and Commerce established a special 

fund that Chinese textile companies could draw on to 

encourage more of them to move offshore. 

African Textiles Should Have Local Value Chain, 

But Chinese Competition Tough.

The issue of Africa’s broader participation in global value chains is critical. One promising area for this 

ought to be in the cotton-textile-garment value chain, 

which is widely seen as the stepladder for Sub-Saharan Africa’s industrial growth.141 Africa needs to start 

processing local raw materials into finished goods for 

export rather than exporting raw cotton and cloth.142

The problem up to now has been the high costs of production for Africa’s textile industry and fierce international competition, particularly from China. 

Chinese textile exports do vie with—and usually 

crowd out—African exports in third-country markets 

such as the United States and the EU.143 With the end of 

the Multifibre Agreement in 2005, African producers 

that had established burgeoning industries in textiles 

and apparel, buoyed by the preferential terms of trade 

established by the African Growth and Opportunity 

Act (AGOA), were rapidly swamped by Chinese competition.144 Even in the case of South Africa, which has 

a relatively advanced economy, Chinese textile imports were crushing their South African competitors, 

leading the Chinese to agree in 2007 to a “voluntary” 

quotas on textile exports to South Africa. This measure ultimately failed, however, because other Asian 

textile exporters, e.g., Vietnam, filled the gap left by 

declining Chinese exports. The ultimate solution for 

the South African textile industry is thus to boost its 

productivity, or suffer collapse in the face of global 

competition. 
59

Nigeria faced a similar dilemma after 2005 because 

of Chinese textile imports. Nigerian manufacturers 

faced higher costs, notably in energy and transport, 

and were unable to compete. Yet, their difficulties ultimately proved to be domestic, linked to the chronic 

inefficiency, misadministration, and corruption within Nigeria’s service industries. Similarly, one Chinese 

investor complained about the challenges of manufacturing in Tanzania: an irregular out-of-phase electricity supply, which damages machinery; inadequate 

water supply; high costs of nonlabor inputs such as 

raw materials; and poor industrial relations.145

Special Economic Zones: Can Lessons Learned by 

China Mitigate Weaknesses in Africa’s Investment 

Climate?

China experimented with foreign investment, at 

first in a limited number of Special Economic Zones 

(SEZs) in its coastal provinces, where the central, 

provincial, and even municipal governments built infrastructure (industrial parks, roads, ports, etc.) and 

offered tax holidays to induce foreign investors to 

come. Beijing started four SEZs in 1980, one in Fujian 

Province, and three in Guangdong Province, including one at Shenzhen, just outside of Hong Kong. These 

zones were phenomenally successful, and this experiment was expanded to other coastal and later inland 

provinces. 

At the 2006 FOCAC Summit, Beijing promised 

to build SEZs in several African countries to attract 

both Chinese and other foreign investment.146 While 

development zones in China were owned by the central, provincial, or even municipal governments, and 

were often built and operated by separate legal enti-
60

ties set up for this purpose, China’s “export model” 

for SEZs in Africa is taking the form of: 1) support and 

subsidies from its government, mixed with; 2) marketbased decisions and investment by a combination of 

Chinese state-owned and private corporations. These 

African SEZs support China’s “going-global” policies 

for its domestic companies, and were also part of a 

broader Chinese government effort to establish up to 

50 overseas SEZs under the 11th Five-Year Plan (2006-

10).147 In addition to economic rationales, Beijing also 

had political motivations for promoting SEZs abroad. 

The establishment of these manufacturing zones offsets criticism that trade with China is eroding the industrial base of its Africa trading partners, and that 

Chinese firms seek only to invest in Africa’s extractive 

industries.148 The zones may also fulfill soft power political goals by demonstrating the efficacy of aspects of 

China’s development model. 

However, China’s decision to build SEZs in Africa 

is intended first and foremost to reduce the costs and 

risks of doing business for Chinese firms in Africa.149

In theory, SEZs will act as “safe havens” for Chinese 

capital. Chinese (and other foreign) firms located in 

these zones are to enjoy tax and investment incentives, 

customs duty waivers for raw materials and inputs, 

visas and work permit approvals for expatriate labor, 

and discounted land and services.150 Some SEZs even 

provide restrictions on strike activity. 

In 2006 and 2007, China’s Ministry of Commerce 

organized two rounds of tenders to review proposals to build six to seven SEZs in Africa. The winners 

of these tenders were eligible for up to 200-300 million RMB ($30-45 million) in grants, and long-term 

low-interest loans of RMB 2 billion ($300 million). 

Up to now, China has built six SEZs in five African 
61

countries. China’s first two zones in Africa are being 

built in Zambia (at Chambishi with a projected cost 

of $410 million) and Mauritius (renamed Jinfei; at a 

cost of $720 million). Both are sponsored by Chinese 

companies with substantial investments in each country.151 There are also two zones in Nigeria (Lekki; $369 

million; Ogun, $500 million for the first phase), and 

one each in Egypt (Suez; cost N/A) and Ethiopia (Oriental, $101 million). (A seventh zone was planned for 

Algeria, but suspended for reasons related to unexpected changes in Algier’s foreign investment laws; 

some consider that a subzone in Lusaka should be 

considered a second SEZ in Zambia.) In addition, the 

China Africa Development Fund (CADF), an equity 

fund of one of Beijing’s policy banks, China Development Bank, decided to invest a total of $100 million in 

at least three of the zones (Nigeria Lekki, Mauritius, 

and Egypt). 

Chinese companies developing these zones include national and provincial SOEs, but also some 

private firms. The zones in Ethiopia and Mauritius 

are 100 percent Chinese-owned, while the others are 

joint ventures, usually with African national or statelevel governments as minority partners. For example, 

Nigeria’s Ogun State government owns an 18 percent 

stake in the Ogun zone, while the government of Lagos State and an investment company it controls own 

40 percent of the shares in the Lekki zone.152 A total of 

$328 million had been spent to build infrastructure in 

these SEZs as of the end of 2010.153

All of the SEZs remain in the very early stages, 

with Egypt’s Suez and Zambia’s Chambishi already 

in partial operation, and Nigeria’s Lekki aiming to be 

fully operational by year-end 2012. None of the zones 

has proceeded completely smoothly, although Zam-
62

bia comes closest. Chinese developers expect host 

governments to support zone development actively; 

instead, they are finding in some projects (such as in 

Ethiopia) that governments allocate land to developers and do little else.154

Some observers are concerned that China’s SEZs 

in Africa, instead of becoming growth nodes that 

partner with African companies, train local managers 

and workers, and catalyze local industry, will end up 

as enclaves without any development connection to 

the rest of their host countries.155 Given Africa’s weak 

industrial base, however, accounting for only about 

1 percent of global manufacturing, a higher priority 

must be to make the zones attractive to foreign investors, both Chinese and third-country. In the shortto-medium term, this may mean less concern about 

whether Africans can maximize their immediate benefit from the zones, and more about providing inducements for new foreign investors. After all, even if the 

economic linkages to the rest of the country are weak, 

these foreign-invested factories will produce wages 

for local workers, build up their skills, and provide 

tax revenue for the state (albeit reduced at least temporarily by any tax holidays). In this regard, China’s 

experience is instructive. The first four SEZs were created in 1980, but by 1995 “zone fever” in China had 

grown so intense that the central government had to 

put the brake on new development zones (in part to 

conserve arable land), and start to phase out generous 

tax incentives for foreign investors. 

Despite the challenges, there have already been 

signs of success: by the end of 2011, 137 Chinese enterprises will have invested a total of $1.08 billion in 

the six zones. Business volume of these enterprises 

is predicted to reach $3.5 billion. The companies will 
63

also contribute $119 million dollars in tax revenues for 

local governments, while creating about 10,000 jobs.156

Outside of these Chinese government-supported, official zones, there are a number of Chinese enterprises 

that have established, expanded, or proposed new 

industrial parks or free trade zones in Nigeria, Sierra 

Leone, Guinea, Uganda, Botswana, and South Africa 

that are independent of government support.157

Chinese developers experienced with zone construction in China note that even in situations in 

which local governments are actively facilitating a 

zone, it usually takes 10-15 years before a zone reaches 

maturity and “takes off.” By way of comparison, in 

the United States, the Research Triangle Park in North 

Carolina was founded in 1959, quickly attracted two 

research companies, but floundered until 1965, when 

IBM announced it would locate a research facility 

there—eventually leading to the presence of 104 research companies by 1998.158

Too Early to Tell Impact of China on 

African Industrialization.

On balance, the above picture is mixed, with China playing both the role of contributor to—and competitor with—African industrialization. Because most 

data are limited and anecdotal, it is too early to tell 

whether Africa is truly poised for an industrial takeoff. Between 1990 and 2005, Sub-Saharan Africa ended 

with an average manufacturing growth rate of just 

over 1.5 percent. Almost no change at all occurred in 

industrial structure or movement up the value chain. 

African industry has struggled to reach a sufficient 

scale to compete in global markets. 
64

China can be a catalyst, but not a panacea for Africa’s industrialization. It is possible that more and 

more Chinese textile companies will set up shop in 

Africa, joining those from other sectors who have already started to do so. How Chinese companies operate their manufacturing operations in Africa will also 

impact their broader contribution to African industrialization. If they cluster only in SEZs that become 

ghettos of restricted labor rights, walled off from contact with domestic firms, they will contribute much 

less to Africa’s sustainable transition to industrialized 

economies—and will represent a tragic lost opportunity for the African countries that host them. Ultimately, however, the success of African businesses 

and foreign investors in manufacturing will rest not 

with China, but rather on the degree to which African 

governments establish an environment more conducive for business, thereby fostering indigenous entrepreneurial activity, as well as foreign investment from 

around the globe. 

CHINA NOT A MONOLITH: IMPACT OF 

NONSTATE CHINESE ACTORS ON AFRICA

There remains a common assumption throughout 

Africa that all Chinese deals are state-led and orchestrated.159 This is untrue. In analyzing Sino-African relations, we must always keep in mind that China is 

not a monolith—there are many Chinas and, similarly, 

many Africas.160 As Chinese firms have gone abroad, 

there has been a steady diffusion of economic power 

from state-affiliated SOEs to a profit-seeking private 

sector; which has introduced a diversity of interests 

and practices that are as often at odds with Chinese 

foreign policy aims as they are in conformity with 
65

them.161 Even today, some Chinese SOEs remain appendages of the government, but most have gained 

a very considerable degree of autonomy (although 

still under general and often loose supervision of 

national, provincial, and even municipal State Asset 

Administrations). Many SOEs have also been partially 

privatized, with companies going public on a stock 

exchange. As such, they come under pressure from 

private shareholders whose interests are not aligned 

with those of the State and Chinese foreign policy. 

Moreover, while the Chinese leadership in Beijing 

may want certain outcomes from China’s engagement 

in Africa, it is also increasingly unable to control a rapidly expanding network of state-owned and privatesector actors who have entered these markets based 

on the logic of globalization and profit maximization. 

This network, from the most “controllable” to the 

least, includes: 

• Large Chinese enterprises investing in strategic 

sectors such as oil, ores, or infrastructure. Most 

are state-owned and/or subsidized with Chinese grants or benefit from cheap policy loans 

by state-owned banks;

• Medium- to large-sized Chinese companies 

found mainly in the manufactured goods, telecommunications, and service sectors,162 and;

• Small firms and individual or family businesses, which are dominant in light industry, and 

the wholesale and retail sectors.163

Chinese state-owned banks such as China EXIM 

Bank and China Development Bank are playing increasingly large financing roles on the continent, but 

they still largely cater to Chinese state companies. Private Chinese companies have often complained of the 
66

lack of Chinese government support in this respect. 

It was in recognition of this that the Chinese government announced the launch in 2009 of a $1 billion 

fund geared especially toward small- and mediumsized enterprises in Africa. Although the bigger stateowned Chinese enterprises dominate the headlines 

with large-scale infrastructure and resource-related 

deals, the most dynamic sector of Chinese investment 

in Africa is the private entrepreneurs.

Unfortunately, and in some cases undeservedly, 

Chinese companies in Africa have developed a highly 

negative reputation for limited employment of Africans, limited technological transfer, and, in some 

cases, uneven workmanship. Worse still, many Chinese investors have brought with them notoriously 

low labor rights standards and a wholesale disregard 

for the environment that mimicked the pattern of accidental injuries and deaths, periodic strikes, and longstanding ecological degradation found in China itself. 

Construction firms in Zambia and Namibia have documented unfair Chinese business practices, including 

collusive bidding, low wages, and a tendency to hire 

contract workers so as to get around mandated labor 

benefits (paid holidays, sick leave, etc.) for permanent 

staff. To avoid censure, Chinese managers bribe union 

bosses and take them on “study tours” (i.e., massage 

parlors) in China.164 A study by Namibian labor unions 

pointed out that the Chinese were following the same 

practices as local African firms. European-owned 

firms that adhered to local labor laws and regulations 

suffered most.165

Another example of illegal business practices by 

Chinese firms relates to violations of intellectual property rights. African nations do not have the institutions 

to keep counterfeit and harmful products from entering their territory.166 Some Chinese manufacturers il-
67

licitly copy African designs, such as wax print textiles, 

and then produce them more cheaply for export back 

to Africa.167 These illegal products not only create economic losses for their patent holders, but they also 

threaten human health and safety. Affecting U.S. companies as well as those of other nationals, counterfeit 

Chinese goods have flooded the African markets, not 

only undercutting those who have created the original 

products and driving them out of the market, but also 

creating health risks with counterfeit medicines and 

false products—with Africans once again the victims 

of this exploitation. 

Even more problematic in the longer term is the 

conduct of Chinese small and medium enterprises, 

some of which deliberately flout labor and environmental standards as well as local regulations in pursuit of profit.168 Unscrupulous Chinese traders use 

front companies to export illegally, everything from 

timber, diamonds, and prized body parts of endangered wildlife back to China. Chinese triads (criminal 

gangs) from Hong Kong have moved into Africa as 

well. Triads have been implicated in the stripping of 

the southern African coast of abalone (90 percent of 

which is gone after only a few years), in the shark fin 

and rhino horn trade, as well as in people trafficking. 

Seven major triad-affiliated groups, four from Hong 

Kong and three from Taiwan, have used front companies to engage in illicit trade in wildlife products.

OFFICIAL CHINA RECOGNIZES DAMAGE 

IN AFRICA CAUSED BY POOR CORPORATE 

CITIZENS

At the 2006 FOCAC meeting, the Chinese leadership, recognizing that its firms in Africa were not 

complying with best business practices regarding 
68

corruption and environmental degradation, pledged 

that these firms would be encouraged to behave in an 

open, fair, just, and transparent way in the future. By 

2007, China had issued “good corporate citizen guidelines” to help moderate the conduct of Chinese corporations in Africa.169 That same year, the World Bank’s 

International Finance Corporation (IFC) and China 

EXIM Bank signed a memorandum of understanding 

to work together to publicize and train Chinese banks 

on the Equator Principles, a voluntary set of social and 

environmental principles agreed to in 2002. There is 

evidence that the Chinese MNCs are, as part of the 

desire to emulate established global MNCs, in the process of embracing aspects of the corporate responsibility agenda. 

Beijing’s promises to ameliorate the worst behavior of Chinese companies abroad also reflect changing attitudes within China itself, such as calls for a 

“greener China.” In 2008, China EXIM Bank published 

new guidelines for social and environmental impact 

assessments.170 Also in 2007, China’s State Forestry 

Administration and the Ministry of Commerce released guidelines that Chinese logging companies are 

expected to use abroad. There were no sanctions for 

not following the logging guidelines, however, and 

thus, it is not surprising that there continue to be concerns about China’s purchase of timber from the African black market (as well as the illegal purchase of 

African ivory), according to the May 2011 testimony 

before Congress by George Washington University 

Professor David Shinn.171

As Chinese business has become more deeply 

embedded in Africa, however, their concerns have 

shifted from attaining access to resources and market 

share to sustaining their position and investments. 
69

This can be seen, for example, in the changing attitude 

of Chinese mining sector companies in Zambia, which 

have increasingly sought to bring their business practices in line with established legal requirements, such 

as allowing trade union activity as a safeguard against 

popular dissent.172

AFRICAN CIVIL SOCIETY ACTS TO 

CONSTRAIN POOR CHINESE BEHAVIOR, 

BUT MUZZLED CHINESE CIVIL SOCIETY 

CANNOT LOBBY BEIJING FOR CHANGE

As African civil society—from labor activists and 

trade analysts to environmental and human rights 

lobbyists—has developed a voice on the range and 

breadth of Chinese involvement in continental affairs, 

civil society actors have also begun to set parameters 

for Chinese action in collusion with African elites.173

China’s relations with strong, independent African 

labor unions are not cordial, with labor standards in 

China sometimes less stringent than in some African 

countries.174

At the same time, there are important actors in the 

PRC who are missing from the Africa equation: China’s civil society. If China’s autocratic leaders allowed 

a free and vibrant civil society, nongovernmental organizations (NGOs), religious groups, etc., might play 

an important role in curbing the worst Chinese business practices in Africa. Compared to the West and 

even Japan, societal interest groups figure much less 

as a factor in shaping China’s aid. For example, in the 

West, NGOs like Oxfam, Save the Children, and Bread 

for the World lobby parliaments to add funds to the 

aid budgets reflecting their particular concerns.175 In 

China, private and semi-private commercial interests 
70

are growing factors in the determination of Chinese 

assistance, particularly at the provincial levels. China 

does have an emerging civil society that might also 

play an influential role were it not severely constrained 

by the Communist Party. However, China state interests—political, commercial, and bureaucratic—motivated largely by profit, overwhelm the humanitarian 

civil society influences on aid, and even the independent indigenous blogosphere tends to oppose foreign 

aid as a waste. 

THE CHINESE DIASPORA: LATEST LARGE 

WAVE IMPACTING AFRICA

Another issue that African governments have yet 

to grapple with is the impact of Chinese immigration into Africa. Conservative estimates suggest that 

there are now a million Chinese migrants across the 

continent.176 With aid projects at one time or another 

in every country in Africa but Swaziland and teams 

of Chinese laborers imported to work on these projects, some stayed behind. This trend accelerated after 

emigration rules were somewhat relaxed in China in 

1985. Once Chinese workers have spent time in African countries, there is a marked tendency for some 

to stay on, either working on new projects with the 

Chinese firm that brought them to the continent or 

branching off into their own small-business pursuits. 

Thus, the development of Chinese small and medium 

enterprises in Africa is also tied to the phenomenon of 

growing Chinese migration to Africa, which is bringing new settler communities to parts of the continent. 

The relative scale of Chinese immigration to Africa 

is also significant. More Chinese have come to Africa in 

the past 10 years than Europeans have in the past 400, 
71

The Economist claimed in April 2011. Already there are 

more Chinese living in Nigeria than there were Britons during the height of the Empire, another scholar 

wrote.177 Nigerian traders who had shifted their sourcing to China—and who, along with other West Africans, are much in evidence in Guangzhou, Yiwu, and 

Hong Kong wholesale markets—have felt the shock of 

competition as Chinese traders have moved directly 

into Nigeria. Indeed, the opening of three wholesale 

and retail shopping centers in major urban areas has 

produced protests from Nigerian businessmen and official action that resulted in their temporary closure.178

“Across Africa, Chinatowns have sprung up, thousands of Chinese citizens have migrated, with populations now dwarfing white expatriates and traditional 

Lebanese and Greek networks in many African cities.”179 In the past two presidential elections in Zambia, China’s growing influence—including the large 

population of its nationals—was a key political issue. 

Thousands of Chinese retail trading shops are now 

strung across much of the continent, selling low-cost 

and low-value products made in China directly to Africa’s rural population. The product of individual entrepreneurship, these shops are generally family owned 

and staffed and rely upon a supply chain stretching 

back to Hong Kong and the mainland.180 In Dar Es Salaam, the commercial capital of Tanzania, Chinese are 

banned from selling in markets. The Tanzanian government announced that the Chinese were welcome 

as investors but not as “vendors or shoe-shiners.”181 At 

the same time, it is important to acknowledge that the 

rise of Chinese retail traders and low-cost imported 

goods has meant that many Africans could afford new 

clothes, shoes, radios, and watches for the first time 

in the lives. Often, Chinese retailers, far from being a 

curse, have actually been a catalyst for development.

73

PART III:

CHINA’S STRATEGIC TIES TO AFRICA:

OIL, MINERALS, AND AGRICULTURE

In this section, three strategic sectors in ChinaAfrica relations are examined: oil, minerals, and agriculture. 

CHINA AND OIL DIPLOMACY IN AFRICA

China’s relentless pursuit of economic development turned the country from a petroleum exporter 

to an importer by 1993—a significant milestone in its 

development, and an event that also spurred China 

to adopt a new foreign policy in 1995 emphasizing 

greater economic ties with Africa. China is currently 

the second-largest consumer of oil in the world after 

the United States, with more than half of its crude oil 

imported. By 2020, official sources estimate that China 

will import about 65 percent of its oil, and surpass the 

United States as the world’s largest net oil importer.182

(In terms of overall energy use from all sources including coal, China surpassed the United States in 2010, 

according to the International Energy Agency [IEA]; 

in 2000, its energy consumption was half that of the 

United States.)183

Barclays Capital predicted that China’s oil consumption in 2015 would be 13.6 million barrels a 

day, significantly higher than an IEA estimate of 10.5 

million.184 The IEA had earlier projected that China’s 

demand for oil would increase to 14.2 million barrels 

per day by 2025, with Chinese oil imports equaling 

current imports by the United States by 2030. Whether 

China’s oil imports surpass those of the United States 
74

in 2020 or 2030, it is clear that Africa’s importance to 

China as a source of energy will only increase over 

time. 

The Chinese government has increasingly looked 

to Africa as a way to diversify, thus reducing dependence on the less stable Middle East, which, in 2010, 

still accounted for 47 percent of Chinese oil imports.185

China has developed a two-pronged strategy toward 

energy investments in Africa to achieve this goal. 

First, China has pursued exploration and production 

deals in smaller, low-visibility countries such as Gabon, Equatorial Guinea, and the DRC. Second, it has 

gone after the largest oil producers, such as Angola, 

by offering integrated packages of aid.186 Another key 

goal of Chinese oil diplomacy in Africa is to foster the 

growth of Chinese National Oil Companies (NOCs) as 

players in the global oil market over the long term.187

Up to now, Chinese efforts to secure oil equity in Africa have not been impressive, and Chinese oil companies are still minor players.188 The commercial value 

of the oil investments in Africa by China’s NOCs is 

just 8 percent of the combined commercial value of the 

international oil companies’ investments in African 

oil, and are often of a magnitude and quality that do 

not interest Western corporations. Chinese companies 

have tended to go places for oil where U.S. and European companies are not present, sometimes because 

they have withdrawn for political reasons under pressure from the international community, such as Sudan, which has sent 60 percent of its oil production to 

China. 

Nevertheless, Western companies are concerned 

about the increased presence of Chinese NOCs, and 

complain that the Chinese enjoy an unfair advantage 

in that their government can link oil investments to 

government-to-government financial or development 
75

assistance, as it did with Angola in 2004.189 In Niger, 

for example, the China-Africa Development Fund 

(CADF) is underwriting a 2000-km pipeline to export 

oil from the landlocked country that would connect 

either to Benin or Chad.190 China is also exploring 

building an oil refinery in Chad.

Other countries in Africa where China has or is 

investing in the oil or gas production or exploration 

include Nigeria, Equatorial Guinea (about 12 percent 

of its oil exports go to China), Chad, Liberia, and, most 

recently, Tanzania, where the Chinese government 

recently signed an agreement to lend $1.06 billion to 

construct a natural gas pipeline connecting the south 

of the country to Dar es Salaam.191 A Chinese company 

is building Chad’s first petroleum refinery in a 60:40 

joint venture.192

In 2009, China’s top three sources of oil in the 

world were Saudi Arabia, Angola, and Iran, while its 

top three sources of oil in Africa were Angola, Sudan, 

and the DRC. Of China’s oil imports, 30 percent were 

sourced from the continent, principally Angola (15.8 

percent) and Sudan (6 percent). Recently, Africa’s share 

of China’s oil imports increased to about one-third. By 

contrast, the United States now receives 18-19 percent 

of its petroleum imports from Africa. In 2009, oil and 

gas accounted for 64 percent of all African exports to 

China, and for 90 percent of African exports to the 

United States. China’s oil imports constitute about 13 

percent of total African oil exports. The United States 

and Europe each purchase about one-third of Africa’s 

total oil exports.193

China’s strategy of using Africa to move away 

from the Middle East through diversification has not 

been without risks. Libya had accounted for 3.1 percent of Chinese imports in 2009, but, with Chinese 

oil imports from Libya disrupted by civil war and 
76

the NATO intervention in March 2011, the DRC took 

third place, and now sends about 50 percent of its production to China.194 With the independence of South 

Sudan in July 2011, this new country became China’s 

second most important source of oil. However, when 

a dispute between Sudan and South Sudan over oil 

export transport fees broke out, there was a shutoff in 

oil exports in November 2011. Reflecting the importance of Sudan and South Sudan for Chinese energy 

imports, Beijing dispatched its special envoy for African Affairs to Khartoum and Juba in December 2011 to 

propose a solution to the dispute, 195 and dispatched a 

new envoy in early May 2012 in a renewed diplomatic 

effort.196 On May 2, 2012, China joined other UN Security Council members in unanimously supporting 

Resolution 2046, which called on Sudan and South 

Sudan to halt cross-border attacks and return to negotiations. 

This Sudan example also provides clear evidence 

of the important oil diplomacy role that the Chinese 

government can play in African countries. In June 

2008 congressional testimony, the Deputy Assistant 

Secretaries of State for Africa and East Asia noted, 

There are often exaggerated charges that Chinese 

firms’ activities or investment decisions are coordinated by the Chinese government as some sort of strategic gambit in the high-stakes game of global energy security. In reality, Chinese firms compete for profitable 

projects not only with more technically and politically 

savvy international firms, but also with each other.197

But this testimony missed the point that, while 

the Chinese government may not have been directing 

Chinese NOC decisions on which deals to pursue, it 

has been a strong advocate on behalf of its national oil 

companies in helping them win deals in Africa. 
77

The Chinese argue that their investment in upstream oil exploration and production in Africa 

should not be considered threatening, but instead 

welcomed, since it expands global supplies. It is important to recognize that China frequently chooses not 

to ship African equity oil back to China. Logistically, it 

is easier to ship West African oil to markets in Europe 

and North America. Commercially, the incentive is to 

choose those markets that fetch the best price. Given 

its lack of success in securing oil equity in Africa, China, like the United States, will continue to rely overwhelmingly on the open market for years to come.198

At the same time, Chinese NOCs are becoming more 

experienced and technologically advanced, including 

facility in offshore exploration and drilling. Over time, 

their competitiveness vis-à-vis Western majors will increase in Africa and elsewhere. 

CHINA’S STRATEGIC TRADE IN METALS 

AND MINERALS IN AFRICA—IMPLICATIONS 

FOR THE UNITED STATES

Access to oil, minerals, and other natural resources 

has been cited by observers as a core interest of China 

in Africa, and usually appears as number one of Beijing’s top interests in the continent. Much as China has 

shown a preference for equity oil in developing oil resources in Africa and elsewhere, Beijing also prefers 

equity minerals and metals. The United States also 

considers access to African resources one of its core 

interest in Africa, although this is arguably a lower 

priority for Washington. The United States imports 

relatively modest quantities of African mineral products, while China imports huge quantities of cobalt, 

manganese, tantalum, copper, iron ore, and other 

minerals.199
78

The case has been made that there is no zero-sum 

game with the United States in China’s massive purchases of African minerals and metals, but rather that 

these purchases have merely pushed up commodity 

prices and benefited the continent through friendly 

competition. Other observers, however, are less sanguine. They note that one worrisome phenomenon 

in recent years has been Chinese control of the production of more than 90 percent of rare earth minerals. Recently, Chinese companies withheld rare earth 

minerals from Japan over the Senkaku/Diaoyu Islands dispute and threatened to withhold them from 

the United States over arms sales to Taiwan. Given 

China’s hostile behavior with rare earth metals, its 

behavior and intent in terms of securing global supplies of other strategic minerals are valid security issues worth examining. These metals and minerals are 

important because they are used in key components 

in communications devices, satellites, and electric fuel 

cells. 

Southern Africa contains several strategic minerals which the United States and its allies require for 

industrial and military needs. The U.S. Government 

is particularly concerned about access to critical defense minerals—especially, platinum group metals 

(PGMs), chromium, and manganese, as well as the 

rare earth minerals cobalt and uranium—which U.S. 

arms manufacturers must have access to in order to 

produce weapons systems. Africa holds 95 percent of 

the world’s reserves of platinum group metals, and 90 

percent of its chromite ore reserves.200 Concerns about 

China’s possibly aggressive and sometimes monopolistic behavior in pursuit of minerals are most acute 

in three Southern African countries—South Africa, 

the DRC, and Zambia (with Zimbabwe also being a 

“country to watch”). 
79

South Africa.

Chinese companies have been actively attempting 

to secure a higher fraction of the world’s supply for a 

number of strategic minerals, particularly manganese 

ore, chromium, and ferroalloys. In recent years, China 

has been investing in South Africa’s mineral sector, 

aiming to secure supply of specific commodities for 

which it has a shortage of reserves. There are reports of 

an offtake agreement for most of South Africa’s annual 

manganese ore production that has been negotiated by 

the China Yunnan Metallurgical Company (CYMCO). 

Over the last 6 years, China has also become involved 

in South African ferrochrome mining and processing. 

Chinese companies Sinosteel, Minmetals, and Jiuquan 

Iron & Steel (Jisco) hold a significant share of various 

South African ferrochrome producers and explorers. Sinosteel acquired 50 percent of the Tweefontein 

chrome mine and the Tubatse ferrochrome smelter 

for a reported $230 million in 2006, creating a joint 

venture with Samancor known as Tubatse Chrome. 

Sinosteel also owns 60 percent of Asa Metals, which in 

turn owns 100 percent of the nearby Dilokong chrome 

mine. China Minmetals subsidiary, National Minerals, has bought the exploration rights for the Naboom 

chrome project in the Limpopo province from Mission 

Point and Versatex for $6.5 million. Jisco is involved 

in South African mining as a result of a $30 million 

purchase of 26.1 percent of International Ferro Metals 

(IFM), which in turn owns the Buffelsfontein chromite 

mine and smelter. China Metallurgical Group also announced, in late-2011, plans to build an iron-titanium 

mine in South Africa.201
80

Democratic Republic of the Congo (DRC) 

and Zambia.

During the Cold War, a core interest of the DRC 

(then Zaire) for the United States was its role as a secure supplier of cobalt, which is used in aeronautics. 

Today, 90 percent of China’s imported cobalt comes 

from the DRC (Katanga Province) and Zambia. The 

2008 “Sicomines” deal between China and the DRC 

was a concession to extract 10.6 million tons of copper 

and 626,619 tons of cobalt, which represented a $9 billion Chinese investment. As part of the Sicomines deal, 

China is building a road network stretching 4,000 kilometers (2,400 miles) and a railway system spanning 

3,200 kilometers (1,920 miles). Three major Chinese 

companies have a controlling interest of 68 percent 

in Sicomines. The Congolese company Gecamines 

has a 32 percent interest. The DRC produces a wide 

range of other strategic minerals, including uranium, 

coltan (columbite and tantalum), tungsten, tin, and 

rare earth minerals. U.S. legislation restricts American 

companies from operating in the war-torn east of the 

DRC where strategic minerals for cell-phones (coltan) 

and electronics are produced.202

Future Access: Mitigate Risk through Selective 

Stockpiling and Encouraging Processing in 

Southern Africa.

The U.S. Defense Logistics Agency (DLA) is responsible for maintaining the National Defense 

Stockpile of strategic and critical materials, including 

base metals such as cobalt and chromium and more 

precious metals such as platinum, palladium, and 

iridium. After the Cold War, Congress directed the 
81

DLA to sell the bulk of its stockpiled commodities. 

With the winding down of wars in Afghanistan and 

Iraq, and the U.S. Government’s strategic pivot back 

to Asia (read: China), the Defense Department will 

likely monitor more closely actions by Chinese firms 

to gain equity stakes in southern African producers of 

strategic minerals and metals, and may decide, over 

the longer term, to bolster its stockpiles selectively. 

One measure that could mitigate any move by China 

to restrict the free trade in strategic minerals and metals would be to assist Pretoria in developing greater 

value chains through local processing. At present, 

China prefers the post-mining processes to take place 

in China, though some Chinese companies have demonstrated a willingness to engage in such beneficiation overseas through the acquisition or establishment 

of local production facilities.203

CHINA, AFRICA, AND AGRICULTURE: FOOD 

AS THE NEXT STRATEGIC ASSET?

Guaranteeing agricultural supplies is a matter of 

national security for the Chinese government. Food 

makes up more than one-third of the average consumer basket. In 2007, food prices became a key concern, 

even considered a risk. On several occasions, China’s 

leaders have signaled their concern over the potential risk of higher prices stoking public unrest. China 

became a net food importer in 2003—10 years after it 

became a net importer of oil. Some observers point to 

the inevitability of urbanization and the shrinkage of 

arable land to make the case that China will need to 

import far more food, and that some of it will increasingly be from Africa. Rising incomes and urbanization 

are, indeed, leading to dramatic increases in expen-
82

ditures on food in China. China now has the second 

highest expenditures on food in the world, behind the 

United States; by 2015, China’s total annual food expenditures will reach over $1 trillion. It has been predicted that China’s import demand for agricultural 

products will grow at double-digit rates over the next 

25 years.204

Domestically, Beijing is responding by boosting 

domestic sources of supply, and by attempting to 

minimize the loss of agricultural land. To ensure food 

security, China set a red line in 2006 to guarantee that 

its arable land never shrinks to less than 1.8 billion 

mu (120 million hectares).205 However, rapid urbanization and huge investments in railway, highways, 

and roads in recent years required conversion of agricultural land for other purposes. The province-like 

municipality of Chongqing has carried out innovative 

land auctions to convert agricultural to urban land 

for developers, often with a requirement to “reclaim” 

nonagricultural land so as to ensure no loss in total 

arable venues. 

Internationally, China is enhancing trade ties to 

traditional food-exporting nations. Between 2001 and 

2010, China’s imports of soybeans, for example, rose 

10-fold, from $2.8 billion to over $25 billion; 99 percent of China’s soybeans come from the Americas. By 

contrast, China-Africa agricultural trade in 2009 was 

just $4 billion, less than 4 percent of China's total agricultural trade.206
83

Africa: Potential Source of Agricultural Imports 

Over Long Term.

Over the long term, Africa has tremendous potential to increase its share of global agricultural exports, most importantly because it has 60 percent of 

the world’s uncultivated, arable land.207 Already, and 

starting from a low base, Africa’s exports of agricultural products to China have been increasing rapidly. 

Local specialties such as oranges from Egypt, wine 

from South Africa, cocoa beans from Ghana, coffee 

from Uganda, olive oil from Tunisia, and sesame from 

Ethiopia and Senegal have become familiar to and 

popular among Chinese consumers.208

China is also aligning its aid and investment in 

African agriculture. China’s agricultural engagement 

with Africa began in the early 1960s as an instrument 

of diplomacy to counter the agricultural aid program 

operated by Taiwan. Since then, more than 44 African 

countries have hosted Chinese agricultural aid projects, and the Chinese have developed more than 90 

farms through their aid.209 Most of these diplomatically useful but unsustainable agricultural projects 

failed, however. In recent years, the Chinese government shifted toward a strategy encouraging the 

takeover of these often moribund turnkey projects by 

China’s nascent agribusiness corporations. Examples 

of takeovers by Chinese companies include a sisal 

farm privatized by the Tanzanian government, a rice 

farm in Guinea, a tea plantation in Mali, and sugar 

complexes in Madagascar and Togo. 

In May 2006, 40 domestic and international experts 

developed a roadmap for China’s strategic planners 

recommending agricultural technology and seed cultivation as two areas in which China could be com-
84

petitive. The experts also recommended that China 

establish cutting-edge agricultural technology demonstration parks across Africa, and Beijing now plans 

to establish 14 such parks. 210

Today, state-owned agribusiness enterprises carry 

out many of China’s agricultural investments in Africa, some of which are aid projects executed under 

contract by the Chinese government for the recipient 

nation. Increasingly, however, these projects are for 

profit from their inception. The Chinese government, 

as part of the broader “going-out” policy initiated in 

2001, provides PRC companies with a separate set of 

incentives for agricultural investments. 

Up to now, Chinese policy support for outward investment in agriculture, as in other sectors, is focused 

on large enterprises. At the central level, the most 

significant national SOE active in this sector is the 

China State Farm Agribusiness Corporation (CSFAC), 

which operates in several countries. CSFAC and the 

Jiangsu Provincial State Farm Agribusiness Corporation (SFAC) established the China-Zambia Friendship 

Farm, which devotes 667 hectares to growing barley, 

maize, and soybeans. Six Chinese SOEs had established 15 farms in Zambia with a total of 10,000 hectares as of 2008. At the provincial level, there are also 

examples of agricultural investments in several African countries, but none are truly large scale. Hubei 

Province SFAC established a 1,000 hectare demonstration farm in 2005 in Mozambique using a grant of land 

from the host government; the SFAC subsequently 

formed Lianfeng Overseas Agricultural Development 

Co. to expand its activities in Mozambique and other 

countries in Africa. The Shaanxi SFAS established a 

5,000 hectare farm with a $62.5 million investment in 

Cameroon, mainly growing rice. Another project involves a Chongqing SFAC growing rice in Tanzania.211
85

In May 2008, press reports claiming that China’s 

Ministry of Agriculture was in the process of formulating a new policy on outward investment in agriculture attracted international concern about Chinese 

“land grabs.” The Director General of the UN’s Food 

and Agricultural Organization (FAO), obliquely referring to countries including China, said in August 2008 

that “the race for food-importing countries to secure 

farmland overseas to improve their food security risks 

creating a neo-colonial system.” Likely in response to 

international criticism, as well as to local opposition 

as in Mozambique, China’s National Development 

and Reform Commission (NDRC) announced in November 2008 a 20-year food-security strategy explicitly stating that foreign land acquisitions would not be 

part of China’s strategy.212 Under China’s communist 

system, all land still belongs to the State, though rural 

land is owned “collectively.” This ideologically driven prohibition in China of private ownership of land 

suggests that Beijing would have been particularly 

sensitive to foreign criticism of land grabs in Africa, 

and that such criticism was likely also a factor in the 

NDRC decision. 

News reports indicated in January 2012 that a company from China’s Hainan Province had won Sierra 

Leone’s approval for a $1.23 billion investment in rice 

and rubber production on 40,000 hectares. If true, this 

would be a break in the pattern of smaller-scale leases 

by Chinese firms. However, given the number of articles in the past on Chinese agricultural investments 

that have subsequently been proven false, such a large 

figure may be inaccurate.213 For example, Chinese telecom multinational ZTE reportedly had signed a joint 

venture in 2007 to produce oil palm biofuels using 

3 million hectares in the DRC; the DRC government 
86

subsequently indicated it had approved only 100,000 

hectares, and the project’s future is still uncertain.214

Conclusion: Reports of Chinese Land Grabs 

in Africa Exaggerated

Reports of Chinese land grabs in Africa are overstated. Arab states, including Libya, Egypt, Jordan, 

Kuwait, Qatar, the United Arab Emirates, and Saudi 

Arabia—as well as private investors from throughout 

the developing and developed world—have indeed 

made recent land acquisitions in Africa. By contrast, 

Beijing, alarmed by local criticism, has remained cautious about large land purchases by Chinese companies. Some Chinese businessmen do see Africa as 

a target for grain-production exports to the Chinese 

market, and as a source of biofuels. Chinese firms 

sought deals for biofuel palm oil in the DRC in 2007 

and biofuel jatropha in Zambia in 2009.215 Yet, the 

Chinese appear to be investing primarily via cooperative projects rather than exclusive land deals.216 So far, 

Chinese investment in African farming, forestry, fishing, and animal husbandry has accounted for only 3.1 

percent of its FDI. 
87

PART IV:

U.S. RESPONSES TO CHINA IN AFRICA

POTENTIAL FOR U.S.-CHINA COOPERATION 

IN AFRICA: LIMITED AND CONSTRAINED 

BY BEIJING

China’s foreign policy toward Africa all too often 

legitimizes human rights abuses and undemocratic 

practices under the guise of noninterference in the 

internal affairs of other countries.217 At a U.S. Senate hearing on China in Africa on November 1, 2011, 

lawmakers criticized China’s state-backed support for 

governments with poor human rights records, stating 

that “China is interested in [its] own goals and has 

very little concern about the governance of the countries that they deal with.” 

In fact, Beijing selectively welcomes good governance—when it protects the trade and investment 

interests of Chinese businesses, e.g., in an advanced 

economy like South Africa. In general, however, China undermines Western goals of promoting democracy, good governance, and human rights in Africa by: 

1) enabling certain governments, such as Zimbabwe 

and Ethiopia, to restrict the flow of information on the 

Internet;218 2) granting aid and trade credits without 

conditionality related to good governance; and, 3) ignoring when its rent-seeking businessmen use bribery 

and gifts to win contracts and government approvals. 

While Beijing’s “no-strings attached” approach to 

aid appeals to some African elites, it also poses a direct 

challenge to the good governance focus of the Washington Consensus.219 The Washington Consensus in-
88

volved the imposition of conditionalities by the World 

Bank, IMF, and donors regarding macroeconomic 

policy, public spending, and transparency as well as, 

in some cases, the holding of democratic elections by 

African governments. Chinese involvement in Africa 

has sparked talk in the West of an emerging Beijing 

Consensus predicated on noninterference in domestic affairs of states. Ethiopian Prime Minister Meles 

Zanawi, speaking at the January 2012 inauguration of 

the new AU headquarters paid for by China, claimed 

that the recent rapid growth experienced by many African countries had coincided with a trend toward the 

adoption of China’s state-led economic model. The 

Prime Minister excoriated The Economist—a standardbearer magazine of the Washington Consensus—for 

having published a banner headline a decade ago that 

Africa was “The Hopeless Continent,” only to recently 

publish a new banner headline that simply read “Africa Rising.”220 Sidestepping a journalist’s question 

about whether Africans should follow the Washington 

or the Beijing Consensus, Chinese Premier Wen Jiabao 

said at the 2009 FOCAC that “Africa’s development 

should be based on its own conditions and should follow its own path, that is, the African model.”221

In this context of an authoritarian, nationalistic, 

and mercantilist China, what real potential is there for 

cooperation with the United States in Africa? From a 

pragmatic perspective, there should be some grounds 

for cooperation. After all, both China and the United 

States have similar interests in gaining access to Africa’s vast energy and raw material resources, and 

both require a stable geopolitical environment on the 

continent in order for them to achieve their objectives. 

For example, China’s willingness in May 2012 to work 

with the United States in the UN Security Council to 
89

pass Resolution 2046 on Sudan and South Sudan primarily reflects its desire to see oil exports from the Sudans resumed as soon as possible. 

The rhetoric of official U.S. policy has been that 

there has not been a zero-sum competition with China 

for influence in Africa. In this view, there is no inherent 

strategic conflict between China and the United States 

in Africa: Sino-American cooperation in Africa is not 

only possible, but it is in the interests of all stakeholders who seek to promote Africa’s development and 

integration into the global economy.222

In theory, China and the United States could potentially work together to build the export capacity of 

African industries; provide technical assistance on climate change; and collaborate on peacekeeping operations, anti-piracy operations, countering drug smuggling, and disaster relief.223 U.S. Assistant Secretary of 

State for African Affairs Johnnie Carson, following a 

November 2011 trip to China, said that, “We are eager 

to see if we can work with China to leverage our comparative advantages to help Africa overcome some of 

it economic challenges, particularly in the area of agriculture, health, and clean water.”224

Moreover, there have already been precedents 

for U.S.-China cooperation within several African 

countries. In Liberia, for example, the U.S. Government trained staff and refurbished the Ministry of 

Defense headquarters. China provided vehicles and 

computer equipment, and is providing some specialty 

training and rebuilding at least one base up-country. 

Good communication between the U.S. and Chinese 

embassies on the ground in Liberia has helped each 

party identify areas for inputs.225 This occurred, for 

example, where China and the United States agreed 

to join forces to combat malaria, and collaborated in 
90

the construction of the military barracks at Bonga for a 

UN peacekeeping operation.226 In agriculture, the U.S. 

and Chinese Ambassadors in Ethiopia arranged exchanges to observe demonstration farms each country 

has built to increase agricultural capacity. In Gabon, a 

U.S. official said recently, the United States hopes to 

work with China and Gabonese public health experts 

on preventing the emergence of infectious diseases.227

The reality, however, is that Beijing is not really interested in broad-based strategic cooperation with the 

United States in Africa, so we will continue to have 

only occasional showcase examples of cooperation 

instead of true, sustained, and strategic cooperation. 

One reason is Beijing’s fear that coordinated U.S.-

China diplomatic engagement could raise suspicions 

among some African parties that the United States 

and China are ganging up against them. The major 

reason, however, is domestic PRC politics, which are 

marked by hyper-mistrust of the United States. This 

mistrust reflects a strong nationalism and the Communist Party’s strict control of the news media, which can 

create a nationalistic echo chamber of anti-American 

propaganda that makes it hard for positive images of 

the United States to be seen, and even harder for advocates of greater cooperation with the United States 

to speak up. 

Another Chinese sensitivity, particularly for the 

China’s Communist Party, is how any potential cooperation is framed. If contributions from the Chinese 

side for a joint cooperative project appear to be equal 

or even superior to those of the American side, then it 

might be accepted by the Chinese side. However, even 

a humanitarian project in which the American side’s 

contribution (e.g., visit of a hospital ship) appears 

to be more impressive than that of the Chinese side 
91

(e.g., medical teams supporting a strengthened health 

care system), it would likely be rejected for reasons of 

“face” and the need for Chinese propaganda to weed 

out unfavorable comparisons with foreign partners. In 

this regard, joint U.S.-China cooperation in the fight 

against malaria might be promising. The Chinese are 

particularly proud of the anti-malarial drug Artemsinin, which was based on traditional Chinese medicine, so they might be willing to cooperate in this very 

narrow area. 

The United States is trying to use bilateral diplomacy to shift China’s policies in Africa. U.S. Under 

Secretary of State for Economic Affairs Robert D. Hormats said at a recent meeting of the U.S.-China Strategic and Economic Dialogue that the United States 

supported Chinese investment and aid to African 

economies but that, consistent with global norms, Beijing should adopt more transparent financing to combat corruption, and impose stricter environmental and 

labor standards. China can play a constructive role in 

Africa as an investor, but needs to be a responsible 

investor, Hormats said. In a sense, this is an Africaspecific corollary of the U.S. theme, first championed 

by then Deputy Secretary of State (and former World 

Bank President) Robert Zoellick, that a rising China 

should become a responsible stakeholder on the global scene.228

Unfortunately, U.S. Government efforts are unlikely to influence China’s policies in Africa. In the 

trade sphere, China uses East Asian mercantilist policies, including currency manipulation and domestic 

innovation rules discriminating against foreign firms 

to circumvent its WTO commitments. In general, Beijing’s authoritarian government thinks only of China’s interests and will resist international pressure. In 
92

November 1, 2011, testimony before the U.S. Senate, 

American University professor Deborah Brautigam 

made a suggestion on how to encourage China to become a more responsible stakeholder in Africa: 

The OECD sets the standard for being a responsible 

global player. . . . The Chinese by and large are familiar with these rules. We need to think about ways 

in which we can make actually joining the club—as 

South Korea and Mexico have recently done—both 

feasible and attractive to the Chinese.

The problem with this suggestion is multifold. 

First, China is unlikely to agree to have its companies 

constrained by OECD rules without spending a few 

more years learning how to “go global,” much as it insisted on long phase-in periods for many sectors prior 

to its WTO accession. When China no longer sees itself as a developing country but rather as an emerging middle-income country, only then will it seriously 

consider joining the OECD. However, it is not certain 

China would ever wish to join the OECD, as this could 

undermine its leadership among non-aligned countries of the south, nor is it certain that other OECD 

members would accept China as a member of this 

democrats’ club. Worse still, even if China did join 

the OECD, it would likely pay only lip service to its 

commitments on aid, trade credits, and anti-bribery. 

Specifically, China would do the utmost to nullify its 

commitments by skirting or ignoring the rules, much 

as it does at present in the WTO. 
93

CONCLUSION: 

RECOMMENDATIONS FOR

U.S. POLICYMAKERS

What, then, should U.S. policymakers do in the 

face of China’s rapid rise and advance in Africa, and 

its minimal interest in collaborating with the United 

States on the African continent? Here are four recommendations: 

1. Face up To China’s Commercial Challenge in 

Africa by Strengthening U.S. Economic Diplomacy. 

One central argument of this monograph is that national strength and security ultimately depend on a strong 

economic foundation. In this regard, the United States 

needs to work proactively to improve its competitive 

position in Africa vis-à-vis China and other emerging 

nations. It could do this in a number of ways:

• Biannual Presidential Summits with African 

Heads of State: Organize a U.S. Presidential 

summit with African heads of state in Washington in the summer of 2014, and do so biannually again in 2016 and beyond. Historically, 

AGOA Forums have rotated annually between 

Washington and an African capital. The next 

U.S. President, whether a re-elected President 

Obama or a new Republican President, could 

travel to the next AGOA Forum in Africa in the 

summer of 2013 as a part of a multi-country 

tour of African nations. This could then set the 

stage for the first-ever U.S. Presidential summit 

with African heads of state in Washington in 

the summer of 2014. Strong economic diplomacy begins with building personal relationships, 

and starting at the top also sends a message to 

the U.S. Government, Congress, and the Amer-
94

ican people that Africa is an important market 

that we, as a nation, will not ignore. Members 

of the U.S. cabinet, such as the Treasury and 

Energy Secretary, should also travel more frequently to Africa to the extent that their portfolios allow them to promote U.S. goods and 

services. 

• Boost U.S. Export Promotion in Africa: President Obama’s National Export Initiative announced March 11, 2010, and Secretary Clinton’s October 14, 2011, speech on economic 

statecraft were excellent statements of intent, 

but need to be converted into sustained, multiyear action with real resources behind them. 

The President sought a 5 percent increase in 

the fiscal year 2013 budget for the U.S. Department of Commerce—a powerful statement that 

his administration intends to promote U.S. 

exports, despite a severely constrained budgetary environment. The Administration and 

Congress should work in a bipartisan fashion 

to ensure increased funding for promotion of 

U.S. exports to Africa, including: 

— (Re)opening USFCS offices in Africa; 

— Increased funding for USTDA, USEXIM 

Bank, and even OPIC activities in Africa (because U.S. investment abroad often leads to 

U.S. exports as well); and,

— Expanded, mandatory commercial training 

for U.S. State Department Foreign Service 

Officers (FSOs) serving at U.S. Embassies in 

Africa with no USFCS presence.

The Administration and Congress should also consider shifting USFCS back into the State Department 
95

and, at a minimum, modifying the promotion criteria 

for State Department FSOs to make successful U.S. export encouragement and enhancement a key factor in 

selection of Chiefs of Mission and in FSO promotions. 

2. Match China’s New Soft Power in Africa by 

Funding U.S. Soft Power. As noted above, another 

reason for China’s newly found success in Africa is its 

expanded development and use of soft power. Several 

elements of its soft power diplomacy are lifted from 

the U.S. diplomatic playbook, including training and 

scholarships; cultural and language centers; promoting news services; developing a volunteer corps; and 

an international visitor program. The United States 

should continue to fund its successful soft power efforts adequately in Africa, including public diplomacy, the Fulbright program, and the Peace Corps. At a 

time when China has opened many Confucius Centers in Africa, the United States should be opening, 

not closing, more American Cultural Centers. 

3. Review U.S. Policy on Strategic Metals Stockpiling: Seek China’s Peaceful Rise, But Prepare for 

the Worst. In raising strategic metals as an issue, I do 

not intend to suggest that the United States and China 

are heading toward an armed conflict at any point in 

the 21st century or beyond. A central and unwaveringly correct tenet of U.S. foreign policy toward China 

is to welcome its peaceful rise. At the same time, prudence calls us to revisit U.S. policy on the stockpiling 

of certain strategic metals. As noted above, Chinese 

companies—upon instructions from the Chinese government—withheld rare earth minerals from Japan 

over the Senkaku/Diaoyu Islands dispute and threatened to withhold them from the United States over 

arms sales to Taiwan. Given that China has already 

engaged in hostile behavior with rare earth metals, the 
96

United States has every right to be wary of China’s 

intentions, and should monitor more closely actions 

by Chinese firms to gain equity stakes in southern African producers of strategic minerals and metals. If appropriate, the United States should selectively bolster 

its strategic stockpiles. 

Chinese culture is rich in sayings, including those 

from Sun Tzu’s Art of War. At the same time, the West 

has a few of its own. One of these is the Latin adage “si 

vis pacem, para bellum,” or “if you wish peace, prepare 

for war.”

4. Never Give Up Hope: Is Maritime Security in 

the Gulf of Guinea One Area of Possible U.S.-China 

Cooperation? I argued above that the scope for U.S.-

China cooperation in Africa is narrow, mainly because 

of the hyper-mistrust of the U.S. Government by Beijing’s Communist Party. This is not to suggest that 

U.S. policymakers should give up in seeking ways to 

cooperate with China to the extent that U.S. national 

interests are served as well. As a Chinese proverb puts 

it, “Seek common ground while putting aside differences.” Given Beijing’s wariness about cooperation, 

one pragmatic way to do this in Africa is to take our 

cue from areas in which Beijing has stated that international action is needed. 

One example of an area in which such bilateral 

cooperation in Africa may be possible is in helping 

countries in West and Central Africa to better control 

their maritime domain. In this regard, Chinese Deputy Permanent Representative to the United Nations 

Wang Min called on the international community on 

October 19, 2011, to provide assistance actively in 

combating piracy in the Gulf of Guinea:
97

The coastal countries [of West and Central Africa] 

and the international community need to attach great 

importance to the root cause of piracy in the Gulf 

of Guinea, adopt comprehensive strategies, [and] 

strengthen security capacity building.229

As the section above on oil diplomacy suggests, 

there is a commonality of interests for the United 

States and China in ensuring safe shipping routes and 

uninterrupted oil production in the Gulf of Guinea, 

whose offshore oil reserves are already the largest in 

the world. The problem of illicit activities in the maritime domain of littoral states of the Gulf of Guinea is 

serious and worsening, fundamentally threatening 

the region’s stability and development. Besides piracy, these illicit activities include trafficking in drugs, 

arms, and people; illegal fishing; and dumping of 

waste. 

China has already shown its willingness to contribute to the fight against piracy in East Africa. Therefore, 

an important precedent for international cooperation 

has already been established within China’s foreign 

policy and military communities for anti-piracy cooperation in the Gulf of Guinea. Wang made his comments on the same day as an open debate in the UN 

Security Council on the topic of “Peace and Security 

in Africa: Piracy in the Gulf of Guinea,” convened by 

Nigeria in its capacity as rotating monthly President 

of the Security Council. Nigeria convened this debate 

at the request of Benin and other countries in the region. UN Secretary General Ban Ki-moon, in a January 

18 letter to the Security Council, recalled the October 

Security Council debate, noted how China had agreed 

to fund the purchase of a ship for Benin, and called on 

all international partners to:
98

provide logistical support to ECOWAS and ECCAS to 

improve their capabilities to counter piracy . . . in particular with regard to infrastructure, radar, communications equipment and training of maritime security 

personnel.230

Therefore, there is existing strong African and UN 

support for collective international action to counter 

piracy (and other illicit activities) in the Gulf of Guinea. Under the cover of the UN Secretary General’s call 

for action, and at the urging of several countries in 

West and Central Africa, including Nigeria and Benin, China may be willing to explore with the United 

States how the two could collaborate with other nations to fight piracy and other illicit activities in the 

Gulf of Guinea.

Given the radically different nature of illicit activities in the Gulf of Guinea, the focus of coordination 

and burden sharing by the United States and China 

could be on training and equipping West and Central 

African navies and coast guards—not on patrols by 

the international community itself. West and Central 

Africa, unlike East Africa, do not face the problem of a 

failed state with a long coastline—Somalia. They have 

not ceded their sovereignty and would not welcome 

prolonged patrols by the international community in 

their territorial waters or Exclusive Economic Zones 

(EEZs). The United States, for its part, may also be 

very leery of seeing Chinese naval vessels entering the 

south Atlantic, even if they would be a great distance 

from the U.S. homeland. To address our own concerns, we could continue the positive work with African navies via the Africa Partnership Station (APS) 

and the African Maritime Law Enforcement Program 

(AMLEP) programs—which include the use of U.S. 
99

naval and coast guard vessels—while encouraging 

China to focus on equipping African naval and coast 

guards toward a primarily law-enforcement mission 

in the Gulf of Guinea, not on patrolling or training 

aboard Chinese vessels.

ENDNOTES

1. A “supercycle” is a prolonged-trend (decade or more) rise 

in real commodity prices.

2. The four countries are Burkina Faso, Swaziland, Gambia, 

and São Tomé and Principe.

3. Harry Verhoeven, “Africa Looks East,” Oxford University 

China Africa Network, February 12, 2011, p. 1.

4. “Lions on the Move: the Progress and Potential of African 

Economies,” McKinsey Global Institute, June 2010.

5. David H. Shinn, “China’s Growing Role in Africa: Implications for U.S. Policy,” testimony before Senate Committee on 

Foreign Relations Subcommittee on African Affairs, November 1, 

2011.

6. Ibid.

7. Robert I. Rotberg, ed., “China into Africa—Trade, Aid, and 

Influence,” Washington, DC: The Brookings Institution, 2008, 

p. 297.

8. Chris Alden, “China in Africa,” London, UK: International 

African Institute/Royal African Society/Social Science Research 

Council, 2007, p. 35.

9. David H. Shinn, “The Impact of China’s Growing Influence 

in Africa,” The European Financial Review, April-May 2011.

10. Rotberg, p. 65.
100

11. Matthew Plowright, “China & Africa: Law of the Land,” 

September 6, 2011, available from www.emergingmarkets.org.

12. “Regional Economic Outlook—Sub-Saharan Africa—Sustaining the Expansion,” Washington, DC: International Monetary 

Fund, October 2011, pp. 2, 39-41.

13. “China, Africa, and the World Bank: Partners in a Journey 

of Discovery,” Washington, DC: The World Bank Group, October 

8, 2010.

14. Assanatou Balde, “India-Africa Summit: A New Economic 

Meeting,” Frontier Advisory, May 24, 2011, available from Afrik.

com.

15. Nayanima Basu, “India-Africa Trade to Reach $70 billion 

by 2015,” May 19, 2011, available from rediff.com.

16. Shinn, “China’s Growing Role in Africa.”

17. Louise Redvers, “India Steps Up Scramble with China for 

African Energy,” Pambazuka News, February 4, 2010. 

18. David Lewis, “Special Report: In Africa, can Brazil be the

anti-China?” Reuters, February 23, 2011.

19. Ed Cropley, “Scramble for Africa: Brazil Gaining Ground 

on China,” Pambazuka News, November 5, 2009.

20. Fabiola Ortiz, “Brazil Forging Strategic Alliance with Africa,” Interpress Service (IPS), May 7, 2012.

21. Ibid.

22. Lewis.

23. Alexander Gabuev, “Russia in Africa: An Alternative to 

China’s Investment Monopoly?” Kommersant, December 20, 2011.

24. Andew Batson, “Africa, China and Getting Beyond Resources,” The Wall Street Journal, September 13, 2010.
101

25. Shinn, “China’s Growing Role in Africa.”

26. McKinsey Global Institute Quarterly, 2010.

27. Charles Robertson and Lucy Corkin, “China in Africa,” 

Renaissance Capital, April 21, 2011.

28. VOANews.com, quoting National Committee of the Chinese People’s Political Consultative Conference (CPPCC) Chairman Jia Qinlin at AU headquarters inauguration, January 28, 2012.

29. Shinn, “The Impact of China’s Growing Influence in Africa”; see also “Sino-Africa Trade and Financial Cooperation: History and Trends,” Bank of China, May 2011.

30. Source: U.S. Department of Commerce, available from 

www.census.gov/foreign-trade/balance/c0013.html.

31. Bank of China.

32. David H. Shinn, “The Role of China in Africa: Trade, Investment and Aid,” Social Investment Forum International Working Group, Spring Symposium, May 18, 2010.

33. Bank of China.

34. A tariff line is the product code used at the national level, 

beyond the six digits of the Harmonized Commodity Description 

and Coding System (HS) developed by the World Customs Organization (WCO). China has 7,550 8-digit tariff lines per the ChinaPakistan Free Trade Agreement. This suggests that China is making tariff concessions to Africa on over 62 percent of its tariff lines.

35. Ibid.

36. Robertson.

37. Bank of China.

38. “Regional Economic Outlook—Sub-Saharan Africa—Sustaining the Expansion,” International Monetary Fund, October 

2011, pp. 39, 48.
102

39. Deborah Brautigam, “The Dragon’s Gift: The Real Story of 

China in Africa,” Oxford, 2009.

40. Shinn, “China’s Growing Role in Africa.”

41. “Regional Economic Outlook—Sub-Saharan Africa—Sustaining the Expansion,” Washington, DC: International Monetary 

Fund, October 2011, p. 48.

42. Robertson.

43. Mthuli Ncube et al., “Chinese Trade and Investment Activities in Africa,” African Development Bank, Policy Brief, Vol. 1, 

Issue 4, July 29, 2010, p. 7.

44. “China Becomes South Africa’s Biggest Export Destination: Ambassador,” Xinhua, August, 21, 2011.

45. Hayley Herman et al., “South-South Relations: Sino-African Engagement and Cooperation,” Emerging Powers in Africa 

Programme, Cape Town, South Africa: July 21, 2010.

46. Shinn, “The Role of China in Africa.”

47. Harry Verhoeven and Nikia Clarke, “OUCAN Conference 

Report: ‘Chinese Investment and African Agency,’ Main Conclusions,” Oxford University China Africa Network, April 7, 2011.

48. Taylor, p. 14.

49. “Into Africa—Institutional Investor Intentions to 2016,” 

Invest AD/Economist Intelligence Unit, January 2012, p. 7.

50. Mutsu Chironga et al., “The Globe: Cracking the Next 

Growth Market: Africa,” Harvard Business Review, May 2011.

51. Ibid.

52. “Regional Economic Outlook—Sub-Saharan Africa—Sustaining Growth Amid Global Uncertainty,” International Monetary Fund, April 2012, p. 4.
103

53. “It’s Time for Africa”: Ernst & Young’s 2011 Africa Attractiveness Survey, Ernst & Young, 2011, p. 35.

54. Available from www.princeton.edu/~pcwcr/reports/benin

1990.html.

55. “Into Africa,” p. 9.

56. Ibid., pp. 7-8.

57. Ibid., p. 18.

58. “Lions on the Move: The Progress and Potential of African 

Economies,” McKinsey Global Institute, June 2010.

59. “It’s Time for Africa,” Ernst & Young, p. 3.

60. J. Peter Pham, “Assessing China’s Role and Influence in 

Africa,” testimony before U.S. House of Representatives Subcommittee on Africa, Global Health, and Human Rights, March 29, 

2012, p. 3.

61. “Into Africa,” p. 7.

62. Ibid., pp. 7, 15.

63. “Lions on the Move.”

64. Harvard Business Review.

65. Rotberg, p. 51.

66. Brautigam, “The Dragon’s Gift,” pp. 80, 82-83.

67. Alden, p. 114.

68. Brautigam, “The Dragon’s Gift,” p. 78.

69. “China’s Mighty Telecom Footprint in Africa,” The New 

Security Foundation, February 14, 2011.
104

70. Pham, March 29, 2012, p. 6.

71. Alden, p. 102.

72. Peter Wonacott, “In Africa, U.S. Watches China’s Rise,” 

The Wall Street Journal, September 2, 2011.

73. Verhoeven, p. 1.

74. Martyn Davies, “How China Is Influencing Africa’s Development,” OECD Development Centre, Background Paper, 

April 2010, p. 6.

75. Anonymous East African Minister, Africa Center for Strategic Studies’ “African Executive Dialogue” meeting, November 

2011, Washington, DC.

76. Alden, p. 132.

77. Verhoeven, p. 1.

78. Raymond Hu, “Chinese Investment in Africa: A Dangerous Game,” American Foreign Policy, Princeton Student Editorials 

on Global Politics, March 16, 2011.

79. Taylor, p. 24.

80. Shinn, “China’s Growing Role in Africa.”

81. Stephen Hayes, President, Corporate Council on Africa, “Assessing China’s Role and Influence in Africa,” testimony 

before U.S. House of Representatives Subcommittee on Africa, 

Global Health, and Human Rights, March 29, 2012, p .3.

82. Yun Sun, Visiting Fellow at the Brookings Institution’s 

Northeast Asia Policy Studies, in public remarks, “The Dragon 

and the Eagle” conference on China and the United States in Africa, Virginia Military Institute, Lexington, VA, November 3-4, 

2011.

83. Shinn, “China’s Growing Role in Africa.”

84. Alden, p. 14.
105

85. “White Paper on China-Africa Economic and Trade Cooperation,” People’s Republic of China (PRC) Information Office of 

the State Council, December 1, 2010.

86. Xie Yajing, “China-Africa Trade Is Witnessing New Development Opportunities,” ChinAfrica, January 18, 2011.

87. Alden, p. 23.

88. Overseas commercial programs were transferred from the 

Department of State to the Department of Commerce under the 

“Trade Agreements Act of 1979.” See Foreign Service Journal, April 

2005, p. 20.

89. Websites of U.S. Commercial Service, China Ministry of 

Commerce (MOFCOM) as of February 7, 2012.

90. Jennifer G. Cooke, “China’s Soft Power in Africa,” from 

Chap. 3 of “Chinese Soft Power and its Implications for the United States,” Washington, DC: Center for Strategic and International Studies (CSIS), March 10, 2009; Taylor, p. 24.

91. Shinn, “China’s Growing Role in Africa.”

92. U.S. Principal Deputy Assistant Secretary of State for Africa Don Yamamoto, “Assessing China’s Role and Influence in 

Africa,” testimony before U.S. House of Representatives Subcommittee on Africa, Global Health, and Human Rights, March 29, 

2012.

93. “Zaoan Feizhou (Good Morning, Africa!),” Jeune Afrique, 

February 12-18, 2012.

94. Alden, p. 27.

95. Testimony by U.S. Deputy Assistant Secretary of State 

James Swan, Bureau of African Affairs, before U.S. Senate Foreign 

Relations Subcommittee on African Affairs, June 4, 2008.

96. Brautigam, “The Dragon’s Gift.”
106

97. Shinn, “China’s Growing Role in Africa.”

98. Brautigam, “The Dragon’s Gift.”

99. Robertson.

100. Brautigam, “The Dragon’s Gift,” pp. 291, 299.

101. Ibid.

102. “White Paper on China-Africa Economic and Trade Cooperation,” People’s Republic of China (PRC) Information Office 

of the State Council, December 1, 2010.

103. Herman.

104. Taylor, p. 22.

105. Brautigam, “The Dragon’s Gift.”

106. “U.S. ‘losing’ sway in Africa as China rises,” November 

2, 2011, available from www.news24.com/Africa/News/US-losingsway-in-Africa-as-China-rises-20111102.

 107. “White Paper on China-Africa Economic and Trade Cooperation,” People’s Republic of China (PRC) Information Office 

of the State Council, December 1, 2010.

108. Shinn, “China’s Growing Role in Africa.”

109. Sanusha Naidu, “Africa Becoming Low Cost Manufacturing Hub for Chinese Investments,” Pambazuka News, May 27, 

2010.

110. Deborah Brautigam, testimony on China’s Growing Role 

in Africa, U.S. Senate Committee on Foreign Relations Subcommittee on African Affairs, November 1, 2011.

111. Richard Behar, “China Storms Africa,” Fast Company, 

June 1, 2008.
107

112. “China International Fund—The Queensway Syndicate and the Africa Trade,” The Economist, August 13, 2011; Lee 

Levkovitz et al., “The 88 Queensway Group—A Case Study of 

Chinese Investors’ Operations in Angola and Abroad,” U.S.-China Economic & Security Review Commission.

113. “Guinea: Blood and Money In the Streets,” Pambazuka 

News, October 22, 2009.

114. Verhoeven, p. 1.

115. Rotberg, p. 18.

116. Alden, p. 124.

117. “Zambian Investors Say Copper Boom to Continue as 

Sata Says It’s No Castro,” Bloomberg, Oct 20, 2011.

118. Brautigam, testimony on China’s Growing Role in Africa.

119. Rotberg, p. 9.

120. Swan, 2008.

121. PRC Premier Wen Jiabao, “Speech: “Building the New 

Type of China-Africa Strategic Partnership,” Pambazuka News, 

November 12, 2009.

122. Davies, pp. 14, 17.

123. J. Stephen Morrison, “Testimony Before the U.S. Senate 

Committee on Foreign Relations Subcommittee on African Affairs,” June 4, 2008, Washington, DC: Center for Strategic and International Studies.

124. Robinson.

125. Plowright.

126. Robertson.

127. Brautigam, testimony on China’s Growing Role in Africa.
108

128. Brautigam, “The Dragon’s Gift.”

129. Rotberg, p. 119.

130. Alden, p. 113.

131. McKinsey Quarterly, 2010.

132. Peter Wonacott, “Small Factories Take Root in Africa,” 

The Wall Street Journal, September 24, 2011.

133. Robertson.

134. Brautigam, “The Dragon’s Gift,” p. 188.

135. “Kenya: Local Factory to Assemble Chinese Vehicles,” 

August 10, 2011, available from allAfrica.com.

136. “The Chinese in Africa—Trying to Pull Together—Africans Are Asking Whether China Is Making Their Lunch or Eating 

It,” The Economist, April 20, 2011.

137. Brautigam, “The Dragon’s Gift,” pp. 223-224.

138. Rotberg, p. 112.

139. Brautigam, “The Dragon’s Gift,” p. 211.

140. Ibid., pp. 89, 91, 192, 194.

141. Rotberg, p. 106.

142. Taylor, pp. 71, 73, 77.

143. Raphael Kaplinski, “What Does the Rise of China Do for 

Industrialization in Sub-Saharan Africa?” Review of African Political Economy, Vol. 35, No. 115, 2008, pp. 7-22.

144. Rotberg, p. 70.

145. Brautigam, “The Dragon’s Gift,”pp. 198-199.
109

146. Ibid., p. 91.

147. Deborah Brautigam and Tang Xiaoyang, “African Shenzhen: China’s Special Economic Zones in Africa,” Journal of Modern African Studies, Vol. 49, No. 1, 2011, pp. 27-54.

148. Davies, p. 24.

149. Taylor, p. 84.

150. Rotberg, p. 141.

151. Brautigam, “The Dragon’s Gift,” p. 101.

152. Deborah Brautigam and Tang Xiaoyang, “China’s Investment in African Special Economic Zones: Overview and Initial 

Lessons,” The World Bank, draft, December 2009, pp. 10-11, 17.

153. “Chinese Investment Energizes Zambia’s Development,” 

Xinhua, August 19, 2011.

154. Thomas Farole, Deborah Brautigam, and Tang Xiaoyang, 

“China’s Investment in Special Economic Zones: Prospects, Challenges, and Opportunities,” The World Bank – Economic Premise, 

March 2010, Number 5, p. 4. 

155. Brautigam, “The Dragon’s Gift,” p. 97.

156. Qiang Lijing and Tan Zhe, “Chinese Investment Buoys 

Africa’s Economy,” Xinhua, September 9, 2011.

157. Brautigam and Tang, “China’s Investment in African 

Special Economic Zones.”

158. Albert N. Link and John T. Scott, “The Growth of the Research Triangle Park,” Nottingham, UK: University of Nottingham, September 18-19, 2000, p. 4.

159. “Tunis Conference Puts Sino-Africa Trade Ties Under 

Microscope,” Pambazuka News, January 21, 2010.

160. Taylor, p. 161.
110

161. Chris Alden, “Paving the Way for the Next Stage in China-African Relations,” Pambazuka News, November 26, 2009.

162. “Regional Economic Outlook—Sub-Saharan Africa—

Sustaining the Expansion,” Washington, DC: International Monetary Fund, October 2011, p. 53.

163. Ncube, July 29, 2010, p. 2.

164. The Economist, April 20, 2011.

165. Brautigam, “The Dragon’s Gift.”

166. Shinn, “China’s Growing Role in Africa.”

167. Taylor, p. 77.

168. Alden, pp. 14, 58, 88.

169. Rotberg, p. 13.

170. Brautigam, “China’s Gift,” pp. 301, 303.

171. Shinn, “China’s Growing Role in Africa.”

172. Alden, pp. 4, 56, 90, 116, 121.

173. Alden, pp. 37, 60, 84.

174. Shinn, “China’s Growing Role in Africa.”

175. Brautigam, “The Dragon’s Gift,” pp. 15, 16, 86.

176. Leo Lewis, “China’s Africa Ambitions Threaten Policy,” 

The Australian, October 17, 2011.

177. Behar.

178. Alden, p. 48.

179. Verhoeven, p. 1.
111

180. Alden, pp. 4, 14.

181. The Economist, April 20, 2011.

182. Christopher Alesi and Stephanie Hanson, “Expanding 

China-Africa Oil Ties,” New York: Council on Foreign Relations, 

February 8, 2012.

183. Shelly Zhao, “The Geopolitics of China-African Oil,” 

China Briefing, April 13, 2011.

184. Chua Baizhen, “China’s Oil Demand to Surpass IEA 

Forecasts, Barclays Says,” Bloomberg, November 23, 2011.

185. Alessi.

186. Stephanie Hanson, “China, Africa, and Oil,” New York: 

Council on Foreign Relations, June 8, 2008.

187. Taylor, pp. 30, 46.

188. Robertson.

189. Rotberg, p. 109.

190. Naidu.

191 . Thembi Mutch, “China in East Africa: Win-Win?,” Think 

Africa Press, May 8, 2012.

192. Brautigam,”The Dragon’s Gift.”

193. Shinn, “The Role of China in Africa.”

194. Zhao.

195. “Sudan’s Parliament Authorizes Confiscation of Oil Exports,” Sudan Tribune, December 9, 2011.

196. “Chinese envoy urges peaceful settlement of Sudans dispute,” Sudan Tribune, May 13, 2012.
112

197. As quoted in Alessi.

198. Morrison.

199. Stephen Burgess, “Sustainability of Strategic Minerals in 

Southern Africa and Potential Conflicts and Partnerships,” Montgomery, AL: U.S. Air War College, 2011, draft.

200. Pham, March 29, 2012, p. 2.

201. Barney Jopson, “South Africa to China: Let’s Make It 

About More Than Minerals,” Financial Times, August 24, 2010.

202. Burgess.

203. Ibid.

204. Duncan Freeman, Jonathan Hoislag, and Steffi Weil, 

“China’s Foreign Farming Policy,” Brussels, Belgium: Brussels 

Institute of Contemporary China Studies, BICCS Asia Paper, Vol. 

3, No. 9.

205. RSIS, “China’s Food Security: Questioning the 

Numbers—Analysis,” May 9, 2011, available from www.

eurasiareview.com.

206. Simon Freemantle and Jeremy Stevens, “Insight and 

Strategy—China’s Food Security Challenge: What Role for Africa?” Chicago, IL: Standard Bank, November 18, 2011.

207. “Lions on the Move.”

208. “White Paper on China-Africa Economic and Trade 

Cooperation,” People’s Republic of China (PRC) Information 

Office of the State Council, December 1, 2010.

209. Brautigam and Tang, “China’s Investment in African 

Special Economic Zones.”

210. Brautigam, “The Dragon’s Gift,” pp. 236, 247.
113

211. “West Africa: The Downside of Foreign Land Acquisitions,” IRIN News, January 19, 2012.

212. David Shinn, “Assessing China’s Role and Influence in 

Africa,” testimony before U.S. House of Representatives Subcommittee on Africa, Global Health, and Human Rights, March 29, 

2012.

213. Poindexter Sama, “Agric Ministry Receives $1.2 Billion 

Investment for Rice and Rubber Production.,” January 20, 2012, 

available from www.farmlandgrab.org.

214. Deborah Brautigam and Tang Xiaoyang, “China’s Engagement in African Agriculture: Down to the Countryside,” The 

China Quarterly, 2009.

215. Joachim von Braun and Ruth Meinzen-Dick, “‘Land 

Grabbing’ by Foreign Investors in Developing Countries: Risks 

and Opportunities,” International Food Policy Research Institute, 

Policy Brief 13, April 2009.

216. Yongjun Zhao, “Engaging China on Africa’s Agriculture,” The Newsletter, No. 57, Summer 2011.

217. Rotberg, p. 15.

218. Shinn, “China’s Growing Role in Africa.”

219. Alden, pp. 35, 105.

220. “Inauguration of New AU Headquarters Celebrates 

China’s Rise in Africa,” January 28, 2012, available from 

VOANews.com.

221. PRC Premier Wen Jiabao, “Speech: Building the New 

Type of China-Africa Strategic Partnership,” Pambazuka News, 

November 12, 2009.

222. Trilateral, p. 2.

223. David H. Shinn, “The United States and China in Africa: 

Advancing the Diplomatic Agenda,” Journal of Foreign Relations, 

November 14, 2011.
114

224. Merle Kellerhais, Jr., “U.S. Diplomat Discusses Africa 

with Asian Counterparts,” IIP Digital, Washington, DC: U.S. Department of State, November 22, 2011.

225. Swan, 2008.

226. Shinn, “China’s Growing Role in Africa.”

227. Yamamoto, March 29, 2012.

228. Wonacott.

229. “China Urges International Community to Assist in 

Fighting Piracy in Gulf of Guinea,” Xinhua, October 19, 2011.

230. “Letter dated 18 January 2012 from the Secretary-General 

addressed to the President of the Security Council,” New York: 

United Nations Security Council, S/2012/45.
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