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Flag-waving supporters await the arrival of Chinese President Xi Jinping at Leopold Sedar Senghor International Airport at the start of his visit to Dakar, Senegal on Saturday. (Reuters)
by Deborah Bräutigam July 24 at 6:00
Why did Chinese President Xi Jinping visit three small African countries during his first state trip in 2018?
This week, Xi will be in Johannesburg for a summit of leaders of the five emerging economies of the BRICs – Brazil, Russia, India, China and South Africa. Other stops include the United Arab Emirates, Rwanda, Senegal and Mauritius.
Clearly, the UAE has oil. But Rwanda, Senegal and Mauritius are poor in resources. These judgments do not correspond to the interpretation of "neo-colonialism" of China's African interests. Although we can expect Xi to emphasize his global Belt and Road initiative in his travels to Africa, his country choice sheds light on another aspect of China's efforts to win friends and influence Africa: positioning the China as a partner for the industrialization of Africa. Why is China such a popular partner in Africa? China can be very attentive to African aspirations
The East Asian model
Just forty years ago, China was an exporter of raw materials, sending oil and coal in the United States. Then China started building special economic zones, starting the export-oriented industrial campaign that turned it into a global workshop.
China has followed a path already traced by Japan, Singapore and other East Asian countries. Smoke, polluting and often dangerous, industrialization was the first echelon of structural change in China, as well as in Europe and the United States.
Africa is also trying to climb this scale
More than half a century after independence, Africa remains stuck in the trap of commodity exports. Manufacturing accounts for only about 10% of value added. Ghana sends cocoa beans to Switzerland, for example, and then imports chocolates. Angola exports crude oil and imports almost 80% of its refined fuel.
When commodity prices are high, economies thrive. In 2014, African countries earned $ 144 billion by exporting oil and various minerals to China. But economic growth weakens when prices fall, as they did recently. In 2016, African exports were only worth $ 40 billion, putting many countries in distress.
Industrialization would be the next stage of Africa's development, adding value to raw materials, to land or to millions of young workers. Yet, Africa's infrastructure and port logistics are notoriously poor. Only 25% of roads are paved. More than 600 million people do not have access to electricity
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From Chinese competition to Chinese investment
Until recently, China's industrial prowess was bad news for Africa. Weakened by the economic collapse and controversial programs of structural adjustment in the 1980s and 1990s, African countries began importing thousands of products from China, including plastics, building materials, packaged foods and local clothing. The textile industry of Nigeria has collapsed under the Chinese competition. In 2007, South Africa negotiated quotas to provide relief to Chinese clothing exports.
But ten years ago, production costs in China began to increase. Environmental regulations have tightened and wages have increased. Chinese companies have started to move their factories abroad. Some have come to Africa, where work is plentiful and often cheap. Since 2011, our research follows the relocation of Chinese factories to half a dozen African countries
China has pledged to help Africa to industrialize
Beijing pays more than simple wishes to African aspirations. In 2016, under the Chinese impetus, the G20 pledged to help Africa to industrialize. At the time, China had already spent more than $ 33 billion on financing the electricity sector in Africa, an essential input for the factories. Chinese investments of $ 41 billion have been invested in transportation.
Often supported by Beijing, Chinese companies have built special economic zones in Africa, creating platforms where Chinese and other companies can come together. In 2015, at another Johannesburg summit, Xi pledged $ 10 billion for a China-Africa Industrial Cooperation Investment Fund. In contrast, support for manufacturing in Africa has been lukewarm. The African Growth and Opportunity Act, promulgated in 2000, allows countries to export duty-free goods to the United States – but the main beneficiary of the measure was African oil and not oil. manufacturing exports. Power Africa, an initiative of the Obama administration in 2013, was launched to address power shortages. Yet, in 2016, Washington only committed $ 3.1 billion to Power Africa
Where do Senegal, Rwanda, and Mauritius integrate?
Ethiopia is the undisputed success story of Chinese investments in the African manufacturing industry. Our researchers have identified more than 400 Chinese manufacturing investments in Ethiopia, some producing products for major US buyers such as Naturalizer, 9 West and GUESS.
Senegal and Rwanda followed the Ethiopian experience. Hoping to attract Chinese companies in search of new sites, Senegal has hired a Chinese company to build a new special economic zone near Dakar, the capital. While visiting the country from July 21 to 22, Xi promised to give priority to the industrialization of Senegal; China could finance the second phase of the zone.
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Rwandan leaders have long been looking to China for inspiration. The high population density of Rwanda makes attractive a labor-intensive strategy. Two decades after a devastating genocide, Rwandans now produce stationery, uniforms and polos in Chinese factories in a special economic zone of the capital, Kigali
When Xi arrives in Kigali on Sunday, a Rwandan leader tells a local newspaper: "I think the focus should be on the industries … we want to build a strong partnership with China, use the Chinese experience in terms of the development of special economic zones."
On the other hand, Rwanda imposed tariffs The office of the US Trade Representative threatened to trigger a trade war and imposed sanctions on US exports from Rwanda.
Xi 's next stop is Mauritius, which could show how the model of Asian industrialization can succeed in Africa. In 1970, the small island set up industrial zones that attracted an earlier generation of Chinese manufacturers from Hong Kong and Taiwan. Having learned from Asia, Mauritius has developed a diversified economy with perhaps the best business environment in Africa.
The next step? Mauritius began negotiating the first free trade agreement with China in April, seeking to expand its exports.
Deborah Bräutigam directs the SAIS China Africa Research Initiative at the Johns H opkins University School of Advanced International Studies.
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