China–Africa and an Economic Transformation

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This is an open access title available under the terms of a CC BY-NC-ND 4.0 International licence. It is free to read at Oxford Scholarship Online and offered as a free PDF download from OUP and selected open access locations. Africa's recent progress in economic growth has been uneven across countries, and has not translated into structural transformation. Although economic ties between China and Africa have made a positive contribution this engagement has been uneven, shaped by variations in strategic approach, policy ownership, and implementation capacity among African governments. As China undergoes major economic rebalancing to upgrade to an innovation-driven economy, this is bound to affect China-Africa relations, offering both opportunities and challenges. Authored by leading scholars on Africa, China, and China-Africa relations, this volume brings together stimulating and thought-provoking perspectives, and insightful analyses. Focusing on Africa's economic development, it looks at core areas of structural transformation: productive investment and industrialization, international trade, infrastructure development, and financing. China-Africa relations are considered in the context of the global division of labour and power, and through the history and contexts of both China and Africa, a very diverse continent. This volume seeks to fill the gap in the existing literature, steer policy and scholarly debate on the progress and trajectory of China-Africa cooperation, and analyze China's development path as a source of learning for Africa. Cover China–Africa and an Economic Transformation Copyright Preface Acknowledgements Contents List of Figures and Tables List of Contributors 1: Introduction to China–Africa and an Economic Transformation 1.1 The Context of China–Africa Ties 1.2 Analytical Framework and Aims of the Book 1.3 The Structure of the Book 1.3.1 Part I: China’s Rise and the Changing Global Development Discourse 1.3.2 Part II: Evolving China–Africa Relations: Context, Perspectives, and Framework 1.3.3 Part III: The Dynamics of China–Africa Economic Ties 1.3.4 Part IV: China and Africa’s Economic Transformation 1.4 The Pursuit of a Complementary China–AfricaEconomic Partnership References Part I: China’s Rise and the Changing Global Development Discourse 2: China’s Economic Emergence and Implications for Africa 2.1 China’s Economic Rise and Global Impact 2.2 China’s Economic Emergence 2.3 China’s Global Impact 2.4 China’s Impact on Africa: The Belt and Road Initiative and Kenya 2.5 How China’s Emergence can Help Transform Growth in Sub-Saharan Africa References 3: The Meanings and Global Externalities of China’s Economic Emergence 3.1 Introduction 3.2 The Chinese Economy as a Global Public Good 3.3 Potential Negative Externalities and Mitigation Factors 3.4 Conclusion References Part II: Evolving China–Africa Relations: Context, Perspectives, and Framework 4: China–Africa Ties in Historical Context 4.1 Introduction 4.2 Mao Zedong and Relations with Africa (1949–76) 4.3 Deng Xiaoping and the Domestic Reform Era (1978–92) 4.4 Jiang Zemin Reaches Out to Africa (1992–2002) 4.5 Hu Jintao Rides the Africa Wave (2002–12) 4.6 Xi Jinping Becomes More Assertive in Africa (2012–Present) 4.7 Conclusion References 5: Evolving Debates and Outlooks on China–Africa Economic Ties 5.1 South–South Cooperation: from Solidarity Politics to Economic Engagement 5.2 Models in Motion: Chinese Experience and African Development 5.3 Debating the Future: Towards Greater Diversification or Rising Dependency? 5.4 Conclusion References 6: The Institutional Framework of Sino-African Relations 6.1 The Effects of Liberalization 6.2 The Key Drivers of Policy 6.2.1 The Ministry of Foreign Affairs (MFA) 6.2.2 Ministry of Commerce (MOFCOM) 6.2.3 Institutional Rivalry between the MFA and MOFCOM 6.3 China’s Aid Framework 6.3.1 The Department of Western Asian and African Affairs 6.3.2 Department of Aid to Foreign Countries 6.3.3 Chinese Academy of International Trade and Economic Cooperation (CAITEC) 6.3.4 The Executive Bureau of International Economic Cooperation 6.3.5 China International Centre for Economic and Technical Exchanges (CICETE) 6.3.6 Academy for International Business Officials (AIBO) 6.3.7 Economic and Commercial Counsellor’s Office 6.4 Chinese Policy Banks 6.5 The International Department of the Communist Party of China 6.6 China’s IR Think Tanks and Africa 6.7 State-Owned Enterprises 6.8 China’s Provinces 6.9 The Forum on China–Africa Cooperation (FOCAC) 6.10 Summarizing Sino-African Ties: Coordination and Friction References Part III: The Dynamics of China–Africa Economic Ties 7: Chinese Loans and African Structural Transformation 7.1 Introduction 7.2 A Historical Framework for Chinese Loans 7.3 China’s Overseas Lending Institutions in the Twenty-First Century 7.3.1 Ministry of Commerce (MOFCOM) 7.3.2 China Export Import Bank (Eximbank) 7.3.3 China Development Bank 7.3.4 Chinese Commercial Supplier’s Credits 7.3.5 Chinese Commercial Banks 7.3.6 Sinosure 7.4 Chinese Loans and Structural Transformation 7.4.1 Chinese Loans and African Infrastructure 7.4.2 Chinese Loans for Manufacturing, Agro-Industry, and Other Value-Added Production 7.4.3 Special Economic Zones and Industrial Zones 7.4.4 Risky Business 7.4.4.1 DEBT RELIEF 7.4.4.2 REDUCING RISKS FOR AFRICAN LENDING 7.4.4.3 CONCERNS OVER CHINESE LENDING AND AFRICAN DEBT MANAGEMENT CAPACITY References 8: China’s Development Finance and AfricanInfrastructure Development 8.1 New Models, New Rivalries, New Cooperation? 8.2 A Global, Political Economy Lens on China’s International Development Finance 8.2.1 China’s Policy Banks 8.2.2 Belt and Road Initiative 8.2.3 FOCAC 8.2.4 The BRICS 8.3 China’s Impact on Global and African Infrastructure Investment Frameworks 8.3.1 The Evolving Discourse on Infrastructure as a Development Priority 8.3.2 Areas of Difference 8.3.2.1 INFRASTRUCTURE AND STRUCTURAL TRANSFORMATION 8.3.2.2 CONTRACTING AND PROCUREMENT 8.3.2.3 PUBLIC INVESTMENT VERSUS PRIVATE INVESTMENT 8.3.2.4 INTERNATIONAL DISCIPLINES ON EXPORT CREDITS AND TIED AID 8.3.2.5 MANAGING OFFICIAL DEBT PROBLEM CASES 8.3.2.6 HUMAN AND CORPORATE CAPACITIES AND COMPETITIVENESS 8.3.2.7 STANDARDS 8.3.3 China’s New Activism on Architecture and Concepts in the International Development Finance System 8.4 Electrification and Digitalization as Transformative Vectors in Africa–China’s Contributions 8.4.1 Transformation, Electrification, and Demography 8.4.2 Transformation, the Digital Economy, and Leapfrogging 8.5 Conclusions: Towards Shared Platforms for African Connectivity Infrastructure References 9: The Changing Dynamics of Chinese Oil and Gas Engagements in Africa 9.1 Introduction 9.2 A Conceptual Framing of China–Africa Oil Relations 9.3 Chinese SOCs and African Petro-States: Evidence from Three Cases 9.4 China and Nigeria: How is the ‘Sweet Crude’ Tilting the Balance? 9.5 Angola: Petro-Nationalism or Transnationalized Engagements? 9.6 The Two Sudans: SOC Success and Losses Wedded to African Agency? 9.7 Conclusion References 10: The Political Economy of China’s Investment in Nigeria: Prometheus or Leviathan? 10.1 Introduction 10.2 Nigerian and Chinese Linkages: An Overview 10.3 Nigerian–Chinese Trade Relations and Textiles 10.4 New Government Measures in Support of Industry 10.5 Export Processing Zones in Nigeria 10.6 Chinese Sezs in Nigeria 10.6.1 Lekki Zone 10.6.2 Ogun-Guangdong Zone, Igbesa 10.7 Evaluation of the Operation of Chinese Companies in the Zones 10.8 Conclusions References 11: Agreements and Dispute Settlement in China–Africa Economic Ties 11.1 Introduction 11.2 Agreements in China–Africa Economic Ties: A Cultural Note 11.3 China–Africa Economic Agreements and Substantive Contents and Norms 11.3.1 Trade Agreements 11.3.2 Investment Agreements 11.3.3 Commercial Agreements (Infrastructure) 11.3.4 Other Types of Agreements 11.4 Dispute Settlement in China–Africa Economic Agreements 11.4.1 Trade 11.4.2 Investment 11.4.3 Commercial (Infrastructure, Loan Agreements, etc.) 11.5 Other Agreements 11.5.1 Belt and Road Initiative Agreements 11.6 Conclusion References 12: Labour Regimes and Workplace Encounters between China and Africa 12.1 Introduction: Workplace Encounters and Economic Transformations 12.2 China–Africa Labour Encounters: Dominant and Emerging Questions and Debates 12.2.1 Workforce Localization: Do Chinese Firms Rely on Chinese Labour? 12.2.2 Working Conditions 12.2.3 Skill Development 12.2.4 Summary 12.3 Understanding Labour Regimes in China 12.3.1 Labour Regimes and Capitalism 12.3.2 Labour Regimes in China: Variation and Shifts 12.4 Capital–Labour Relations from the African Ground: Illustrations from Case Studies 12.5 Chinese Exceptionalism? African Agency and Context Acknowledgment References Part IV: China and Africa’s Economic Transformation 13: China’s Light Manufacturing and Africa’s Industrialization 13.1 Introduction 13.2 From Flying Geese to Leading Dragons 13.3 A Pilot Survey of Chinese Light Manufacturing 13.4 Flying Geese First Movers 13.5 Policy Recommendations References 14: Catalysing China–Africa Ties for Africa’s Structural Transformation: Lessons from Ethiopia 14.1 Introduction 14.2 Beyond Theory and Ideology: the Role of History and African Agency 14.3 Ethiopia–China Relations: Background and Context 14.3.1 Trade Patterns 14.3.1.1 EXPORT GROWTH AND COMPOSITION 14.3.1.2 IMPORT VOLUME AND STRUCTURE 14.3.2 The Productive Nature of Chinese FDI Inflow 14.3.2.1 CONTRIBUTION TO PRODUCTIVE EMPLOYMENT 14.3.2.2 SKILLS AND KNOW-HOW TRANSFER 14.3.3 Financing and Infrastructure Development 14.3.3.1 POWER SECTOR 14.3.3.2 TRANSPORT INFRASTRUCTURE 14.3.3.3 TELECOMMUNICATIONS 14.4 Engaging China Strategically: Learning from Ethiopia 14.4.1 Articulation of Long-Term Development Vision 14.4.2 Committed Political Leadership and Strong Political Ownership 14.4.3 Prioritizing Investment in Infrastructure and Energy 14.4.4 Learning by Doing and Emulation 14.4.5 Pragmatism and Policy Flexibility 14.5 The Bigger Picture: Constraints and Pathways to Africa’s Economic Transformation 14.5.1 Persistent Trade Imbalances 14.5.2 Excessive Debt Burden and Finance Sustainability 14.5.3 Quality FDI and Productive Capacity 14.5.4 Limited Knowledge Transfer Impact 14.5.5 Transforming FOCAC as an Effective Platform 14.5.6 Improving the Business Climate on Both Sides 14.5.7 Narrowing the Knowledge and Cultural Gaps 14.6 Conclusion Appendix References 15: The Future of China–Africa Economic Ties: New Trajectory and Possibilities 15.1 Countering ‘Anti-Chinese’ Narratives: Let the Facts Speak 15.2 Unevenness, Diversity, and Shifting Dynamics 15.3 Bringing in Africa’s Economic Transformation 15.4 Strategic Approach to China–Africa Economic Ties: the Way Forward 15.4.1 China as a Source of Learning: Writing their Own Script 15.4.2 Prioritizing and Focusing on Productive Investment 15.5 Policy Autonomy and Being in the Driving Seat 15.5.1 Investing in Innovation, Research, and Development 15.5.2 Mapping out a New Research Agenda References Name Index Subject Index