Beijings relations with Africa and Latin America: seeking truth from facts

1
Beijings relations with Africa and Latin
America seeking truth from facts

• Issues in Chinese Foreign Policy
• University of Turku 13-15 October 2008
• Mario Esteban
• Centre for East Asia Studies
• Autonomous University of Madrid

2
Relevance of Africa and LAC in China's foreign
policy

• These areas are less important for China than the
  big power and her neighbours.

3
Evolution of the PRC policy toward Africa and
Latin America

• Anti-imperialist and revolutionary policy
  (1949-72)
• People's diplomacy much more efficient in Africa
  than in LAC.
• Pragmatic approach (1972-2008)
• Looking for diplomatic recognition (till 1989).
• Breaking isolation (1989-93).
• Looking for diplomatic recognition (1993-2000).
• Intensifying economic relations (2000-2008).

4
Objectives of the PRC policy toward LAC and Africa

• Diversifying their foreign relations as much as
  possible, reducing dependency from developed
  countries.
• Keeping good relations with providers of energy,
  foodstuff, and other key natural resources.
• Reducing as much as possible the international
  visibility of Taiwan.
• Forging alliances against developed countries in
  multilateral fora.
• Balancing US hegemonism promotion of
  multilateralism.
• Opening markets for Chinese enterprises.

5
Evolution of the PRC policy toward Africa and
Latin America

• Present situation
• Best moment in the history of China-Africa and
  China-LAC relations.
• Economic relations are much more developed than
  political, military, and cultural relations.
  This imbalance is particularly acute with regard
  to LAC.

6
Political foundations of China Africa China
LA relations

• Shared experiences as colonies and as
  developing countries.
• No historical animosities between China and these
  regions.
• Ideological affinity does not explain trends in
  these relations, pragmatic approach.
• Substantial cross-ideological and multi-partisan
  domestic support for the expansion of relations
  with China in the major Latin American countries.
  In Africa different attitudes between incumbent
  authorities and the opposition.

7
Extractive industries

• Although China is one of the main buyer of LAC
  and African commodities, Chinese companies have a
  minor role in the exploitation of those natural
  resources, which is mainly in the hands of third
  country companies.
• Chinese companies tend to sold to the best
  bidder.
• Chinese extractive companies have a poor record
  on corporate responsibility, but not necessarily
  worse than companies from other countries.

8
Trade

• China is resorting to African an Latin American
  commodities (energy, timber, food, and metals) to
  keep her pace of economic development.
• Food security.
• Energy security (African and LA oil comprise 30
  and 6 of China's total oil imports
  respectively).

9
Trade

• Volume of China-Africa trade 73,3b. (2007). 32
  annual increase since 2000. China is Africa third
  commercial partner. Trade balance is increasingly
  positive for Africa.
• Volume of China-LAC trade 102,6b. (2007). Over
  40 annual increase since 2000. China is LAC
  third commercial partner.
• Although China's trade with this two regions has
  increased more than with other regions, only
  comprises 6 of total Chinese trade.

10
Trade

• Controversies about
• The quality of Chinese products.
• Irregular competition.

11
Foreign Direct Investment

• Chinese FDI abroad is increasing rapidly (50
  annually) but still far behind main international
  investors.
• Around 80 of Chinese FDI is made in world tax
  heavens therefore the final destination of
  Chinas FDI is basically unknown
• Latin America and Africa concentrate 20
  (Caribbean tax heavens) and 3 of Chinese FDI
  stock respectively.
• Main sectors extractive industries,
  infrastructures, business services (5,6 b. 20
  of Standard Bank), manufacturing, food
  industries.

12
Development Assistance

• There is no accurate data on the volume of
  Chinese development assistance, but we know for
  sure
• Gained momentum since 1997 in the Caribbean
  (Bahamas, Saint Lucia) and since 2000 in Africa
  (FOCAC).
• Similar amount to the aid provided by the main
  Western donors in Africa.
• Delivered in three ways grant aid, interest -
  free loans, and concessional loans.

13
Development Assistance

• Rationale
• Gaining diplomatic allies.
• Having access to natural resources necessary to
  sustain Chinas economic development.
• Promoting Chinese businesses (Go out).

14
(No Transcript)
15
(No Transcript)
16
(No Transcript)
17
(No Transcript)
18
Development Assistance

• Eight principles for China's aid to foreign
  countries (Zhou Enlai, 1964)
• Mutual benefit in providing aid to other
  countries.
• Respect for the sovereignty of the recipient
  countries and no conditionality.
• China provides economic aid in the form of
  interest-free or low-interest loans and extends
  the time limit for repayment as far as possible.
• Chinese aid intends to promote self-reliance and
  independent economic development of the recipient
  country.
• The Chinese government tries its best to help the
  recipient countries build projects which require
  less investment while yielding quicker results,
  so that the recipient governments may increase
  their income and accumulate capital.
• The Chinese government provides the best-quality
  equipment and material of its own manufacture at
  international market prices. If the equipment and
  material provided by the Chinese government are
  not up to the agreed specifications and quality,
  the Chinese government undertakes to replace
  them.
• In providing any technical assistance, the
  Chinese government will see to it that the
  personnel of the recipient country fully master
  such technique.
• The experts dispatched by China to help in
  construction in the recipient countries will have
  the same standard of living as the experts of the
  recipient country.

19
Development Assistance

• Why Chinese cooperation is so competitive
• Lack of conditionality support for the
  incumbent authorities in the domestic and the
  international arena.
• Deliver results quickly and effectively.
• Comprehensive nature (health, education,
  economic, military, etc.)

20
Development Assistance

• Cons of Chinese cooperation
• Negative impact on good governance and democracy.
• Scarce business, skills transfer and
  technological transfer opportunities for the
  local labour and companies.
• Developing the recipient country is not its main
  goal--) unequal impact on the welfare of the
  local population.
• Chinese irregular migration.

21
(No Transcript)
22
(No Transcript)
23
(No Transcript)
24
(No Transcript)
25
Military relations

• China-LAC military relations are modest, mainly
  reciprocal visits of military authorities and
  basic military training, and will remain modest
  with the exceptions of Brazil and Venezuela.
• China Africa military relations are much more
  significant and involve sustantive arms
  transfers.
• Military relations are not a priority for China
  effect of closer economic and political
  relations. China uses military relations for
  gaining leverage over these countries,
  particularly in Africa.
• Growing commitment to peace in both regions
  through participation in UN peacekeeping
  operations Haiti eight more missions in
  Africa.
• Indirect benefits from high-technology ventures
  with Brazil and Argentina (satellite industry,
  nuclear cooperation).

26
How much political muscle does China have in LAC?

• Chinas political influence in the region should
  not be exaggerated
• Almost limited to South America the Taiwanese
  connection.
• Latin American voting pattern in the UN.
• Four strategic partnerships.
• Chinas growing presence in LAC regional fora.

27
Impediments for closer China-LA political
collaboration

• Apart from Brazil, most of the Latin-American
  countries lack a coherent China strategy.
• US influence in LAC.
• Discrepancies in political values.
• Geographical distance, plus cultural differences
  and language barriers entail lack of
  understanding between peoples in China and Latin
  America.
• 12 LAC countries maintain formal diplomatic ties
  with the ROC.

28
Will China promote the expansion of populism and
anti-globalization forces?

• Vested Chinese interest in stable,
  export-oriented Latin American governments.
• Concern about the rise of indigenous groups in
  Ecuador, Peru, and Bolivia.
• Support for the emergence of moderate governments
  in countries such as Venezuela, Colombia,
  Bolivia, Chile, and Peru, willing to resolve its
  territorial disputes.
• Chinas follows a reactive policy towards
  Venezuela, Cuba, and Bolivia. Military relations
  with these three countries are underdeveloped.
• China has not questioned the electoral victory of
  Felipe Calderón.

29
How much political muscle does China have in
Africa?

• China's political weigh in Africa is much bigger
  than in LAC
• Existence of effective bilateral organizations
  such as the Forum on China-Africa Cooperation .
• Voting pattern in international organizations.
• African authoritarian authorities looking from
  external patronage.

30
Impediments for closer China-Africa political
collaboration

• Cultural differences and language barriers.
• Partisan involvement in the domestic politics of
  many African countries.

31
Chinese impact on African governance

• Pragmatic, not normative concern on corruption.
• Disruptive factor on the state-society balance.

32
(No Transcript)
33
Conclusion

• Although the importance of Africa and LAC is
  marginal for China in comparison with other
  regions, it is particularly relevant in some key
  areas
• Source of commodities (energy and food security).
• Political competition with Taiwan.
• Allies in the international community.
• LAC is more important for China in the economic
  arena, whereas Africa is more important for
  energy security and political support.