News 2007-06-21

News 2007-06-21

China and Development Cooperation in Africa

Growing partnership between China and Africa: As the 2007 Group of Eight [G8] summit concludes, African countries are still looking for industrialized nations to follow through on aid promises from previous summits. The Western media only recently began to nervously report upon the rapidly growing partnership between China and Africa.  However, during the latest G8 submit, this issue was neglected. China has a strong political commitment towards Africa. This was also underlined by the high-level Sino-Africa Forum in November 2006, in which leaders of 48 African countries participated. China’s economy absorbs growing quantities of natural resources (oil, timber and minerals) to sustain its rapid economic growth. Overseas investment and trade help to secure access to these resources. Africa has become a primary partner region in China’s “going-out strategy.” China has also emerged as the most import actor in African development cooperation. China has committed now more aid funds to Africa than the Word Bank.

Chinese development policy: China’s principal interest in Africa is access to natural resources. However, China’s economic interests are wider. Some analysts argue (see recommended reading below) that China now has self-interest in Africa’s longer-term stability and development. Also paying more attention to governance and environmental problems is in line with this self-interest.  Indicators of the emerging new Chinese policy include recent efforts to work towards a “harmonious society” also on the international level; the emerging commitment in corporate social responsibility, and the issuing of environmental police guidelines by the China Exim (Export-Import) Bank. In January 2007, the vice-chairman of the standing committee of China’s National People’s Congress declared that Chinese companies domestically and abroad faced sanctions if they shirked their social responsibilities. EXIM is the country’s official export credit agency. It will likely become the largest global lending agency in 2010. Despite the serious environmental and social problems surrounding China Exim Bank projects, it merits mention that China is also offering expertise and products that are sometimes better suited to markets in poor countries than Western goods. One example is the cheap anti-malarial drug Artemisinin, which the Chinese government has provided for free to many African countries. In addition, domestic politics within China are notably changing in ways that could promote more responsible investment by China Exim..Experts of the Exim Bank seem to become increasingly aware that the Bank needs to be more specific on its environmental policy in order to become more effective.

Limited international development dialogue: Yet there seems only limited development dialogue and technical cooperation with the aim to enhance the enabling environment for China-Africa economic and technical cooperation. One initiative in this direction is the UNDP Project of Support to Establishing the China-Africa Business Council (CABC). The International Rivers Network (IRN) will be working with the Chinese environmental NGO partners to encourage a public debate about China’s emerging international role and responsibility for projects such as Merowe Dam. As requested by the NGO Pacific Environment on the Export-Import Bank Annual Meeting in Washington, D.C., the Exim Bank undisclosed its environmental policy.

Kuchelmeister Consult—working since 1989 in natural resource focused development cooperation in China—would be pleased to learn more about development initiatives on dialogue with the China Exim Bank and other government agencies about China’s environmental and social impacts on Africa.

Bosshard, P. "China’s Role in Financing African Infrastructure.” May 2007 www.irn.org/pdf/china/ChinaEximBankAfrica.pdf . (Accessed May, 14 2007).

Export-Import Bank of China. “Environmental Policy.” (Chinese/English) http://pacificenvironment.org/downloads/Chexim%20environmental%20policy%20Chinese%20and%20English.pdf.  Accessed May, 14 2007).