Foreign Policy In Focus

China’s direct investment into Africa has gone from $5 million back in 1991 to over $50 billion last year. The driving force behind this investment is China’s enormous appetite for raw materials. In return for oil, minerals, or timber, China offers a package deal featuring a mix of cash, investment, cheap credit, technical expertise and training, and in-kind benefits such as new presidential palaces, stadiums, roads, dams, and railways.

China’s growth rate topped 10 percent last year. If Beijing’s goal of quadrupling the size of the economy by 2020 is to be met, energy consumption will climb even higher. And Africa will become an even more important economic partner.

Chinese companies frequently operate in business environments in Africa that other investors avoid. While African countries welcome this interest, China’s willingness to invest raises several difficult questions. China invests in and sells arms to some of the continent’s worst human rights abusing nations, such as Sudan and Zimbabwe. Chinese business practices often leave much to be desired, including a tolerance for corruption and low standards on workplace and environmental regulations. And Chinese investment is often not sustainable for it doesn’t employ or train African workers or process raw materials on African soil.

Ultimately, however, it is up to Africa to cut a better deal with China.

• African countries collectively can negotiate better deals that raise standards and employ more African labor. China has indicated that it prefers to deal en masse rather than with many different countries.
• African civil society applauds China’s willingness to invest but raises tough questions about the accountability of both Chinese companies and African leaders. Bringing civil society critics to the table can help African leaders negotiate better deals with China and also help reduce the risks of investments for Chinese companies.