China in Africa Brief

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China In Africa: Return of the Cold War? Presented by: Mr. Doug Lathrop Department of Joint, Interagency & Multinational Operations U.S. Army Command & General Staff College Ft. Leavenworth, KS

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China In Africa: Return of the Cold War? 3 basic questions: 1. What is China up to in Africa? 2. What impact will China in Africa have upon U.S. strategic security interests there? 3. What implication does this have for the U.S. military instrument of national power?

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Africa’s New Cold War: Different Players & Different Reasons Cold War I: - 1957 - 1991: Free West vs. Soviet East - Competition of Ideologies Cold War II: - 1991 - Present: Free West/North vs. China - Competition for Strategic Resources & Markets China’s increased presence in Africa is part of a wider effort to “create a paradigm [shift?] of globalization that favors China.” (Drew Thompson) European colonialism: Christianity, civilization & commerce Chinese Imperialism: “Its all about economics”

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A Brief History of China in Africa - Mid-1970s: >15k doctors & 10k agricultural engineers in 3rd World 1960s & 70s: Chinese military assistance to Ethiopia, Tanzania, Uganda, Zambia, Zimbabwe, etc… - - actively supported several wars of independence (ZANLA) - Since 1960s: >15k Africans have studied in China - 1970s & 80s: Built sports stadiums all over the continent and left. Resulted in a very pro-Chinese attitude. (Intentional shaping of the theater?) - 1970-76: Built TANZAM railway from Dar es Salaam to Zambian copper fields. - Recently finished rebuilding Mombasa to Nairobi highway. - Since mid-1990s: Actively pursuing African resources & markets - - >670 Chinese companies invested in: mines, fishing, precious woods, telecommunications, OIL, etc… - China regarded itself as Africa’s elder brother during the Cold War. - 1960s - 1970s: Steady flow of doctors, teachers & engineers. -- Today they are bankers and business people

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China’s Early Goodwill Building in Africa In Africa, China has “Stadium Diplomacy.”

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Chinese-built TanZam Railway - Built 1970-76 - aka “The Great Uhuru” or “TAZARA” Railway. - Purpose: Transport Zambian copper to port at Dar Es Salaam. TANZAM RR Mombasa-Nairobi Hwy China’s Goodwill Building:

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China’s Macro View of Africa Key source of raw materials Market for cheap Chinese-made products Infrastructure investment opportunities -- hydro-electric plants -- pipelines -- factories -- hospitals -- etc…. Focused on markets where western firms are deterred by political considerations. -- China’s declared principles of respect for national sovereignty & non-interference in internal affairs -- China’s double advantage: Freedom to partner with bad regimes in absence of Western competition China views Africa as central to its strategic goals and perceives U.S. influence as less since 1991.

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China’s Macro View of Africa (cont’d) China’s policy shift from Cold War ideology to the pursuit of economic self-interest. Becoming new imperialistic power in Africa? Comment on South Africa’s 200% trade imbalance w/ China: “The trade relations between South Africa and China are a replay of the old story of South Africa’s trade with Europe. We sell them raw materials and they sell us manufactured goods with a predictable result -- an unfavorable trade balance against South Africa.” (Moeletsi Mbeki: Deputy Chairman, South African Institute of International Affairs)

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China’s Overall Strategy in Africa “China has a strategic approach to Africa in which the markets, the energy security and political relationship are all very much of a piece. They are not looking at the next 2-3 years but at the next 15-20 years.” Ann Grant Standard Chartered Capital Markets - As China has done throughout written history, they look to the long-term.

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China’s Engagement in Africa Recently - 2004: >700 Chinese companies in 49 African countries - 2006: >900 Chinese doctors in Africa - Currently, >500 projects underway by China Road & Bridge Corporation in Africa (e.g. Mombasa – Nairobi Hwy) China’s emerging African presence: -- oil fields in East (Sudan) & West (Gabon) -- farms in south (e.g. Zambia) -- mines in center (e.g. DRC) -- others the West had abandoned as less profitable -- Also, China has…. --- a monopoly on construction in Botswana --- designated 14 countries as official tourist destinations

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China’s Engagement in Africa Recently - 1st 10 months of 2005 -- trade increased 39% over 2004 (oil) - China’s economic growth rate is a hungry beast: -- Since 2002, China accounted for over 40% of total growth in global oil demand (Ever wonder why we’re paying almost $3 a gallon for gas?) - 25% of China’s oil imports come from Sudan and Gulf of Guinea. - China has scrapped hundreds of tariff on African imports and wrote off $1.3bn of African debt in 2003. - China has declared 2006 “The Year of Africa”

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Examples of China’s Activities in Africa Sudan: - Light-Sweet crude oil - China buys >60% of Sudan’s oil exports - China built refineries, pipelines & production infrastructure - China cooperated in forced displacement of peasants from oil concessions - China interested in keeping N-S conflict alive -- keeps Western interests from returning - Sudan’s oil is why China (in UNSC) vetoes resolutions on Darfur conflict

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China’s $3 billion oil investment in Sudan 1,512km (930miles) long allegedly built by Chinese prison labor - 1996, CNPC bought 40% of Greater Nile Petroleum Operating Co. - 1997 China won 20-yr. lease on western Kordofan oil fields (325k bpd) - China provided 70% of funds for pipeline & fields’ facilities. - Jun 1999 oil began to flow - 1999 China paid 50% for new refinery built north of Khartoum (70k bpd by Jun 2004) - Aug 1999 Sudan becomes a net oil exporter - 2003 China contracted to build 730km pipeline from fields in western Kordofan to Khartoum, etc……. - By 2002, Sudan supplied 9.26% of China’s total oil needs. - 2004: 64.3% of Sudan’s total oil exports go to China

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Examples of China’s Activities in Africa Angola: China broke relations in 1974 due to closeness with USSR. - Now is China’s 2nd largest commercial partner in Angola. Exports 25% of exported oil to China 2004: $2bn “soft loan” (1.5%Apr for 17 yrs / 10k bpd) to rebuild war-torn infrastructure (railways, roads, offices, fiber- optic network) -- Chinese will receive bulk of lucrative construction contracts (Buy Chinese Act?) -- Only 30% sub-contracted to Angolans -- Loan allowed Angola to resist IMF pressures to improve transparency of oil revenues

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- Pres. Dos Santos has allowed 4 million Chinese workers to immigrate to Angola to work within specific projects. Chinese often import most building materials and use only a few unskilled local laborers. June 2006: China pledged another $2bn”loan” Examples of China’s Activities in Africa - 9 Dec 2004: China forced Sec. of Angolan Council of Ministers to resign when UK’s “Global Witness” was about to expose his diversion of oil revenues to pre-election pro-government propaganda campaign. Angola: (cont’d)

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Examples of China’s Activities in Africa Guinea: - May 2006: China offered to build 50k seat stadium - Guinea is world’s largest exporter of bauxite

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Examples of China’s Activities in Africa Sierra Leone: - Stadium in Freetown - Constructed government office complex & parliament building - Built military HQ - Invested in: sugar plant, tractor factory, industrial complex, renovated & manages largest hotel “We like Chinese investment because we have one meeting, we discuss what they want to do, and then we do it…there are no benchmarks and preconditions, no environmental impact assessments. If a G-8 country had offered to rebuild the stadium, we’d still be having a meeting about it.” (Sierra Leone’s Ambassador to the PRC)

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Examples of China’s Activities in Africa Sierra Leone: - China’s involvement frustrates local anti-corruption campaigns “We've spent 15 years working on conventions against corruption and now the Chinese come in and they haven’t signed up to any of it. They're secretive and they only deal with governments -- they don’t consult with civil society anymore. I’m worried that African governments will see China as an alternative to G-8 countries because with the Chinese they don’t have to worry about good governance and all that.” (Zainab Bangura, member of Sierra Leone’s National Accountability Group)

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Examples of China’s Activities in Africa Zimbabwe: Mugabe’s recent “look east” policy Perceives China as source of “no-strings assistance & investment” (Wishful thinking?) Bought 12 M-8 fighter jets & 100 army trucks Joint ventures in mining, transport, communications & energy Sent crates of pro-ZANU-PF T-shirts for 2005 elections Provided radio jamming device in Harare for elections Designed Mugabe’s new $9mn 25-bedroom mansion “With all-weather friends like the People’s Republic of China Zimbabwe will never walk alone.” (Zimbabwe’s Speaker of the Parliament )

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Examples of China’s Activities in Africa Zimbabwe: (cont’d) - China: -- produces 70% of electricity at Hwange and Kariba -- has stakes in the national railway -- Chinese entrepreneurs are overtaking small-scale retailers & local manufacturers “They [Chinese] are all over the place, in the streets driving fancy cars, picking up their children from elite private schools. If the British were our masters yesterday, the Chinese have come and taken their place.” (Trevor Ncube, newspaper publisher)

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Examples of China’s Activities in Africa South Africa: - Exports to China in 2005 = $1bn Imports from China in 2005 = $4.4bn Anglo American invested $400mn in China China invested $130mn in S.A. mainly in a chromium mine

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Examples of China’s Activities in Africa Case of Cheap Chinese Textiles: Chinese textile exports to S.A. grew from 40% to 80% by end of 2004 End of 2005: Multi-Fiber Agreement expired. Chinese textile exports to U.S. soared putting 10,000 S.A. textile workers out of work. October 2005: Africa lost >250,000 jobs to cheap Chinese textiles. Chinese imports continue flooding African markets. Sept 2005: S.A.’s largest trade unions threatened to boycott retailers importing cheap Chinese products When combined with used clothing imports, Africa’s domestic textile industry has almost disappeared.

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Examples of China’s Activities in Africa Odds & Ends: - Kenya Airways now has direct flights to Guangzhou & Hong Kong - DRC: Over past 2 years Chinese merchants have turned from a trickle to a torrent….same in Zambia, Zimbabwe & Angola. -- set up as middlemen buying from local outfits -- Now buying up the companies - Nigeria: Jan 06 CNOOC bought 45% share of offshore oilfield for $2.3bn. Spent another $2.3bn to rehab a refinery in Kaduna. - Chinese oil exports or extraction in Sudan, Nigeria, Angola, Gabon, Chad & Algeria, etc… - By 2006: Estimate of >800 Chinese companies in Africa and >78,000 expats - China will launch Nigeria’s first space satellite in 2007. - China secured 4 oil drilling licenses from Nigeria in a deal involving $4bn in investment.

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Examples of China’s Activities in Africa Odds & Ends: (cont’d) Dec 2003 Sino-African business conference: - China offered debt relief to 31 African countries and zero trade tariffs. Just in advance of 2005 G-8 Conference in Gleneagles, China cancelled $10bn of African debt. 1998-2000: China supplied $1bn worth of weapons to both Ethiopia & Eritrea

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China in Africa - China’s convenient policy on non-interference: “We don’t believe that human rights should stand above sovereignty… We have a different view on this, and African countries share our view.” He Wenping Director of the African Studies Section Academy of Social Sciences, Beijing - Does China have a favored status for historically ideological partners in Africa? ”We’re a Socialist-Marxist state and we’ve had 30 years of ties with the PRC and yet they bypassed us to go to Gabon. This tells me that China has no friends, but rather only interests.” Diplomat from Benin in 2004.

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Analysis of China in Africa Is China concerned about the long-term effects of its dealings with dictatorial thugs? One person’s view on this: “What China is perhaps not anticipating is how, when you embrace terrible regimes, you eventually get tainted for it.” Gerald Bender University of Southern California

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China in Africa Pros & Cons from the African Perspective: Pros: - China provides an alternative to US/EU diplomacy - Gives African more control over their affairs (which Africans?) - China is willing to do business with anyone - China is willing to invest in post-conflict nations (low-hanging fruit) Cons: - China is willing to do business with questionable regimes. - China supplies advanced war materiel despite arms embargos - Success of Chinese merchant class in Africa is crowding out African businesses

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China’s Activities in Africa One Effect of China’s commercial activities in Africa: - Chinese competition has impoverished the economies of many African states whose merchandise cannot compete in western markets and sometimes not even in domestic markets. - Cost to Africa for Chinese engagement: -- No internal political interference -- Requirement to employ Chinese citizens & buy Chinese resources. “Once you shake hands with the devil, you do as you’re told.”

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China in Africa China’s motives behind its African Safari: - Makes economic sense - Acquires resources on a vast scale and gets them delivered securely - China uses its financial muscle to drive forward its acceptance as a “free market” economy - China able to exert pressure on govts that still recognize Taiwan China’s ultimate strategic goal still unclear: “Involvement in Africa crystallizes China’s dual identity between being a developed country and a major power…They have achieved a position of far greater importance in Africa than they probably planned to.” Andrew Small Foreign Policy Center (UK)

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New African Cold War perspective: - U.S. could get increasingly concerned about China’s presence & its growing sphere of influence. - China could see U.S. efforts to promote stability & democracy as an effort to cut off China’s access to raw materials and further contain China’s “peaceful rise.” “You tried to impose a market economy and multi-party democracy on these countries, which are not ready for it. We are also against embargos, which you have tried to use against us.” Zhou Wenzhong Chinese Deputy Foreign Minister (2004) China in Africa: Return of the Cold War? Will this conflict of interests fuel a new Cold War in Africa?

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Analysis of China in Africa: U.S. Interests 2nd basic question: What impact will China in Africa have upon U.S. strategic security interests there? What are U.S. interests in Africa? - From the view point of the Feb 2006 National Security Strategy: -- Promote democracy, human rights, and good governance (building the infrastructure of democracy) -- Develop free-market economies & free trade -- Develop partners in the GWOT -- Work with other to diffuse regional conflicts Oh, yeah…Let’s not forget access to cheap, light and sweet oil, strategic minerals, and potential future markets for U.S. goods.

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Analysis of China in Africa: U.S. Interests & Activities What has the U.S. done to further those interests? AGOA: Africa Growth and Opportunity Act -- 37 of 48 sub-Saharan countries eligible -- 2000-2004; African exports increased 115% -- 2004-2005: Exports rose 40% to $50.3bn -- U.S. $119mn Trade Capacity Building (TCB) fund established -- AGCI: African Global Competitiveness Initiative = $200mn over 5 years to improve African export competitiveness Millennium Challenge Account: 4 countries approved for up to $537mn $15bn over 5 years to fight HIV, TB & Malaria ACRI morphed into A.C.O.T.A. (peacekeeping capability building) PSI morphed into TSCTI (Trans-Sahara Counter Terrorism Initiative) On-going USAID programs (albeit reduced presence continent-wide) etc…. Q: Where has the U.S. been lagging far behind China? A: Foreign Direct Investment (FDI) by corporate America.

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Analysis of China in Africa: U.S. Interests & Activities Answer to 2nd Basic Question: What impact will China have upon U.S. strategic security interests in sub-Saharan Africa? Response: Blinding flashes of the obvious…… - Increase the insecurity of access to & cost of strategic resources - Short circuit U.S. attempts to greater globalize Africa’s economy - Stunt the development of mature democracies & increase and/or entrench the number of corrupt & repressive governments - Will reduce potential of greater levels of conflict resolution - Could cause some strategically key nations to get addicted to the Chinese laissez-faire way of doing business (addictions come at a cost) - Will cause U.S. diplomatic & military tools to get a greater workout This leads us to the final question:………………

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…What implication does this have for the U.S. military instrument of national power? Analysis of China in Africa: U.S. Interests & Activities A probable answer is………… - U.S. military presence will see an increase over the next 5-10 years despite its Mogadishu hangover. - An Africa Command (AFCOM) is finally being considered - Power projection platforms will be considered more seriously (especially in Gulf of Guinea region) - Will see more U.S. boots-on-the-ground and not just in support of PKOs.

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Reasonable conclusion: - The West wants economic access to Africa but cannot and does not want to compete the same way China does. - The West must find some way to slow down China’s economic conquest of Africa in hopes of giving stability, democracy, and good governance to take hold. - Time is of the essence…. especially when considering that India is not far behind China in its quest for strategic resources. Some final thoughts on U.S./West competition with China in Africa: Analysis of China in Africa: Return of the Cold War?

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Questions???