China-Africa Express: As business takes off, what happens on the ground?

BOGOR, Indonesia (19 September, 2011)_Last year, I flew to Nairobi on what I call the China-Africa Express: Kenya Airways flight 887, which goes from Nairobi via Bangkok to Guangzhou and back. Being on that flight brought home, in a way, how much the world is changing.
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Chinese propaganda poster from 1975 depicting Chinese agricultural aid to Africa Chinese engagements in the Congo Basin and on the African continent in general proliferated in the 1960s and 1970s. Many early development assistance projects from China were agricultural projects, such as the one featured in this 1975 propaganda poster, captioned ‘Revolutionary friendship is as deep as the ocean’. Source: Collection International Institute of Social History, Amsterdam. Designer: Guo Hongwu. Publisher: Shanghai Renmin Chubanshe, 1975.

BOGOR, Indonesia (19 September, 2011)_Last year, I flew to Nairobi on what I call the China-Africa Express: Kenya Airways flight 887, which goes from Nairobi via Bangkok to Guangzhou and back. Being on that flight brought home, in a way, how much the world is changing.

Aboard that plane, traders from everywhere in Africa were making their way to South China to purchase manufactured goods to market back home, while passengers from all over China were fanning out over Africa to build, to invest, to buy natural resources, and to live and work.

It was a full flight, and one of the most lively I’d experienced in years: people on the move, people in the prime of their life, people on the top of their game. Of course, every new day brings stories about China’s investment in Africa and the quest of her businessfolk for the continent’s rich resources. Sometimes for better—Chinese business improves Africa’s terms of trade and brings investment with (maybe) less political strings attached—and sometimes for worse—China’s policies support pariah regimes, and take advantage of lax human rights and environmental protection regimes to get more minerals, oil, timber, land.

The stories reveal many different biases, and objective analyses are hard to find. African accounts often reveal a deep fatigue from years of western economic and political domination, leading some to welcome China’s “no strings attached” policies without asking about the potential environmental and social downsides. Western-oriented accounts sometimes accuse China of neo-colonialism, of a “rapacious economic invasion” of Africa, of new forms of mercantilism.

China’s own State press quickly counters any potentially negative account: A German official appears to (partially) blame this year’s drought in East Africa on China’s acquisition of agricultural land for export crops; China’s Ministry of Commerce, cited in the China Daily, counters that China imports “no cereal grains” from Africa. The media circus has been going round for years now.

To researchers, press assertions make for good hypotheses to be tested. A number of research groups are working now to try to get more objective indications of the economic and environmental significance of shifts in global trade and investment flows, the rapid ascendance of the BRICS countries (especially China), and efforts of African governments and civil society institutions to better manage their economies, environments, and natural resources in the face of rapid change.

So we ask: Is China really “different” (in terms of the social and environmental impacts of its trade and investment in Africa) and if so, how? That’s a very simple question that is bound to yield a great number of incredibly complicated answers. In fact, it’s so complex, that we have only begun to unpack the questions and start collecting the kind of data we need to bring some more reliable answers.

A lot of good work has been started by groups like Fahamu, the South African Institute for International Affairs , and Centre for Chinese Studies at the University of Stellenbosch, in an attempt to understand what it means for African countries when China brings new types of development assistance, donations of aid money, and business deals to countries with a history of economic and political vulnerability.

Artisanal small-scale mining is common in the Congo Basin region. A significant proportion of exported ores and minerals are extracted by individuals and families such as those shown here washing copper and cobalt ore by hand in a river in DR Congo’s Katanga province. Photo by FairPhone (www.fairphone.com).

Now, some of us at CIFOR are working on a project to understand specifically how new trade and investment configurations associated with China are likely to affect forests and forest-based livelihoods in Africa. This year, the International Forestry Review published an article based on research by Paolo Cerutti and others, and we just put out a summary of a set of scoping studies we did in several Congo Basin countries.

Some of the findings from this work may be surprising to some readers.  In Cameroon’s logging industry, for example, Cerutti and colleagues find that, although different markets demand different species, which causes different effects on forests, the national origin of companies involved in logging, whether Chinese or other, didn’t make an obvious difference.

A company exporting to Europe tends to cut only a few species that are preferred in the market, while companies exporting to China tend to cut and process more different species per area.  In forestry, this is sometimes seen to be a good thing. Harvesting a wider range of species can reduce pressure on specific favourite species that might eventually be depleted from selectively logged forests, and it can also bring greater economic benefits per area harvested. On the flip side, it can cause more damage to forest stands per hectare because more trees overall might be removed.

Meanwhile, from the small sample of companies the Cerutti article looked at, there didn’t seem to be much difference in how local communities around logging concessions made out: whether the company was Chinese or not, or certified to a high standard of sustainable logging or not, local people seemed to fare more or less the same, economically speaking. So… from this one study (and many more are needed) whether a company itself is Chinese or not doesn’t necessarily always matter.

The Congo Basin summary is a set of background information to help us design more detailed research questions to look at the impacts of Chinese trade and investment in minerals, timber, and agriculture in Gabon, the Democratic Republic of Congo and Cameroon. While it is too soon to present final results, one of the things that became clear during that research that one of the characteristics that differentiates Chinese companies working in Africa today is that in some places they are interfacing very strongly with smaller producers, including artisanal small-scale producers of minerals, for example.

On one hand, as was found during previous work done elsewhere (in Amazonia), the direct connection Chinese traders provide to small-scale producers may bring more direct economic benefit to local people. On the other hand, small-scale and often informal or even illegal resource extractive activities are hard to regulate from an environmental and social perspective. Governments in the region have programs to formalize small-scale activities, which may reduce the potential negative effects while allowing local people to continue to benefit from market demand for their resources, but closer attention to these issues is needed.

Meanwhile, the China-Africa Express keeps taking off, daily, and business is growing as, we once were told, business must do. How trees and people on the ground fare is a story CIFOR will be bringing more science-backed news about over the next couple of years.

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  • I have enjoyed reading this piece. I am a forest economist and have worked in the area of forest products trade and investment. I am interested in China and Africa trade and investment in forestry. keep me informed.