Challenge: It is frequently postulated that Sino-African relations are burgeoning in part because China offers African leaders a more acceptable alternative economic ideology to the "Washington Consensus", aptly called the "Beijing Consensus". In many ways a host of other criticisms of China's engagements across the continent follow from this, somewhat over-simplistic, misunderstanding.
The "Washington Consensus" refers specifically to a set of policies that commands a consensus in some significant part of the US capital, Washington (Williamson, 2004:7). The consensus originally comprised a particular policy-mix, informed by a broader neoclassical economic framework, which was formulated to assist debtor countries of the 1990s attain fiscal order. The envisioned path towards economic growth and development included ten broad principles, including fiscal discipline; the re-ordering of public expenditure priorities towards basic health, education and infrastructure; and tax reform (Williamson, 2004:3-4). However, since its inception, the Washington Consensus has detached from its original meaning and principles, incorrectly becoming a synonym for neo-liberal market fundamentalism.
Taking this overly broad interpretation, many have positioned China's centralised political system, state activism in domestic economic affairs, non-intervention in external affairs, and "socialism with Chinese characteristics", to name a few cornerstones of China's ever-shifting ideology, as a polar opposite of the Washington Consensus. As such, the "Beijing Consensus" has been defined simply in terms of contrasting isolated ideological aspects of China against the "Washington Consensus" (Lumumba-Kasongo, 2007).
The unhinged quasi-ideologies have been artificially placed on a collision course, perceived to be played out on the continent in a new, post-Cold War proxy war. Thus, according to this view, much of China's foreign policy that has gained traction in Africa is based fairly simply on its offering of an alternative to the Washington Consensus, which was particularly tarnished by the International Monetary Fund‟s (IMF) structural adjustment programmes of the 1980s and 1990s (Merredith, 2005; Van der Wath et al., 2006).
As reported in previous editions in this series, China's macroeconomic success over the past few decades has indeed turned economic theory on its head. These successes are alluring for African economies. Many suggest that China's economic performance rebukes the conventional view that freedom and prosperity are interlinked (Alden, 2007). However, the face-off is superficial, misrepresenting the enormous structural internal transformation China has undertaken since Deng Xiaoping initiated reforms in the late 1970s. China's economic and social successes over the past three decades have promoted economic liberalisation.
To lance the boil of partisan perspectives, such a viewpoint is based on misconceptions of basic relationships. Take, for instance, freedom and Gross Domestic Product (GDP): high levels of freedom correlate positively with high levels of GDP per capita as opposed to rapid GDP growth. Indeed, the world's most wealthy nations have, on aggregate, the highest level of economic freedom in the world.
China's economic freedom may have been just 54 out of 100 in 2009, which is meaningfully lower than the 84 score of the US; however, before Deng's reforms in 1978, China's economic freedom was close to zero. Subsequently, China's economic freedom has improved at an average of 1.5 points each year over the past three decades. No nation has improved its level of economic freedom as much or as swiftly. As a result, China's economic growth rate has averaged around 10% each year since 1980. Evidently, GDP growth is a function of a country's rate of change in freedom, as opposed to its absolute level. China has enhanced its growth potential by enhancing economic freedom. According to Kane (2007:3), "the lesson is that more freedom leads to more growth, but stagnant freedom (even if high) leads to stagnant growth".
China's public policy has become increasingly free-market orientated over the course of the last 30 years. Marketisation has, quite undeniably, been a vital ingredient in China's own development strides in poverty alleviation and economic growth since 1978. More explicitly, China's exceptional economic growth is, in part, a result of a combination of trade liberalisation; the liberalisation of inward foreign direct investment (FDI); the use of a competitive exchange rate; its vast savings and a current account surplus; and political stability. These are cornerstones of the Washington Consensus.
The intensity of China's engagement of Africa over the past decade has taken many by surprise, simultaneously igniting hopes for a greater future for the continent and fears of the dangers of entering yet another structurally imbalanced relationship which offers little domestic value-add for Africa's fragile economies. Indeed, China's engagement with Africa, which has been most pronounced since the turn of the century, continues to lampoon vibrant and globally engaging debate around the needs and challenges facing Africa's ongoing economic development.
Generally speaking, the volume of Chinese financial assistance, trade and investment in Africa, and the manner in which these flows have accelerated the continent's impressive contemporary growth trajectory have seen China heralded as an overwhelmingly positive partner for forward-looking African emerging and frontier markets. Moreover, China's own domestic economic transformation over the course of the past three decades provides cogent lessons for African economies aiming to fasten themselves more meaningfully onto the global economy.
The recent global economic downturn has provided China with a valuable opportunity to prove both its own domestic economic resilience and its commitment to Africa. Throughout 2009, the relatively moderate decline of China-Africa trade stood in stark contrast to the hollowing out of trade volumes between Africa and its traditional partners in the advanced economies of the Euro-zone, Japan and the United States (US).
However, there are two sides to every coin. In the same manner in which the West has borne the brunt of many of the accusations regarding Africa's post-independence economic failings, China, rapidly becoming Africa's most substantial commercial partner, has courted similar controversy in recent years. Driving this side of the spectrum are allegations of China's unwillingness to ensure local beneficiation when extracting Africa's abundant natural resources, as well as Beijing's strict policy of non-interference in the domestic affairs of trading partner states, some of which remain actively omitted from similar engagements with Western partners owing to perceptions of domestic abuses of power.
Many have gone as far as to assert that China is emerging as a "neo-colonial" power in Africa. The veracity of these allegations has inspired action by Beijing, which has used its Forum on China Africa Cooperation (FOCAC) as a platform to counter much of the negative attention it has gained from its engagements in vulnerable African markets.
Notably, much of the criticism of China's commercial strategy in Africa originates from the continent's traditional partner states. However, there is also rising debate within Africa as to the longevity and mutually beneficial nature of the current strand of Sino-African ties. Indeed, with China as a catalyst, debate around the terms of African engagement has been rekindled, with consensus remaining positively elusive. For example, in a recent online debate on the Economist website entitled "This house believes that China's growing involvement in Africa is to be welcomed", 59% voted yes, and 41% no.
While some criticisms of China's engagements in Africa are certainly justified, others are seemingly intellectually inconsistent with empirical data, sentiment on the ground and anecdotal evidence. Various myths concerning the manner of and motivations for Chinese intensified advance into Africa have resulted. Following which, many of these misunderstandings obfuscate, forming the premise upon which additional arguments concerning Sino-African relations are concocted.
To be sure, the criticisms levelled against China have often polarised debate in Africa, forcing governments and civil society to lazily adopt extreme positions on either side of an artificial ideological spectrum. Few contest, however, that China's engagement with Africa is long term, and a more informed analysis of these contestations is therefore timely.
- To this end, this paper looks at the following salient challenges:
- Is China's success simply based on its offering Africa a more palatable economic ideology to the West?
- Given the large weight of commodities in Sino-African trade, do engagements have meaningful positive domestic multipliers for Africa?
- Are low-cost manufacturing goods from China leading to Africa's de-industrialisation?
- Is a strategic China taking selfishly what it needs from an economically weak Africa with limited local consideration, extending limited gains to the host nation?
- Have China's engagements provided rogue states in Africa with a viable trap-door from pressures to reform their political, economic and social institutions?
- Are Chinese loans and bilateral assistance free-riding on Africa's past debt relief, adding new layers of additional debt?
The purpose of this paper is not necessarily to endorse a particular position, but rather to provide rational debate on each of the more contentious challenges to Sino-African ties and, in doing so, illuminate the noise currently dominating discourse with greater depth of understanding.
* Readers can access the analysis here.