ChinaiscompetenttohelpAfricangovernmentsimprovetheirabilitiestomakebetterdecisionsandcreateamorefavorableinvestmentenvironment.Asitsassistanceinhumanresourcesprojects,itcouldprovidediplomaeducation,short-andmid-termtraining,andpersonnelexchangesforofficialsandtechniciansinrecipientnations.
Chinaismovingawayfromitshelp-for-infrastructurerelationshipwithAfricatofocusoncooperationthatwillleversubstantialinvestments
ByZhouJinyan
WithChina-Africarelationsonthefasttrackofdevelopment,investment-drivencooperationwillbethenewnorm.ChineseForeignMinisterWangYihaspledgedthatChinawillexpandSinoAfricantraderelationstoindustrialcooperationandtechnologytransfer.Traditionalcooperationfocusingonengineeringcontractswillbebroadenedtoincludeinvestmentmanagementandfinancialservices.Cooperationintheformofassistance,mainlybygovernmentagencies,willtakeawin-winapproachspearheadedbybusinesses.
ChinahaspledgedtocontinueemergencyandnecessaryassistancetoAfricancountries,graduallyexpandingthescale,innovatingthemodeandoptimizingtheconditions.Inmyopinion,boostinginvestmentbyassistanceisthemostappropriateapproachtoinnovatethemodeofcooperation.
ThiscanbereadbetweenthelinesofChina’slatestAfricanpolicydocumentsandtheJohannesburgActionPlan(2016-18)agreedonattheJohannesburgSummitoftheForumonChina-AfricaCooperationinDecember.Theimplementationof10majorplanstoboostcooperationwithAfricainthenextthreeyears,asannouncedbyChinesePresidentXiJinping,willrequirejointeffortsandinvestment.
Inagriculturalcooperation,Chinawillcontinueitsearlierassistancesuchasbuildingagriculturaltechnologydemonstrationcenters,sendingagricultureexpertsandprovidingvocationaltrainingaswellasfoodassistance.Inanewmove,BeijinghassaiditwillsupportChinesebusinessestoinvestintheextendedagriculturechaininAfricaanddevelopit.
Ininfrastructurecooperation,thenewpolicyproposespublic-privatepartnerships.
Althoughsocialdevelopmentcooperation,suchasinpublichealth,wasgenerallydiscussedunderthecomprehensiveagendaofdevelopmentcooperation,Chinahaspledged,forthefirsttime,toencourageChinesepharmaceuticalcompaniestoinvestinAfrica.IthascalledforjointoperationofhospitalsandcooperationinmedicineproductionandhealthinformationmanagementtohelpAfricaimprovetheavailabilityofhealthanddiagnosticservicesandcommodities.
China’sintentiontoboostinvestmentbyassistanceisevidentfromallthis.
Why?
Thereasonforinnovatingonthemodeofaidistooptimizetheoutcomeofassistanceandinvestment.
First,fromtheassistanceperspective,thereisaconsensusonreformingthecurrentmodeofassistance.Providingassistanceinmereinfrastructureconstructionisunsustainable.Recipientcountriesarepronetobecomedependentonforeignaidandloseimpetustobuildtheirowndevelopmentcapacity.Besides,stadiumconstructionprojectsontherequestofAfricancountrieswillbecomefewerandfewerinthefuture.
Second,China’sinvestmentinAfricaisstillatalowlevel.Inthefirsthalfof2015,China’sinvest-mentinAfricadecreasedby40percent.Alotofchallengesmustbetackledbeforereachingthegoalofinvesting$100billionbytheendof2020.Withthepriceofinternationalcommoditiesslumping,Africaneconomieshavebeenseverelyaffected.LastOctober,theInternationalMonetaryFund(IMF)assessedthatgrowthinSub-SaharanAfricawassettoslowdownto3.8percentin2015,thelowestin15years.Therefore,transformingtopartnershipstimulatedbyinvestmentwillbethekeytoupgradeChina-Africarelations.
Third,fromtheperspectiveofworldopinion,ifChinaofferstoomanyloanstoAfrica,Westerncountriesmayworryandcriticizeit,sayingAfricannations’externaldebtswouldbetooheavy.SuchreactionsmayjeopardizeSino-Africancooperation.Instead,graduallyexpandingtheassistancescale,innovatingonthemode,optimizingtheconditionsofassistanceandboostinginvestmentbyassistancewouldhelpAfricancountries’povertyalleviationefforts.Itwouldalsoimprovepeople’slivelihoods,acceleratetheircapacity-buildingeffortsandpromoteindustrialization.
Boostinginvestmentbyassistanceisessentiallydifferentfromconditionalassistance.Westerndonornationshavereachedaconsensusthattheyshouldminimizeandgraduallyremoveconditionswhenprovidingaid.China’sapproachofboostinginvestmentbyassistancedoesn’tmeanitsupportsthenotorious“conditionalaids.”Itisaninnovationonthemodelofofferingassistance.Suchassistancewouldboostinvestmentbyimprovinglocalinfrastructureandtheinvestmentenvironment.
How?
TheinvestmentenvironmentisthekeyissueforChinesebusinessestomakeinvestmentdecisions.Boostinginvestmentbyassistancedoesn’tmeantheassistancewilldirectlyincreaseprofits.Withtheassistance,Africangovernmentsanddecisionmakingagencieswouldbeabletoenhancetheirgovernancecapability,thuscreatingabettermacroeconomicenvironmentandattractingmoreforeigninvestment.Assistanceinthisregardincludestrainingandsendingpolicyadvisors.
ToboostindustrializationandinvestmentinAfrica,theremustbegoodgovernanceandastableinvestmentenvironment.IthasbeenastereotypethatChina-Africaintergovernmentalrelationsarestrongwhilepeople-to-peopleexchangesarerelativelyweak.ComparedwithJapan,theUnitedStatesandEuropeancountries,Sino-Africanintergovernmentalrelationsarerestrictedtohigh-levelvisits,thushavinglimiteddeepinfluence.
TakeAngolaasanexample.Bilateralcooperationoverthepast10yearsmadesignificantcontributiontoAngola’sreconstruction.However,astheinvestmentsfocusedonengineeringcontracts,Chinadidn’texertcorrespondinginfluenceonLuanda’spolicy-makingprocess.AngolaacceptedpolicyadvicefromWesternnationsandagencies.Thenation’stopofficialsoncetoldtheIMF,“Wedon’tneedyourmoney,butyourbrain.”
ChinaiscompetenttohelpAfricangovernmentsimprovetheirabilitiestomakebetterdecisionsandcreateamorefavorableinvestmentenvironment.Asitsassistanceinhumanresourcesprojects,itcouldprovidediplomaeducation,short-andmid-termtraining,andpersonnelexchangesforofficialsandtechniciansinrecipientnations.Innovationonthemodeofassistanceregardingtheselectionofpersonnelwillbereflectedinselectingtraineeswhoarefundamentallyusefultolocaldevelopment.Currently,thetraineelistsareprovidedbylocalAfricangovernments.Butitoftenturnsoutthatthesepersonnelarenotthemostsuitable.Inthefuture,Chinesebusinessescanplayabiggerroleinselectingtrainees.
Boostinginvestmentbyassistanceisthemainapproachtoinnovateonthemodeofassistanceandthekeytoupgradebilateralrelationstoacomprehensivestrategicpartnership.Tothisend,theremustbeeffectivecommunicationbetweengovernmentsandbusinessessothatassistancecaneffectivelyleversubstantialinvestments,injectingsustainablemomentumintoAfricaneconomiesandChina-Africacooperation.CA
(TheauthorisanassistantresearchfellowattheInstituteofWestAsianandAfricanStudies,ChineseAcademyofSocialSciences)