Exploitation Disguised as Investment
For the past decade or so, Chinese corporations have been pouring massive so-called investments into sub-Saharan Africa, especially in the mining sector. Chinese multinationals are fast establishing a foothold on the continent, which happens to be an ideal space from where they can take advantage of its mineral wealth and massive growth opportunities. Most African leaders are welcoming this financial influx, and some have even begun to view China as a more reliable business partner than western countries. But not everyone is convinced of the economic superpower’s ‘good’ intentions. Some even worry that China is in the process of trying to colonise the continent.
Africa is known as the final frontier of the emerging markets. It is not only home to seven of the 10 fastest-growing economies; the continent is also experiencing massive population growth which means that a large chunk of the global population will eventually be African. Thriving African markets, and those doing business there, will be well placed. Challenges like malaria deaths and child mortality rates are plummeting as rapidly increasing literacy rates and internet access are opening massive pools of previously obscured talent. Governance is improving and democracy is burgeoning. Not to mention the incredible options for investment in countries like Mozambique, Nigeria, Ethiopia, and South Africa. The Chinese seem to have copped on to this and are now tapping into all of this potential with seemingly limitless support.
China: ‘It’s a Mutually Beneficial Relationship’
Chinese corporations continue to assert that the financial aid it’s pumping into the continent is done with no strings attached and that their relationship with Africa is symbiotic. While local economies are supported by Chinese companies buying large quantities of metals and minerals, these companies are also drastically undercutting local manufacturing prices. This forces African countries to import finished goods from China. A lot of these goods are poorly manufactured, but because Africa can’t match the cut-rate prices, the continent has become dependent on these products. Sadly, the Nigerian textile industry has been brought to its knees because of an incursion of cut-priced textile products from China.
And that’s not all there is to it - upon closer inspection, it becomes clear it’s not all about above-the-board business with China, their lack of transparency in business dealings is questionable at best, and they’ve been meddling with things that have absolutely nothing to do with them.
An Undercurrent of Political Factors at Play
China has even gone so far as to interfere with African politics. Recently, a peace deal was made between Guinea and Beny Steinmetz, an Israeli mining magnate, after long and contentious court proceedings relating to the Simandou iron-ore project. After years of sitting on the rights to the deposit, China failed to develop anything. Like many other business dealings by Chinese corporations in Africa, there is a marked lack of transparency in deals and bidding processes - and this deal was no different. In fact, it is still not clear whether the rights were lawfully obtained by the Chinese through political interference.
This lack of transparency has resulted in the African continent feeling ambivalent about the involvement of the Chinese in its mining sector and other industries. One has to wonder what the motivation behind this lack of clarity and political meddling could be, if not an attempt at some new way of colonising the continent.