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Sweet and sour: China in Africa, beyond the headlines

Sino-African relations expert Prof Deborah Brautigam examines China’s involvement and investments in Africa, and highlights the nuances in relations that the news media often glosses over. Presented by Eric van Bemmel.

"Chinese aid is tied.  It's tied to Chinese goods and services and until recently that was also the case for most countries from the west that gave aid in Africa. In the United States for example most of our aid is still tied.  So if you are travelling to Africa on an USAID project you have to fly on an American carrier.  You have to drive in a Ford rather than buying a Toyota when you are in Africa." -- Prof Deborah Brautigam




Prof Deborah Brautigam
Prof Deborah Brautigam

Dr. Deborah Bräutigam has been writing about China, Africa, state-building, governance and foreign aid for more than 20 years. Currently Professor and Director of the International Development Program at Johns Hopkins University’s School of Advanced International Studies (SAIS), she has also held faculty appointments at American University, Columbia University, the University of Bergen, Norway, and been a fellow with the Centre for Chinese Studies, Stellenbosch University, South Africa; and the International Food Policy Research Institute (IFPRI).  Author most recently of The Dragon’s Gift: The Real Story of China in Africa (Oxford University Press 2009, 2011), Dr. Bräutigam’s other books include Taxation and State-Building in Developing Countries: Capacity and Consent; Aid Dependence and Governance; and Chinese Aid and African Development. Dr. Bräutigam has twice won the Fulbright research award. She is also a recipient of fellowships from the Council on Foreign Relations and the Woodrow Wilson International Center for Scholars. Her research has been funded by grants from the German Marshall Fund of the United States, Columbia University, the North South Center at the University of Miami, and the Centre for Economic Policy and Research (CEPR). She has served as a consultant for Transparency International, the United Nations, the World Bank, DFID, GIZ, DANIDA, the African Development Bank, and USAID and has appeared on CNN, MSNBC, the BBC, VOA and CCTV. Her Ph.D. is from the Fletcher School of Law and Diplomacy, Tufts University.

Online versions of published research

Deborah blogs on issues of China in Africa at China in Africa: The Real Story.

Credits

Presenter: Eric van Bemmel
Producers: Kelvin Param, Eric van Bemmel
Audio Engineers: Gavin Nebauer
Voiceover: Nerissa Hannink
Series Creators: Eric van Bemmel and Kelvin Param

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VOICEOVER 
Welcome to Up Close, the research talk show from the University of Melbourne, Australia. 

ERIC VAN BEMMEL 
I'm Eric van Bemmel.  Thanks for joining us.  While China is one of scores of countries investing in and otherwise economically engaging with Africa, it's activities there in the past decade or so now draw increased media scrutiny from humanitarian aid to infrastructure development to wholesale resource extraction.  China's presence in Africa is sweeping and many layered and it's growing bigger with each passing year.According to some calculations trade between China and the African states it does business with will exceed USD220 billion for the year 2012 alone, beating the previous year's trade by some 25 per cent.  Meanwhile airports, roads, ports and the like have been constructed or rehabilitated across the African continent with more planned, providing a shot in the arm for African exports and the regional economies they underpin.Critics say China, in an entirely self serving strategy is happy to prop up corrupt or autocratic African governments to secure and maintain access to precious mineral resources and large tracts of arable land.  Others claim China is a benign business orientated presence that actually benefits local economies and makes them less dependent on aid.  The real situation no doubt lies somewhere in between.  In this episode of Up Close we ask a seasoned observer of Chinese engagement in Africa if we are getting the whole story in the western press and to give us her reading of what China and the Chinese presence means for Africa and Africans.Deborah Brautigam is Professor and Director of the International Development Program at the School of Advanced International Studies at Johns Hopkins University in the United States.  A China scholar with a special interest in Africa spending some three decades, Deborah Brautigam is the author of the 2011 book, The Dragon's Gift: The Real Story of China in Africa.  Deborah also blogs on this topic at China in Africa: The Real Story.  We will put a link to it on our episode page.Deborah, thank you for joining us on Up Close.

DEBORAH BRAUTIGAM
You are welcome, Eric.  Good to be here.

ERIC VAN BEMMEL
So Deborah, is it even fair to talk specifically about Chinese involvement in Africa?  Is it really any different or more significant than engagement in Africa by other countries?

DEBORAH BRAUTIGAM
There are two parts to that question really.  I think it's pretty clear that Africa is 54 different countries.  So when we are talking about Chinese engagement we are talking about a lot of different things there and a lot of different places.  Then China of course is many different things as well.  It's the Chinese Government, it's Chinese businesses, it's Chinese export credit agencies, it's Chinese migrants going out.So really a lot of different things to break down there in order to get the full picture about what's going on, but I think that said, it's certainly accurate that the engagement of all different parts of China with many parts of Africa is growing very quickly and it has become much more visible over the past decade.

ERIC VAN BEMMEL
Who's taking an interest in this story?  Are there different communities of interest?  Business communities versus say, social justice?

DEBORAH BRAUTIGAM
Absolutely, Eric.  The business communities are concerned because they believe that Chinese companies in Africa get special help from their government and they are finding it hard to compete.  We have NGOs and communities interested in human rights, they are concerned because Chinese companies are coming in with different standards.  The same kinds of standards they have in China.  So that's of concern.And then we have people in the aid community worrying that they are trying to put conditions and they are trying to help African governments have better governance and that the Chinese are coming in without any conditions at all.  So all of these communities I think have been concerned and interested in this phenomenon.

ERIC VAN BEMMEL
Now on that topic of aid, in terms of official Chinese aid and development can you give us some examples of what they are doing on the ground there?  Also, can we separate aid from activities that benefit China?

DEBORAH BRAUTIGAM
Well, I've been working on Chinese aid in Africa since 1983.  So to me it's very clear, the distinction between what counts as official aid and other instruments that the Chinese Government has to promote business.  Now Chinese aid is tied.  It's tied to Chinese goods and services and until recently that was also the case for most countries from the west that gave aid in Africa.  In the United States for example most of our aid is still tied.  So if you are travelling to Africa on an USAID project you have to fly on an American carrier.  You have to drive in a Ford rather than buying a Toyota when you are in Africa.So this kind of tied aid is also something the Chinese practise.  Now they have a lot of other instruments as well and these are export credit agencies and they have a development bank, the China Development Bank and both of those instruments are mainly about boosting Chinese exports and boosting Chinese business.We have these kinds of instruments in the west but they are tiny compared to the volume of finance that the Chinese have.  After all, the Chinese are financing the US deficit.  It's not that surprising that they have very large instruments to export their capital overseas.  The aid program is interesting.  China has had an aid program in Africa for decades and some of their distinctive signature projects are things like medical teams.  In dozens of countries in Africa you find Chinese medical teams are grouped in hospitals and they provide firsthand treatment to African patients and they are very well appreciated.You also find things like Chinese building bridges or building roads, building stadiums or building buildings like ministries of foreign affairs.  My analysis of the Chinese Aid Program is that it is pretty much about diplomacy.  It's about making friends and influencing people and trying to get people to be friendly toward you.  There are several diplomatic issues that the Chinese particularly want to keep people on their side and one of them is this diplomatic struggle with Taiwan.  So they have been going back and forth in many parts of Africa in terms of diplomatic recognition.  Taiwan of course, well it's called the Republic of China and after the Civil War ended in China in 1949 the losing party was pushed off to the island of Taiwan and they have remained there ever since.  So they had the United Nations seat for China until 1971 and they still have diplomatic ties with a lot of countries, small countries around the world including some in Africa.  

ERIC VAN BEMMEL
Turning to trade and investment, Deborah, trade between China and Africa has grown on average some 33 per cent per year since 2001.  I have read that Africa taken as a whole may become China's largest trading partner by 2017 or 2018 surpassing even Europe or the United States.  As I mentioned before, the current trade is over USD200 billion per year.  What's making up all this trade?

DEBORAH BRAUTIGAM
Well, the trade is far more evenly divided between the continent of Africa and China than trade for example between the continent of Africa and the United States.  So what we find for the continent is that it is evenly divided between imports coming in from China which are largely manufactured goods of various kinds, consumer items and machinery, factory equipment and increasingly automobiles and things like that.  Then exports coming out from Africa which are 80 per cent or 90 per cent raw materials.Now, if you look at Africa and the United States exports coming from Africa to the United States are also largely raw materials but the trade balance is much more in the continent's favour.  We are exporting much less proportionately to Africa and we are importing far more from them.  With the Chinese it is balanced continent wide but of course that obscures the fact that it's about five countries that make up most of the natural resource exports to China.Some countries like Angola or Sudan or Algeria have proportionately larger exports.  South Africa fits there as well and then most of the rest of the continent has a trade deficit with China where they are importing more than they are exporting, but many other countries specialise in one thing or another.  For example, in Gabon there is a lot of timber coming from their forests and this is actually quite worrisome because the Chinese and Malaysian and other usually Asian timber companies active in Gabon's rainforest have been operating without much regard for Gabonese environmental regulations, so that's a concern.In other parts of Africa, we can see this in Tanzania and Mozambique as well.  So NGOs have been publicising these problems and people have been trying to put pressure on the Chinese companies to change their activities.  So far there hasn’t been a lot of result from that pressure.So other countries export things.  For example, Burkina Faso is China's largest supplier of cotton from Africa.  Ethiopia supplies sesame seeds and in Ghana until recently their major export to China was cocoa.  So a lot of things are going in from different parts of the continent.  It's not just raw materials in terms of minerals or oil. ERIC VAN BEMMELDeborah, regarding Chinese investment in Africa, specifically foreign direct investment or FDI as it is known, are we able to calculate the dollar figures?

DEBORAH BRAUTIGAM
The FDI figures, the Chinese are transparent and open.  They publish their FDI figures but I would not use those figures and the reason why these figures are unreliable is actually kind of interesting.  China has capital controls.  That means that you can't just send money out of the country.  You have to get permission.  Someone has to authorise it and there are restrictions on it.  So Chinese companies, when they do have money outside, they tend to keep it outside.  So if they make profits or if they sell something they keep their money in offshore financial centres including Hong Kong which is considered to be outside of China according to the statistics.  So what you find is that Chinese companies from those offshore locations will export their capital or invest, but it can't actually be traced.  To see how this works out we can look at Latin America.  The official statistics for Latin America show that Chinese foreign investment there, the two largest places are the British Virgin Islands and the Cayman Islands and that's ridiculous.  They aren’t really investing in those areas, but those are offshore tax havens or offshore financial centres.So from those centres it's impossible to trace where the money goes next and to trace it as being Chinese.  So the same thing is true in Africa.  Money goes into Africa from these offshore financial centres so it is very hard to see how much is actually going from China into Africa.I will give you a different example.  The Chinese bought a company called Addax.  It has oil assets.  It has them in Cameroon, it has them in Nigeria, I believe in another country too as well, perhaps Gabon and in Iraq, but Addax is domiciled in Switzerland.So it shows up in the official figures as a Chinese investment in Switzerland.  So it makes it very hard to tease out the actual figures.  Now that said, we do have estimates.  Derek Scissors at the Heritage Foundation has been running something called the China Investment Tracker.  He tracks big investments of over $100 million each and his estimates are that over the past few years it has been about $6 billion, $7 billion a year in commitments of investments.Now some of those projects will not actually come to fruition.  Some of them have become trouble transactions.  For example, one in the Congo was initially supposed to be $9 billion and from what we can tell, that was in 2007, it's only about $500 million so far.  It's supposed to be a copper mining investment with a lot of infrastructure associated with it.  So far no money has come in for the copper and only the infrastructure has been built.So that's what we are dealing with in terms of the challenge of trying to figure this out.  One more thing on that which is that we see a lot of headlines on different kinds of investments, the size of something, $7 billion, $8 billion, $2 billion, a lot of times those are just headline figures and those projects never happen.  So we have seen this in Guinea for example, in West Africa there was supposed to be a $7 billion investment.  It fell by the wayside.  We saw this in Zimbabwe, the troubled country down on the border with South Africa.  There was supposed to be an $8 billion investment in diamonds.  It never happened.So we see a number of these kinds of transactions that don’t actually come through for a number of reasons.  Perhaps they were just an initial discussion and it went into a headline.  Often African governments will give press releases about this because they like to tell their people, look we are bringing in all this investment but then the investment doesn’t actually happen.

ERIC VAN BEMMEL
Yes, you’ve written about these infrastructure projects, promised but not delivered and they are getting beyond the memorandum of understanding, it's not always an easy thing.

DEBORAH BRAUTIGAM
Exactly.  Now, I would caution though about calling these promises or pledges.  What we are talking about is a long series of negotiations for any kind of project, whether it's an investment or something that will be financed by a Chinese bank.  So there's an initial memorandum of understanding and one expert who works on these issues, not just with regard to China but in Africa more generally, says that only about 3 per cent of any memorandum of understanding ever reach completion and actually become a project.  So we are talking about a lot of companies, a lot of banks going around and having initial discussions about something and saying, yes, we are interested, but then getting to the final point where something actually happens is very difficult.  One of the reasons is that these products demand feasibility studies.  The Chinese bank doesn’t want to actually put the money up until it sees whether or not the project can repay the loan.  So this has happened over and over again, the Chinese do a feasibility study and then they go, hmm, this product doesn’t look quite as profitable as it did in the beginning and we don’t think we are going to finance it or we don’t think we are going to invest in it and that's natural.  That actually happens all the time and it happens all the time with western companies but it just doesn’t get the headlines because nobody is tracking western interest the way they are tracking Chinese interest.So it seems as though the Chinese are making promises and then not following up but I think it is much more realistic to look at this as the natural progression of negotiations on any kind of project.

ERIC VAN BEMMEL
The lesson to be drawn here is we need to be sceptical about such agreements actually turning into projects.

DEBORAH BRAUTIGAM
Yes, and that's not a new thing. It's not a new thing for the Chinese.  It's not a new thing for us but we can't take a headline as an actual project and that's a point I would like to drive home.

ERIC VAN BEMMEL
I'm Eric van Bemmel and on Up Close this episode we are speaking with China scholar, Professor Deborah Brautigam about the many faces of Chinese involvement in Africa.Deborah, The Economist in 2011 put Chinese investment in Africa at 22 per cent manufacturing.  What are some examples of manufacturing?  What do they produce in Africa and for which markets?

DEBORAH BRAUTIGAM
Well, that figure from The Economist actually comes from 2009 and it was released by the Chinese themselves in their White Paper on Africa, but I think it's fair to say that most parts of Africa are not known for being manufacturing power houses.  So if you are looking to find products you can import, there isn't that much.  The exception of course is South Africa and the Chinese do import manufactured goods from South Africa, but what are they manufacturing in Africa?  It's a number of things.I did field work in Nigeria for example.  I was interested in following up on reports I had heard that there was manufacturing by Chinese in the plastics industry and also in other sectors in Eastern Nigeria.  So I did a very long trip which involved a plane flight and another plane flight and then a two hour ride in a car with two policemen with AK47s on either side of me because this was actually an area where there had been a lot of kidnapping.And so the manufacturers that I was going to visit didn’t want me to get kidnapped and so they assured my security on this trip.  So it was one of my more exciting trips as a researcher.  Fortunately I was fine but what I found was that Chinese companies and Nigerians were doing joint ventures and plastics was one of the things they were producing.  So I said to one of the manufacturers who happened to be Nigerian who had partnered with some Chinese, I said to him, I have read that Chinese imports of plastics have wiped out the plastics industry in Nigeria, so how is it that you are able to compete?  He said, do you know I get my raw materials here in Nigeria, it is petrochemicals.  I import the machinery from China.  I pay my workers about the same that workers are paid in China and I have really great distribution networks here.  So he said, my quality is better, my prices are lower and I can't produce things fast enough.So I think there is a huge market within Africa in places like Nigeria, Egypt, Ethiopia, South Africa for goods that are produced in Africa.  Chinese companies are figuring this out and some African companies are partnering with them.  Import substitution I guess you would call it, that's one big draw for that 22 per cent of investment. The other big draw is protected markets outside of Africa and so Chinese companies are moving in to Africa in order to export from Africa into Europe and the United States which give trade preferences.  So what they are doing is they are moving some of their more expensive and some of their lower on the technology scale facilities from China to these other locations.  I was in Ethiopia in the summer and I interviewed Chinese shoe manufacturers who were producing for Naturalizer and Guess.  They were producing in a factory.  They had about 1000 workers, 800 Ethiopians and 200 Chinese technicians and managers and they were exporting into the United States and into Europe.What's interesting is during that research I also interviewed European shoe manufacturers and glove manufacturers who were moving from China into Ethiopia.  It would look like European investment but they were actually moving parts of their factories from China into Africa.  So that won't look like Chinese investment but in some ways it is as well.But here is interest in adding value to raw materials in Africa.  Agribusiness is another area.  The Chinese have moved, in at least five countries that I know of, they have purchased sugar refineries.  So they are producing sugar and again this is not to send it back to China but usually it is for local markets and sometimes they will send it to Europe.  In Sierra Leone for example in West Africa, a Chinese company has a sugar farm and a sugar manufacturing outlet and they are producing sugar to sell to Europe to take advantage of the high sugar prices in the protected markets there.

ERIC VAN BEMMEL
Now Deborah, on that topic of agriculture, the United Nations Food and Agriculture Organisation in 2009 warned that the world may be slipping into a quote, neo-colonial system of land grabbing and Africa being a central part of that, there have been a number of countries involved, Middle Eastern countries securing large tracts of land in Tanzania and Sudan.  Famously the South Korean Daewoo company tried to take out a 99 year lease on 1.3 million hectares of Madagascar which led to the downfall of the Government there and the squashing of that deal.  The Zimbabwe Independent in 2009 reported that China acquired some 2.8 million hectares in the Democratic Republic of Congo to create palm oil plantations.  Can we call these “grabs” and how can care for arable land and the African environment in general be entrusted to those with little connection to the land?

DEBORAH BRAUTIGAM
Eric, I think the issue of land grabs is a really interesting one. This is a very important issue for Africa where you have a lot of farmers that are operating on a subsistence level.  They use a lot of land for that subsistence agriculture because they have to move it around from place to place because the soil tires frequently.Now, large new investors coming in have an interesting position because they are usually invited in by the governments who want to see commercialisation of African agriculture.  They are not seeing that happening as much by their own farmers with the exception of course of Zimbabwe where they did have commercial farmers and they drove them away because they happened to be white.  So this is an issue that is very important and it is an issue that is very troubling.  Now, where does China fit here?  My first book on China in Africa was published in 1998 and it was about Chinese engagement in agriculture.  I called it Chinese Aid and African Development: Exporting Green Revolution.  It was all about Chinese aid because at that point there was very little investment.I have been looking at this issue for quite a long time and what's interesting to me is that there is actually very, very little Chinese investment in agriculture in Africa.  I was again in Ethiopia as I mentioned earlier and I talked to the commercial office at the Ministry of Agriculture about investment.  They were complaining to me.  They said, yes, we had a Chinese company.  They came here in 2010.  They signed a lease for 25,000 hectares to produce sugar and then they left and they haven’t been back.  So they haven’t done anything and we have 10 Indian companies here that are working away.  We don’t know what the problem was and I did more interviews and I found out that the area they were allocated had no roads.  So they thought this was just going to be too expensive and they weren’t interested any longer.You mentioned the project in the Congo.  This is one of the few projects that we have evidence that actually got as far as a lease like the one in Ethiopia and again it had the same kind of result.  The lease was for 100,000 hectares, not 2.8 million.  I don’t know where that figure came from.   I have seen this circulated a lot but we actually have a copy.  Researchers have been working on this from CIFOR, the Centre for International Forestry in Jakarta.  They did research in the Congo on this project and they have a copy of the lease which is now available on the internet.  It is 100,000 hectares but actually it's an agreement.  They never got this land because they did a pilot project and they found again it was going to be too expensive.  So they decided not to go forward with it.You see this over and over again and so the cases of Chinese investment on a large scale above 10,000 hectares, they're almost non-existent.  What we do find are a number of farms like the one I mentioned in Sierra Leone.  This was something that was owned by the Government of Sierra Leone and they leased it as part of a privatisation effort.  You can find that in Tanzania.  On the East Coast of Africa you find a Chinese sisal farm which is producing sisal which becomes a fibre that can be turned into ropes.  They leased it through a privatisation effort.  In Zambia there are a number of Chinese farms.  They are all fairly small or medium size and they are all producing for the Zambian market.  So the Chinese involvement is a lot less than we tend to think through the headlines.  When you do research on it as I have been doing over the past year on a new research project that I have I'm finding that they tend to start evaporating.  I will give you one more example.  I thought I had a really good one.  I read in a paper that was done by the African Economic Research Consortium, a very legitimate organisation, they said, there was a $2 billion Chinese rice project in Nigeria.  So I thought, well I will go and visit that project when I am there.  I looked into it a little further and I found, oh it wasn’t $2 billion it was 2 billion Naira (NGN) which is about $12 million.  Then the second problem, it wasn’t Chinese, it was Indian. 

ERIC VAN BEMMEL
Deborah, the sort of independent Chinese, economic migrants to Africa, often individuals or families coming in, making a home in Africa and starting businesses, we don’t read a lot about them.  We hear about the big ticket projects, the infrastructure projects and investments and whatnot.  What about the small guy so to speak?

DEBORAH BRAUTIGAM
Well, it's interesting, Eric, that we don’t hear a lot about these.  I think on the street in Africa this is the single issue that gets the most concern because you find that the many traders in places like Nairobi, the capital of Kenya, there are many African traders and they are now competing with Chinese traders in their own markets.  This is unusual for them.  They didn’t even face this during the colonial period where you had people at a very small scale coming in and sitting down, sometimes on the pavement and selling flowers or selling peanuts in order to get started and to build a little capital and to move up the value chain as one might say in the trading sector.So they are very worried about this.  They are concerned.  These Chinese traders have better access to the wholesale markets in China.  They can sell things for lower prices.  They work very long hours and they are very competitive.  So there have been movements against this in Nairobi.  The traders marched actually while I was in Kenya.  In May this year this happened.  It has also happened in Namibia.  There have been protests about Chinese traders in Zimbabwe and in South Africa and I believe also in Mozambique.  So the concerns are very real.Now, on the other hand of course African consumers are rather glad to get more competition.  They are glad to get prices going down and they are glad to get the greater choice but they also complain about the poor quality of some of the goods that have been coming in from China.

ERIC VAN BEMMEL
A long time observer of China and its involvement in Africa, Professor Deborah Brautigam is our guest on Up Close this episode.  I'm Eric van Bemmel.Now Deborah, the west is often portrayed as sort of an aid donor to Africa.  Portrayals of China meanwhile are more a sort of a laissez faire attitude towards the politics on the ground in Africa, interested in business and investment pretty much only.  Is that fair that view?  Is it something that the western press needs to correct?

DEBORAH BRAUTIGAM
I think it is interesting, Eric.  If you look at the actual numbers, just from the United States for example, in 2009 we invested almost $9 billion in Africa, in 2010 $8 billion in Africa.  We are big investors in Africa.  We are not just donors.  As donors we are more altruistic.  We are more concerned with human rights and good governance but as investors we are investing everywhere,  everywhere except Sudan.  We are investing in badly governed countries like Equatorial Guinea which has a very bad human rights record or Zimbabwe or Angola. The Chinese are investing in these places as well.  So I think we often have this false dichotomy that the west is the good guys, the altruistic guys in Africa and the Chinese are out there grubbing around for business with anyone.  To segway from that there is another impression that we have which is I don’t think is based on facts either and that is that China concentrates on poorly governed countries or props them up in order to get access to their resources.If you look at China's largest investments in Africa they have been in South Africa.  So South Africa is a relatively well governed country and I don’t think anyone would accuse the Chinese of propping up the South Africans.  They are very interested in doing natural resource investment in well governed countries and I only have to say that to you in Australia because you are the number 1 destination for Chinese investors.  They would much rather invest in Australia in natural resources that in the DRC Congo because they have a much better sense of investment security in a place like Australia or even South Africa.  So this idea that they are just going to the poorly governed countries is really not borne out by the facts.

ERIC VAN BEMMEL
Now Deborah, a couple more issues I want to touch, one is labour issues and particularly on these larger Chinese investment projects in Africa.  True or false, the Chinese rely mostly on their own workforces, even for projects deep in the African interior.  

DEBORAH BRAUTIGAM
I think by and large that's false.  My own research shows that it is about, on any given project, it's about 80 per cent African workers and about 20 per cent Chinese.  I have been keeping track of this in a kind of anecdotal database for a long time.You do find exceptions.  There are places like Angola, Sudan, Algeria and Libya before the war where the proportion of Chinese workers is far higher.  Libya and Algeria would probably be 100 per cent Chinese and Sudan and Angola it's lower.  In Angola it is about 50 per cent Chinese and 50 per cent Angolans on any given project.  So it varies by the enforcement of local work permit regulations by the local government and how willing they are to allow Chinese companies to bring in workers, but as any Chinese manager will say to you if you ask them about this, they will say, you know it's expensive to bring people from China.  We have to pay their airfares.  We have to house them.  We have to feed them.  We have to provide allowances for them and that costs a lot of money.  We would rather hire people locally if we can find them and if they can do the work at the speed and the quality that we require.So in terms of construction projects that have to be done quickly, maybe there is a political rationale, an election coming up, an African government wants to be sure that something is finished before they go to the voters, then they have an incentive to allow Chinese companies to bring Chinese workers from China, but they are going to be paying more for that than if they had hired people locally, even though they will probably get the work done far more quickly.In terms of factories it's almost always a very high proportion of African workers because again the cost ratio is just a lot better for hiring in Africa.

ERIC VAN BEMMEL
Isn't it true though that the Chinese workers work relatively cheaply and typically live at close to local living standards?

DEBORAH BRAUTIGAM
They would, they live very, very simply.  In fact in many instances in a construction project it would be below local standards or many kinds of local standards and it is certainly below the standard where they would be living in China.  Unlike Americans and Europeans, when we go to Africa we often live above the standard that we have here, particularly in Washington where it is quite expensive.Chinese live below often the standard that they have back in China because they are trying to save their money.  So the company is saving money by not spending much on housing.  The workers are saving money so that they can send it back to their families.  So these conditions, they will live in containers and I have pictures of these living conditions that I have taken from various projects that I visited around the continent, very, very simple indeed.

ERIC VAN BEMMEL
Now, there are complaints among some Africans that Chinese projects lack transfers of technology and skills.  Is that a fair criticism?

DEBORAH BRAUTIGAM
In some ways it is fair.  I think that because the Chinese are so heavily involved in construction projects, in fact Chinese companies are doing about $35 billion worth of construction projects across the continent in any given year recently.  Only about 20 per cent of these are actually paid out of Chinese finance and the other 80 per cent are financed in various other ways.So you have got these $35 billion worth of construction projects going on. And a lot of these are being done with as I mentioned African workers and they are being trained on the job, but they aren’t being trained necessarily to maintain these projects.  They are not being trained in the kinds of necessarily the electrical work or the skilled maintenance kinds of plumbing, all of these kinds of things.  Even if they are trained as part of the project, there is no guarantee that they will be kept there.  They might be transferred to some other part of the Government if they come from the Government.So within those construction projects I would say, the technology transfer is not very good and it could be a lot better.  Now, that said, the Chinese have tried to compensate for this in places like Ethiopia where they have received complaints about not employing enough Ethiopians on their projects.  So they set up a vocational technology institute in downtown Addis Ababa, the capital of Ethiopia and Ethiopians are being trained there and Chinese are actually doing the teaching as well as having built that institute.Then they have a lot of other training programmes.  There is something like 30,000 Africans that have gone to China for short term training as well as at this point about 6000 Africans every year are receiving university degrees in China.So I would say that the construction projects, not a lot of technology transfer through the Chinese Government and therefore an aid program, visitor programs, there's a lot more training going on and then of course in the factories there is lots of training.  So that kind of thing is a technology transfer.

ERIC VAN BEMMEL
Deborah, one often hears in the western press anyway about contentious labour relations between African workers and Chinese managers.  What are your thoughts on that?

DEBORAH BRAUTIGAM
I think that's absolutely true, Eric.  You have investors and managers coming from China where you don’t have labour unions to speak of, certainly not independent labour unions and they don’t have a high degree of corporate social responsibility. They are used to pretty top down labour relations and they come to Africa where you do have labour unions and you do have workers that are used to being treated better.  They have contentious labour relations.So you see this in particular in some examples of mines where Human Rights Watch has studied one mine in particular in Zambia and established that the human rights problems and the brutality and the lack of standards in terms of safety for them were quite shocking and so that is definitely true.  It's not true everywhere.  It's not true in every project but it's a problem and there have been cases where Chinese managers have been killed by workers, one coal mine in Zambia has a particularly notorious labour relations.  There are other examples where the labour relations seem to be fine.  Some Chinese companies are learning I think how to manage African workers but there is no question that standards and practices in China have not transferred smoothly to the African context.  A more interesting aspect perhaps is that a study that was done by labour unions and a labour NGO based in Namibia, they did studies of Chinese labour relations in a number of different countries in Africa and they found that by and large the Chinese were worse than other foreign investors in terms of their labour relations, but they were about the same as African investors.  So that they weren't that different from the local labour relations amongst black African investors and I say, black because in Namibia you have a lot of investors of European extraction who are also Namibian and they tend to have high labour standards than those that are more indigenous and smaller and medium scale.

ERIC VAN BEMMEL
Deborah, finally to what extent does the conversation about China and Africa involve issues of race and racism?

DEBORAH BRAUTIGAM
This is another unfortunate side of the engagement.  For decades we have seen problems of racism in this relationship.  In the 1970s for example African students who were studying in China were perceived as very alien in a lot of ways and there were problems at some of the universities, even riots against these African students.  Chinese students were concerned about interracial dating and they had cultural clashes.These same concerns which really are based in racism, you could say about the Chinese in Africa.  The Chinese themselves I think by and large have a kind of a casual racism that in the west is no longer politically correct, even though some people may still feel it, but for the Chinese they have no hesitation about saying racist things about some of the people who work for them in Africa.  I have heard this with my own ears in Chinese so it was something they didn’t hold back on at all.  I think the cultural practices are very different.  The Chinese do work very hard.  This is an unusual aspect I think globally about Chinese workers and that's often not the case in Africa.  So this leads to disparaging remarks and general assumptions about what Africans are like.  So that's an unhappy part of this relationship.It's not the case everywhere of course.  You have Africans and Chinese that have formed warm bonds and marriages and that's happening a little bit more but I would say, it is still relatively rare.

ERIC VAN BEMMEL
Deborah, we will leave it there.  Thank you very much for joining us on Up Close.

DEBORAH BRAUTIGAM
Eric, it has been a pleasure.  Thanks for having me.

ERIC VAN BEMMEL
That was Deborah Brautigam, Professor and Director of the International Development Program at the School of Advanced International Studies at Johns Hopkins University in the United States.  We have been talking about the many layered engagement of China and the Chinese in Africa. Relevant links, a full transcript of this and all our episodes can be found at our website at upclose.unimelb.edu.au.  Up Close is a production of the University of Melbourne Australia.  This episode was recorded on 19 December 2012 and produced by Kelvin Param and me, Eric van Bemmel.  Audio engineering by Gavin Nebauer.  Up Close is created by me and Kelvin Param.  Thanks for joining us.  Until next time, goodbye.

VOICEOVER
You have been listening to Up Close.  We are also on Twitter and Facebook.  For more info visit upclose.unimelb.edu.au.  Copyright 2013.  The University of Melbourne.


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