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 Day 19

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The Big BRICS

China Finds Its Place

by VIJAY PRASHAD

An old colonial saw worries about the entry of the Asians into European colonies in Africa and its settler colonies (of Australia, New Zealand and South Africa) – they will arrive to be field labor and shop-keepers, multiply by migration and by procreation and then supplant the white man from their own colonies. A broadside by the Johannesburg based colonial L. E. Neame (The Asiatic Danger in the Colonies), published in 1907, warned that if the Asians came to Africa, these “inferior masses who, with all their virtues, will underlive and undersell” the Europeans. After the Chinese migrate to Australia, Neame worried, “the Chinaman would become sufficiently expert to do the work, and the white man be compelled to join the ranks of the unemployed, or accept a Chinaman’s wages and live down to the Chinaman’s standard.” The danger was not to the Africans or the Aborigines, whose well-being was not Neame’s problem, but to the European.

A hundred years later, North Atlantic writings on the Chinese in Africa are far more genteel in their offensiveness. A few titles will suffice:

China Safari: On the Trail of Beijing’s Expansion.

Crouching Tiger, Hidden Dragon? Africa and China.

The Age of the Dragon: China’s Conquest of Africa.

The Dragon’s Gift: The Real Story of China in Africa.

The Morality of China in Africa: The Middle Kingdom and the Dark Continent.

Clichés abound. Dragons and Tigers must be part of the story. So too must hunting. Africa is subordinate; China is the predator. The story line from Old Neame is relatively unchanged. Then it was the small merchant and the agricultural worker who was the worry; now it is the Chinese state, its public sector firms and the Chinese entrepreneur.

Australian mining firms, such as Rio Tinto, Newcrest, and Ivanhoe, have all begun to excavate the African sub-soil for copper and platinum, gold and iron ore. The Australia-Africa Mining Industry Group has designs on vast projects, compensating for regulations in Australia that have sent costs upwards. No books have appeared with the following titles:

Crocodile Africa: Australia Mines the Dark Continent.

Dingoes Dig the Savanna: What is Australia Doing in Africa?

The Adventures of Rio Tinto, King of Guinea.

What Chinese business is doing, in essence, is not so very different on the surface from any other country’s firm. A hunt for resources and markets has detained Capital since the 19th century – and this is precisely what motivates the Chinese and others to bring their surplus and their needs to places such as Africa. There is nothing mysterious or inscrutable about what the Chinese are up to. Their Capital seeks what all Capital seeks – investments, resources and markets. To claim otherwise is to fall into the old colonial anxiety about the Asiatic Menace.

Besides a new UN study shows that the largest investors in Africa are France, the United States, Malaysia, China and then India. If there is any residual worry it should be spread equally amongst these five states, two of the largest investors being from the North Atlantic.

In that most unlikely anti-imperialist journal, The Financial Times, Nigeria’s Central Bank chief Lamido Sanusi, another unlikely anti-imperialist, wrote, “It is time for Africans to wake up to the realities of their romance with China.” “So China takes our primary goods and sells us manufactured ones,” wrote Sanusi, “This was also the essence of colonialism.” Africa, he argues, “is now willingly opening itself up to a poorerprashadnew form of imperialism. We must see China for what it is: a competitor” (“Africa Must Get Real About Chinese Times,” March 11). Sanusi essayed no broadside against North Atlantic imperialism. That simply would be gauche.

What is the antidote to Africa’s problem? African countries must “produce locally goods in which we can build comparative advantage, but also actively fight off Chinese imports promoted by predatory policies.” In other words, African states need to craft import-substitution schemes as in the 1960s and 1970s – although these very schemes were assaulted by the North Atlantic states in the name of globalization, promoted enthusiastically by the Financial Times and by Sanusi himself. “Investment in technical and vocational education is critical,” says Sanusi, although he does not tell us how this is to be funded. Sanusi is in favor of the withdrawal of Nigeria’s fuel subsidy, and would like to open up the fuel markets – there is no Venezuelan solution to Nigeria’s own education policy, namely to use the super-profits and royalties from the oil sector to finance a massive human development project. Far easier to warn about the Asiatic menace and champion policies that you actually oppose than to truly grapple with the stranglehold of class power in African states.

Sub-Saharan Africa, according to the most recent Human Development Report (2013), “has become a major new source and destination for South-South trade. Between 1992 and 2011, China’s trade with Sub-Saharan Africa rose from $1 billion to more than $140 billion.” The North Atlantic, notably the US, has tried all manner of mechanisms to compete against China, including pressure through the WTO, bilateral pressure on its regional allies and of course the threat of the Africom (the African Command). Nothing has worked.

China is not in Africa on a missionary project. It is in African countries as part of its own accumulation strategies. I asked Ibrahim Kaduma, Tanzania’s former Foreign Minister, how he would approach the Chinese investments in Africa. He said that “African states need to come up with their own assessment of their path forward” and engage with the Chinese or any other investor on the basis of these values. Absent a strong foundation, and absent a clear program for development, the new elites accommodate whoever comes in, often for a very small price paid to them personally. The nation suffers as a result.

Stopping over in Dar es Salaam, China’s new leader Xi Jinping sought to assuage the growing disquiet in the continent over China’s investments. “Africa belongs to the African people,” he said. “In developing relations with Africa, all countries should respect Africa’s dignity and independence.” Such moist rhetoric is familiar to the continent. Capital tends to speak in this register. It does not like to portray itself as heartless. Nevertheless, there is a strand in African affairs that sees things from a positive light. Donald Kaberuka of the African Development Bank hopes to learn from the Chinese “how to organize our trade policy, to move from low to middle income status, to educate our children in skills and areas that pay off in just a couple of years.” In other words, there is an African constituency that seeks to follow the Chinese Road or at least the Flying Geese Paradigm to benefit the growth rates of African states.

These views do not emerge out of a hallucination. “To check the adverse consequences of rising exports to some of its partners,” the Human Development Report (2013) notes, “China is providing preferential loans and setting up training programmes to modernize the garment and textile sectors in African countries. China has encouraged its mature industries such as leather to move closer to the supply chain in Africa and its modern firms in telecommunications, pharmaceuticals, electronics and construction to enter joint ventures with African businesses.”

No doubt that Chinese investment is already building a vast communication and transportation network in Africa. No doubt either that Chinese business is building up industrial infrastructure and with it institutions for education and health. No doubt too that Chinese aid and grants come without “conditionalities.” All investment, whether from the North Atlantic or Asia, comes for the raw materials and the markets. But North Atlantic money also sought political power, with the US pushing its funds via the government’s Agency for International Development, a phantom arm of the State Department. China’s money comes from its Ministry of Commerce and its Export-Import Bank, who have a double mandate: to ensure access for China to raw materials (oil and rare earth minerals) and to ensure a market for China’s overheated industrial sector. Business leads the way.

This business first approach is not neutral. It reveals first a weakness in the Chinese model, petrified by the limitations of capitalism – overproducing goods through the magic of industrial capitalism; underpaying workers who cannot buy these goods; delivering credit as a mechanism to produce demand; seeking new pastures for cheaper raw materials to reduce the cost of the final good, and for markets to sell these goods. This is the satanic cycle of capitalism. China is an export-oriented industrial giant gradually shut out from the saturated consumer-driven debt economies of the North Atlantic, and therefore now eager, even desperate, to create and cultivate new markets in the South. This is precisely the lever that African countries could use to make the best of their current situation. Without a clear-cut social democratic or socialist project, “values” in Kaduma’s lexicon, what you end up with are bad deals for Africa negotiated by venal politicians who are eager to skim their own share of the cream.

As Xi arrives in Durban, the BRICS summit will announce the formation of a BRICS Development Bank with a $50 billion capital chest (China has a surplus of $3.31 trillion, a vault that will be likely be recycled through this kind of bank). But there are grave doubts about the model of the investment, coming in to promote resource extraction rather than social development. There is worry too that the new BRICS Bank, which is likely to be housed in Shanghai, will be a well-capitalized Southern version of the World Bank rather than the kind of development bank envisaged by BancoSur (before its radicalism was tempered by the Brazilian government – as pointed by Oscar Ugarteche and Eric Toussaint). The kind of regimes that now control the BRICS process are constrained by their own class projects – they favor neo-liberal policies as long as these do not discriminatorily favor the North.

Vijay Prashad’s new book, The Poorer Nations: A Possible History of the Global South, is out this month from Verso Books.