China’s trade with Africa is big business. The Chinese government has so far led efforts to build good relations with host countries, and it is now time to put the ‘corporate’ into corporate responsibility, says Paul French
This August saw the publication of a new China-Africa Economic and Trade Co-operation White Paper by the Chinese government. China’s growing role in Africa is nothing new – from minerals to manufacturing and oil to agriculture, the People’s Republic is now a major investor, employer and, some would argue, exploiter, of Africa.
Needless to say Beijing doesn’t see itself as an exploiter. From the start of China’s most recent African sojourn Beijing has been keen to stress how it is different from the former European colonial exploiters or American Big Capital. Some Africans agree with this; some do not.
It is a serious business relationship. In 2012, China-Africa trade reached $198bn, a year-on-year growth of 19%. Of this, $85bn consisted of China’s exports to Africa, up 17%, and $113bn was China’s imports from Africa, up 21%.
Remember that the vast majority of the imports are minerals and energy resources rather than goods and services. For these imports it is probable that the sellers were African governments and most of the revenues went directly to them – sadly, not an overly transparent group of administrations.
However, there is growing Chinese investment too – sugar refineries in Mali, glass, fur, medical capsule and car factories in Ethiopia, and textile and steel pipe manufacturing projects in Uganda are among the best examples.
What hasn’t been stressed particularly in previous white papers on Africa from Beijing is corporate responsibility. Bringing investment and financing was largely seen as enough by Beijing – but it hasn’t been.
Communities have demanded more, as have some governments, and pressure has been applied by NGOs. At a state level China has pledged to do more to improve public amenities – digging wells for water supplies, building affordable housing, and constructing broadcasting and telecommunications facilities.
Such projects have happened, and helped, in poorer African states including Sudan, Zimbabwe, Djibouti, Guinea and Togo. Beijing has built rural schools in Malawi, and the Boali No 3 hydropower station in the Central African Republic.
So far, though, most of the corporate responsibility-related initiatives have been launched by the Chinese government, rather than the large Chinese companies operating in Africa. Beijing’s Africa-wide initiative Brightness Action, for example, treats cataract patients though a network of mobile hospitals.
And of course Beijing offers emergency funds. In 2011, Beijing provided 50m yuan ($8.2m) in emergency aid to Tunisia and Egypt to help cope with refugees stranded in the areas bordering Libya.
This may all sound good but it hasn’t always translated well for China. It can look like government handouts in return for lucrative deals – it just doesn’t feel very engaged.
Chinese firms tend to let Beijing take the reins and pay the donations. Perhaps this was partly what caused an outbreak of anti-Chinese feeling during Zambia’s last elections when some populist politicians accused Chinese mining companies of paying slave wages, of flouting basic safety and environmental standards, and of corrupting African leaders across the continent with their multi-billion-dollar “no-strings-attached” deals.
Both Zambia and Ghana have seen demonstrations against the apparent arrogance of Chinese mining companies, while other African countries (including Zimbabwe, South Africa and Lesotho) have also seen rising anti-Chinese sentiment.
Right now there are concerns in Africa among migrant Chinese communities and, back in Beijing, about African perceptions of China and the Chinese. This column has argued before that Chinese companies have been forced to improve their corporate responsibility game as they increasingly go abroad and some real improvements have been seen in some countries.
However, change is coming faster in those countries better able to enforce it – witness Chinese companies improving their performance in Europe and America – and are noticeably slower in regions where enforcement is lax, such as Africa.
The good news is that sustainable business issues in Africa by Chinese companies is now being talked about – it’s included in the annual China-Africa Economic and Trade Co-operation White Paper.
However, it is still far too top-down. Beijing is having to make the initiatives. Ground level, individual company initiatives on corporate responsibility could be one way of diffusing these rising tensions.
Based in Shanghai, Paul French is an independent China analyst and writer.China China column China Government China trade