China, Africa and the world after COVID-19

The Coronavirus crisis has created a welcome opportunity for us to reassess the relationship between China and Africa on several levels – trade, supply chains, excessive borrowing and predatory lending, racism towards Africans.

Our eyes are now (or should be) clear, but some years ago, in the haze of Chinese courtship of Africa, I argued against the conventional wisdom: Africa was not “rising” (what is the continent’s industrial productivity or a clearly noticeable worldview to drive a rise?) but only “emerging”.

Africa simply became the “Sinosphere”, a Chinese “takeaway”

Some of us argued that African countries are approaching their relationship with China on the wrong foot, that it provided an opportunity to learn some important lessons, but we were focused on the wrong things. We thought that seemingly cheap loans, trade (with trade deficits in favor of China), virtually all African leaders “reporting” in Beijing for diplomatic summits with China’s helmsman, and fine words of solidarity, meant that love was in the air. Today, many countries are taking a second look at their relationships with China, a world power no one can ignore.

China’s economy has been dented by COVID-19. Its $300 billion in trade with Africa is threatened, and more important, African countries can’t pay their $200 billion in debt to China and are asking for debt forgiveness.

China is NOT in the business of debt forgiveness

China also is unlikely to be able to finance its “New Silk Road” infrastructure initiatives in African countries in the immediate future, and the economies of African countries will be depressed after Covid-19. All in all, China’s economic adventure in Africa has seemingly become far less profitable than it once was, at least in the immediate future.

The China-Africa relationship must be shifted away from a focus on extractive industries

How did we get here? My purpose here is to set out the back story on Africa and China, and perhaps we can use it as a guide to the future. The motto of my alma mata the London School of Economics is “rerum cognoscere causas” (to know the causes of things). This is vital for sustainable progress.

China should be a lesson for Africa at three fundamental levels. First, how communist China became a member of the United Nations only in 1971 and achieved global reckoning in 40 years. Second, how China achieved internal economic transformation, then globalized it to achieve dominance.

Third, China is a great example, of relevance to Nigeria in particular, of how a large population can be harnessed to achieve a demographic economic dividend of gargantuan proportions. But first, it had to bring its population under control before this could happen.

Not least important, China offers a classic lesson in the importance and potency of a coherent worldview backed by masterful strategy, which is what my book Emerging Africa recommends to African leaders and peoples.

The China-Africa relationship offered an opportunity to both parties to create an axis of influence that, unlike Africa’s history with the west as nothing more than exploited client states, Africa’s strategic relationship was also served by this relationship.

This opportunity was blown because African countries could not identify correctly, let alone press, their own fundamental interests. They lacked a worldview. Corruption also caused people to look the other way. And it all became China’s game. Africa simply became the “Sinosphere”, a Chinese “takeaway”.

China hasn’t just discovered Africa. In the 1950s it supported Egypt’s seizure of the Suez Canal, and backed the decolonisation of Africa at the Bandung Africa-Asia Conference in 1955. China established diplomatic relations with Ghana on the latter’s independence in 1957.

Second, the China-Africa relationship in the 60/70s was rooted in three things: China’s competition with the Soviet Union for global socialist influence, a shared history of humiliation that led China to support anti-colonial struggles, and its effort to isolate Taiwan.

Third, with China’s capitalist economic transformation started in 1978 by Deng Xiaoping, it’s influence in Africa is now driven more by the need for raw materials and energy to support its economy than was the case in the socialist past when it was more about “solidarity”.

Fourth, Africans were inspired by China’s success. The Asian global giant seemed to demonstrate that poverty was not destiny. Fifth, the rising relationship was part of China’s strategic positioning in its increasing competition with Western powers.

Africa was sucked in by China’s emphasis on business with “no questions asked” (meaning, “we don’t care about your human rights record”). And, also, by the emphasis on “infrastructure” which seemed very “practical” compared to the western focus on democracy/ institutions. But our leaders did not ask themselves a simple question: is who is giving you what, between China and the West, the basis of the economic transformation of your country? Instead, like the abused spouse, African leaders now felt “romanced” because someone “appreciated” them.

The responsibility to respect and enforce human rights in African countries is primarily that of our countries, not China or the US. The US and the West care about it because it’s part of their own worldview, which is built partly on human rights and individual freedom. The Chinese care less about human rights in Africa because they have other priorities (our raw materials) and because their own worldview is built on something else: order and stability in their society as an end, and so the collective matters more than the individual.

The China-Africa relationship must be shifted away from a focus on extractive industries. Trade relations, marked by a hideous imbalance, should be repositioned. Africa’s development salvation doesn’t lie abroad; it can only come from within. China won’t and can’t “develop Africa”, and nor can the West. The sun may rise in the east but even China knows it hasn’t set in the west. Africa should use its relationship with China to seek strategic changes in that with the west. China feels it’s future and image as a global power is tied significantly to Africa. This gives Africa bargaining power.

Africa’s current relationship with China is not advancing our strategic interest. That interest is to become productive economies with a manufacturing industrial base. The China-Africa “special relationship” is preventing this interest from being realised.

Trade is the reason and the solution. We must challenge the “dumping” of cheaply produced, sub-standard Chinese goods on African countries at the World Trade Organisation (WTO) Dispute Settlement mechanism. Forex import bans like those the Central Bank of Nigeria has stipulated, or banning whatever else, while we sign deals to trade in Chinese yuan-renminbi, won’t solve our problem. What’s essential is to deploy trade policy to challenge and alter the structural disadvantage we suffer in the world trading economy.

Africa’s trade relationships with China perpetuate this structural disadvantage. We must pursue our rights at WTO including making a case for unique tariff regimes that will allow our local manufacturers to thrive, with their competition coming from within the African Continental Free Trade Area, provided the “Rules of Origin” are truly enforced and not gamed by foreign trade powers.

China’s vastly expanded foray into Africa over the past two decades is part of a worldview of global expansion and economic dominance. The question for Africa is: what is the continent’s worldview approach to China? For all of Africa’s strategic importance to China, Africa still remains a small part of China’s total world trade, roughly in the region of 3 percent. Outside of Asia, China’s main sphere of economic activity, the rising superpower is also heavily invested in Latin America – portfolio diversification!

There are some vital lessons we can learn from China. One, economic development and transformation flows first from effective internal political organisation. The Chinese “state-capitalist” economy is directed strategically by a COMPETENT, cohesive Chinese Communist Party government. Second, the Chinese state provides a supportive and conducive environment for Chinese companies to thrive internally and externally in world trade through competent economic policy and incentives. There is an obvious overall, cohesive strategy at play.

Third, the importance of philosophical worldviews as a foundation for true development, and the consistency of that worldview and its disciplined application to the organisation of the country’s economic system. A shared worldview is how the Chinese authorities mobilise their citizens for economic productivity.

The Chinese worldview is based largely but not completely on their Confucian religion. That worldview is this: Time is endless, and is one continuum (this is why they think in 50-100 year horizons, not just about now or in Ad Hoc fashion like “some people”!); order/stability is an end in itself, not just a means to an end; and, therefore, the society is more important than the individual. This worldview is very different from the western one, which is based on individual freedom and independent institutions, and rational thinking and innovation. But it also has worked well.

Worldviews are subjective – racism and the transatlantic slave trade were based on a worldview of racial superiority. But if consistently applied, worldviews can create prosperity and world orders. They can also be dislodged by an opposing worldview: slavery/colonialism ended as the human rights worldview rose in the West and in Africa itself, reflected in the latter as the struggle for freedom.

Thus, unity of purpose in the Chinese society has been essential to the rise of China. The lesson for Nigeria and other African societies, which are burdened by ethnic and religious disparities (just like the US, the preeminent world power, is a country of many races) is that they must overcome their internal divisions if they are to rise as nations. Development begins first in the mind, for “as a man thinketh, so is he”. This requires the emergence of leaders with a worldview of transformation, a vision behind which their polities and citizens can be reorganised, before economic transformation can happen. Look at the discipline that drives China.

Solange Guo Chatelard wrote: “If there’s one thing African states can learn from China, it is how to imagine their future, explore new possibilities, and engage with the rest of the world while retaining control over the conditions of those engagements”.

Kingsley Moghalu, a former deputy governor of the Central Bank of Nigeria, is the author of Emerging Africa: How the Global Economy’s Last Frontier Can Prosper and Matter (2014: Bookcraft, Ibadan/Penguin Books, London)