Post by sapuco on Feb 14, 2010 9:31:17 GMT 4
The New Rules: China in Africa Means Frontier Integration
Thomas P.M. Barnett | 08 Feb 2010
Last week in Cape Town, South Africa, I was a keynote speaker at the massive Mining Indaba conference, the premier annual gathering of global extractive companies involved in Africa's dominant economic sector. And the difference between the many military and aid conferences I've attended on Africa and this international commodities convention in Africa was telling. If you think most Americans now obsess over a "rising" China, you should know that we take a backseat to the Africans on this score. But whereas we often see China's rise as a potential threat, Africans see it as an opportunity, and China's "positive resource alliance" -- as another speaker put it -- is the primary reason why.
In my writings and speech-making around the planet, I have long portrayed China's rapid penetration of resource-rich developing economies as something both good (e.g., infrastructure enhancing) and bad (e.g., done with little care for human rights and the environment) -- but, above all, inevitable. China's simultaneous industrialization, urbanization, modernization and globalization of its economy simply compel this vast outreach effort, characterized by the nation's stunning uptick in outward foreign direct investment flows. As one of the "last in" on globalization's bandwagon, China has naturally become an aggressive integrator of frontier economies.
Nowhere is this expansion more apparent, and controversial, than in Africa -- and specifically in sub-Saharan Africa, where Chinese foreign direct investment and trade have increased several-fold in the past half-decade. To many observers, China's out-of-the-blue economic penetration, no matter its mercantilist tint, must be viewed as an overall positive. While the West in general, and the U.S. in particular, look upon Africa primarily as an aid sinkhole and never-ending source of civil strife (not to mention future terrorists), China's ravenous resource requirements are fueling a commodities boom across much of the continent. That has triggered rising strategic interest in a region arguably long-ignored by the West.
Yes, China's involvement is highly concentrated in oil and mining, as well as in a small cluster of resource-rich countries (e.g., Angola, South Africa, Congo, Sudan, Nigeria and Zimbabwe), but its presence continues to both deepen and spread across the region. Africa represents 12 percent of the world's population and one-fifth of its landmass, but not much more than 2 percent of global GDP -- despite boasting two-fifths of the world's natural resources and virtually one-third of its mineral reserves. Given those disparities and the continent's sordid colonial history, the businessman in me says China deserves this chance to do better than its Western predecessors.
Certainly, China would be hard-pressed to do worse.
Already we're seeing economic growth in China and Africa begin to sync up -- meaning that, as goes China, so goes Africa. Following the recent global economic crash, while Europe appears to be stuck in an L-shaped recovery and America in a slightly less-depressing "U," China's impressive V-shaped rebound means Africa will come through the downturn about as well as could be expected. As for the perceived global economic power shift from West to East, Africa is already there.
But this is hardly a zero-sum game. What Europe once successfully did to North America in the 19th century and the U.S. repeated in East Asia in the second half of the 20th century, China -- along with India and other Asian economies -- is now doing to Africa: slotting first its resources and ultimately its labor into the lower rungs of global production chains, as the rapidly aging Chinese are forced to move up that ladder as quickly as possible. Again, consistent with the historic norm, the last one integrated has become globalization's newest replicator.
If this dynamic strikes you as evidence of China's ambition to "rule the world," remember which superpower re-launched this global "conspiracy," in its post-colonial form, almost seven decades ago.
Already, African states have become China's primary source for crude oil, cobalt, manganese, chromium and platinum. In general, China's demand for African resources continues to grow while the rest of the world's appetite diminishes, meaning that, as far as Africa is concerned, globalization is primarily a Chinese phenomenon. And the more that globalization's prime "mover and shaker" invests in Africa, the more the rest of the global economy starts viewing the continent in similar "bargain" terms, creating a positive bandwagon effect.
Why is this so crucial?
Left to their own devices, the always-in-a-hurry Chinese will bribe their way into any "resource-cursed" economy, often paying above-market prices as a result. The Chinese today, much like the West four decades ago regarding oil, want to own the resources -- as much as possible -- in the ground. They view commodity risk primarily in terms of supply, while the advanced West now views it primarily in terms of price. That means the Chinese are also willing to finance all infrastructure development necessary to access the resources, something that benefits African economies in a broader sense.
The nifty upshot is that the West's longtime monopoly on infrastructure development in Africa is finally broken, as our aid-driven investments are now forced to compete with China's business-driven investments. But China's rapid penetration also attracts the competitive efforts of other emerging economies, thus encouraging the Chinese to improve their heretofore rather mercantilist offerings. The true winner in both instances? Africa's emerging middle class, who should get just rich enough -- and thus assertive enough -- to demand even more democratization of political systems across the continent in coming years, continuing a positive trend of the past two decades.
But here's where it gets tricky for the Chinese. Globalization has a tendency to "re-map" fake states, and Africa has plenty such colonial creations, featuring oddly straight borders that do not correspond to underlying tribal identities -- or, more importantly, to disparate sub-national economic trajectories. When globalization enters such fake states, it's always the richest and most ambitious parts of the country that seek a "divorce" -- namely, some increased independence to pursue a better deal with the global economy.
Examples? Consider the Croatians or Slovenes in the former Yugoslavia, or the Kurds' ambitions in the now less-than-unitary Iraq. Check out the restive -- and rich -- province of Santa Cruz in Evo Morales' increasingly socialist Bolivia, or the underlying economic motivations (North versus South) in Sudan's upcoming plebiscite. As importantly, notice how when America intervenes in such unstable fake states, U.S. troops are often forced to play midwife to the resulting offspring.
So even though Africa already has more states per square mile than any other continent, it's likely to wind up with even more as globalization takes far deeper root. True, the promising rise of regional economic integration schemes -- like those proposed for the East African Community -- is counterbalancing this inevitable fracturing process, and it's hard to tell which trend will prevail over time. But one thing is certain: China will be increasingly hard-pressed to watch from the sidelines when things go bad.
That's not just a function of China's investments in energy, minerals and the associated infrastructure, but also because of its efforts to buy up arable land in countries like Ethiopia. Add the fact that, in some African nations, Chinese immigrants now outnumber colonial-era European populations, and you've got a potent mix of hard-to-ignore strategic interests.
Of course, for now, China's official line is all peace and harmony and non-interference -- spoken like a true neophyte superpower that has yet to face any strategic conundrums.
But notwithstanding alarmists' concerns, even an "all grown up" Chinese superpower, willing to take responsibility for its strategic commitments, will represent a distinct upgrade to global stability -- so long as the right relationships with other great powers are built into that growth process. The problem is that, for now, those relationships are not being built. Indeed, the most important bilateral relationship in this regard -- Sino-American -- seems to be regressing these days, with regions like Africa not even on the agenda. Where are the strategic policymakers on both sides of this putative dialogue? So far, nowhere to be seen.
Time -- and strategic opportunity -- is wasting.
Thomas P.M. Barnett | 08 Feb 2010
Last week in Cape Town, South Africa, I was a keynote speaker at the massive Mining Indaba conference, the premier annual gathering of global extractive companies involved in Africa's dominant economic sector. And the difference between the many military and aid conferences I've attended on Africa and this international commodities convention in Africa was telling. If you think most Americans now obsess over a "rising" China, you should know that we take a backseat to the Africans on this score. But whereas we often see China's rise as a potential threat, Africans see it as an opportunity, and China's "positive resource alliance" -- as another speaker put it -- is the primary reason why.
In my writings and speech-making around the planet, I have long portrayed China's rapid penetration of resource-rich developing economies as something both good (e.g., infrastructure enhancing) and bad (e.g., done with little care for human rights and the environment) -- but, above all, inevitable. China's simultaneous industrialization, urbanization, modernization and globalization of its economy simply compel this vast outreach effort, characterized by the nation's stunning uptick in outward foreign direct investment flows. As one of the "last in" on globalization's bandwagon, China has naturally become an aggressive integrator of frontier economies.
Nowhere is this expansion more apparent, and controversial, than in Africa -- and specifically in sub-Saharan Africa, where Chinese foreign direct investment and trade have increased several-fold in the past half-decade. To many observers, China's out-of-the-blue economic penetration, no matter its mercantilist tint, must be viewed as an overall positive. While the West in general, and the U.S. in particular, look upon Africa primarily as an aid sinkhole and never-ending source of civil strife (not to mention future terrorists), China's ravenous resource requirements are fueling a commodities boom across much of the continent. That has triggered rising strategic interest in a region arguably long-ignored by the West.
Yes, China's involvement is highly concentrated in oil and mining, as well as in a small cluster of resource-rich countries (e.g., Angola, South Africa, Congo, Sudan, Nigeria and Zimbabwe), but its presence continues to both deepen and spread across the region. Africa represents 12 percent of the world's population and one-fifth of its landmass, but not much more than 2 percent of global GDP -- despite boasting two-fifths of the world's natural resources and virtually one-third of its mineral reserves. Given those disparities and the continent's sordid colonial history, the businessman in me says China deserves this chance to do better than its Western predecessors.
Certainly, China would be hard-pressed to do worse.
Already we're seeing economic growth in China and Africa begin to sync up -- meaning that, as goes China, so goes Africa. Following the recent global economic crash, while Europe appears to be stuck in an L-shaped recovery and America in a slightly less-depressing "U," China's impressive V-shaped rebound means Africa will come through the downturn about as well as could be expected. As for the perceived global economic power shift from West to East, Africa is already there.
But this is hardly a zero-sum game. What Europe once successfully did to North America in the 19th century and the U.S. repeated in East Asia in the second half of the 20th century, China -- along with India and other Asian economies -- is now doing to Africa: slotting first its resources and ultimately its labor into the lower rungs of global production chains, as the rapidly aging Chinese are forced to move up that ladder as quickly as possible. Again, consistent with the historic norm, the last one integrated has become globalization's newest replicator.
If this dynamic strikes you as evidence of China's ambition to "rule the world," remember which superpower re-launched this global "conspiracy," in its post-colonial form, almost seven decades ago.
Already, African states have become China's primary source for crude oil, cobalt, manganese, chromium and platinum. In general, China's demand for African resources continues to grow while the rest of the world's appetite diminishes, meaning that, as far as Africa is concerned, globalization is primarily a Chinese phenomenon. And the more that globalization's prime "mover and shaker" invests in Africa, the more the rest of the global economy starts viewing the continent in similar "bargain" terms, creating a positive bandwagon effect.
Why is this so crucial?
Left to their own devices, the always-in-a-hurry Chinese will bribe their way into any "resource-cursed" economy, often paying above-market prices as a result. The Chinese today, much like the West four decades ago regarding oil, want to own the resources -- as much as possible -- in the ground. They view commodity risk primarily in terms of supply, while the advanced West now views it primarily in terms of price. That means the Chinese are also willing to finance all infrastructure development necessary to access the resources, something that benefits African economies in a broader sense.
The nifty upshot is that the West's longtime monopoly on infrastructure development in Africa is finally broken, as our aid-driven investments are now forced to compete with China's business-driven investments. But China's rapid penetration also attracts the competitive efforts of other emerging economies, thus encouraging the Chinese to improve their heretofore rather mercantilist offerings. The true winner in both instances? Africa's emerging middle class, who should get just rich enough -- and thus assertive enough -- to demand even more democratization of political systems across the continent in coming years, continuing a positive trend of the past two decades.
But here's where it gets tricky for the Chinese. Globalization has a tendency to "re-map" fake states, and Africa has plenty such colonial creations, featuring oddly straight borders that do not correspond to underlying tribal identities -- or, more importantly, to disparate sub-national economic trajectories. When globalization enters such fake states, it's always the richest and most ambitious parts of the country that seek a "divorce" -- namely, some increased independence to pursue a better deal with the global economy.
Examples? Consider the Croatians or Slovenes in the former Yugoslavia, or the Kurds' ambitions in the now less-than-unitary Iraq. Check out the restive -- and rich -- province of Santa Cruz in Evo Morales' increasingly socialist Bolivia, or the underlying economic motivations (North versus South) in Sudan's upcoming plebiscite. As importantly, notice how when America intervenes in such unstable fake states, U.S. troops are often forced to play midwife to the resulting offspring.
So even though Africa already has more states per square mile than any other continent, it's likely to wind up with even more as globalization takes far deeper root. True, the promising rise of regional economic integration schemes -- like those proposed for the East African Community -- is counterbalancing this inevitable fracturing process, and it's hard to tell which trend will prevail over time. But one thing is certain: China will be increasingly hard-pressed to watch from the sidelines when things go bad.
That's not just a function of China's investments in energy, minerals and the associated infrastructure, but also because of its efforts to buy up arable land in countries like Ethiopia. Add the fact that, in some African nations, Chinese immigrants now outnumber colonial-era European populations, and you've got a potent mix of hard-to-ignore strategic interests.
Of course, for now, China's official line is all peace and harmony and non-interference -- spoken like a true neophyte superpower that has yet to face any strategic conundrums.
But notwithstanding alarmists' concerns, even an "all grown up" Chinese superpower, willing to take responsibility for its strategic commitments, will represent a distinct upgrade to global stability -- so long as the right relationships with other great powers are built into that growth process. The problem is that, for now, those relationships are not being built. Indeed, the most important bilateral relationship in this regard -- Sino-American -- seems to be regressing these days, with regions like Africa not even on the agenda. Where are the strategic policymakers on both sides of this putative dialogue? So far, nowhere to be seen.
Time -- and strategic opportunity -- is wasting.