The title of this post is taken from Vladimir's Lenin's famous treatise, "Imperialism: The Highest Form of Capitalism," in which he offers the Bolshevik perspective on WW I. It's often compared with John Hobson's work on empire, also from the early 20th century. State Capitalism is a characterization of the Chinese business model. The name is self-explanatory, the question is whether it is sustainable against global free market forces and domestic turmoil should the model begin to lag in implementation.
Here is a very useful map of Africa illustrating Chinese investments on the continent. The map was published in August 2012 in Business Insider.
In this online publication from Zimbabwe, issue is taken with a recent book that praised China as an investment partner for Africa. It's an illustrative case of the broader, global puzzle into which this debate fits. This portion is telling:
China’s opaque business dealings with dictatorships reveal that it is not interested in the development of the country and communities where it operates from, hence it pays little regard to business ethics, transparency and accountability.
While the Chinese played an important role in the decolonisation process on the African continent, and Zimbabwe in particular, I’m afraid its involvement in the country now is retrogressive as it is only concerned with extraction, not development. While failing to promote development in Africa, China has however successfully helped to prop up repressive regimes which are mortgaging their resources to it.
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It's difficult to not observe China's behavior and not associate it with long-standing notions of neo-imperialism. The goal is wholly material and not in the least social: deals are made for the extraction of vital natural resources, with socio-political concerns not part of the equation. Even assuming China remains disengaged from direct involvement in political and military affairs in Zimbabwe and elsewhere, there are consequences to not acting and there are consequences to the development that is taking place. The Zimbabwean quoted above notwithstanding, consider the long-term effects of China's investments in universities. First, there is the Forum on China-Africa Cooperation. Just on the opening page of FOCAC's webpage are a few new headlines that exemplify where I'm going with this:
Congo borrowing $1.1 billion USD from China
Chinese firms set up railway technology training center in Nigeria
Africa becomes largest Chinese medicine export market
At this past summer's FOCAC meeting, President Hu Jintao himself announced new levels of Chinese support for training and education in Africa, as summarized here (quoted below); the full text of the speech is here
“China will implement the African Talents Programme to train 30,000 personnel in various sectors, offer 18,000 government scholarships and build cultural and vocational training facilities....China will continue to implement the China-Africa Joint Research and Exchange Plan to sponsor 100 programmes for research, exchange and cooperation by academic institutions and scholars of the two sides."
“China and Africa should increase cultural and people-to-people exchanges and encourage exchanges and interactions between the two sides in education, culture, science and technology, health, sports and tourism.”
Hu Jintao said China had trained close to 40,000 Africans in various sectors and provided more than 20,000 government scholarships to people in African countries.
“China and Africa have set up 29 Confucius Institutes in 22 African countries. Twenty pairs of leading Chinese and African universities have entered into cooperation under the 20+20 Cooperation Plan for Chinese and African Institutions of Higher Education,” he added.
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Have a look at the Confucius Institutes referenced above here.
These exercises in soft power will not necessarily spare China from entanglement in African political affairs. As China is learning at home, education, skills, and jobs lead to public expectations that these qualities of life will continue, and that they will pay off benefits beyond the family throughout civil society. Evolving public expectations often challenge the prevailing social order; we can look to the Arab Spring and to the 100,000 annual protests in China itself for ideas of what can come next.
More immediately, even the extent of contact China has established in Africa has brought out tensions, which the United States sees as opportunities. Some examples are cited in this Christian Science Monitor article covering Secretary Clinton's August trip to Africa this past August.
This report by the Congressional Research Service from June, 2012, contains much useful information. A textbox within the report contains this summary:
Comparing Chinese and U.S. Trade with Africa
The value of total trade between China and Africa stood at $8.9 billion in the year 2000. In 2009, Chinese-African trade, totaling $70.4 billion, surpassed that of U.S.-Africa trade ($62 billion), and reached $127.3 billion in 2011, an increase of 1,423% over the 2000 level.25 Africa’s share of global Chinese trade also grew over the past decade, from 1.9% of Chinese global trade in 2000 to 3.5% of China’s global trade in 2011. China is also Africa’s largest single source of imports, while the United States is its largest export destination. In 2011, about 62% of African exports to China consisted of crude oil (over $24.77 billion of which came from Angola, the source of over 9% of China’s oil imports in 2011). Another 34% was made up of raw materials, mostly metal commodities and wood. Oil also dominates Africa’s exports to the United States; crude oil made up about 75% of U.S. imports from Africa in 2011. Both China and the United States export a highly diverse, variable array of products to Africa, notably equipment, machinery, vehicles, and other technology. U.S.-African trade has also grown over the past decade, but not as rapidly as Sino-African trade.
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It's a rather remarkable stat -- 1,423% in 11 years. The as yet unsaid factor in this neo-colonial race through Africa is the difference between the American model of foreign direct investment and the Chinese model, bringing us back to state capitalism, and a topic far too broad for this blog post.
I started this post on US/PRC/AFRICA as a corollary to another piece on US drone policy in Africa and elsewhere. The United States has worked to expand economic ties with Africa beyond the trade that has been dominated by three African countries, Nigeria, Angola and South Africa. In the short-term, China has advantages in its ability to centrally direct the negotiation, direction, and scale of investment projects in Africa whereas the United States is limited in this regard, able to shape the environment for private investments more so than dictate such activities. The activities that the U.S. Government does directly dictate are in the security sector, for example the counter-terrorism framework established through the CIA, U.S. Special Operations Command (USSOCOM), U.S. Africa Command (AFRICOM), and various combined joint task forces working with the African Union and African governments.
At this point, we're left with questions, the answers to which will determine much of what happens geopolitically for decades to come:
What mix of hard power and soft power brings the right results? What concerns about the people of Africa and the governments they live under should constrain positions in trade and investment negotiations? If an "African Spring" should emerge, how will this affect the outside powers and their interests? What are the long term consequences of the United States and a globalizing China competing for access to natural resources? Will this turn into a competition for the political allegiances of African leaders?
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