China in Africa – unforeseen consequences?

Speaking recently at a ceremony celebrating the 30thanniversary of the Chinese State Construction Engineering Corporation’s (CSCEC) presence in Botswana, the Botswanan Minister of Investment, Trade, and Industry stated that Botswana is ready for another round of Chinese investment. Since the 1980’s, Botswana and China have maintained a relatively peaceful relationship free of controversy and turmoil. Chinese investments have gone a long way in helping to modernize Botswana, along with providing Botswana with a large market for them to export their goods to. As Botswana looks to receive more Chinese investment, the government in Botswana may want to consider the potential risks involved with increasing economic ties with China.

Though Botswana has enjoyed relatively smooth relations with China, other states in the region have experienced considerable strains. Chinese involvement in both the Kenyan and Zambian economy has proven to be great source of economic growth, with consumers reaping the benefits of cheaper goods, increased employment opportunities, along with new infrastructure and public works projects that have improved the standard of living. However, Kenya and Zambia have taken on far more Chinese investment than Botswana has. This makes them good indicators of what could come about within Botswana if the government choses to accept more investment from the Chinese government. Although the type and amount of investment that both countries have received differs, both Kenya and Zambia have come to share the same problems that have risen due to allowing greater Chinese investment.

First, the general issues that Kenya has faced through their acceptance of Chinese investment can be best highlighted in the specific case of the Standard Gauge Railroad (SGR). On the financial side, Kenya owes 3.2 billion dollars (2.5 GBP) in debt to China for construction of the SGR. This is reflective of what occurs on a national scale, as China currently holds 72% of all Kenyan bilateral debt. With burden of debt upon the African state, economists are anxious that Kenya will not be able to pay back this immense debt owed to China, which has sparked fears that the Chinese will use this financial leverage to take advantage of Kenya. Moreover, while the project did provide thousands of new jobs to local Kenyans, it was reported that Chinese supervisors engaged in behavior that was discriminatory and racist while they also allegedly physically assaulted workers. Beyond this one railway project, many Kenyan workers who have been hired by various Chinese companies have complained of dealing with racist and abusive behavior by their Chinese bosses. Chinese nationals within these state corporations have been known to engage in criminal activities directly stemming from their work. In the case of the  SGR, three Chinese nationals were charged with attempting to bribe investigators who were looking into ticket scams being run within the SGR.

Image Courtesy of futureatles.com via Flickr © 2014, some rights reserved

In Zambia, much of the Chinese investment funds have gone towards boosting their copper mining sector, the backbone of the Zambian economy. Like Kenya, although investment has boosted employment and economic productivity, investment has attributed to strikingly similar issues. One of these shared issues is the Chinese’s poor treatment of its local employees. In the Zambian copper mining sector, four Chinese mining companies have faced allegations of inhumane treatment of their workers, with some having to work five twelve-hour days a week, to work 365 days a year with no break, and to work with chemicals and substances that have severely affected their health. Beyond the abusive treatment of local workers, Zambia’s debt with China has recently come under scrutiny, with China now set to take over the capital city’s international airport due to the Zambian government’s failure to pay back some of the debt on the loans  they took  from China. Furthermore, illegal activities committed by Chinese nationals have also been a byproduct of increased Chinese activity within Zambia, with 31 Chinese nationals arrested in 2017 on the grounds of illegal copper mining.

Looking through the contemporary examples of Zambia and Kenya, the principle of signing onto investment from China increasingly appears to be more like a Faustian bargain. Countries seeking an economic boost are willing to take the money perhaps ignorant of the possibility of the mistreatment of locals at the hands of Chinese corporations, illegal activities run by Chinese nationals, and immense debt that gives China increased financial leverage over them. In the case of Botswana, China has been surprisingly lenient with them, as China recently agreed to extend its loans and cancel some of the debt Botswana owed them. Additionally, China offered additional loan money to Botswana along with this, which further cements economic ties between the two nations. Despite having largely avoided the other overlapping issues that typically accompany Chinese investment up to now, only time will tell what will become of Botswana with their acceptance of loans from China. If Zambia and Kenya have demonstrated anything, it is that Botswana should exercise a fair amount of caution when dealing with China.

 

 

Banner Image: Image Courtesy of NASA via Wikimedia Images © 2015, public domain

Leave a Reply