United States Department of State (Washington, DC)
Thomas J. Christensen and James Swan
4 June 2008
document
The following is the statement of Thomas J. Christensen, Deputy Assistant Secretary for East Asian and Pacific Affairs, and James Swan, Deputy Assistant Secretary for African Affairs on China in Africa before the Subcommittee on African Affairs of the Senate Foreign Relations Committee on China in Africa on June 4, 2008.
Mr. Chairman, Senator Isakson, and Members of the Committee, thank you for the opportunity to address the subject of China’s growing engagement with Africa and its ramifications for U.S. foreign policy.
China’s growing presence in Africa has generated significant discussion during the last several years. This attention reflects the reality that China has important and growing interests in Africa, including access to resources and markets, development of diplomatic ties, and Chinese claims of leadership in developing world. These objectives are not inherently incompatible with U.S. priorities and, in fact, may offer important opportunities for the continent. In general, we see China’s growing activity on the continent as a potentially positive force for economic development there, which is a goal we share with China and many others. As President Bush has said, we do not see a “zero-sum” competition with China for influence in Africa. Nor do we see evidence that China’s commercial or diplomatic activities in Africa are aimed at diminishing U.S. influence on the continent.
As Deputy Secretary Negroponte recently noted in testimony before the full Senate Foreign Relations Committee, policy differences in some areas should come as no surprise given the two countries’ very different demographic and economic conditions, histories and political systems. Our goal, as with other areas of the world, is to engage Chinese officials to try to define and expand a common agenda for Africa that ultimately will serve both our national interests and maximize the benefit Africa derives from U.S. and Chinese economic investment in the continent. We are actively looking for areas of complementarity and cooperation with the Chinese, while engaging at multiple levels on differences in approach to specific issues.
Our regular high-level dialogues with China include the “Senior Dialogue” led by Deputy Secretary of State Negroponte, which focuses on political and security issues and the Treasury-led “Strategic Economic Dialogue,” which addresses bilateral and global economic issues. We also plan to begin this autumn a bilateral dialogue on development assistance led by the Director of U.S. Foreign Assistance Henrietta Fore and her counterpart in China’s Ministry of Commerce.
The State Department holds a regional sub-dialogue on Africa as part of the U.S.-China Senior Dialogue on security and political affairs. The sub-dialogue is led on our side by Assistant Secretary Jendayi Frazer. In addition to these formal dialogues, Assistant Secretary Frazer talks with her Chinese counterparts on an ongoing basis on a variety of issues, most recently hosting China’s Special Representative Liu Guijin in May. Special Envoy to Sudan Richard Williamson also regularly communicates with Ambassador Liu on Sudan. In September 2007, Ambassador Ruth Davis, Chief of Staff of the Bureau of African Affairs, traveled to China for a series of high-level meetings and public appearances aimed at explaining U.S.-Africa relations. And, of course, our diplomats in Africa are in regular contact with their Chinese counterparts on the full range of issues on the continent.
China in Africa
China’s engagement with Africa is not new. Beijing initiated bilateral assistance to Africa in 1956 and, by its own account, has funded over 800 projects between 1957 and 2008. There are few capitals in Africa where China has not built a showpiece building, from a national sports stadium to a gleaming new ministry headquarters. Estimates of Chinese development assistance to Africa in this decade vary, but tend to fall around $1-$2 billion per year. This amount is still relatively modest in comparison to the annual contributions of $18 billion (including debt relief) provided by the European Union (EU) and member countries, $9 billion from multilateral institutions, and about $5 billion from the United States Government.
China’s economic and commercial engagement in Africa has dramatically increased and diversified during the last several years. Bilateral trade rose from $10 billion in 2000 to $70 billion in 2007, and China is now Africa’s second largest trading partner after the United States. Africa ran an overall trade surplus with China between 2004 and 2006, as it did with the United States, and it is clear that China, like the United States, has become an important source of both export revenue and investment for the continent. China’s direct investment in Africa increased from $491 million in 2003 to over $2.5 billion three years later and continues to grow. Africa is also becoming an important export market for Chinese consumer goods. Small, private Chinese investors have invested millions of dollars into opening enterprises in Africa that operate in textiles, light manufacturing, construction and agriculture. Recent media attention has focused on high-profile Chinese investments in Africa, such as the Industrial and Commercial Bank of China’s October 2007 purchase of a twenty-percent stake in South Africa’s Standard Bank, or a $9 billion loan and investment package for Congo that will be repaid in cobalt and copper from Congolese mines.
China’s economic and commercial engagement in Africa should be understood in a broad context. Its activity has increased dramatically in recent years, but started from a relatively low base. As of 2006, the value of China’s trade with Africa was lower than with the Middle East or Latin America and was a minute percentage of its trade with the rest of Asia. On the investment side, China’s investment flow into Africa constituted only 2.9% of its global outward direct investment. China’s total direct investment stock in Africa accounted for only 1% of global foreign direct investment in Africa.
The composition of China’s involvement in Africa has changed greatly over the past decade. Whereas the foundation for China’s early interaction with Africa was the promotion of a shared leftist, anti-colonial ideology, the common ground now is mostly a convergence of economic interests in a global trading system. In many ways, China’s successful embrace of market-based economics and openness to most aspects of globalization can be a positive example for African nations. There also have been significant increases in two-way tourism, academic and non-governmental exchanges, and diplomatic initiatives. China has even modeled many of its engagement programs after very successful U.S. exchanges on the continent. For example, historically, the United States has identified young emerging political and economic African leaders for exchange programs in the United States under something known as the “international visitors program.” China is now doing the same thing -- identifying members of parliament, local entrepreneurs, and well-placed government officials in such key ministries as Foreign Affairs, Internal Affairs, and Trade and Commerce for training and exchange programs in Beijing. China also funds trips by local traders and businesspeople to Africa to source Chinese consumer products. It funds sports teams and provides equipment for aspiring African Olympians. Since the year 2000, China’s primary public relations vehicle for promoting its African presence is the Forum on China-Africa Cooperation (FOCAC), which is held every three years.
China’s increased economic and commercial activity in Africa raises a variety of issues that African, Chinese, and other international experts are examining. Some Africans worry that the influx of low-cost goods from China undercuts local industry. We also hear concerns that Chinese infrastructure projects underutilize indigenous labor, finance, and resources. Chinese projects often employ imported Chinese workers and utilize imported raw materials. Observers have warned that China’s assistance efforts in Africa, which emphasize ‘no strings’ and are not predicated on the same kinds of conditionality as other countries’ aid programs, could endanger progress in promoting good governance and market reform in Africa. As Chinese companies’ presence on the continent expands, they will increasingly be expected to bolster indigenous capacity and contribute to long-term development. The U.S. government would like to engage the Chinese on how their economic policies in Africa can help produce better results for sustainable economic development if they conform to the international community’s broader initiatives for Africa. We remain steadfast in our belief that strong democratic institutions and protection of fundamental human rights are the foundations for sustainable economic growth.
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