The Issue: Chinese Investment in Africa

There has been much controversy and debate lately over China's increased investment in African countries. It seems that every critic has a different prediction of the long-term impact this will have on the continent. The most widely critiqued portion of this business affair is pointedly China's policy of non-interference in domestic affairs. They attach no conditions to their loans such as most aid and development banks do, requiring environmental assessments among other things. The Chinese openly sell arms to the Sudanese government. They do not pressure African dictators to democratize their countries. Chinese contractors repeatedly bribe governments, offering to build a railroad or school in return for winning a bid on a contract. China's policy is in practice and it is working, but who is it working for?

Yes, the Chinese have built an innovative infrastructure in Africa complete with schools, railroads, and telecommunications networks. And they have promised to build more. The Chinese own the majority of mines and major companies operating throughout the continent. The Chinese have flooded the African market with textiles and consumer goods. No one will argue that these are not good things that Africa desperately needed. Infrastructure is an important step and is something that the U.S. is trying desperately to create in Iraq. The Chinese have accomplished this successfully because they have detached themselves from the domestic affairs in Africa and operate simply on a strictly business mentality. It has never been China's intent to aid the African continent. They saw an opportunity and invested, just as any stock broker. Africa is full of natural resources and China only wants to capitalize on their investment as well as secure energy resources for their booming economy.

Now you must ask: Who is operating these companies? Who is working in the mines? Who is winning government contracts? Who is building the schools and the railroads? There is only one answer: the Chinese. They are funding the continent so that Chinese owned and operated companies can expand there. This is the point at which most critics use the term colonialism. The Chinese hold all the power, money, and goods. There is no transfer of technology or skills. The dictators of African countries are blinded by the sudden increase of money and goods, as well as a new powerful friend. They do not even think to demand the same things that their new Asian friends demand in their country. China demands that all companies operating within their border are at the least 51% Chinese. So in this fragile continent where its natives talk of defeating their fate, it would seem that this new influx of funds from China is supporting only Chinese interests.

Clearly China is profiting from this investment, but the benefits are not solely monetary. China has emerged from its investment with some fierce new political allies. The support of countries such as Zimbabwe helped China gain a seat on the U.N. Security Council. These countries are also powerful allies in China's constant battle to prevent Taiwan from achieving its independence, ratifying the "One China" campaign. This is all well and good for China's interests, but how does it fare for the interests of Africa? Well, it doesn't. China's policy of non-interference in domestic affairs keeps it from assisting African nations on a political level. So the actions of China's new political allies are not reciprocated.

So it would seem that China is the only one profiting. However, that is not the case. China has built the infrastructure and brought over the companies and the money, all of which are good things for the economy of Africa. But is it enough? Will it last? That is what many are wondering. Only time can answer those questions. China is maximizing on its investment and now it is up the people of Africa to maximize on this opportunity. If this boost to the economy is to have any long-term sustainability then Africa must impose stricter demands on foreign investment. One of the major concerns is that China is not transferring technology and skills. I think it would be wise for African nations to demand that for foreign companies operating on Chinese soil at least 30% of the employees should be Africans. That way they could learn from their more educated and experienced Chinese coworkers. I would love to see the African governments use some of this influx to support African entrepreneurs by setting up small business grants. African leaders need to realize the power of the natural resources that their soil holds. That is one powerful bargaining chip. I don't think for a second that China would remove their investments in any way if Africa imposed these types of regulations. The natural resources are just too great.

We all know the Rich Dad, Poor Dad theory. Rich dads teach their kids to invest and poor dads teach their kids to work. For decades Africa has lived under poverty and they have been taught to work. Now Africa has gained a rich and powerful investor so they must learn from China. They must learn from China how to invest in their future.