U.S. Assistant Attorney General John Demers discussed the China Initiative and the process for assessing risks posed by Chinese acquisitions or the business operations of Chinese companies in America.
Senate Foreign Relations Committee, "China's Role in Africa," Nov. 1, 2011
Presenters included David Shinn, Deborah Brautigam, and Stephen Hayes.
Testimonies to the Senate
I thank Chairman Kerry of the Senate Foreign Relations Committee and Chairman Coons of the Subcommittee on African Affairs for inviting me to participate in this hearing. I have been researching China-Africa relations intensively over the past five years in connection with a book scheduled for publication next spring. Unless noted otherwise, the statistics and analysis contained in this testimony refer to all fifty-four countries in Africa. China tends not to make a distinction between Sub-Saharan Africa and North Africa as the U.S. government often does.
China’s Interests in Africa
China generally does not discuss its “hard” interests in Africa. Rather, it emphasizes several general themes such as respect for African countries’ sovereignty and development policies, support for African development, cooperation with Africa in the United Nations and multilateral forums, and learning from each other. China also urges African countries to accept the “one China” principle by recognizing Beijing. Based on my analysis, China has four “hard” interests in Africa:
Maintaining or increasing access to energy, minerals, timber, and agricultural products.
Developing good relations with all African countries so that China can count on their support in regional and international forums.
Increasing significantly China’s exports to Africa, especially as the economies of African states become more robust and Africans increase their disposable income.
Ending Taiwan’s official diplomatic presence in Africa and replacing it with recognition of Beijing.
I should point out that you can substitute the United States for China in each of the first three interests; they apply as much to the United States as they do to China. I would argue that the United States has several additional interests that do not yet apply in a meaningful way to China. First, the United States has an interest in military aircraft over flight and landing in African countries and access to their ports by U.S. naval vessels. Second, the United States puts a high priority on countering a series of issues—terrorism, piracy, drug trafficking, money laundering, etc.—that pose a threat to American interests. While these issues may eventually become important Chinese interests, they have not yet reached that level.
China is not a new actor in Africa. Yet over the past decade, China’s presence in Africa has grown remarkably, a reflection of China’s rapid transformation as a global actor. This presents opportunities and challenges for Africa and its traditional development partners, including the United States. China’s motives in Africa are two?fold: diplomacy and business. There are more countries in African than in any other continent. Each has a vote in the United Nations, and many are also members of the World Trade Organization. Warm diplomatic ties are important for Chinese foreign policy goals, including competition with Taiwan, the effort to obtain market economy status at the United Nations, and Chinese efforts to emphasize sovereignty as a core foreign policy principle. On the other hand, Africa is an important source of raw materials and business opportunities for China’s companies as they become global corporations.
Current Dimensions of Chinese Engagement in Africa
Current dimensions of Chinese engagement in Africa include trade, foreign direct investment, engineering contracts, development finance, development and humanitarian assistance, and military cooperation. I will focus here on the economic aspects. China’s total trade with Africa in 2010 was $120.9 billion, about 4 percent of China's total trade with the world ($2972.7 billion). Chinese official figures for FDI in Africa 2007?2010 show an average of about $1.5 billion per year if one discounts the exceptional year 2008 when Industrial and Commercial Bank of China purchased 20 percent of South Africa’s Standard Bank for around $5 billion. FDI in 2010 was reported to be $2.1 billion, with a stock of FDI at $13 billion.
Senator Kerry and other Members of the Foreign Relations Subcommittee on African Affairs,
I am honored to be asked to testify before you on China’s role in Africa. I have worked for some years with Chinese emerging leaders before I became President of the Corporate Council on Africa more than twelve years ago. Much of my life has been engaged in China and African affairs.
The Corporate Council on Africa, whom I proudly serve, is a membership organization of more than 180 companies. Collectively the members represent more than 85 percent of all US private sector direct investment in Africa. Probably no organization in America is more engaged in the economic and political landscape of Africa. As such we are a non-profit, non-lobbying organization committed to increasing US-Africa trade and investment. We are engaged in different ways in most issues affecting the economic relationship. Certainly, the Chinese engagement with Africa is one of those key issues.
A great deal has been said about China’s perceived domination of the African market. Clearly China has long-term aims, both economic and political, through its heightened involvement in Africa. Given their needs for the development of their own nation coupled with the fact that so much of the world’s strategic resources are to be found in Africa this should not be surprising. I think it wise to presume that their interests go beyond just economic, however, and they seek wider political influence than they have had in the past. They are, after all, one of the principal bankers for the world right now, and their planning, unlike most countries today, is cohesive, coherent and long-term, both in economics and politics.
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