Chinese Steel, African Rails

Power shot of Li Keqiang and Angolan President
Jose Eduardo dos Santos  

One topic I've been over in some of my courses is China's foreign investment in Africa.  Though it can be problematic to lump all the countries in sub-Saharan Africa in one category, China clearly has high hopes for the continent as a whole.

Chinese Premier Li Keqiang's visit to Africa this past week was lauded by Chinese media outlets, though Western sources remain more skeptical.  Still, the visit underlined the importance of the region.  More and more high-level leaders have been visiting China in recent years, with Wen Jiabao and Hu Jintao having made several multi-country trips during their time in office.  Seniority means a lot in the PRC.

In the US, various ministry-level delegates would suffice to act as the president's proxy and could be somewhat autonomous in their negotiations.  But in China, the fact that Li Keqiang himself visited (as opposed to sending a representative from the Chinese Ministry of Commerce (MOFCOM)) means that the top leadership wants to make sure the deals get brokered correctly.  It also shows the world that China respects the continent enough to treat it as an equal.

The results of the trip?

A framework contract for a 13.1 billion dollar railway project in Nigeria by China Railway Construction Corporation.  For some reason this deal is getting much less attention than the 3.8 billion dollar railway upgrade in east Africa, perhaps because of the latter's potential to develop the area, link several countries, and connect with ports on the Indian Ocean.

Both projects will be built by Chinese companies and funded by Chinese money.  One major source is the China Exim Bank, which has allowed half of its lendings to go to Africa since 2011 (source).  China must believe that they will get a return on their investment.

China will likely be using Chinese materials for the construction of these projects.  It so happens that China has an overcapacity of steel, as well as cement, coal and solar panels, so these infrastructure deals may be clever ways to dump overstock into foreign projects.  As the old saying goes,  一石二鸟 (yi shi er niao) literally meaning two birds, one stone.

Li Keqiang and Nigerian President Goodluck Jonathan.
Is Mr. Jonathan comfortable with that embrace?

It's unclear that the infrastructure projects going on in Africa will allow local residents to get on the ladder of development.  It's also unclear that it won't.  What is certain is that China's investment in Africa will be scrutinized by the world.  China has come under heavy criticism from the international community due to their involvements in Africa, being branded as "neo-colonialists."  But  according to Ugandan President Yoweri Museveni, the Chinese "don't give lectures on how to run local governments and other issues I don't want to mention."

My opinion?  The international community should watch but keep quiet.  After all, what have Western nations been doing to help develop Africa?  Throwing money at the problem in the form of foreign aid may allow us to sleep better at night.  But China actually has the wherewithal to do on-the-ground work in the dark continent.  I say kudos.

Ethiopian Prime Minister Hailmariam Desalegn 
and Li Keqiang, working on the railroad

Li Keqiang and Kenyan President
Uhuru Kenyatta