A Paper Tiger?

Vijaya Ramachandran at the Center for Global Development recently posted on a slowdown in China's involvement in African infrastructure projects. She points to Chinalco's investment in Rio Tinto, an Australia-based firm, that would give China access to copper, iron and aluminum in both Australia and South America--and, thus, lessening the need for China to work in Africa. Personally, I'm a bit skeptical of this one non-Africa investment as indicating China losing interest in Africa, but she presents some compelling reasons for why Beijing may be less inclined to turn to African partners.

Infrastructure, particularly roads, present a major problem for investors. While in Ghana, that four-hour bus ride from Accra to Kumasi only mentioned the four hours that the bus was actually moving--not the five other hours spent crawling our way out of Accra in a sea of tro-tros on a makeshift dirt road. But, then again, China did promise to build quite a few of those roads, so perhaps the funding and initiative to do that has dried up, at least in comparison to working somewhere else. However, Ramachandran brings up a second point, one that I can certainly understand:

Furthermore, the Chinese model of importing large quantities of their own workers to undertake construction projects has not gone down well with the local business community in many countries. Language and cultural barriers have provided additional roadblocks. But perhaps most importantly, the price of oil has fallen (from $140 a barrel when many of the oil-related deals were signed to $50 a barrel), making Chinese investors perhaps less willing to put up with Africa’s weak infrastructure and burdensome business climate.

The part about Chinese firms importing their own workers particularly strikes me. I could perhaps understand importing a few engineers and managers, but the laborers? Given the high unemployment, especially amongst young adults and recent graduates, I can't understand the need to import laborers--especially if one wants to work with the local business community in the future. In Ghana, I noticed a lot of Chinese engineers (you can tell by the color of the hard hat) but most of the labor appeared to be African; I didn't notice if there were any Ghanaian engineers, though it's possible the workers resented working for a foreign boss. The newspapers in Accra certainly covered Chinese investment to a great extent, especially regarding aluminum, so, as a kind of side experiment, I decided to keep track of how many American, British and Chinese flags/stickers I could see on the tro-tros and taxicabs I was riding in. The US and UK paraphernalia far outweighed Chinese flags (of which, I saw maybe half a dozen). When people asked if I was Chinese and found out I was American, they seemed to get more friendly. And, of course, asked if I knew Barack Obama.

Freedom House marked the 20th anniversary of Tiananmen Square with this post on China and Africa. I haven't had a chance to read the Undermining Democracy report, but feel free to add comments to this post about it.