The New Scramble For Africa: How China Became The Partner Of Choice
Addis Ababa has a surprise in store for those who haven’t visited in two years. Cutting through the heart of this booming city, where construction cranes are the most persistent feature of the skyline, is the Addis Ababa Light Rapid Transit (AALRT) network. It rears up suddenly at Meskel Square, which until 2013 gazed out onto an expanse of chaotic traffic. The traffic now bustles beneath the shadow of what is only the second metro ever built south of the Sahara.
On the back of the green and white trains that trundle up and down the line are not one, but two logos the Ethiopian Railways Corporation, and, next to it, the logo of the giant state-owned China Railway Group (CREC).
How did China get involved in developing an African metropolis that westerners tend to associate with famine and death And this is just one project among many across the continent. In 2014 alone, China signed more than £56bn in construction contracts across Africa. Since the turn of the century, Chinese firms have built stadiums, highways, airports, schools, hospitals and, in Angola, an entire city that still stands empty. China has pumped hundreds of billions of dollars into African governments and infrastructure. In return, it has reaped hundreds of billions in commodities.
Few in Africa are certain that there is fair quid pro quo at play here. Is this the dawn of a new colonialism, they wonder, a new scramble for Africa in which the continent is once again left in tatters Or is it the beginning of an era during which Africans shake off old colonial masters and look elsewhere for direct investment and aid
The Light Railway goes some way to answering these questions. The project dates back to December 2011 when the idea for a 34.25km electrified light railway secured funds from Exim Bank of China. Construction for the 39-station project began in 2013 and the metro opened in September 2015, well ahead of schedule.
The line has cost $475m, 85% of which was loaned by Chinese policy banks or enterprises. The project was a collaboration between CREC and the Ethiopian Railways Corporation, the junior partner, while the Shenzen Metro Group and CREC will serve as operations managers for the next five years until a planned handover to the local rail authorities.
The metro moves about 15,000 people per line per day and costs about six birr (10p) a ride. But describing it as an outright success would be a stretch. The construction often looks slapdash – a standard complaint about Chinese construction projects across the continent.
At St Estfanos station, an empty USAID wheat sack serves as a garbage bag. This serves as a neat analogy of the competing interests in Ethiopia, and also of the different approaches. For the West, the country has always been a basket case, or alternatively, a bulwark against Islamist extremism. For the Chinese, it represents a vast, untapped market: a country of almost 100 million people, 90 percent of whom are unbanked, primed to roar through the remainder of the century as a force in Africa, and beyond.
The beginning of a ‘win-win’ relationship?
In 1971, during the Cultural Revolution, a young Chinese man called Gau “Victor” Hau had just finished a two-year stretch in an agricultural re-education camp. His first assignment from the Chinese Communist Party was in Tanzania as a translator on the most sizeable and important project ever undertaken by the Middle Kingdom on foreign soil.
Now Gau is a career railway adviser for the massive state owned entity, China Railway Construction Corporation Limited (CRCC). But in 1971 his ability to speak English was crucial to a huge railway project planned between Tanzania and Zambia. In the late 1960s, Chairman Mao and the Chinese Communist Party (CCP) had entered into an agreement with Tanzanian liberation hero Julius Nyerere and his Zambian contemporary Kenneth Kaunda. They would build a railway line from the Tanzanian port city of Dar es Salaam to Kapiri Mposhi, located in Zambia’s copper belt. For Kuanda, the railway was an existential necessity: surrounded by white supremacist regimes in Rhodesia and South Africa, there was no way for him to export his primary resource to the sea. Hence, the Uhuru (Kiswahili for “freedom”) Railway.
For the CCP, the project was no less vital. Prior to rapprochement with the Nixon administration in 1972, and during Mao’s lengthy enmity with the Soviet Union, China was subject to diplomatic purdah. To secure enough votes to become reinstated on the UN Security Council Beijing required allies, and hoped to find the necessary support in Africa. The Tanzania-Zambia Railway Authority (Tazara) line, to be paid for in full by the Chinese, was the beginning of what Beijing promised would be a “win-win relationship”, a kinship based on mutual need to fend off shared antagonisms.
But there was a second, perhaps even more pragmatic, reason to build the railway. “We have to rely on importing natural resources from other countries,” Gau said, seated behind a desk in his large Beijing office. “If China was to keep up sustainable development for many years, China has to secure a supply of natural resources and minerals to feed our industries.”
Tazara, with a $400m price tag, was blindingly expensive, especially for a country mired in poverty and still reeling from the chaos of Chairman Mao’s revolutionary exertions. Gau says the railway’s real cost was likely $1bn (at least $6bn in today’s money), with a further $1bn in maintenance over the years. It was an immensely difficult engineering challenge. The track cut through 1,860km of bush and mountain ranges, with more than 300 bridges, 22 tunnels, 96 stations, and about 400,000 sq m of support structures. Almost 50,000 Chinese engineers, translators, project managers and labourers were contracted to the project, with a further 100,000 Zambian and Tanzanians filling out the workforce. All of this was funded by China with an interest free loan, to be paid back over 30 years, with a 10-year grace period.
Although the project was completed two years ahead of schedule in October 1975, and jump-started a multilateral relationship between the People’s Republic and dozens of African countries, neither Tanzania nor Zambia would pay anything close to their share – this was less a “partnership” than a gift, Gau pointed out. And Tazara’s success, like that of the AALRT, ended up as a mixed bag. According to Gau, China did not train enough local people to maintain the tracks and the equipment, and the railway now operates at a loss, beset by delays and inefficiencies. Indeed, the line is little more than a sop to industrial development: TAZARA’s gauges don’t even match up with that of Tanzanian Railways Limited, meaning that it exists in its own infrastructural universe.
But if the project wasn’t a dazzling leap forward for east Africa’s economy, it was brilliant geopolitics. “At that time China was mainly concerned with the political significance of the railway,” says Gau. “Without Tazara, China would not be so easily rehabilitated with a UN seat.”
If Tazara represented the first and most significant attempt to forge a lasting south-south engagement, it remained for almost three decades an isolated and anomalous project, its lustre fading as soon as the inaugural trip had been undertaken.
This was mainly a result of China deciding to double down on development at home – the recovery from the Cultural Revolution precluded any further costly adventures abroad. But as the 1970s melted into the 1980s, and gave way to a resurgent 1990s under Deng Xiaoping’s mandate of “socialism with Chinese characteristics”, when “some would get rich first”, the single greatest push for growth in the country demanded strong international partnerships if it were to succeed.
In order to properly hit the diplomatic reset button, in October 2000 the Chinese hosted the first Forum on China-Africa Cooperation (FOCAC). Four African heads of state made the trip to Beijing, at the invitation of the Chinese, who hoped to build an extensive and lasting multilateral partnership with the continent. By the time of the third FOCAC, six years later, 44 African leaders attended. Billions of dollars of development money was promised, and a new age had begun.
Chinese priorities change: from politics to minerals
Over the course of the commodities super-cycle, the boom market for natural resources such as oil, steel, gold, manganite and platinum, lasting roughly from the turn of the century to 2013, China and sub-Saharan Africa’s economies were effectively coupled: when graphed, they mirrored each other. China purchased raw materials to fuel development at home, while massive state-owned organisations entered the African market, alongside Chinese-made goods and half a million Chinese migrants.
Did this epochal encounter between 1.3 billion Chinese, and 1.1 billion Africans – nearly a third of the planet’s population – maintain any of the coherent strands of “win-win” friendship that ballasted the Tazara project? Was the relationship still guided from above by bureaucrats in Beijing’s Ministry of Foreign Affairs who knew exactly what they wanted, and could easily benchmark the outcomes?
Not at all. Since Tazara, the Sino-African phenomenon has become much more sophisticated and highly fragmented and is no longer stage-managed by governments. Nowhere is this better shown than by a project announced in Johannesburg in 2013. That year, the South African press began reporting on a vast £4.8bn real estate development in Modderfontein, north-east of the city, continually citing that fact that it would be financed and constructed by “the Chinese”.
The press was never clear on what was meant by “the Chinese”. The details were surprising: the Modderfontein New City endeavour was headed by Zendai Group, a Hong Kong-listed company run by an eccentric, goateed entrepreneur named Dai Zhikang. Most of the group’s more successful projects were undertaken in Shanghai. The plan was that the South African community, stretching over tens of thousands of hectares, would include “all the functions of a city, such as finance, trade, logistics, commerce, technology, education, health care and housing”. Modderfontein New City, the company’s website insisted, would become “the New York of Africa,” with twisty postmodern skyscrapers and gigantic retail outlets, all operating on a green grid.
Was this a nothing more than an old-school land grab, orchestrated by Beijing in a tidy neo-colonial manoeuvre? That was certainly the implication of the earliest news coverage. But on closer inspection, Modderfontein was just an ambitious real estate play that required big injections of private equity from South Africans. Zendai purchased an initial 1,600 hectares of land for about £57m, and put another £22m into infrastructure. The idea was to attract partnerships and other dealmakers, who would in turn attract others – a growth strategy based largely on the same real estate agent spin encountered anywhere in the world.
Setting aside the big numbers, the big ideas and the big anxiety, there was nothing sinister about Modderfontein New City. Indeed, three years after the initial purchase Dai seems to have lost interest in real estate, and has dived into the Chinese art market. His South African arm, Zendai Development SA, is trucking along with the project. Whether the New City becomes a reality is anyone’s guess.
This is the way of things in these latter days of the Sino-African encounter. Without question, the Chinese are major players, engaged in hundreds of projects across a continent that desperately needs infrastructure and development. But not all of these projects are government-driven: some are worth only a few thousand pounds, and are negotiated between Africans and Chinese migrants in distant desert communities in remote Chad or Niger.
Nonetheless, as American and British populists prepare to close their doors to the outside world, and as Western influence dims across the continent, China may well be the catalyst Africa has required to leap forward into the future. But with the pros come some serious, unanticipated cons.
Addis Ababa’s light railway, while it hasn’t quite made beaten up Lada taxis obsolete, has so thoroughly transformed the city that it counts as a work of urban alchemy. But the social cost may yet prove immense: as Addis expands and explodes, the city’s borders push into land belonging to the Oromo people, causing social ruptures and violence. Ethiopia is facing its own muted version of the Arab Spring.
The fall of the regime in Ethiopia seems unlikely, but 2016 has taught us the limits of unlikelihood. Would a new government be as amenable to the Chinese, who were themselves so amenable to the previous oppressors? These questions abound in Africa, as certain regimes teeter, others tumble, and still others harden into lengthy runs at the helm. If the Chinese were once hoping for a comprehensive, mandated south-south axis, they have ended up with something more and less than that: an economic, cultural and social encounter that is changing the world, one railway line at a time.