China, the US, and Africa: A New Foreign Aid Triangle?

A Chinese construction worker (R) supervises the building of a road on 30 April 2007 in Makenisa, 9km south of Addis Ababa, Ethiopia. (Simon Maina/AFP)

As American government and business leaders welcome their African counterparts to Washington this week, business and economic development are at the top of the agenda. The U.S.–Africa Summit and more than 100 side events are expected to cover opportunities for greater trade and investment between the regions, in a follow-up to President Obama’s trip to Africa last summer. Left unspoken, however, is the fact that Africa increasingly seems to be a theater for competition for economic and political influence between the two great powers of the 21st century, China and the United States.

The recent release of China’s second white paper detailing its foreign aid activities has sparked renewed debate over the country’s aid policies. Like most countries, China has linked its foreign aid programs to its broader political and economic strategies. And a particular focus of these programs has been Africa: From 2010 to 2012, Africa received 52% of all Chinese foreign aid – more than any other continent. Although, China has also increased aid to Africa focused on social goods like agriculture, health, and education. For example, Chinese medical teams have been dispatched to Zimbabwe, Malawi, Mozambique, and Sudan to help with the treatment of malaria. Projects in Ethiopia have focused on training 1,800 Ethiopian teachers for agricultural vocational schools. In Liberia, China supported a technical cooperation program to teach 500 Liberians to weave bamboo/rattan into goods.

China wants to shed its image as a country hungry for Africa’s natural resources and raw materials by emphasizing programs focused on development issues like poverty reduction, health, and education, which were highlighted in Chinese Premier Li Keqiang’s recent visit. This spring, China signed a US$3.8 billion deal to finance most of a rail line connecting Kenya’s Indian Ocean port of Mombasa to its capital, Nairobi. Over time, this line will connect Uganda, Rwanda, Burundi, and South Sudan. It provides badly needed infrastructure that can lower costs and increase trade in the area, and better connect East Africa.

China’s aid to African countries fulfills needs on both sides, while fostering stronger diplomatic and economic relations. Africa stands to benefit from capital and investment, better infrastructure, and access to Chinese markets. China’s ability to swiftly finance and implement projects makes the country a particularly attractive donor. China, meanwhile, can find in Africa the stocks of energy and natural resources that it needs to sustain its economic growth.

In spite of these efforts, concerns about China’s foreign aid to Africa have mounted. China’s foreign aid has prompted criticisms over disregard for the rights and needs of African workers, poor project governance and low-quality outcomes, and unfair sharing of benefits from resource extraction. For example, the 2011 Kilumba Kiaxi Housing project in Luanda, Angola was one of the largest social housing programs in the country. Designed, managed, and executed by Chinese state-owned enterprise Citic Construction Company, the project accounted for some US$10 billion of investment. But critics have pointed to the fact that the project employed around 10,000 Chinese workers, compared with just 5,000 Angolan workers – diverting from local communities such benefits as incomes and skills training. There have also been reported labor violations and quality control lapses.

Some criticism of Chinese aid to Africa probably stems from anxiety in Western nations as China positions itself as an alternative to Western donors. (Indeed, China maintains that its strict policy of providing aid on an unconditional basis can benefit recipient countries more than typical Western policies of offering aid with conditions attached.) Skeptics also argue that aid in Africa is part of China’s broader strategy to increase goodwill and political support in multilateral forums like the United Nations – although the same argument could also be made about other donor countries.

How, then, might the U.S. and other Western countries engage China in a constructive dialogue about making its aid more responsible and accountable to local stakeholders? In a recent interview with the Economist, President Obama said, “First of all, American companies continue to be an enormous force in the global economy and in talking to U.S. companies, there is a real recognition of opportunity there. Secondly, I do think that the American traditions of transparency, accountability, rule of law, property rights are ingredients that are critical to unlocking Africa’s future. Third, America was, and continues to be, an economy based on ideas, and as we move deeper into the 21st century, our emphasis on developing human capital is something that Africa very much wants and we’re good at it… And I do think that China has certain capacity, for example, to build infrastructure in Africa that’s critical. They’ve got a lot of capital and they may be less constrained than the U.S. is fiscally in helping roads get built and bridges and ports.”

The U.S. and China could progress toward their goals in Africa by increasing their engagement about foreign aid. In particular, a trilateral forum for greater collaboration among China, the U.S., and African governments could be helpful. Such a forum could not only increase trust and transparency, but also ease some African concerns about Chinese investment, such as China’s inability to promote better governance under its no-interference aid policy. The U.S. wants to increase its developmental programs in Africa but may lack the financing or resources to do so. China’s ability to quickly deliver financing, and U.S. rules of transparency and accountability, could complement each other in future African aid programs. By pairing their strengths, the U.S. and China could together carry out more effective social and capacity-building programs for the continent.

About the Author

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Christina Dinh is a Program Officer for the Asia Society Policy Institute. She is based in Washington, D.C.