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August 9, 2010 |  1 comment |  Print | E-Mail Your Research  

Think Tank Analysis: The EU and China in Africa: The Case of Kenya

Daniel Fiott: The West is troubled by Chinese business activities on the African continent, perceiving Chinese firms as satellites of the central state.This paper uses the case study of Kenya to compare the economic and developmental activities of the EU and China in order to address some common misperceptions.

Proclamations such as the "New Scramble for Africa" have become synonymous with China's growing political and economic presence in Africa. Greater Chinese involvement on the continent has alarmed many in Europe and the United States, best characterised by media headlines such as "Why China is trying to Colonise Africa" and think-tank pieces entitled "Beijing's Safari." China's recent activities, such as the November 2009 pledge of 10 billion US dollars in low-cost loans for Africa over the next ten years, and its debt-forgiveness for many of Africa's poorest states, have only added to Western suspicions about China's activities in Africa. Some have linked China's economic activities in Africa with its refusal to condemn the regimes in the Sudan and Zimbabwe, and - more specifically to the focus of this paper - China's silence during Kenya's electoral-turned-ethnic strife in 2007. The combination of a lack of human rights conditionality for loans and China's increasing natural resource stocks accrued in Africa is a heady mixture that some find hard to swallow.

Is it not, however, paternalistic to suggest that Africa somehow needs "saving" from China? Certain African governments have shown a remarkable ability to forge international connections and partnerships. Increased Sino-African cooperation under the Forum on China-Africa Co-operation (FOCAC) is evidence of this. To take a more specific example, the Democratic Republic of Congo's recent rejection of a 3 billion dollar "infrastructure for resources" loan in favour of an alternative offered by the International Monetary Fund shows that African governments do not automatically opt for China. If anything, many African governments now see the possibilities of dealing both with China and traditional partners such as the EU as a way ‘to arrange for favourable terms on a range of issues' and to secure and increase economic gains.

Much of the anxiety of China's activities in Africa can be explained, in part, by misperceptions of the actors involved. "Africa", "China" and the "West" are words that fail to do justice to the intricate characteristics of each actor - they are not monolithic actors operating in an undifferentiated land mass. China, like the EU, is not a single Leviathanesque actor, and one must be careful not to associate every action with the central state apparatus. As an illustration, many have been quick to suggest that because of the Chinese government's direct control over the China National Offshore Oil Cooperation (CNOOC) and the China Export-Import (EXIM) Bank, Chinese firms en masse are mere satellites of the Chinese state. In reality, while many of these are ‘non-state owned' firms  - representing 85 percent of total Chinese firms in Africa during 2006 - they can gain assistance from the EXIM for "going global", but public institutions ‘do not enjoy direct lines of authority' over them. Firms are left to wither on the vine of bankruptcy by the Ministry of Commerce (MOFCOM) if their venture proves unsuccessful.

It is the aim of this paper to address some of these misperceptions by focusing on a single African country: Kenya. Having already benefitted from the development of hydro-power plants and a loan of $16 million for roads, in addition to recent news that Chinese firms will construct a multi-billion dollar port near Lamu (on the East coast), Kenya is an apt case for closer examination. What types of investments are being made in Kenya? Are these investments being made by the Chinese state or by private firms? How do these investments compare to those being made by the EU and its member states? Does the Kenyan government display a greater willingness to deal with "China" at the expense of the EU? This paper will investigate these issues with an analysis of EU and Chinese commercial and developmental activities in Kenya related to its natural resources, manufacturing sector and road infrastructure.

Daniel Fiott is a research fellow at the Brussels-based think tank the Madariaga – College of Europe Foundation.

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Tags: | China | Kenya | Business | trade | development | EU | European Union | Africa |
 
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Basia A Bubel

November 9, 2010

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China is also heavily involved in Sudan and is taking an interest in many African countries. This is good for both the African Nations as well as China. China is a great alternative for African countries to the US or the EU who are seen as the old colonizers. China seems to be a much safer and "warmer" alternative that really meets the demands and needs of many African nations that it trades with. It is a very important strategy for China to invest more in these African nations in order to secure land and energy resources for its large and growth population. This investment strategy is a very realistic approach.
 

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