Monday, June 5, 2023

China Rules the World – Time to get crack out of the colonial hangover

This piece was prompted by several negative newspaper stories on the alleged incompetence of Chinese construction companies in Botswana. These negative stories seem to be based on sheer ignorance of China as a major world power, and also by the belief in the superiority of the material and non-material products of the Western and or European, from race through table manners to dress codes and pop culture, and by implications in the inferiority of anything non-Western or non-European, and especially African. This mindset is a residue and or a vestige of our colonialized past. How all this came about has been ably critiqued by Ibekwe Chinweizu in his magnus opus, The West and the Rest of Us.

But as we are all aware, in 2003, Goldman Sachs predicted that China, the most populous country in the world, with a population of about 1.3 billion, could overtake the USA as the world largest economy by the year 2041. The USA has been the largest national economy in the world since the 1870s, when it overtook the United Kingdom. In 2011 Goldman Sachs revised their forecast and predicted that China will become the world’s largest economy by 2026. In May 2014 the International Business Times quoted OECD Report that predicted that China’s economy will overtake US Economy by 2016. Now I am informed that the at this point in time, the USA and China are running neck and neck in purchasing power parity.

I am well aware that there is no consensus by economists on these latest economic developments, with some urging very strongly that purchasing power and economic size are not at all related. What seems not in dispute is that in 2010 China overtook Japan as the second largest economy in the world, and it is expected that India will also move ahead of Japan and become the third largest economy in the world, after China and the USA. In the event India surpasses the USA as the world second largest economy, this will mean that the most populous nations in the world China and India, accounting for a quarter of the world population, are also the world’s largest economies. This will have profound impact in the world as we know it today, especially because Europe had dominated the world since 1492 and most people cannot just imagine the world without USA and Europe in control. The dominance by the West, the so-called Western civilization, with its monopoly of wisdom on everything, including production of knowledge about ‘other’ people, is beginning to be challenged and contested.

The situation is not helped by what Goldman Sachs characterize as the Great Transformation of the global economy in which BRIC group of countries (Brazil, Russia, India and China) would become increasingly dominant players in the world economy, eventually eclipsing the USA and Western Europe put together. According to Goldman Sachs “the world’s center of economic gravity will continue to move in favor of the BRIC group of nations and significantly so. According to the Bank, the four BRIC countries’ contribution to world GDP has moved from 11 percent in 1990 to around 25 percent in 2010, in a period of only 20 years! Should the analyses and predictions by Goldman Sachs and others be anything to go by, it will be the first time in modern history that the economy of the world is dominated by non-Western (that is, non-European) or even previously Third World nations. Chinese Economic Relations with Africa..
It is now common knowledge that China has surpassed the USA as Africa’s largest trading partner. I am informed that Chinese trade with Africa is currently estimated at US$150 billion!

In the early days of Africa’s independence, Chinese development assistance was usually given on much easier terms, with the grant element often as high as 50 percent or more. It is generally accepted that the Chinese loans were and still are generally interest free with maturities of 20-30 years including grace periods of 10-15 years. Currently China is reported to be involved in at least two mega construction projects in Southern and Eastern Africa. According to BBC Africa News of 28th November 2013, just across the border, the East China Nonferrous Metal Investment is reported to have entered into a 100 year investment agreement with Namibia to develop an industrial park around an iron ore mining facility in Kunene, some 700 kilometers from Windhoek.

The envisaged park will have a steel making factory that will employ an estimated 10,000 local workers. The Western media calls this ‘looting’ of African raw materials! In East Africa, it is reported that China Road and Bridge Corporation, a subsidiary of China Communications Construction Company, will build a rail line connecting Kenyan cities of Mombasa on Kenyan coast and Nairobi, and then link to Kampala in Uganda, Kigali in Rwanda, Bujumbura in Burundi and end in Juba in South Sudan. It appears that there will also be a link between Kampala and Kisangani, in the DRC. Needless to say, no Western financial institution would be willing to finance such a major infrastructural development: it will not make business sense to them. Interestingly, according to World Bank’s ICP report, at 27 percent, China now has the largest share of the world’s expenditure for investment (gross fixed capital formation), followed by the United States at a distant 13 percent. China is also reported to be operating the fastest passenger train in the world, the Shanghai Maglev Train, which travels at a speed of 431 kilometers per hour.

Chinese Economic Relations with Botswana. Chinese assistance to Botswana is not a recent development. In the WeekendPost Saturday 23-29 March 2013 the late Mompati Merafhe has revealed that China has been a friend of Botswana from as far back as 1977 and has assisted the BDF in acquiring arms, and I must add, at the time when USA and Britain were reluctant to sell Botswana arms, lest that fuel arms race in the region, whilst busy supplying South African and Rhodesian racist regimes. According to the former Minister of Infrastructure, Science and Technology, Chinese companies have carried out several major construction projects in Botswana, and these projects were achieved because their funding was provided through the Chinese government soft loan facility. I am not aware of any soft loan facility provided by any of the Bretton Woods institutions to Botswana or any African country for that matter. It is also important to note that before the arrival of the Chinese companies, the construction industry in Botswana was dominated by South African and European construction companies and a handful of citizen owned companies, who mostly behaved like a cartel and fixed prices. It is common knowledge that this cartel created huge cost and time overruns.

The Business Day of Friday May 23rd 2014, under the heading ‘Stefanuti scales down in Botswana operations – Chinese prices ‘too low’ Stefanuti Stocks, a South African construction company states it was scaling down its operation in Botswana because its order book has been dented by intense competition from Chinese construction companies. It is now generally believed that the arrival of the Chinese construction companies in Botswana has substantially reduced the construction costs for Botswana government, saving the government much needed revenues to invest in other areas. Surely this is not a bad thing for the country. Notwithstanding this positive developments between China and Africa in general, and China and Botswana in particular, Chinese construction companies have been portrayed in a very negative light by the media, both in the West, in African and in Botswana, especially as regards workmanship or quality of their work. The PPADB lists about 30 Chinese companies registered to do business in Botswana.

I recently examined some 17 Botswana newspapers stories on Chinese construction companies covering the period May 2010 and March 2013. I was surprised to find out that these negative stories all revolved around only fourChinese companies, namely (1) China Civil Engineering Construction Corporation (CCECC) (2) China National Electric Equipment Corporation CCNEEC), (3) Sinohydro and (4) Shanghai Fenyuue. Whilst there was plenty to say about these four (and correctly so) it appears there was no good story to tell about the 26 other Chinese companies doing business in Botswana, that have probably finished their projects on time and within budget. What I found even more bizarre is the complete lack of mention of the role of the client’s project’s supervising engineers in the form of (a) projects architects, (b) quantity surveyors (c) structural engineers (d) civil engineers (e) electrical engineers and (f) mechanical engineers. I am advised on good authority that these clients supervising engineers are the ones who are supposed to advice the client on such matters as quality and workmanship and recommend payment etc. I would have thought payment implied work was done according to project specifications. Or are we to understand that when it comes to Chinese construction companies, payments were done without the input of the client supervising engineers? ALL companies doing shoddy work should be exposed, and so should all the supervising engineers doing shoddy inspection work for government! But having said all this, I think I understated the source of West’s antipathy towards China.

The spectacular Chinese economic transformation of the last 35 years or so was actually state driven, rather than private sector driven. This has profound lessons for developing nations who have always been railroaded to follow neo-liberal approaches by World Bank and IMF. While China has about 117 state-owned enterprises across every sector of the Chinese economy, in Africa and other parts of the ‘developing’ world the Bretton Woods institutions are still enforcing privatization and rolling back of the state. It is interesting to note that more recently Lloyd Blankfein, Goldman Sachs Chairman and CEO, was quoted by CNN saying the 21st century looks like it can very well be the Chinese century, just like the 20th century was the American century. Well, if you can’t beat the yellow man, just rubbish him.

*Prof Mogalakwe is a member of Africa-China Research Group (ACRG) at the University of Botswana. The views expressed here are personal.


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