Redefining ‘Aid’ in the China-Africa Context: Renewed relations through old ties?

1. Redefining ‘Aid’ in the China-Africa Context: Renewed relations through old ties? May Tan-Mullins (University of Durham, UK), Marcus Power (University of Durham, UK) and Giles Mohan (Open University, UK)

2. Outline • Introduction: Angola’s ‘unconditional’ loan • Current debates on China’s ‘new’ aid offensive: Rogue aid? • Historical & deconstructive analysis of Chinese aid in Africa • Democratisation, rights discourses & politics of aid • Conclusions: emerging issues

3. Introduction: Angola’s ‘unconditional’ loan • In 2006 the ExIm Bank of China offered a $2 billion low-interest loan in return for an agreement to supply 40,000 barrels of oil per day. • China’s ExIm Bank originally offered this loan to the Angolan government at 1.7% interest over 17 years but it has been extended & refinanced several times, with the interest lowered to 0.25%. • The deal ‘came with very low rates of interest and a generous payback period. But more critically, none of the International Monetary Fund (IMF) meddlesome conditionalities regarding corruption or graft are included’ (Taylor, 2007: 90).

4. ‘Unconditional’ loan’s conditions • Agreements of co-operation between the national oil companies of China and Angola (Sinopec and Sonangol) . • Tied to this loan is the arrangement that 70% of all public enterprise contracts financed by Chinese money will be built by Chinese companies.

5. China’s ‘new’ aid offensive • 1983-1995 China’s aid contribution to Africa stood at an average of US$200 million per year • A permanent Forum on China-Africa Co-operation (FOCAC) was established in 2000 at the Beijing Sino-African ministerial conference • 2006 - China committed US$8.1 billion to Africa compared to just US$ 2.3 billion from the World Bank in the same period • A US$5 billion China-Africa Development Fund was launched in 2006 • In 2006 China published the equivalent of a White paper entitled China’s Africa strategy • China plans to open three to five trade and economic co-operation zones in Africa by 2009

6. Criticisms of China’s aid offensive: Rogue Aid? • Lack of political, environmental, or human rights conditions (often attached to Western agency funds) • Inhibits good governance and institutional strengthening • Blurring between aid and investments • Lack of transparency in aid allocation

7. Rogue aid • China as exceptional, as impervious to western logics of rationality, humanitarianism & ‘development’ • China’s ‘rogue aid’ is said to be undermining international development policy in that it offers: “development assistance that is non-democratic in origin and nontransparent in practice. Its effect is typically to stifle real progress while hurting average citizens”, and China is “underwriting a world that is more corrupt, chaotic and authoritarian” (Naim, 2007) • US Treasury Department has called China a ‘rogue creditor’ practicing “opportunistic lending” • Simplistic, racialised readings of Sino-African relations, exotica as hallmark

8. Main criticisms Key gap in Rogue aid discourse: • Ignores longer history of Chinese ‘solidarity’ with Africa - reveals continuities, geopolitical strategy and ‘other’ ways of conceiving development • Lack of engagement with liberal myth of aid as ‘apolitical’ – all donors use discourses of ‘partnership’ to conceal interests • Establish western development discourse in a better and ‘morally right light’

9. Historical geography • 1950s, focus on Afro-Asian solidarity, shared history, common enemies, exporting revolution from China to ‘Africa’ • Asian-African Conference in Bandung, Indonesia and establishment of the Afro-Asian People’s Solidarity Organisation (AAPSO) • TAZARA • Cold war context, ideology & geopolitics, confrontation with the U.S (1950s/60s) & U.S.S.R (1960s/70s) e.g. Angola

10. Historical geography • 1980s- focus on domestic development and non-interference policy • 1989 Tiananmen, 1991 collapse of Soviet bloc • Post reform period and the 1990s: need for resources and new hegemon: United States

11. Historical geography • Aid given as grant, strictly bilateral, Chinese aid workers did not “loll in hotel suites & run up expenses as other expatriates did” (Snow, 1995) • Aid as a means of exposing the limitations of China’s opponents, reluctance to co-ordinate with other donors • Rhetorical unity of ‘third world’ post-Bandung, focus on South-South co-operation for development, ‘camouflage tactics’ and aid programmes aimed to ‘showed up to the North’ (Snow, 1995) • Countering the international recognition of Taiwan, building a ‘third world alliance’ in Africa • China happy to work on projects that were inessential monuments to the glory of African regimes they worked with • Principles for aid and co-operation reflected China’s own experience as an aid recipient with ‘client’ status

12. Evolving geopolitical agendas and alternative development models • Not just about semantics but part of a geopolitical tradition of China seeking to avoid ‘donor’ status, presenting itself as a friendly developing country (with experience of external oppression) and broker of ‘south-south’ co-operation • Ideological inflections of foreign policy diluted in favour of flexible, differentiated and proactive stance • Post-Mao focus on modernisation of PRC economy, access to foreign markets, capital & technology • Post-Tiananmen re-evaluation of foreign policy, focus on access to energy resources, efforts to counter US hegemonism

13. Democratisation, rights discourses and politics of aid ‘To begin with, China has no intention to undermine Africa's democracy. China is working hard to build a socialist democracy and promote human rights and good governance at home. And China is a responsible major country in the world. I doubt there is any tiny political gain China can get by doing such things against the historical trend and the common wish of the people of all countries.’ (Liu Guijin, Chinese government’s special representative to Africa, 2006)

14. Democratisation, rights discourses & politics of aid • Lack of political and institutional conditionalities through which sound economic management might emerge • concern about community participation and promotion of democracy, whereas the Chinese discourse does not. • Willing to deal with rogue regimes such as Sudan and Nigeria • Lack of transparency in aid allocation (OECD) • Fear of jeopardising achievements in good governance and in aid effectiveness and that it will seek trade and investment opportunities without worrying about stability and governance issues in recipient countries. • China can be ‘socialised’ into the norms of the international aid business/community.

15. Democratisation, rights discourses & politics of aid • The demonization of Chinese aid projects in Africa presented an ideological inflection of the ‘West’ as the model of ‘moral and correct’ practices • The Soviet Union and the United States spent decades giving ‘development aid’ to dictators in exchange for their allegiance….. nor is China the only regime offering rogue aid (Naim, 2007: 95) • Renders Africans as ‘helpless’ and denies agency to African regimes • Inappropriateness of some IFIs • Historical stress of non-interference • Non interference policy, the Africans were more willing to look to the Chinese model of successful economic development and provide them with leverage in global economy

16. Conclusion • China has always engaged strategically with Africa and used the continent to bolster its geopolitical aims. • Aid has been, and will always be political, and Chinese practices of aid disbursement are no more demonic than other donors. • Rogue aid discourse conceals realities of all donors’ agenda, and the criticism on Chinese aid sets western aid up as ideologically and morally better. • It also denies agency to African regimes which are treated as victims of Chinese opportunism

17. Conclusion • Evolving Chinese policies? e.g. Sudan? • China versus Africa or China versus 53 states? • Other stakeholders such as grassroots leaders and civil society? • Chinese understanding of Chinese development discourse?