China and re-globalisation . . . Implications and appropriate African strategy

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Xi Jinping

Arthur G. O. Mutambara
Re-globalisation involves the reform, upgrading, expansion and transformation of globalisation to make it more inclusive and balanced. The objective is to restore legitimacy, embed certainty and entrench sustainability.

China, the second biggest economy in the world, is the key engine of Re-Globalisation, through such initiatives as the Asian Infrastructure and Investment Bank (AIIB), the New Development Bank (NDB), the BRICS framework, and its huge corporates such as Ali Baba.

One Belt-One Road Initiative

A key part of China’s Re-globalisation strategy is the “One Belt-One Road Initiative” which was renamed the Belt Road Initiative (BRI) in 2016.

Initially, the BRI was conceived as a development strategy focusing on connectivity and co-operation between Eurasian countries, primarily China, the land-based Silk Road Economic Belt (SREB) and the ocean-going Maritime Silk Road (MSR).

The BRI has now been expanded to become China’s grand strategy to the world, including Africa. The Chinese motive is to enhance regional and global trade-and-investment connectivity in pursuit of Re-globalisation.

The BRI enables China to take a more significant role in global affairs with a China-centred commercial, investment, infrastructure and trading global footprint.

Socialism with Chinese characteristics is a political theory serving as the principal guiding Chinese ideology, since the Deng Xiaoping period.

This is a strategy of adopting elements of market economics as a mechanism to increase productivity and foster growth while the Communist Party retains both its formal commitment to achieve communism and its monopoly on political power.

Currently, this Deng disposition is now fashioned as the Xi Jinping. Thought on Socialism with Chinese Characteristics for a New Era. This new formulation includes the establishment of a common destiny between Chinese people and other people around the world within a peaceful global environment characterised by a win-win approach to commerce and international relations.

Implications

In examining the implications to, and designing the strategy by, the African continent, we must learn from the sources of China’s success: Population and market size (1,3 billion people), economic strength (GDP of USD 11 trillion), a large natural resource base, world-class infrastructure, a highly technocratic national leadership, and most importantly, astute and explicit strategic thinking and economic planning.

It is also prudent for Africans to understand that at the centre of all the Chinese global endeavours are Chinese national interests. They are not Father Christmas. They are no longer driven by the ideology and disposition that Chairman Mao had during our struggle for Independence.

They are now businesspeople, period, albeit with slightly nuanced characteristics from their Western counterparts.

The best the African can hope for is a win-win situation, not a free lunch or ride. There will be no handouts. It is strictly business. The win-win is not guaranteed, the African must work for it. We must negotiate better deals. The Africans must put their thinking caps on, lest they get massively short-changed by our good brothers and sisters from China.

Strategies We must do the following:

(1) We must be proactive as opposed to reactive. We must not merely respond or react to China’s Grand Strategy to Africa. We must proactively design our own Africa Grand Strategy to the World, and in it, our Africa Grand Strategy to China. This strategy must be independently crafted by Africans, and clearly driven by what we want, and not unduly influenced by what the Chinese are doing or their vision.

(2) We must not engage China as individual countries. No. We are too small to unlock any meaningful economic value as individual nations. We get short-changed. Even South Africa with 55 million people and a GDP of $300 billion is too small to meaningfully engage with China. We must only engage China as one continental economic bloc — the AU and its AfCFTA (African Continental Free Trade Area).

This is a colossal economy consisting of a population and market of 1,2 billion Africans, a potential GDP of US$2,3 trillion and a massive collective resource base.

The scale, scope and impact of this gigantic continental bloc will give us the leverage to unlock economic value when we interface with China.

This AU framework should be the only front we present to China in all negotiations, deals and economic relationships. There should be no bilateral deals between any individual African country and China.

(3) The African continent must embrace and deploy technologies of the Fourth Industrial Revolution through the creative and innovative concept of leapfrogging, deriving from the fact that sometimes, a nation’s poverty or lack of development makes it easier to use more advanced technology.

The concept of leapfrogging is conceptualised with reference to generations of technologies. An underdeveloped community or country can skip an older technology or technologies into a newer technology.

Hence, Africa in embracing and deploying the technologies and innovations of the FIR, leapfrogging strategies have the potential to bypass intermediate stages of development that are often environmentally unsustainable, and resource intensive in terms of infrastructure sunk costs, financial investment and human capital outlay. The lack of development and poor infrastructure mean there are no sunk costs and older technology constraints to consider.

Leapfrogging is enabled by the absence of these legacy challenges, that is, problems relating to technology or infrastructure that has been superseded but is difficult to replace because of its wide use. Advanced economies have to deal with lots of legacy constraints, whereas less developed countries have fewer such limitations.

In embracing the FIR through leapfrogging, the African continent, operating as one economic bloc, can learn from, and partner with, China. How has China engaged the FIR? What are the lessons and areas of potential synergy?

(4) The African continent must vigorously pursue rapid industrialisation and modernisation rooted in, and driven by, beneficiation and value-addition. In dealing with China and Re-Globalisation, it is important that we realise that there is no such thing as altruism in international relations, trade or commerce. China is no exception to this dictum. For example, beneficiation, value addition and technology transfer will have to occur in Africa without the support of the Chinese, Americans or Europeans.

It is not in the interest of the rich Western economies or China to promote beneficiation in Africa. Their preference is for Africa to produce and sell raw materials to them while they sell refined and value-added goods to Africa.

The African engineer, designer and entrepreneur must have self-belief and confidence to design and build a catalytic converter, a computer, a cell-phone, a car or a plane. You need a decolonised entrepreneurial spirit. African governments and the private sector must have confidence in local manufacturing.

African consumers must have confidence in local products. They must support and buy locally designed and produced refined and value-added products. Of course, the market size of 1,2 billion Africans is available for our own value-added products if we work as the AU.

Approach through strategic alliances

The raw material critical mass required for beneficiation, is achievable if we work in regional value-addition industrial clusters and engage China through these. For example, we can define a diamond cluster (Zimbabwe, SA, Botswana, Angola and DRC), a platinum cluster (Zimbabwe and South Africa), a cocoa cluster (Ghana, Ivory Coast and Guinea), and a petroleum cluster (Nigeria, Algeria and Senegal).

With the scale, critical mass and consensus achieved in these clusters, value addition and beneficiation will be commercially viable on the African continent. This can be done with or without the blessing or involvement of China, Europe or the United States.

Beneficiation and Value Addition

As indicated earlier, it is not in the interest of the large economies such as China and the United States to promote beneficiation in Africa.

What is to their strategic advantage is for Africa to produce and sell raw materials to them while they sell refined and value-added goods to the continent.

Beneficiation will happen in Africa despite these rich nations. Africa is on her own with respect to the value addition agenda!

As Steve Biko correctly taught us: “Black man (and woman), you are on your own”.

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