Beyond the Long Twentieth Century:
China in Sub-Saharan Africa and the
Changing Dynamics of the World-System
Institute for Research on World-Systems
University of California, Riverside, Riverside, CA. 92521
v. 2-24-16, 9103 words
This is IROWS Working Paper #106 at https://irows.ucr.edu/papers/irows106/irows106.htm
The growing influence and role of the People’s Republic of China (PRC or China) in the modern world-economy is the basis of ongoing polemics in world-systems analysis and in other academic and non-academic fields of study. Twenty years ago, in The Long Twentieth Century, Giovanni Arrighi (1994) astutely theorized that the bifurcation of financial and military power that occurred during the financial expansion of the late twentieth century was not only anomalous of all other such expansions but it paved the way for a possible Sino-centered world-system. In, Adam Smith In Beijing, he went a step further and outlined the rise of China in light of the United States’ waning hegemonic rule (2007). While the growing Chinese economy and a complementary expanding role in the global economy, propelled Arrighi’s to contemplate a systemic shake-up, he saw the catalyst for the subversion of the modern world-system ostensibly as China’s demographic size (Arrighi 2007; 1994, p. 371-386). It is true that population size has been shown to have impacts on economic growth and development. However, this paper asserts that China has the potential to transform the logic of the modern capitalist world-system not only because of its demography but also its distinctive approach to its involvement in the world-economy, particularly its interactions with those countries of the Global South.
To illustrate this point, we examine China’s engagement with Sub-Saharan Africa (SSA) where it has spent billions of dollars on foreign direct investment and foreign aid along with a growing trade relationship. I will demonstrate that demographic size alone cannot account for any substantive reorganization of the world-system; that China has taken specific actions, primarily economic on the surface but with political underpinnings that could potentially create rippling system-wide change. In providing considerable economic aid to SSA with the only caveat being the adoption of a 'One China' policy, the PRC is influencing an entire continent’s economic outlook. So far, initial empirical evidence shows positive growth patterns instead of further peripheralization in the SSA countries where China is heavily involved. In addition to their economic outlook, China is impacting the foreign policy of a bloc of nations that make up the second most populous continent in the world, while simultaneously undermining Western neoclassical ideas of development. Yet, despite all of this, China appears to maintain and buttress the existing core-periphery hierarchy and power structures of the world-system. Is this the case that ‘the more things change, the more they remain the same?’
China in Africa, South-South relations, Sub-Saharan Africa, Development, Geopolitics
The interplay between China’s demography and expanding economy can clearly bring about changes in the world economy. This has been shown empirically (Hung, 2015). This paper contends that while China is gaining grounds in the world economy, it is assisting other countries in the Global South in a way that the West and those in the developed world had not done before. In the most recent iteration of a world hegemon as understood by Immanuel Wallerstein, the United States’ foreign relations including foreign aid, had an implicit ideological component (a thrust toward democratization of governments and free market economies) and more recently, with the aid of Bretton Woods institutions, an explicit economic component (as epitomized by the structural adjustment programs (SAPS) of the 1990s and the Millennial Development Goals (MDGs) of the 2000s). China’s development projects in the Global South post-reintegration into the world economy have certainly not insisted on these ideological-economic terms and China has made a point of not interfering with the day to day governing practices of the governments in Global South with the exception of the renunciation of the Republic of China, Taiwan as the sole representative of China on the global stage. In so doing, China impacts the position of varying countries in the Global South in the world economic structure. To see how this plays out, we will now look at the specific case of China’s involvement in Sub-Saharan Africa.
Brief Modern History of China in Africa
The legacy of Chinese involvement in Africa can be traced back to the Bandung Conference of 1955. The conference goal was to promote Asian-African economic and cultural cooperation, to oppose colonialism in all its manifestations, and to promote world peace. China played a central role in the conference using it as a platform to strengthen its ties with other Asian and African countries. This was approximately the same time when the Sino-Soviet relationship was becoming strained and a tangible rift between the two was becoming more and more evident.<![if !supportFootnotes]><![endif]> China sought to present itself as the archetypal communist country and distance itself from the Soviet Union under Nikita Khrushchev. Therefore, it was seeking to garner influence within the Third World and Africa in particular.
Robert Scalapino, writing for Foreign Affairs in 1964 saw China’s involvement in Africa as a direct challenge to Soviet influence on the African continent. He notes, “Soviet leaders are thus well aware of the fact that the outcome of this struggle could be crucial to the ultimate balance of power both in the world and in the Communist camp. They also know that this struggle cannot be won by military means”<![if !supportFootnotes]><![endif]> (Scalapino 1964, p. 640). Despite the fact that Russia had significantly more money and a stronger military presence in the world than China; the Chinese believed that there were other approaches to fostering strong lasting relationships with the developing world, and Africa in particular.
Therefore, in late 1963, Chinese Premier Zhou Enlai attempted to further cement Sino-African relations through a ten-country tour.<![if !supportFootnotes]><![endif]> His stated aims included supporting African and Arab struggle against imperialism and colonialism in all their forms; their pursuit of neutrality and non-alignment; their desire for unity and solidarity; their efforts to pursue dispute settlements by peaceful means; and held that their sovereignty should be respected by all. Furthermore, he wanted the African and Arab Countries to know that China was committed to their independence; to their struggle against backwardness and for economic development; that China would provide aid projects that yielded quicker results; and that China would not attach conditions to aid packages nor ask for privileges in return (Enlai 1963).
During this period in Sino-African relations, China’s support and commitment to the African liberation movement was epitomized by the Tanzam Railway Project, which linked Tanzania and Zambia. Several assessments for building the rail line had been performed between 1963 and 1966 and requests for financing were solicited from but ultimately unapproved by Britain, the Soviet Union, the United States, the World Bank, Canada, West Germany, and even the African Development Bank. The Zambian and Tanzanian governments turned to China and after much discussion, China stepped up to the challenge. The Tanzam project, which began in 1970 and ended in 1975, created one single track for 1160 miles from Kapiri Mposhi in Zambia central province, to the port of Dar es Salaam in Tanzania. Being a landlocked country, it allowed Zambia to free itself from economic dependence on Zimbabwe (then Rhodesia) and South Africa, both of which were ruled by white governments.
China’s acknowledgement, response and assistance to the African and Arab struggles paid off, with some of those countries acknowledging the government of the People’s Republic of China as early as 1963. More importantly, the African continent played a pivotal role in the PRC’s 1971 bid for a United Nations seat. The Republic of China (ROC) – Taiwan – held a seat in the United Nations and on the UN Security Council as the representative of China. However, in 1971, the People’s Republic of China placed a bid for this seat. The UN election resulted in 76 votes in favor of the PRC taking over the ROC seat, 35 opposed and 17 abstentions. Of those 76 positive votes, 26 came from African countries – a total of 1/3 of the yes votes. Jinyuan Gao puts this in perspective: “it goes without saying that they made the greatest contribution to the recovery of China’s legitimate seat in the United Nations” (Gao 1984, 250).
In the Post-Mao period, withdrawing from international politics, China began a period of self-examination and reflection, focusing on internal and domestic policies. The Tiananmen Square Student Massacre occurs during this time in June 1989. In 1992, you have Deng Xiaoping beginning his economic reforms.<![if !supportFootnotes]><![endif]> These reforms are significant and helped usher in a new era of Chinese economic advancement. Given its position on the UN Security Council, China always saw itself as part of the developing world but also as its de facto leader. As though presciently, in 1998, Ian Taylor writes, “this position enables Beijing to project China onto the global stage as a major player in its own right. But, if this image is to be sustained and carried off, Beijing feels compelled to maintain an active and visible interest in areas such as Africa which act as a support constituency to add political and numerical back-up to China’s claims” (Taylor 1998, 458). In 2000, the first Forum on China-Africa Cooperation was held in Beijing.
Re-emergence of China-Africa Relations
During this first Forum, a Programme for China-Africa Cooperation in Economic and Social Development was approved and was grounded on the principles of equality and mutual benefit, diversity, practical results, common progress, and amicable settlement of differences. This seemed to mirror the objectives put forth by Enlai during his 1963 trip through Africa. Some of the same ideas reappeared - non-interference in African countries’ domestic issues, economic aid without strings attached, and settlement of disputes through peaceful negotiation. An essential change though, and an important aspect of the Programme was the ‘One-China Policy,’<![if !supportFootnotes]><![endif]> which the Chinese government believe to be the political foundation for the establishment of the China-Africa relations.
The One-China Policy has been a staple of Chinese foreign policy with political, and strategic implications for China. For its domestic policy, the continued attempts at isolating the Republic of China (Taiwan) from the rest of the world makes for political gains within the ruling China Communist Party. The successful integration of Taiwan into the PRC would be a massive political payload for any party leader. Militarily and from a maritime geostrategic point of view, the payoff is just as huge. Taiwan is in the center of the East China Sea, the Luzon Strait and the Philippine Sea. See Figure 2. It locks China in through what is commonly referred to as the “first island chain.”<![if !supportFootnotes]><![endif]> Per The Science of Military Strategy, “if Taiwan should be alienated from the mainland, China will forever be locked to the west side of the first chain of islands in the West Pacific, and… the essential strategic space for China’s rejuvenation will be lost” (Guangqian and Youzhi 2005).
On the other hand, for the African countries, the ramifications are different depending on how they choose to look at this policy. It could be the means to an end (end being economic growth); it could be a bargaining chip for improving the number of options for foreign trade relations (India and Brazil are also investing, although not as heavily as China, in the African continent), for foreign aid, and for foreign direct investment. It could also mean that China would begin to drive the formulation of the foreign policy of the countries on the African continent with diplomatic, trade, and economic implications.
There is a general agreement that Chinese foreign aid and foreign direct investment to Sub-Saharan Africa keep increasing. However, the absolute figures vary wildly in the literature. The need for a high-quality, and systematic record of China’s aid and foreign investments efforts was made clear at the recent Researching China’s Overseas Finance and Aid: What, Why, How, Where and How Much? held at the Hopkins School of Advanced International Studies. As a non-Development Assistant Committee (DAC) member country, China does not have to follow global development reporting standards. Therefore, much of the aid packages remain underreported in the World Bank and United Nations Conference on Trade and Development (UNCTAD) figures.
Accompanying this are claims of inadequate transparency in aid packages given to SSA countries by China. China AidData – a large project, at William and Mary College – has undertaken the daunting task of tracking Chinese foreign aid and development projects around the globe with some success. It was originally created to track under-reported financial flows (TUFF) at which time a methodology was developed – media based data collection (MBDC). AidData claims that it is a systematic, transparent, and replicable approach to gathering development finance data (AidData 2013).
Still, AidData has been criticized for overestimating the total aid amounts and for its very methodology.<![if !supportFootnotes]><![endif]> AidData has since attempted to address the issues of data reliability especially because of its MBDC methods. AidData now relies heavily on academic case studies and research, and has engaged in ground-truthing – verifying and updating existing data with in-person interviews on Chinese development finance and site visits (Muchapondwar et al. 2014).
While the issue of tracking China’s investment and aid to SSA can be problematic, there is still the issue of effectiveness. Is FDI and foreign aid benefiting these African countries and if so how? The existing literature is rich with theoretical debates as to the impact of FDI and foreign aid on the host countries (see Table 2 for a summary of the literature). For some, foreign investment could destroy up-and-coming, new and even established local businesses. An early study by Volker and Chase-Dunn suggested that FDI and domestic investment generally promoted economic growth in the short run and was a strong alternative to privatization as part of structural adjustment requirements. However, they found that continued dependence on flows of foreign investments over a long-term period was destructive to economic growth and was associated with greater income inequality (Bornschier and Chase-Dunn 1985). It was later shown that not only was FDI beneficial for the host country but also a catalyst for economic growth (Firebaugh 1992; Onakoya 2012). For Firebaugh, the previous analyses simply misinterpreted their findings (Firebaugh 1992).
Yet, doubt associated with the positive link between FDI and economic growth seems to persist (Curwin and Mahutga 2014; Ndikumana and Verick 2008). Using post-socialist countries (given their quick transition into industrialized economies without FDI) to test this link, Curwin and Mahutga found that FDI penetration reduced economic growth both in the long and short term. That domestic investment was a much more statistically significant correlate to economic growth is supported both empirically and in theory (Curwin and Mahutga 2014). One of the most interesting papers in the literature discussing the impact of foreign investments, especially in the developing world, is by Jeffrey Kentor and Terry Boswell.
In Foreign Capital Dependence and Development: A New Direction, the authors find that foreign investment concentration does have a significant negative effect on economic growth but that is primarily due to the structure of the investment concentration. That is, the negative effect is completely dependent on whether there are numerous trade and investment partners or a single one. If the foreign investment is concentrated through one trade partner, the effects are extremely negative. The authors claim that this “inhibits an LDC’s ability to construct and implement economic policies that are in its own long-term interest. A lack of autonomy affects the bargaining power of states in dealing with the transnational corporations they host and in negotiating with foreign investors in global markets…” (Kentor and Boswell 2003, p. 310). However, with multiple partners the negative effects diminish. Under the Kentor and Boswell model, in the case of SSA, FDI would not be intrinsically bad. As these countries continue to grow economically, expanding FDI partnerships with other emerging economies like India and Brazil would the most beneficial in the long run.
The effect of foreign aid on the economy of developing nations is also a source of major debate (See Table 2). Early studies showed that aid worked to the extent that without it, economic growth would be much lower (Tsikata 1998). In their influential 1997 paper, on the impacts of foreign aid on developing countries, Dollar and Burnside demonstrated that aid mostly grew the recipient country’s economy but that for aid to remain effective, good quality state institutions were of utmost necessity (Dollar and Burnside 1997). McGillivray found similar results as Dollar and Burnside but also added to the discourse by asserting that good policy regimes were needed for foreign aid to have a positive impact on economic growth (McGillivray 2006).
On the other hand, Doucouliagos and Paldam’s 2008 meta-analysis had inconclusive results when looking at aid effectiveness on the economy (Doucouliagos and Paldam 2008). Still, the most recent empirical study, while specific to the politically unstable and aid-dependent Sierra Leone, demonstrated that over time, aid had a strong impact on economic growth (Kargbo 2012). In SSA, China has infused the economies with a large amount of foreign aid and at the same time injected high amounts of FDI into the economy. As this unfolds there has been significant impacts on infrastructure, exports and general economic expansion (Kaplinsky and Morris 2009; Kpetigo and Tapsoba 2011; Ndambendia and Njoupouognigni 2010).
Chinese Foreign Aid and Investment in SSA
As part of this new cooperative development program, during the 2000 Forum, China announced the cancellation of 1.2 Billion USD worth of debt from a total of 31 African countries and by 2005, tariff exemptions were applied to 400 items for 29 Sub-Saharan countries. In 2004, 9400 African were trained in China through its African Human Resource Development Fund. In 2005, 15,600 scholarships were distributed to 52 different countries. Since 2000 thousands of Chinese doctors and teachers are working in SSA through development aid projects. At the most recent Forum, China announced that it was issuing a 20 Billion USD line of credit to Africa. Again, due to the lack of transparency, these figures are thought to be underestimates.
One thing is indisputably clear – China’s economic relations with SSA have increased significantly since 2000. According to IMF DOT statistics, the portion of China’s SSA imports increased from 3% in 2001 to 11% as of 2012. For the same period, SSA’s imports from China increased from 15% to 20% as opposed to decreasing imports from DAC members from 75% to 35%. Even though the absolute percentage change in SSA’s imports from China is only a 5% increase, the drop in imports from DAC members is 35%. There may be a number of reasons for the drop in imports from DAC members but with SSA’s increasing trade with China and other developing countries, this speaks volumes.
Furthermore, the nature of the trade relations between SSA and China is striking as shown in Figure 3. Trade relations between SSA and China is concentrated in Nigeria, South Africa, Liberia, Ghana, Benin, and Angola accounting for more than 80% of total imports from China. Angola, South Africa, Dem. Rep. of Congo, and Equatorial Guinea account for approximately 75% exports to China. Kaplinsky, McCormick and Morris have written extensively on why this particular group of countries (Kaplinsky, McCormick and Morris 2010). So have Brautigam and Kobayashi (Brautigam, 2011, 2010, 2008; Kobayashi 2008).
<![if !vml]><![endif]>What all the authors seem to point to though, is the fact that much of SSA’s exports to China involve the natural resource sector. See Figure 4 and 5. UNCTAD and the Ministry of Commerce the People’s Republic of China (MOFCOM) data show FDI to Africa growing faster than any other country’s between 2004 and 2007 – 1 Billion USD to 4.5 Billion USD. Per Kaplinsky and Morris, Chinese FDI in SSA, this rapid increase in FDI is used primarily to support resource-extraction projects in SSA (Kaplinsky and Morris 2009). Brautigam implies that China’s venture into SSA has to do with China’s own self-awareness of its growing need for natural resources, writing that the Chinese “were well aware that resource scarcities, particularly in domestic energy, would soon become an issue for domestic production, and they moved to position the country to overcome that challenge” (Brautigam 2008, p. 11). This follows the same logic of Kaplinsky and Morris who noted that the increasing price of commodities starting in 2001 led to increased demand for energy, minerals, and food crops for China and India but also for other developing countries. This precipitated the need to tap into underdeveloped natural resources and markets on the African continent.
In 2006, Ron Sandrey documented the structure of China’s import from Africa in 1995 as follows: 20% - oil, 10% - iron ore, and 10% - cotton. However, by 2005, 60% - oil, 7% - ore, 5% - cotton (Sandrey 2006). A different and more recent report shows that not much has changed in the structure of Chinese import from Africa. UN Comtrade Statistics show that in 1995 China’s import from SSA was 50% fuel, 43% crude material, 5% chemicals. By 2011, the figures had changed dramatically to 75% fuel, 15% crude material, and 15% manufactured goods (excluding South Africa).
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MOFCOM’s Statistical Bulletin of Outward FDI document Chinese FDI to SSA increase substantively between 2003 and 2010, peaking in 2008. This also confirms that most of the FDI is to resource-rich SSA countries and most likely in support of aid-based development and infrastructure projects or resource financed infrastructure (RFI).
In a recent paper, AidData indicated that the correlation between official development assistant (ODA-type) aid provided by the Chinese are not necessarily linked to natural resource extraction as previously highlighted by other scholars and that Chinese aid was as policy-driven as aid provided by DAC members (Muchapondwar et al. 2014). While this might be the case, the fact remains that Chinese “aid” is a combination of ODA-type aid and other official flows (OOF-type) aid but majority of this “aid” is made up of OOF-type. So, the fact that Chinese ODA-type aid cannot be linked strongly to their investments in the natural resource extraction sector does not mean much if most of its aid is OOF-type.
The case of the Angola is particularly insightful to our understanding of the links between Chinese aid programs and FDI. In 2002 when Angola was at the height of its economic and international disfavor – denounced for its domestic political and social policies; suffering from inability to gain credit through the BWIs; and a rejected attempt to gain access to funds by way of Japan and South Korea – China stepped in and extended massive credit lines to Angola. The Chinese government through the China Construction Bank (CCB) and Export Import Bank of China (Exim-Bank) extended a 150 Billion USD loan to Angola for infrastructure projects. The interest rate on the loan was extremely low and the loan was guaranteed by Angola agreeing to provide China with 10,000 barrels of oil per day. However, the Chinese government did not allow direct fund transfers to the Angolan government. Instead, the money was given directly to those companies that were to perform the infrastructure projects and while 30% of these companies were supposed to be Angolan, the remaining companies were all Chinese state owned enterprises (SOEs). This has led some to claim that China’s venture into Africa and other countries of the Global South can be explained through the theory of elite capture. It is essentially a means of distributing government resources to members of the elite, which government officials themselves belong to. Funds are transferred from the government to pseudo-private state-owned enterprises that then gain access to funds and resources even outside of China where certain rules and obligations may not apply.
SSA economies have unmistakably experienced an upsurge since China’s ‘intervention’. According to the World Bank, at present, economic activity continues to be robust in SSA. From 1995 to 2013, the region enjoyed an average GDP growth rate of 4.5% (compounded weighted average of ‘developing SSA’<![if !supportFootnotes]><![endif]>). Average un-weighted growth rates across all SSA countries for the period is 2.4% translating into an increase of about 30% GDP per capita on average. According to Drummond and Liu, China’s economic growth (which has been remarkable) resulted in an increase in investment and aid to SSA and direct trade expansion for its African partners. More dramatically they found that for resource-rich SSA countries, one percentage point increase in China’s domestic investment growth is accompanied by a 0.8% increase in export growth rate (Drummond and Liu 2013).
Rosen et al at the US Department of Agriculture Economic Research Service, documented that between 1980 and 2000, grain production in Africa, an indicator of food production, was consistent with the rate of population growth. However, between 2000 and 2010, grain production growth accelerated to 4.1% per year, which translates to 1.6% annual growth rate per capita. They note that this represents significant improvements over the two prior decades (Rosen et. al. 2012). In 2013, Vanessa Jacquelain an economist at the Agence Française de Dévelopment noted that SSA countries “now carry the lowest external debt burden in thirty years” (Jacquelain 2013). The World Bank Data also show improvements in the areas of health and education. Life expectancy in SSA cratered in the 1980s at approximately 48.5 years and only started increasing around 2003. The average life expectancy in SSA is now at 56.4 years. Primary school completion, like life expectancy was consistently low since the 1980s and only started increasing around 2001. It is highly probable that the cratering of world development indicators in SSA like GDP growth, life expectancy and education are correlated to the rise of neoliberalism and in particular, it’s instrument - foreign aid driven by policy and adjustment strategies epitomized in the Poverty Reduction Strategy Papers and the Millennium Development Goals. China’s venture in SSA can be understood as presenting a superior alternative to SAP-driven economic aid and FDI.
Neoliberalism’s Impact on SSA
Writing for the re-launch of the New Left Review, Perry Anderson claimed that the principle aspect of the past decade was the “virtually uncontested consolidation, and universal diffusion, of neo-liberalism” (Anderson 2000, p. 6). The rise of the neoliberal agenda in the developed world was applied without thought to the African continent beginning in the late 1970s and early 1980s. The World Bank’s 1981 Accelerated Development in Sub-Saharan Africa: An Agenda for Action, commonly called The Berg Report, exemplified this. The market being the driver of all socio-economic growth, and the only way to reduce poverty meant that African economic, political and social institutions were to be restructured so as to make the private sector front and center. This neoliberal project in Africa was supposed to be inclusive and open Africa to the global economy; encouraging growth by relying on agriculture and allowing complete control by market mechanisms.
Yet, in 1992, Paul Lubeck claimed that after “nearly a decade of submission to structural adjustment programs (SAPs) administered by the World Bank and the International Monetary Fund (IMF), neither the promised “accelerated growth,” nor market equilibrium, nor new foreign investment has been forthcoming” (Lubeck 1992, p. 520). Per Lubeck, there was some consensus amongst most scholars on the root causes of the African non-development situation. These included random boundary drawing among the colonial powers plus their patterns of export, harmful ecologically practices that degraded the environment, along with the Third World debt crisis of the 1980s. However, neoliberal policies were the hammer that drove the nail into the coffin. Hellinger et al. acknowledged at the United Nations Civil-Society Hearings on Financing for Development that global economic management dominated by the G7 finance ministries in the form of structural adjustment programs engendered the destruction of local businesses and farms, the reduction of employment and incomes, and the increase in poverty and economic inequality. In short, wherever its implementation was attempted, it produced general social, economic and financial instability (Hellinger et al. 2001).
Padraig Carmody in his book, Neoliberalism, Civil Society and Security raises interesting questions about the contradictions inherent in neoliberalism as a policy in Africa. He argues that the failure of market liberalization and structural adjustment programs to grow the economies of African countries was met with further requests for adjustment. The model for development itself was never questioned. In the case of Zimbabwe, he notes that changes brought about by neoliberal pressure on the Mugabe government only served to increase the precariousness of the people of Zimbabwe (Carmody 2007). George Caffentzis questions the fervent continuation of SAPs writing, “if African economies performed so poorly… then one can only declare that its ruling economic policy is to blame, especially when this policy was to get its legitimacy from its claim to reduce debt, increase FDI and export shares” (Caffentzis 2002, p. 93).
Adesina, went further than most in completely condemning neoliberalism as an intellectual thought and tradition (Adesina 2004). He brought into question the tenets of neoliberalism – the belief in the moral necessity of market forces in the economy and entrepreneurs as a good and necessary social group. For Adesina, neoliberalism relied on a ‘verbal logic’ instead of complex mathematical modeling, in order to ensure its accessibility and appeal to the masses. Furthermore, the advanced economies of the world championed trade and market liberalization, requiring SSA to open its markets, with sickening results. Adesina notes that, “the elimination of the agricultural protection in the OECD countries would have meant an estimated gain for the SSA economies of US$6 per capita or US$3,857.4 million…” (Adesina 2004, p. 12).
The impact of neoliberal mechanisms like SAPs and the opening of SSA markets manifested themselves in the contraction of the economy and the mounting of social development crisis. It also led to the incapacity of states to respond to increasing global and financial crises. UNCTAD statistics from 2002 show persistently declining terms of trade for SSA beginning around 1980 through 1998. Conditions imposed by World Bank and IMF during this period eroded special differential treatments that some African countries had enjoyed previously. Even more crushing is the fact that countries that were strong implementers of the SAPs experienced negative annual GDP growth compared to “weak adjusting” or “non-adjusting” who were either experiencing little, but positive growth rates.
New Structures and Change?
So we come back to the question of how China is changing the world-economic system especially in terms of how it is stratified; and how China’s rise is going to affect SSA’s own station in the world-system and world-economy. In this section, I look at systemic change from a more conceptual basis rather from a micro-macro economic sense.
Creating hegemony and geopolitics
In this effort, we begin by examining the concept of hegemony as a process of struggling for influence; perhaps in the pursuit of a version or new idea/concept of “development” that may or may not conform to Western standards. Maybe, then we can begin to understand the notion of hegemony as non-static and specific to a particular vision of domination.
The idea of hegemony is complicated. In terms of global influence, is it mostly economic? Is it mostly political? Is it mostly military? Is it ideological? The $682 billion spent by the U.S. in 2012, according to the Office of Management and Budget, was more than the combined military spending of China, Russia, the United Kingdom, Japan, France, Saudi Arabia, India, Germany, Italy and Brazil — which spent $652 billion, according to the SIPRI Military Expenditure Database. Still, the US has yet to decisively win a military intervention since the end of WWII not counting Grenada. And while some talk of China’s economic rise, that is tied to and dependent on the US’s economy for good or bad.
In classic trimodal world-system analysis, a “core” country exhibiting dominance over all others in areas of production, trade and finance would be considered hegemonic. However, to understand the current dynamics of global interaction amongst nations, it makes more sense to understand the world-system, more as a fluid enough superstructure where nations can create hegemony. By taking this approach that we can have a better understanding of what China is doing in the Global South and in our case, SSA. If China is engaging in ‘hegemony-making’, its economic assistance to SSA can be seen as powerfully subversive and potentially destabilizing to the world system, especially given its political implications. Conceptually, we can refer to Gramsci’s apropos idea of hegemony that comes across not as static but dynamic.
Hegemony in Gramscian terms is more of a process – a wrangling of sorts for influence but done in a shrewd, restrained way. This type of hegemony largely suggests a dominant or subordinate group leading through persuasion, with a hint of coercion. It is not categorically embodied by one country with predetermined attributes. It is achieved through exercising power over subordinate groups, but even with power firmly in its grasp, leadership is equally important (Gramsci 1971). Furthermore, gaining hegemony does not involve the total domination of all competing potential replacements of the failing hegemon but rather, it is aligning one’s interests (economic, political, social) with that of everyone else. The consent of different subordinate groups that allow themselves to be lead by a dominant group is absolutely necessary. John Storey explains that hegemony implies “a society in which there is a high degree of consensus… in which subordinate classes appear to actively support and subscribe to values… which bind them to, incorporate them into, the prevailing power structure” (Storey 1993, p. 119). In a way, this is similar to the idea of comparatively complementary regimes of accumulation put forth by Astra Bonini. In the paper Complementary and Competitive Regimes of Accumulation, she demonstrates that if the hegemonic regime of accumulation, structures the economy in a way that is comparatively competitive to raw-material producing countries, then those countries will be able to effect upward economic mobility within the modern world system (Bonini 2012).
At the first FOCAC, President Jiang Zemin reminded conference attendees that while China was the largest development country, Africa was the continent with the largest number of developing countries. He announced that the “Chinese people and the African people both treasure independence, love peace and long for development and that they are both important forces for world peace and common development. It is the unremitting efforts made by the people throughout the world including, the Chinese and African peoples, that forces for world peace have kept growing and the world development cause has made considerable progress” (Zemin 2000). He went on to further state that the root cause of unequal development that marks today’s world is due to “many irrational and inequitable factors in the current international political and economic order… [that] are detrimental not only to world peace and development, but also to the stability and development of the vast number of developing countries” (Zemin 2000). President Jiang Zemin then outlined the Five Principles of Peaceful Coexistence, characterizing a more positive approach to world cooperation and existence. Leaving aside any debate about the effectiveness of China’s foreign direct investment and foreign aid to Africa, it appears that China has made serious headway in terms of the acceptance of its view on development and coexistence in much of the Global South.
Gramsci writes, “undoubtedly the fact of hegemony presupposes that account be taken of the interests and the tendencies of the groups over which hegemony is to be exercised, and that a certain compromise equilibrium should be formed -- in other words, that the leading group should make sacrifices of an economic-corporate kind. But there is also no doubt that such sacrifices and such a compromise cannot touch the essential; for though hegemony is ethical-political, it must also be economic, must necessarily be based on the decisive function exercised by the leading group in the decisive nucleus of economic activity” (Gramsci 1934, p. 161). That is to say, the period during which there is a struggle for hegemony, compromises and alliances will be made with subordinate groups to bring them all together under a hegemonic umbrella.
Writing for the Financial Times in 2008, President of Sengal, Abdoulaye Wade explains, “China’s approach to our needs is simply better adapted than the slow and sometimes patronising post-colonial approach of European investors… [That] economic relations are based more on mutual need… [and that] China, which has fought its own battles to modernise, has a much greater sense of the personal urgency of development in Africa than many western nations” (Wade 2008). In 2009, Paul Kagame, President of Rwanda, openly praised the Chinese form of business making and investments in Africa (BBC News October 11, 2009). And in 2010, The Globe and Mail noted that South Africa’s President Jacob Zuma, praised China as the example of economic policy success (Geoffrey August 25, 2010).
From a Gramscian perspective, we can understand China as playing a type of ‘war of position’, which is not so much about a cultural struggle in as much as it is a politico-economic one. China provides an alternative mode of development for SSA – one in which it refrains from interfering with the countries’ domestic politics vis-à-vis its political and economic institutions and bureaucracy. It is also setting an example for other South-South relations (India and Brazil’s FDI and aid to SSA). This ‘war of position,’ is a long struggle that becomes increasingly important during times of organic crisis. Post 2008, as the global recession became more intense, China had to be more willing to play a larger role in the world-economy and in the less developed world. The fact remains that China’s own upward mobility within the world system is improved through its facilitation with the upward mobility of so-called peripheral countries. Further, a Sino-centric world economic system is only possible to the extent that China succeeds in creating a system of alliances, which allows it to mobilize the majority, to its goals. This could produce what Arrighi and Silver understood as a non-catastrophic transition into a new world order (Arrighi and Silver 1999). In Chaos and Governance, the authors note, “US adjustment and accommodation to the rising economic power is an essential condition for non-catastrophic transition… An important aspect of this is the capacity and willingness of the East Asian economic expansion to open up a new path of development for themselves and for the world that departs radically from the one that is now at a dead-end” (Arrighi and Silver 1999, 289).
China continues to claim and demonstrate that it has a method of development that is non-intrusive yet effective. Many world leaders both in the Global North and South are beginning to buy into that rhetoric (most likely for their own reasons and for their own perceived advantage). March 28, 2014 was a big day for the legitimization of China’s policies in the world economy. The United Kingdom, going against the United States’ advice, officially voted to join the Chinese-created and Chinese-led Asian Investment Infrastructure Bank. The response to the AIIB has been incredibly polarizing with some seeing it as an aggressive blow at the US’s hegemonic position in the world as the Chinese alternative to the World Bank while others see it more as a way to balance the scales in favor of the weaker and emerging economies. Hung writes, “China, in other words, is deliberately forgoing some of its leverage, including in the very organization it is setting up. And it is doing so because it wants the cover and the legitimacy that will come from the participation of other countries. Creating the A.I.I.B. is not Beijing’s attempt at world domination; it is a self-imposed constraint, and a retreat from more than a decade of aggressive bilateral initiatives” (Hung 2015b).
So if China is in fact playing a long ‘war of position,’ how is this playing out in terms of its position in the stratified world system? First we turn to a seminal piece of work – The Stratification of the World-Economy: An exploration of the Semiperipheral Zone. In it, using the population by state (as a percentage of total population) and the log of Gross National Product (GNP) per capita in 1970 USD, the authors empirically demonstrate the long-term stability of the trimodal structure of the world economy over a 45-year time period. In this paper, Arrighi and Drangel confirmed that a trimodal world system was fully in place and that trimodality had persisted over time. Based on their data, movement between the three zones were extremely limited and noted, “95% of the states which we could find data (and 94% of total population) were in 1975/83 still on or within the boundaries of the zone in which they were in 1938/50” (Arrighi and Drangel 1986, 44). If we were to take the period, 2000 to 2010 and using the Arrighi Drangel method, we notice significant changes happening in the structure of the world economy especially in 2010 when the economies of both China and India are growing and causing major shifts in the stratification process. The lines between the semi-periphery and periphery become blurred and there is almost a quad-modal distribution. However, what is not clear is whether the changes in the distribution of the organization of the world economy are permanent or simply an anomaly. Herein lies the difficulty of understanding global trends – the need for retrospection. On the African continent, the economies of the natural resource-rich countries are clearly expanding in a positive way, but only time can tell how this will translate in terms of improving the day-to-day lives of the average African. Further, while we can empirically observe broad changes occurring in these peripheral states, whether they are permanent or temporary remains to be seen. For now, there are positive changes occurring that should be documented and validated instead of being dismissed as yet another attempt of the Rest (in this case China) imitating the West (their imperialist/colonialist past).
China could be engaging in hegemony making but most likely what we are seeing is China playing geopolitics. Its economic reforms have allowed it to compete successfully in the world economy and it has expanded its trade networks throughout the Global South. Some scholars such as Hung (2015b) and Karatasli and Kumral (2015) made arguments to the effect that China wants and needs to maintain the status quo/the current world economic structure. Some have branded China’s engagement with SSA as some form of neocolonialism or neo-imperialism. However, one must be much more particular when applying these concepts/terms to describe and define SSA’s relationship with other countries. On the one hand, you have the Berlin Conference of 1884 where the supposed world leaders officially agreed on how to separate a continent. A continent already inhabited. There, you have formal colonial imperialism and colonization. Not until the 1950s when de-colonization began to occur that you have entire nations/peoples beginning to grab and demand their sovereignty. Of course, one can argue that de-colonization occurred primarily because the costs of colonialization outweighed the benefits to the colonialists. If we begin to talk about neocolonialism and neoimperialism, China’s involvement in SSA is qualitatively different.
China is engaging in geopolitics in a multipolar world. For now, only time will tell the true impact of China on SS; but so far, so good.
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<![if !supportFootnotes]><![endif]> In 1954 Khrushchev had agreed to the split of Vietnam at the Geneva Conference on Indochina. While the Chinese delegates signed the agreement, Mao was deeply troubled by this as it was a clear instance of the Soviet’s move away from global communism. Two years later, when the Communist Information Bureau which had brought communist leaders together globally, was broken up, China’s ideological split from Russia was cemented.
<![if !supportFootnotes]><![endif]> This is important, because it gives us an insight into China’s current policies vis-à-vis Africa and the rest of the Global South – especially its lack of military interventions overt or otherwise.
<![if !supportFootnotes]><![endif]> Enlai’s 10-country tour included the United Arab Republic (now Egypt), Algeria, Morocco, Tunisia, Ghana, Mali, Guinea, Sudan, Ethiopia, and Somalia.
<![if !supportFootnotes]><![endif]> The Tiananmen Square Student Massacre occurred during this time June 1989 followed by Dieng Xiaoping economic reforms beginning 1992 were .
<![if !supportFootnotes]><![endif]> One-China Policy is the policy that there is only one state of China even if two governments claim to be China. Further, to engage in diplomatic relations with the PROC means breaking relations with the ROC (Taiwan).
<![if !supportFootnotes]><![endif]> The ‘first island chain’ is the area China must secure and disable from American bases, aircraft and aircraft-carrier groups to effectively defend itself from and preemptively strike its enemies. It is generally thought to include the Japanese Archipelago, Taiwan, Philippines, Borneo, and the Malay Peninsula.
<![if !supportFootnotes]><![endif]> Deborah Brautigam at Johns Hopkins University’s School of Advanced International Studies and Philippa Brant at the Lowy Institute have criticized AidData because so much of the dataset is not verified or has one source. On the other hand, Development Gateway notes that given China’s penchant for not regularly participating in reporting systems such as OECD’s Credit Reporting System, the International Aid Transparency Initiative, and country-specific Aid Management Platforms, AidData’s achievement in making openly available, the data for nearly 1700 official finance projects in 50 African countries is laudable and an impressive achievement.
<![if !supportFootnotes]><![endif]> This includes countries such as Angola, Nigeria, South Africa, and The Gambia, to name a few.