advertisement

Opinion & Analysis

Chinese shine to global influence and leadership

Chinese President Xi Jinping makes a toast during a welcome banquet for the Belt and Road Forum at the Great Hall of the People in Beijin on May 14, 2017. AFP PHOTO | WU HONG
Chinese President Xi Jinping makes a toast during a welcome banquet for the Belt and Road Forum at the Great Hall of the People in Beijin on May 14, 2017. AFP PHOTO | WU HONG 

I have been a keen watcher of China since about 15 years ago when a surprise economic turnaround in that country sent global commodity prices on an upward trajectory.

In 2003 crude oil prices had shot above the then notional $28 dollar maximum price set by Opec, and soon prices were climbing beyond $50, and finally past the $100 level.

The global oil supply, demand and prices then became key features in global financial and trade news.

China’s fast-growing export-driven manufacturing sent the Chinese all over the world, including Africa, looking for energy and mineral resources to feed their industries.

In Africa, the Chinese found a continent that was in a desperate need of infrastructure development funding and which was ready to make contra deals.

Previously, Africa was engaged in perpetual and mostly frustrating negotiations for infrastructure funding with multilateral agencies and this was often accompanied by stifling conditions. African countries readily signed up for construction contracts tied up to Chinese credit.

As years moved on, China had acquired invaluable experience and presence in infrastructure financing, development, and contracting.

And the Western World was rapidly losing much ground in infrastructure jobs in Africa, in addition to loss of access to critical minerals, and export markets in Africa. And this situation mostly persists to this day.

As China accelerated their national economic growth, the country continued with a deliberate low-profile and non-interfering strategy in most of the geo-political situations.

In Africa, this made the Chinese a development partner of choice as it was usually business without insistence on compliance with human rights and governance standards.

By mid 2010s, when Xi Jiping assumed Chinese presidency the country was already ranked the second biggest global economy.

The President modified China’s economic development policies to de-emphasise export manufacturing and focus on internal consumption and improved quality of Chinese lives. China also became a true supporter of green and clean energy policies.

However, it is in the past month that we are noticing a transformed and confident China emerging into global economic leadership as the USA indulges in a self-imposed lapse from global responsibilities and leadership.

China seems to be purposefully moving fast to fill an obvious vacuum created by President Trump’s apparently incoherent and wayward economic and political policies.

And China has been on the shine recently. In the past few weeks the country unveiled a new jetliner Comac C919 that will soon be competing with the likes of Airbus and Boeing.

Last month China launched its first homemade military aircraft carrier, a sign of a growing military capacity not leveraged on purchases from the West.

In Europe we have seen China take over the large Switzerland-based agro-chemical conglomerate, Syngenta, giving China a new avenue to globalise in agriculture. There was also a recent Chinese significant participation in the UK’s 3,200MW nuclear energy generation infrastructure.

On economic diplomacy, China has recently negotiated and signed with the Americans a new bilateral trade agreement. The result of this give-and-take trade protocol is that the anti-China rhetoric previously uttered by President Trump has now simmered. The trade deal is a sign of growing Chinese ascendancy into global trade diplomacy.

However, it is the launch in Beijing last weekend of the “One Belt One Road” global infrastructure initiative that confirmed China’s emerging status in global economic leadership.

The forum assembled tens of global leaders (including presidents Uhuru Kenyatta and Putin of Russia) to discuss a Chinese-driven initiative to connect Asia, Europe, and Africa with ports, railways and highways.

One can correctly link this initiative to the vast Chinese experiences gained in international infrastructure financing and contracting, especially here in Africa.

No country can afford to ignore China’s rapid ascendancy to global economic prominence. However, in Africa we should be guided by lessons learned from China’s ways of doing business.

The Chinese are shrewd negotiators who end up with much more value in virtually every deal. They prey on our known weak negotiating points.

Further, we should be prudent and not take up unsustainable levels of debts simply because it was easily available from the Chinese.

advertisement