Beyond Growth: What Role for Sustainability in the China-Africa partnership?

Zambian miners

Zambian miners


photo credit: bypassedblog via photopin cc

“China is a dragon, hungrily consuming African resources with no regard for the environmental cost”.

Descriptions of this kind – seen frequently in Western media reports  – are increasingly shaping African and Western perceptions of Chinese activities in Africa. This is problematic for two reasons: firstly, these reports fail to disaggregate the different Chinese players active in Africa; and secondly, these reports are often based on incomplete or biased data regarding the environmental impacts of Chinese investment on the continent. The question of ‘environmental sustainability’ is one that has been raised frequently in the African context, particularly in the wake of large-scale Chinese investments in many African countries. Is China having a detrimental effect on the environment in Africa? Hoping to find out, I took part in the Oxford University China-Africa Network workshop on sustainability on Thursday afternoon here in Oxford. Here’s what I learned:

Titled, ‘Beyond Growth: What Role for Sustainability in the China-Africa partnership?’, the workshop featured three main speakers, Prof. Tony Allan (King’s College London/School of Oriental and African Studies) who spoke on African management of water resources, Mr. Jamal Saghir (Head of Sustainable Development for Africa, World Bank) who spoke on Chinese investment in Africa, and Mr. Hassan Dudde (Managing Director of Somali Economic Forum) who spoke on Somalia’s strategy for attracting foreign investment. For my part, I came to the conference with a single question in mind: “Given the scale of environmental degradation in China, can we expect Chinese investment to have similarly dire consequences for the environment in Africa?”

A 2007 report from Mr. Saghir’s organisation (The World Bank) stated that 16 of the world’s 20 most polluted cities are in China. Meanwhile, recent reports from Beijing found that the concentration of harmful PM2.5 particles in the Chinese capital reached a record high of 993 in January this year, nearly 40 times the safe level of exposure recommended by the World Health Organisation. Groundwater is reported to be contaminated in 90% of China’s cities and air and water pollution are thought to cause 760,000 premature deaths each year in the country. These indicators tell the story of the course of economic development in China, a course that in many instances has placed the imperative for economic development before the imperative for environmental sustainability.

Given that African leaders are also desperate for economic growth in their countries, I wanted to know whether Chinese economic activity could lead to a similar spiral of environmental degradation on the continent. I must say that after two hours of listening carefully to each of the three speakers in turn, I am no closer to being able to answer this question.

To his credit, Mr. Saghir provided an insightful overview of Chinese investment in Africa, arguing that Africa is at a critical stage in its history and that as the second largest shareholder in the World Bank, China has a crucial role to play in the continent’s economic transformation. According to Mr. Saghir, China is the largest investor in new African infrastructure and a major player in investment in Africa overall, with China ExIm Bank as China’s largest single investor in Africa. Mr. Saghir’s presentation explained that five countries account for 60% of China’s investment in Africa: Ethiopia, Sudan, Angola, Zambia & Ghana. China’s investment in these countries is overwhelmingly related to resource extraction and associated infrastructure, predominantly electricity generation and transport networks. Indeed, Chinese firms often pay for resources by providing host countries with the infrastructure needed to extract these resources. The terms of these investments are not necessarily concessional, with an average interest of 3.6% and a 12-year maturity with four years grace.

As was pointed out, African mineral and fuel exports are growing and China is increasingly reliant on these exports from Africa. This is driven by: (1) a desire to diversify away from traditional hydrocarbon exporters in the wake of the security concerns raised by the 9/11 attacks, (2) a need to recycle foreign exchange reserves through FDI, (3) a desire to internationalise Chinese private and public sector firms, (4) a need to fuel China’s economy and (5) a need to expand foreign markets for Chinese goods. On top of this, Beijing has promulgated a discourse of South-South cooperation, indicating that it does not wish to be considered a donor by African governments, but rather as a partner in economic development for the mutual benefit of African and Chinese citizens.

Even in the field of energy generation alone, the scope for Sino-African partnership is huge. According to Mr. Saghir Africa’s total energy output in a year is equal to China’s output every other week. “Energy is the biggest game in town”, he said, pointing out that China has already invested US$10 billion in the energy sector in Africa, and there is clearly appetite for more. Indeed, Mr. Saghir predicted that African firms will increasingly look to China for lessons on managing infrastructure and investments in their own countries. But what impact will this have for sustainability in Africa?

Although Mr. Saghir indicated that, in future, Chinese investment contacts will come under greater scrutiny from African partners; he did not expand on the bargaining position of African governments on environmental issues, nor did he mention the problem of poor environmental regulation in Africa, or the fact that African governments seem overwhelmingly interested in taking lessons in economic growth from China, not lessons in environmental sustainability.

Like Mr. Saghir, Prof. Allan and Mr. Dudde both indicated that Chinese firms have only just begun to scratch the surface in terms of investment in African resources. But like Mr. Saghir, neither of them provided any evidence to suggest that Chinese partnership with African players will be able to move “beyond growth”, to focus on the broader issue of environmental sustainability.

I am a realist and I recognise that economic development in developing countries has traditionally come at a heavy cost for the environment. In this sense, Chinese investments in Africa are not exceptional. Furthermore, it is important to note that much of China’s environmental degradation – and at least 30% of its carbon emissions – are derived from the manufacture of goods for export, meaning that China bears more than its fair share of the environmental cost of global consumption. Nonetheless, looking at China’s domestic situation gives me little optimism that it will seek to mitigate the environmental impacts of its activities in Africa.

This is not to say that China has been inactive on environmental issues. Beijing has pledged to reduce carbon emissions at home by 40-45% between 2005 and 2020. In the five years between 2005 and 2010 alone, the country achieved a remarkable reduction of energy intensity of 19% against a target of 20%. However, rather than being an ideologically driven effort to place environmental protection targets above economic performance targets, Beijing’s environmental strategy is driven by a fear of domestic unrest and pressure from its own citizens, who are increasingly voicing their dissatisfaction with poor environmental governance at home. Neither Chinese state-owned firms nor Chinese private firms face this kind of pressure in Africa … yet.

And so, the question of the environmental impact of Chinese economic activity in Africa is a question of the willingness of African leaders to prioritise environmental sustainability alongside economic growth targets. It is also a question of the ability of African populations to put pressure on their leaders to do this. Lastly, it is a question of the capacity of African governments to regulate Chinese industries in their countries. This is easier said than done. As the Chinese saying goes: 上有政策,下有对策 (above you have policies, below you have practice). African governments will need to take a tough line on corruption and adopt a strong and decentralised approach to environmental regulation in order to prevent massive degradation of the environment in Africa.

–      Views expressed are entirely the author’s own unless stated otherwise –

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One response to “Beyond Growth: What Role for Sustainability in the China-Africa partnership?

  1. Great post. I was just wondering how much of the 10bn investment in energy infrastructure has been from the Chinese government, and how much from private sector investors? I’d also be interested to know if you can recommend any further reading on the domestic environmental strategy being based on pressure from the populace? Really interesting read – thank you!

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