Is China the key to Africa's development?

Is China the key to Africa's development?

Is China the key to Africa's development?

Notes from different corners of the world.
March 6 2008 7:17 AM

Trade-Offs

Is China the key to Africa's development?

Young men sell a variety of products on the streets of Arusha. Click image to expand.
Young men sell a variety of products on the streets of Arusha

ARUSHA, Tanzania—Inside a dark shop opposite a frenetic bus station, transistor radios are stacked beneath newfangled LED flashlights and belts hang like snakes from the ceiling, their buckles emblazoned with the decidedly un-African word Guangzhou. Outside, in the equatorial sunshine, men who crowded inside the store become mobile versions of it, strapping to their backs 4-foot-wide square racks interlaced with watches, wallets, belts, and other items.

A lanky young vendor whom I'll call Charles walks miles to the city's outskirts shouldering a weighty rack of trinkets, hoping to unload it along the way. Charles, who asked that his real name not be used because it's illegal to vend in the city center, hawks plastic watches for 40 cents and leather belts for $1.80, but his sales are consistent, and on a good day he takes home $45 in earnings. What is impressive about Charles' operation is not only the low, low prices of the Chinese goods he sells but that he brings them to people in the slums who've never bought these things before.

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"These new Chinese products help low-income people because they can't afford the European or American stuff," says Mr. Abasi, who owns the store that supplies Charles and other vendors. "People know these products are not good quality, but they buy them because they look expensive."

While the United States and Europe still loom large here as cultural and economic icons, China is making inroads into Africa in rivulets. In this city, Tanzania's second largest, the rivulets take the form of manufactured goods, construction projects like roads and cell-phone towers, and a smattering of Chinese restaurants. For a desperately poor country like Tanzania, this "South-South" trade with China has created massive new opportunities for accelerating economic development.

In recent years, the increase in trade flows between sub-Saharan Africa and Asia has been dramatic—exports from Asia to Africa have grown at an annual rate of 18 percent since 2002. Part of the equation is that low-cost goods from China fit economies like Tanzania's well. Goods like those sold by Charles are low-quality and sometimes fake, but they are creating new microenterprise opportunities for entrepreneurial Africans. Charles told me he, like many other Arusha vendors who had regular jobs before going independent, worked in a shoe shop until he was laid off.

The new opportunities to trade with China are so tantalizing for Africans that some are returning from abroad to invest in their homelands. Georgine Spake is an elegant, tall Congolese woman who speaks English with a thick French accent and lives in the leafy suburbs of Washington, D.C., with her American husband and four children. Upon visiting her birthplace of Kinshasa last June, after a nine-year hiatus, Spake told me she was dumbfounded to discover that most of her friends and family were traveling to and from China to do business. Lured by the promise of turning her own respectable profit, Spake flew to the bustling manufacturing hub of Guangzhou, China, to investigate import opportunities with a cousin who was already importing security cameras and telephones. She stayed for a month, paying a Congolese man who lived there $150 to be her translator and fixer throughout her stay. By the end, she arranged for the shipment of 30 tons of garlic to be sold at wholesale in Kinshasa. She chose garlic, she said, because there has been great demand for it since the eastern Democratic Republic of Congo, which traditionally cultivated garlic and onions, fell prey to conflict.

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According to Spake, Guangzhou was swarming with Africans. Each night, many of them congregated at a bar called the Elephant, where African musicians and dancers performed. There she exchanged business tips in hushed tones with Senegalese, Cameroonians, and Zimbabweans, as their local handlers hovered nearby to prevent their clients from being poached by other handlers.

Spake now communicates with a Chinese partner by e-mail and phone and plans to return to Guangzhou this June to arrange more shipments of garlic and, perhaps, tomato paste.

Though the trade balance between China and Africa is heavily weighted toward Chinese exports, Africa's exports to China grew by 48 percent annually between 1999 and 2004, according to the World Bank. Just as it has grown ravenous for Sudan's oil and the DRC's gold, China is discovering Tanzania's natural resources. In the southern coastal region, Chinese companies are buying millions of dollars' worth of indigenous hardwood logs to feed China's construction and furniture industries, which supply companies like IKEA with products. Nonprofit organizations that monitor the trade in illicit goods have tracked the flow of ivory from and through Tanzania to China.

But as China's investments grow increasingly hard to resist, the fast-flowing trade is ripe for corruption in weak African states like Tanzania. A report released in May 2007 by TRAFFIC International, a joint program of the WWF and IUCN—the World Conservation Union, found that Tanzania had lost $58 million in timber revenue to corruption, in part because the majority of the timber sales were illegal. Most of the benefits from the trade were lumped among a select few groups with little trickling down to the communities living closest to the forests.

One way to ensure that local communities benefit from the logging is to process timber products on African soil before exporting them, says Rogers Malimbwi, a professor of natural resources at Sokoine University in Dar es Salaam. Tanzania's timber sector is beginning to build mills to process the timber, but much of it still leaves the country as intact logs, he said.

Meanwhile, African consumers are also beginning to experience the ugly side of trading with China, a lesson Americans learned all too well last year with the massive recalls of Chinese-made dog food and toys. In October 2007, counterfeit electrical equipment from China caused fatal electrical fires in Dar es Salaam, the country's commercial capital, according to the Confederation of Tanzania Industries, which called for a crackdown on counterfeits.

"The Chinese medicines are making people sick, and the electrical wires are not safe," said Spake. "But China is giving the African people a chance to do business and make more money, and for some people that means being able to buy food to eat."