Chinese and Indian engagement in Africa: competitive or mutually reinforcing strategies?

• Author: Cheru, Fantu
• Position: Sino-Indian Relations - Report

This article explores the strategies used by China and India to build a strong relationships with Africa. It analyzes China and India's competing interests and strategies around four broad issues: access to Africa's potentially vast markets, development cooperation, diplomatic influence and energy security. Several questions are raised based on the nature, similarities, differences and impacts of Chinese and Indian strategies. Will these create a new dynamism in South-South relations, or lead to a new form of asymmetrical relations between Africa and its Asian giant friends? What are the likely implications of closer Sino- and Indo-African ties for the continent's relations with the West, Africa's traditional trading partner, with which it has long-established relations, economic ties and strategic interests? In seeking explanations or answers, we caution that the differences between Chinese and Indian strategies of engagement are more of form than intent, underscoring the primacy of the competing national interests that do not completely foreclose mutually reinforcing strategies. We note that India's strategies presently swing between playing "catch up" with China--which has clearly made greater inroads--and pragmatically accommodating Chinese and other interests in Africa. There are even instances, as in the case of the Sudanese oil industry, in which Chinese and Indian oil companies are cooperating as partners in an oil-producing consortium, despite competing in other African countries. While the emerging scenario is one of competition that is moderated to some extent by accommodation, we conclude, based on certain conditions, that in the medium to long term, India may turn out to be more competitive than China in its engagement strategies with Africa.

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Over the last decade, China and India, two emerging global economies, have become Africa's most important economic partners, and their growing engagement with the continent is transforming Africa's international relations in a dramatic way. This relationship has evolved over time, but is currently dominated by competing interests in trade, investment, economic cooperation and the quest for influence. Trade between China and Africa is believed to have grown from about $20 billion in 2001 to $120 billion in 2009. (1) In the same regard, estimates suggest that trade between India and Africa rose from $9.9 billion in 2004-05 to $39.5 billion in 2008-09. (2) While securing energy resources is a critical factor in China's and India's expanding relations with Africa, both countries are also strengthening trade, investment and aid ties with Africa through various bilateral and multilateral forums such as the Asia-Africa Summit, the Forum on China-Africa Cooperation (FOCAC), the China-Africa Business Council (CABC), the India-Africa Forum Summit (IAFS), the India-africa Project Partnership and the India Brazil South Africa (IBSA) Dialogue Forum.

Africa, with an estimated population of about 900 million, is a potentially huge market for investments and manufactured commodities. In addition, given its vast natural resource wealth, including oil, the continent offers a trove of natural and energy resources--raw materials in high demand by the rapidly industrializing Asian giants. Also, given the socioeconomic and security challenges facing Africa, including the poverty of a vast majority of its peoples, the continent offers a developmental opportunity for aid, cooperation and peace support operations based on Southern solidarity.

This article explores the competitive and mutually reinforcing strategies used by China and India in Africa. It also provides explanations for the ways competition between them has to some extent been moderated by accommodation as they pursue their interests in Africa. In setting about its task, this article is divided into four broad sections. The introduction addresses the background and key issues, including how the rising profile of China and India in Africa affects the continent's relations with its traditional trading partners in the West, who are concerned about what it could mean for their own interests and influence in Africa. It is followed by an analysis of Africa's embrace of China and India. The third section explores the similarities and differences between Chinese and Indian strategies of engagement and their implications for Africa's development. The last section discusses how competing strategies have been moderated by accommodation. It concludes that under certain conditions in the medium to long term India may turn out to be more competitive than China in Africa.

AFRICA: THE "BIG PRIZE"

China and India have, in the context of their respective global activism, continued to open up and expand investment and trade opportunities, as well as to pursue strategic, energy and food security interests in Africa. This feeds into a view of Africa as a "big prize," partly because the continent is seen as a source of new growth in a highly competitive yet interdependent world. This perception, along with the quest for influence in the continent, underpins the competing interests of both countries in Africa. These competing interests and corresponding strategies revolve around four broad issues: access to Africa's markets, opportunities for development cooperation, strategic and diplomatic influence and energy and resource security.

Some recent figures suggest that China has overtaken the EU as Africa's second largest trading partner and is the largest source of African imports, in a context where EU-Africa trade is in decline and beset with troubles linked to protracted negotiations over a new trade agreement, seen by many Africans as unfairly skewed in Europe's favor. (3) Europe is therefore keen to regain its place of prominence in Africa's trade, partly by seeking ways of addressing the competition from China, including what it considers to be the dire implications of China's tactics in the "new scramble for Africa." (4) Other commentators are of the view that it is the United States that has been displaced by China as Africa's second largest trade partner. (5) U.S.-Africa trade is concentrated in select African countries and is largely dominated by oil. Thus, there are concerns about the likely implications of China's aggressive search for oil deals in Africa for U.S. energy security, even though it has been noted that China's oil companies lag far behind the Western and especially U.S. multinationals that dominate the African oil sector. (6)

China-Africa and India-Africa trade have also raised some concerns in Japan, which seeks resources from Africa, even though Africa accounts for only about 2 percent of Japan's total global trade. Japan, using cooperation and trade forums such as the Tokyo International Conference on African Development (TICAD) is intent on closing the gap in the competition for Africa's resources by doubling trade with the continent in a context where the rate of growth in China's and India's trade with Africa has far outpaced Japan-Africa trade. (7)

It is important to note that the United States, the EU and Japan, faced with a rapid rate of expansion in China-Africa and India-Africa trade--a rate that exceed theirs--are critical of China's methods. In their view, these give China undue advantages and block political and economic reforms in Africa. (8) What is clearly at stake are competing Western and Eastern interests in Africa, and the ways in which Eastern expansion is likely to threaten or undermine medium- to long-term Western strategic, economic and political interests in Africa. What is not usually mentioned is that the emerging Eastern powers are also key partners of the West in the global market, and a force to be reckoned with within the post-Cold War international political economy. In other words, Africa is at the center of competing interests. These dynamics will shape the development of African countries and Africa's international relations and place in an emerging global order.

Africa's position as a center of East-West competition raises the question of whether there exists a coherent African strategy for harnessing the potential developmental spin-offs that could accrue from increased investments, trade and aid from the Asian giants, and if one does not exist, what should be done to create one. Another related question is whether new engagement between Africa, China and India will amount to the continent replacing Western economic domination with Eastern economic domination.

Out of the two Asian giants, China's engagement in Africa has attracted more attention. According to Naidu, this is because India is a democratic state and is thus viewed as less of a threat. (9) Apart from possible ideological concerns, some Western commentators are critical of China's "no political strings attached" aid and its non-interference policies, which they note are largely "supportive of illiberal regimes" and "undermine efforts by international organizations to promote accountability, sustainable development, and environmentally sensible projects in Africa." (10) Others are less enamored of the view that China's resource diplomacy often thrives on supporting regimes with poor human rights records such as Sudan and Zimbabwe, or undercuts Western businesses by selling at low prices in Africa. They argue that Western anxieties are partly driven by perceived threats to their own competing interests in African resources, markets and spheres of influence. (11)

Although China's economic ties with Africa are more extensive in comparison to India's, the latter is moving quickly to expand its presence in Africa and close the gap with its Asian neighbor. The April 2008 India-Africa Forum Summit held in New Delhi--though modest by comparison to the China-Africa Forum of November 2006 and attended by fewer African heads of government--demonstrates India's commitment to putting its own footprint in...