OVERVIEW

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BRIEFING PAPERS

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Policy Briefs

INTEGRATING CHINA INTO MULTILATERAL DEBT RELIEF: PROGRESS AND PROBLEMS IN THE G20 DSSI

By: Deborah Brautigam and Yufan Huang (Policy Brief 64/2023)

Deborah Brautigam and Yufan Huang provide the first in-depth evaluation of China’s participation in a major multilateral experiment in sovereign debt management: the G20’s COVID-19 Debt Service Suspension Initiative (DSSI). Through analysis of available data, more than 100 interviews, and fieldwork in Angola, Kenya, and Zambia, we argue, with some caveats, that the DSSI was a success. First, it succeeded in providing a pathway for China, the world’s largest bilateral creditor, to negotiate debt treatments together with the Paris Club in the Common Framework. Second, China fulfilled its role fairly well as a responsible G20 stakeholder. In the 46 countries that participated in the DSSI, Chinese creditors accounted for 30 percent of all claims, and contributed 63 percent of debt service suspensions. Finally, the DSSI pushed the Chinese government to align interests among fragmented banks and bureaucracies with conflicting goals. This process, still underway, is a necessary step toward full acceptance of the necessity for debt restructuring in the post-pandemic era.

From Contractors to Investors? Evolving Engagement of Chinese State Capital in Global Infrastructure Development and the Case of the Lekki Port in Nigeria

By: Hong Zhang (Policy Brief 63/2023)

Will China continue to finance global infrastructure development in the same way it used to? As the world, and especially China itself, re-emerges from the COVID-19 pandemic, the answer to this question will shape the global political economy of development in the years to come. In January 2023, Nigeria inaugurated Lekki Port, the country’s first deep seaport as well as the first port project executed through “integrated investment, construction, and operation” (IICO) by a Chinese company in Africa. Using the Lekki Port case, Hong Zhang argues that the Chinese financing model is likely to change as required by the evolving needs of China’s infrastructure industry, specifically their desire to move up the value chain. However, Chinese state-owned enterprises (SOEs) and financial institutions face a steep learning curve in their attempt to upgrade. Collaboration with international actors from advanced economies is one way forward.

HOW AFRICA BORROWS FROM CHINA: AND WHY MOMBASA PORT IS NOT A COLLATERAL FOR KENYA’S STANDARD GAUGE RAILWAY

By: Deborah Brautigam, Vijay Bhalaki, Laure Deron, and Yinxuan Wang (Policy Brief 62/2022)

In December 2018, a leaked letter from Kenya's Auditor General warned that the Kenya Ports Authority's assets - of which Mombasa Port is the most valuable - risked being taken over by China Eximbank if Kenya defaulted on the Standard Gauge Railway loans. The rumor that Kenya had used Mombasa Port as collateral for the railway became widely accepted globally as another example of "Chinese debt-trap diplomacy." In this Policy Brief, Deborah Brautigam, Vijay Bhalaki, Laure Deron, and Yinxuan Wang unpack this case using tools of international contract law and commercial project finance. Their detailed forensic analysis shows why the rumor is wrong. Rather than a deliberate debt trap, the railway project was carefully and creatively designed to reduce the risks of sovereign default and enhance the bankability of an infrastructure project with high costs but significant long-term benefits for Kenya and the region.

How Zambia and China Co-Created a Debt “Tragedy of the Commons”

By: Deborah Brautigam (Policy Brief 61/2021)

Zambia's debt difficulties hit headlines in November 2020 when the country defaulted on its Eurobond payments. In August 2021 a new president, Hakainde Hichilema, took office, facing a debt burden that had never been fully transparent to Zambia’s public and the world. In this Policy Brief, CARI Director Deborah Brautigam analyzes how Chinese creditors, contractors, and Zambian stakeholders failed to take steps to make Zambia's borrowing sustainable. Curious why Zambia was a clear outlier, the author explores the system for project development and loan approval in Zambia and China and offers concrete policy recommendations.

China's Digital Silk Road in Africa and the Future of Internet Governance

By: Henry Tugendhat and Julia Voo (Policy Brief 60/2021)

The Digital Silk Road (DSR) is a Chinese policy initiative launched in 2015, yet six years later there is relatively little concrete information about what it has achieved so far. Henry Tugendhat and Julia Voo offer a preliminary analysis of what the DSR entails in Africa. Discover their findings, including how Chinese lending for technology projects in Africa was actually greater before the launch of the DSR than after.

Chinese Resource-Backed Infrastructure Financing Investments: Comparing Governance in Guinea and Ghana

By: Qianrong Ding, Hayden Hubbard, Emily Larkin, and Dawalola Shonibare (Policy Brief 59/2021)

This policy brief is an output of the CARI-funded SAIS-IDEV student practicum for the 2020-2021 academic year, based on the two cases provided by the Transnational Environmental Accountability Project (TEA Project). Read on as the authors conclude that although resource-backed infrastructure agreements provide needed investment into Ghana and Guinea, the lack of transparency in these agreements has created serious environmental, social, and governance concerns. These concerns are in part due to a history of poor regulatory compliance by Chinese firms in both countries, and in part due to the lack of government transparency and regulatory enforcement in mining sectors of Ghana and Guinea. Improving transparency, regulatory enforcement, and feedback mechanisms between local communities, firms, and government can ensure that mining investments through RFI agreements are socially, economically and environmentally sound.

A Comparative Analysis: Chinese and Indian Exim Bank Finance in Ethiopia

By: Zhengli Huang and Pritish Behuria (Policy Brief 58/2021)

Zhengli Huang and Pritish Behuria examine projects financed by Indian and Chinese Exim Banks to analyze how the development financing of two ‘emerging’ donors – India and China – has evolved in Ethiopia. In India and China, Exim Banks work both as export credit agencies and other traditional development finance organizations, thereby blurring the boundary between development assistance and economic cooperation. The authors selected Ethiopia as it is a strategic partner for both countries, and existing literature has shown that the Ethiopian government is an outlier on the continent in employing its diplomatic relations to support strategic developmental goals.

International Development Lending and Global Value Chains in Africa

By: Vito Amendolagine (Policy Brief 57/2021)

As the world becomes more and more integrated, participating in global production fragmentation by connecting to global value chains (GVCs) can provide a “golden” opportunity for developing countries to access international markets and boost economies. Vito Amendolagine analyses the extent to which international development lending can support African countries in trading intermediate goods with foreign partners with the goal of further specializing in high value-added activities within cross-national production networks. Based on his research, it appears that Chinese lending increases the involvement of borrowing countries in the international trade of intermediate goods, while World Bank loans contribute to move African countries toward higher valued added activities along international production chains.

Understanding the Structural Sources of Chinese International Contractors’ Market Power in Africa

By: Hong Zhang (Policy Brief 56/2021)

Do Chinese international construction and engineering contractors (ICEC) in Africa have any agency themselves, or are their strings tightly controlled by the Chinese state? Join Hong Zhang as she unpacks the role of ICECs in China's international economic relations – her findings based on primary Chinese sources may surprise you.

Do Chinese Infrastructure Loans Promote Entrepreneurship in African Countries?

By: Jonathan Munemo (Policy Brief 55/2021)

As Chinese loans to Africa have been on an upward trajectory for more than a decade, there are questions about the economic consequences that large scale borrowing from China has on African economies. Jonathan Munemo investigates the impact these rising loans have on entrepreneurship and finds that African countries with a higher percentage of economic infrastructure loans have greater entrepreneurship in the form of new business startups.

Development Finance and Distributive Politics: Comparing Chinese and World Bank Finance in sub-Saharan Africa

By: Keyi Tang (Policy Brief 54/2021)

When development finance becomes available to weak states, which parts of the state will receive the windfall gains? Development finance does not always reach the people who need it the most, both within and across countries. In this research, Keyi Tang examines how donors’ preferences and recipient countries’ regime types affect the subnational distribution of development finance. By combining a large-N analysis of Chinese and World Bank’s loans and grants to 48 African countries between 2000-2012 and small-N case studies of a hybrid regime, Zambia, and an autocratic regime, Ethiopia, Keyi finds that domestic politics play a bigger role than donors’ conditionality in development finance allocation. The more democratic a regime is, the more likely co-ethnic regions of the incumbent leader are to receive finance from both China and the World Bank. Democracy may not always help prevent clientelism but may actually facilitate it under weak institutions.

Private Security Companies in Kenya and the Impact of Chinese Actors

By: Shuwen Zheng and Ying Xia (Policy Brief 53/2021)

Researchers Shuwen Zheng and Ying Xia use Kenya as an active case study to explore the development and impact of Chinese private security companies (PSCs). As a whole, the private security sector is in a boom period – but how are Chinese actors faring in this growth? Join Zheng and Xia as they delve into the nuances involved in the sustainability of Chinese PSCs and conclude with several recommendations for how Chinese actors can adjust to flourish in the private security sector.

Railpolitik: Ethiopia’s Rail Ambitions and Chinese Development Finance

By: Yunnan Chen (Policy Brief 52/2021)

Explore Yunnan Chen's analysis of railway construction as a manifestation of China’s economic statecraft in Africa. As African leaders have eagerly leveraged the railway sector, this paper looks through the lens of African agency to examine the case of Ethiopia’s Chinese-financed railway projects, including the Addis- Djibouti Railway, contrasting it to Ethiopia’s experience with subsequent European/Turkish financed projects.

Chen shows the opportunities, missed and taken, by Ethiopian actors in leveraging external partners, focusing on areas of technology and skills transfer. Ultimately, the different financing arrangements entail different relationships—one politicized, one commercial—offering different scopes of bargaining power: while the political relationship offers greater flexibility regarding financing, the commercial project has been more successful for exercising agency in relation to contractors.

Comparing the Effects of Chinese and Traditional Official Finance on State Repression and Public Demonstrations in Africa

By: Afa'anwi Ma'abo Che (Policy Brief 51/2020)

Join Dr. Che as he explores the effects of Chinese official finance on state repression and public demonstrations in Africa. After using standard multiple regression analysis to measure how different attributes of Chinese and traditional official finance predict variations in rates of repression and demonstrations, Che looks at specific case studies in Cameroon and Uganda to illustrate his findings. These research findings have policy implications scholars, journalists, and policy practitioners need to keep in mind moving forward.

French and Chinese Business Cooperation in Africa

By: Thierry Pairault (Policy Brief 50/2020)

Although little research exists on business engagement between French and Chinese companies in Africa, Thierry Pairault offers in this policy brief many significant examples of French and Chinese engagement. While African governments want to carry out infrastructure projects at the lowest cost, they also want to ensure projects are carried out according to certain technical standards they are familiar with. Hence, at least in French-speaking countries, we see the choice of Chinese contractors to build and French engineering firms to supervise and manage. Read on to see how the future of any cooperation will lie with the business sector, and with individual firms.

The Growing Preference for Chinese Arms in Africa: A Case Study of Uganda and Kenya

By: Elijah Munyi (Policy Brief 49/2020)

The past decade has seen a rise in the global share of Chinese defense sales – in this publication, Elijah N. Munyi looks at the implications for the African continent. Munyi examines the motivations for some African states' growing preference for Chinese arms with a particular focus on case studies conducted in Uganda and Kenya. Read on to find out how Prof. Munyi delves into the nuance behind the preferences for military procurement.

China’s Development-Security in Practice: The Case of Mali

By: Lina Benabdallah and Daniel Large (Policy Brief 48/2020)

In June 2020, the United Nations renewed its Mission in Mali (MINUSMA) for another year in the midst of a complicated political crisis and increasing levels of violence. Later in the summer, a military mutiny that escalated into a coup ousted Malian President Ibrahim Boubacar Keita on August 18, further changing the already complex political landscape in Mali. This publication by Lina Benabdallah and Daniel Large sheds light on China’s role and influence in Mali. The paper examines China’s development-security nexus, a defining element of Chinese foreign policy in Africa, in Mali. China’s development-focused approach to security in Mali has notable advantages but is also marked by serious limitations, notably around the politics of Mali’s conflicts. Read on to see how in the context of Beijing’s ambition to play a bigger role in Mali, and in the Sahel more broadly, the applied relationship between its developmental and security engagements are set to become more important.

China, Africa, and Debt Distress: Fact and Fiction about Asset Seizures

By: Deborah Brautigam and Won Kidane (Policy Brief 47/2020)

In the past two years, news headlines have periodically speculated that African borrowers are at risk of losing their sovereign assets to Chinese lenders. In this policy brief, the authors explore what is known about the legal aspects of Chinese lending, including the waiver of sovereign immunity and the consequences thereof, and provide policy recommendations.

DEBT RELIEF WITH CHINESE CHARACTERISTICS

By: Deborah Brautigam, Kevin Acker, and Yufan Huang (Policy Brief 46/2020)

As China is poised to become the world’s largest creditor, concerns about debt sustainability have grown. Yet considerable confusion exists over what is likely to happen when a government runs into trouble repaying its Chinese loans. In this paper, the authors draw on CARI data to review the evidence on China’s debt cancellation and restructuring in Africa, in comparative and historical perspective. Cases from Sri Lanka, Iraq, Zimbabwe, Ethiopia, Angola, and the Republic of Congo, among others, point to patterns of debt relief with distinctly Chinese characteristics.

You can browse the dataset here.

China, Africa, and the Rest: Recent Trends in Space Science, Technology, and Satellite Development

By: Julie Klinger (Policy Brief 45/2020)

Did you know China's first successful contract to build a satellite was for Nigeria's Space Research and Development Agency? Space is booming on the African continent. Millions of dollars in deals to build and launch satellites are being signed with a host of partners. This policy brief by Julie Klinger explores how African scientists and entrepreneurs are engaging in space science policy at home and abroad, pushing the frontiers of what is possible in a rapidly transforming political and economic context.

Photo: L-R (front row): Mr. Emmanuel A. Aremo, Dr. Gbadebo O. Adeniyi, Engr. Elijah O. Oyedeji, Engr. Olumuyiwa O. Adeyemo, Engr. Oluwole O. Onibon-oje, Dr. Olusegun S. Sholiyi (Centre Director), Julie Klinger, PhD, Dr. Nelson O. Ibigbami, Dr. Moshood Lanre Adetoro, Mr. Temidayo Oniosun, (back row): Engr. Rasheed O. Durojaiye, Mr. Dada Raphael, Mr. Nathaniel-Mary Ehizogie, Mr. Ikechukwu Nkere, Engr. Clement I. Ogunro, Dr. Habeeb O. Aro.

African Military Aircraft Procurement from China: A Case Study from Zambia

By: Jyhjong Hwang (Policy Brief 44/2020)

Jyhjong Hwang does a deep dive into the Zambian Air Force as a case study to explore why developing countries want to expand their air forces and why Chinese arms suppliers may be preferred. Ultimately, she finds five different logics are spurring Zambia's decisions: military and bilateral relations history, current strategic concerns in defense and finance, domestic political economy, psychological quest for prestige, and systemic concerns are all essential factors.

“Africa’s China”: Chinese Manufacturing Investment in Nigeria in the Post-Oil Boom Era and Channels for Technology Transfer

By: Yunnan Chen (Policy Brief 43/2020)

Nigeria has been a primary destination for Chinese investment in the last two decades, as Chinese entrepreneurs and investors have been drawn by rich resources and huge market potential. However, challenges remain in harnessing the potential of this growing manufacturing investment for the structural transformation of the economy. This paper assesses the evolving landscape of Chinese investment in manufacturing and potential for technology transfers, finding a growing Chinese presence in manufacturing sectors, particularly in construction and consumer sectors. However technology transfer within these is highly uneven, and challenged by economic and policy instability in recent years.

The Footprint of Chinese Private Security Companies in Africa

By: Alessandro Arduino (Policy Brief 42/2020)

The African continent's threat spectrum is unique in that it encompasses all the risks, from criminal to political violence, that public and private Chinese companies are likely to face as the Belt & Road Initiative continues to expand. Read Dr. Alessandro Arduino's latest policy brief as he offers a novel, high-level analysis of the security frontier in Africa and the role Chinese private security companies (PSCs) are currently playing, and will continue to play, in the African security sector.

How Huawei Succeeds in Africa: Training and Knowledge Transfers in Kenya and Nigeria

By: Henry Tugendhat (Policy Brief 41/2020)

Dive into some of the keys behind Chinese Huawei's success in Henry Tugendhat's latest policy brief. Tugendhat describes how the Chinese giant in the Original Equipment Manufacturing (OEM) sector is taking Africa, specifically Kenya and Nigeria, by storm. By carefully balancing between training local engineers and keeping control of its intellectual property, Huawei moves forward transferring knowledge to local populations.

Chinese Medical Teams: Knowledge Transfer in Ethiopia and Malawi

By: Allison Grande with Sara Fischer and James Sayre (Policy Brief 40/2020)

This policy brief offers an in-depth analysis of Chinese Medical Teams (CMTs) and their work in Ethiopia and Malawi. What do CMTs offer to African health systems and what can be done to maximize their impact? Read along with Grande, Fischer, and Sayre to see what recommendations they have to improve CMTs’ role within the healthcare system in Ethiopia and Malawi - and which lessons can also apply to other African nations. 

Export, Employment, or Productivity? Chinese Investments in Ethiopia’s Leather and Leather Product Sectors

By: Tang Xiaoyang (Policy Brief 39/2019)

In this set of publications (a working paper and a policy brief), Tang Xiaoyang offers a detailed analysis of the Ethiopian leather sector. Built from fieldwork conducted between 2011 and 2018, this research highlights the role of Chinese investments into the Ethiopian leather sector and offers key insights into the main differences between the marketing mechanisms used by Chinese versus Ethiopian enterprises, and their impact on overall competitiveness.

Comparing the Determinants of Western and Chinese Commercial Ties with Africa

By: David G. Landry (Policy Brief 38/2019)

Many have hypothesized that Chinese firms undermine the global drive to promote good governance in developing countries, and in Africa in particular, by targeting poorly governed countries for commercial ventures. This paper by David G. Landry tests that hypothesis. It is the first to explicitly compare the determinants of Chinese and Western commercial activities through quantitative modeling and finds that governance quality among African countries plays a positive role in predicting their commercial activity, in terms of their foreign direct investment inflows, exports, and imports—with both Western countries and China.

Disasters While Digging: Rates of Violence Against Mine Workers in Democratic Republic of Congo, South Africa, and Zambia

By: Christian Freymeyer (Policy Brief 37/2019)

In 2010, violence broke out at a mine in Zambia and many local workers were injured. This incident served as a jump-off point for criticism of Chinese mines in Africa and a broader discussion of the treatment of workers by Chinese managers and companies. But is there actually a higher rate of violence against workers in Chinese-owned mines? In this brief, Christian Freymeyer explores rates of violence against workers in mines in Democratic Republic of Congo, South Africa, and Zambia, and further dissects the idea of mine ownership to help answer this question.

The Blind Spot: International Mining in Angoche and Larde, Mozambique

By: Sergio Chichava, Shubo Li and Michael G. Sambo (Policy Brief 36/2019)

Comparing Chinese and Irish companies in their respective dealings with local civil societies and communities, Chichava, Li, and Sambo probe the social impacts of heavy sand mining by international companies in Mozambique. They set to find out how international mining affects local social organization in terms of work, labor relations, and livelihoods, and how disputes are negotiated between the mining companies, municipal and provincial governments, and civil society groups representing the interests of local communities. Disagreements around compensation, resource depletion, and labor-relations are the primary source of controversy and tension generated by the mining projects.

Wealth from Waste? Chinese Investments and Technology Transfer in the Tanzanian Plastic Recycling Industry

By: Ying Xia (Policy Brief 35/2019)

Since the 1990s, China has emerged as the center of the global waste trade and recycling industry, importing and reprocessing millions of tons of waste materials every year. In recent years, due to rising costs for labor and environmental compliance in China, Chinese investors have been exploring the recycling industry in Africa, currently serving both Chinese and African markets with a variety of products. This research examines the potential of knowledge transfer from Chinese investments in the Tanzanian plastic recycling industry to the local economy. It also assesses how the recent regulatory change in China, i.e., the imposition of an import ban on waste materials since 2018, has affected plastic recycling and reprocessing industries in Tanzania.

Lessons from East Asia: Comparing Ethiopia and Vietnam’s Early-Stage Special Economic Zone Development

By: Keyi Tang (Policy Brief 34/2019)

This paper by Keyi Tang compares how Ethiopia and Vietnam, two rising stars actively employing industrial policies as catalysts of structural change, have learned from East Asian countries’ experiences in developing their own special economic zones (SEZs). A Chinese and a Taiwanese overseas SEZ were the first SEZs developed respectively in Ethiopia and in Vietnam, which provided eye-opening lessons for domestic policymakers on how to better improve the legal and institutional framework, infrastructure, and administrative services needed for SEZ development. Overall, however, one of the biggest obstacles facing Ethiopia and Vietnam in learning from China’s experiences is the lack of local autonomy given to SEZs in their own administration.

Do China-Financed Dams in Sub-Saharan Africa Improve the Region’s Social Welfare? A Case Study of the Impacts of Ghana’s Bui Dam

By: Keyi Tang and Yingjiao Shen (Policy Brief 33/2019)

This empirical case study by Keyi Tang and Yingjiao Shen conducts an impact evaluation of Ghana's Bui Dam, a China-financed hydropower project completed in 2013. Through two difference-in-differences econometric models and an extensive literature review on relevant field research, this papers analyzes the environmental and socio-economic impacts of the Bui Dam on local households and communities. The authors’ empirical models show that the Bui Dam has significantly improved local urban households’ access to electricity and increased their ownership of some electric appliances.

Chinese Manufacturing Investments and Knowledge Transfer: A Report from Ethiopia

By: Tang Xiaoyang (Policy Brief 32/2019)

The uniqueness and diversity of socio-economic conditions in Africa call for a careful case-by-case examination to understand the real impacts of FDI on knowledge development. As such, this study aims to shed light on the knowledge transfer effects of Chinese investment in Africa’s manufacturing sector with a concrete case study of Ethiopia. This paper examines knowledge transfer mechanisms between Chinese investments and Ethiopian firms, institutions, and individuals at four different levels in the manufacturing sector. The lessons learned from this case may provide insights into China-African cooperation and Africa’s development process in general.

The Impact of Chinese Investment on Skill Development and Technology Transfer in Zambia and Malawi’s Cotton Sector

By: Tang Xiaoyang (Policy Brief 31/2019)

This paper by Tang Xiaoyang looks into China-Africa Cotton (CAC), one of the first Chinese cotton firms to enter the African market. The study analyzes China-Africa Cotton’s operations in Zambia to investigate the impact on the technological development of the local cotton sector. As a new player in the arena, CAC has business models and a management style that differ from those of previous foreign investors in the region. Within six years, CAC has grown from a sole ginnery into a firm with tens of thousands of contracted outgrowers, and is now a comprehensive multinational business with an integrated value chain.

Local Skill Development from China’s Engagement in Africa: Comparative Evidence from the Construction Sector in Ghana

By: Qingwei Meng and Eugene Bempong Nyantakyi (Policy Brief 30/2019)

Over the past decade, Chinese enterprises have made significant progress in developing new business ventures in Africa, yet there is ongoing debate about whether these Chinese enterprises contribute to local skill development of their host countries. To inform this debate, Qingwei Meng and Eugene Bempong Nyantakyi use survey data from the construction sector in Ghana to examine the heterogeneity in skill transfer to local workers in Chinese enterprises, other foreign and local enterprises, and the challenges faced by firms in local skill development. The results show that both Chinese and other foreign owned enterprises contribute positively to local skill development through the provision of general and specific training. However, Chinese enterprises have a higher propensity to provide short-term general training to local workers than those of other foreign enterprises.

Comparing the Determinants of Western and Chinese Development Finance Flows to Africa

By: David G. Landry (Policy Brief 29/2018)

This paper by David G. Landry explores whether various institutional indicators among African countries impact their development finance from China and Western countries differently. This research is the first to explicitly compare the determinants of the value of Chinese and Western development finance received by other countries. It finds that bilateral trade relations and UN voting alignment have a stronger impact on China’s development finance than that of Western countries. The research also finds that institutional quality plays a much stronger role in predicting Western development finance than that of China, as China appears to disregard institutional quality in its allocation of development finance.

China-Britain-Uganda: Trilateral Development Cooperation in Agriculture

By: Hang Zhou (Policy Brief 28/2018)

Trilateral development cooperation is believed to reflect aid’s changing geographies while helping to forge new, more equitable partnerships. Chinese engagement in trilateral development cooperations has so far received limited attention, and this paper by Hang Zhou seeks to fill the gap. By drawing on field research from one of China’s first trilateral projects with traditional donors in Africa—a Ugandan cassava project co-initiated with Britain—this paper details key coordination challenges from the project implementation phase. More importantly, it also critically examines two often-claimed “advantages" of trilateral development cooperation: its contribution to more horizontal development partnerships and its role in providing recipient countries with more suitable technical assistance.

Work, Employment, and Training through Africa-China Cooperation Zones: Evidence from the Eastern Industrial Zone in Ethiopia

By: Ding Fei (Policy Brief 27/2018)

This paper by Ding Fei investigates the developmental impacts of Ethiopia’s Eastern Industrial Zone (EIZ) through a cross-company and cross-sector analysis of local worker experiences of working for, training with, and learning from resident companies. It highlights both similarities and differences in Chinese companies’ management strategies and training provisions, which are contingent upon industry sector, scale of production, and market conditions. While sixty percent of the surveyed local workers did receive training of varying quality and length, they were not satisfied with the training provision and promotion opportunities in current companies. The paper argues for concrete and targeted policy implementation by the Ethiopian government to enforce skills transfer by foreign investors, building of linkages between companies and local training institutions, and organizing zone-wide skills sessions.

Chinese manufacturing moves to Rwanda: A study of training at C&H Garments

By: Janet Eom (Policy Brief 26/2018)

As a small, landlocked country with few natural resources, Rwanda has focused on becoming a knowledge-intensive business and technology hub rather than a labor-intensive manufacturing base. But in 2015, a Chinese garment manufacturing firm, C&H Garments, began operations in Kigali. This paper by Janet Eom finds that the Rwandan government’s shift towards creating jobs in the manufacturing sector, and implementation of requirements for training and hiring local workers, have been key to negotiating an agreement with C&H Garments that supports technology transfer to Rwandans. However, the C&H factory has faced obstacles such as cultural and linguistic differences; this paper suggests the exchange of African managers between countries may help. Finally, this study holds significance given that the Rwandan government’s desire to boost local manufacturing capacity has been at the center of recent trade tensions between Rwanda and the United States under the African Growth and Opportunity Act (AGOA).

The East Africa Shift in Textile and Apparel Manufacturing: China-Africa Strategies and AGOA’s Influence

By: Weiyi Wang, Jinghao Lu, and Wilmot Allen (Policy Brief 25/2018)

With rapidly rising labor costs and tightening environmental policy, the global textile and apparel industry is expected to shift its center away from China. In fact, Chinese entrepreneurs have long started looking for opportunities in the African continent in the face of fierce domestic competition. What are the opportunities and challenges facing Chinese investment in the textile and apparel sectors in Africa? How can Africa capitalize on the preferential trade provisions of AGOA to boost these sectors? Drawing from field research and literature review, this policy brief by Weiyi Wang, Jinghao Lu, and Wilmot Allen examines the strategies of leading textile and apparel firms and makes recommendations for supporting more of the value chain shift into East Africa. 

What kinds of Chinese "Geese" are flying to Africa? Evidence from Chinese manufacturing firms

By: Deborah Brautigam, Tang Xiaoyang, and Ying Xia (Policy Brief 24/2018)

In a thoroughly researched piece, Brautigam, Tang, and Xia offer a preliminary analysis of the nature of Chinese manufacturing investments in Africa, focusing predominantly on four countries -- Ethiopia, Ghana, Nigeria, and Tanzania. Drawing on fieldwork conducted between 2014 and 2016, they explore the varieties of existing Chinese manufacturing investment and the sectors into which Chinese companies are investing. Several investors fit the model of Akamatsu’s “flying geese” (large firms seeking new locations for production as part of global networks and value chains), yet the authors also identified three other kinds of “geese”: large, strategic, local market-seeking geese; raw material-seeking geese; and small geese traveling together in flocks. The different kinds of firms offer different kinds of development opportunities and challenges for structural transformation in Africa.

Silk Road to the Sahel: African Ambitions in China’s Belt and Road Initiative

By: Yunnan Chen (Policy Brief 23/2018)

This paper by Yunnan Chen explores the Belt and Road Initiative, which has become a centerpiece of China’s foreign economic policy. While it primarily focused on the Eurasian region, the BRI has salient implications for African development and regional integration, accelerating existing infrastructure and industrial cooperation and contributing to African industrialization strategies. However, rapid expansion of infrastructure lending also brings risks in its debt burdens, sustainability impacts, and economic viability.

The Risks and Rewards of Resource-for-Infrastructure Deals: Lessons from the Congo’s Sicomines Agreement

By: David G. Landry (Policy Brief 22/2018)

This paper by David G. Landry explores the Sicomines agreement and highlights the role risk has played from its inception a decade ago until now. This case reveals how, while simple on the surface, Resource-for-Infrastructure (RFI) deals carry significant risks for their signatories because of the long time horizon through which they operate. This has led the Sicomines agreement to experience many hurdles, both on the infrastructure delivery and resource extraction fronts. Landry employs financial modeling techniques to highlight the pitfalls of attempting to identify a “winner” in such ventures until they reach their conclusion. As demonstrated through the Sicomines case, the expected benefits of RFI deals can change swiftly and unpredictably.

Chinese Medical Teams in the DRC: A Comparative Case Study

By: Xiaoxiao Jiang Kwete (Policy Brief 21/2017)

This paper by Xiaoxiao Jiang Kwete analyzes China's program of sending a Chinese Medical Team (CMT) to an African country, in this case the Democratic Republic of Congo (DRC). The CMT in the DRC, from HeBei Province, started its 15th deployment in May 2012, for a two-year mission in the Chinese-Congolese Friendship Hospital in Kinshasa. This brief focuses on the challenges the CMT faced in the DRC, compares it to Médecins Sans Frontières's operations in the DRC, and proposes recommendations for improvements in the future.

Community Engagement in Chinese and American Gold Mining Companies: A Comparative Case Study in Ghana

By: Yang Jiao (Policy Brief 20/2017)

This paper by Jiao Yang presents the results of field research examining local engagement and impact on local communities by a Chinese company and an American company operating in Ghana. Golden Sunshine Mining Company Ltd., a large-scale Chinese gold mining corporation is a relatively young company and is just starting to venture into the world of corporate social responsibility. It relies on local expertise in its engagement with the local community, and so far it has had a limited impact on local labor recruitment. Meanwhile, Newmont Ghana Gold Limited, an American company that has operated in Ghana for over ten years, has developed a robust local governance structure for supporting community development projects. Although locals seem to expect this level of effort from mining companies, Golden Sunshine does not prioritize community development.

Adaptation of Chinese Immigrants in Zambia

By: Lu Yao, Barry Sautman, Yan Hairong, and Zhou Weixuan (Policy Brief 19/2017)

This paper examines the widespread belief that Chinese immigrants in Africa self-isolate and whether this alleged behavior is due to extreme ethnocentricity. Such beliefs implicate Chinese identity as central to this behavior, implicitly assuming that other non-indigenous people do not self-isolate. While some scholars claim that Chinese enterprises have achieved significant localization, others hold that the Chinese tend to live isolated from local society and leave open the reasons for this trend, allowing that ethnocentricity may be a cause. However, for the authors, who conducted a survey on the level of adaptation of Chinese immigrants in Zambia, there is no evidence that Chinese immigrants are particularly ethnocentric.

The United States and China in Africa: What does the data say?

By: Janet Eom, Jyhjong Hwang, Lucas Atkins, Yunnan Chen, and Siqi Zhou (Policy Brief 18/2017)

This brief examines how Chinese engagement compares to US engagement in African countries. How do oil exports influence Chinese and US trade relations with Africa? Why do Chinese and US firms favor investment in different African industries? What are the main sectors to which China and the United States provide loans in Africa? To answer such questions, this policy brief analyzes CARI’s data on Chinese and US trade, foreign direct investment (FDI), and loans to Africa over the past 15 years. The authors find that Chinese engagement emphasizes Africa’s infrastructure needs, key countries are consistently top destinations for different types of economic activities, and fluctuating commodity prices are important to both the United States and China in Africa.

Creating a Market for Skills Transfer: A Case Study of AVIC International

By: Irene Yuan Sun and Lin Qi (Policy Brief 17/2017)

This paper explains how Chinese companies view the issue of local skills development in Africa. Do Chinese companies perceive local skills development to be a salient issue? Has this issue caused them to change their strategies and operations? How has this influenced how they interact with local stakeholders, and what sorts of changes are produced as a result of these interactions? This study offers a starting point for answering these questions by using AVIC International as a case study. AVIC International is a Chinese state-owned company and member of the Global Fortune 500, and is one of the major construction contractors and heavy machinery providers in Kenya. It has also made major investments in the area of local skills development.

Local Politics Meets Chinese Engineers: A Study of the Chinese-Built Standard Gauge Railway Project in Kenya

By: Uwe Wissenbach and Yuan Wang (Policy Brief 16/2016)

As part of China’s new “Belt and Road Initiative,” Kenya’s Standard Gauge Railway (SGR) aims to open East and Central Africa up to Chinese trade and investment. The first phase of the SGR, from Mombassa to Nairobi, is being constructed by the China Roads and Bridges Corporation (CRBC). Much like other Chinese infrastructure projects in Africa, the SGR has sparked controversy around its economic viability, opaque contracting practices, financing arrangements, and community and labor issues. Yet, as this policy brief by Uwe Wissenbach and Yuan Wang shows, the project has also created modest development opportunities for local content, jobs, and skills.

Provincial Chinese Actors in Africa: The Case of Sichuan in Uganda

By: Xuefei Shi (Policy Brief 15/2016)

China has a system, referred to as duikou zhiyuan (对口支援, “twinning assistance”), in which developed provinces assisted less developed ones. A similar twinning system can also be found in China’s foreign aid programs. For example, since 2006, China has funded 25 agro-technology demonstration centers (ATDCs) in Africa, most of which have contracts with teams from different Chinese provinces. This brief by Xuefei Shi looks specifically at Sichuan Province's projects in Uganda to assess how the twinning system has allowed Sichuanese companies to expand those aid relationships into business ventures. Shi argues that Sichuan companies have a big head start, and are likely to be able to expand in the local market at an unprecedented scale, outpacing their rivals from other Chinese provinces.

Do Huawei's Training Programs and Centers Transfer Skills to Africa?

By: Benjamin Tsui (Policy Brief 14/2016)

Since first entering the African telecommunications market in 1998, Huawei Technologies has established seven training centers and sponsored training programs throughout the continent. This policy brief examines Huawei's engagement in developing local talent in information communications and technologies (ICT) in Africa, specifically in Egypt, Kenya, Nigeria, and South Africa. It argues that African governments should encourage schools and universities to develop partnerships with foreign ICT companies such as Huawei, promote partnerships between foreign and local companies, and provide incentives for foreign firms to establish training centers.

Technology Transfer in Telecommunications: Barriers and Opportunities in the Case of Huawei and ZTE in South Africa 

By: June Sun (Policy Brief 13/2016)

South Africa is one of the most important markets in Africa for Chinese firms Huawei Technologies (Huawei) and Zhongxing Telecommunications Equipment Corporation (ZTE). Telecommunications, and the information and communication technologies (ICT) sector more broadly, presents a particularly interesting China-Africa case study. This brief outlines three barriers to technology transfer from Chinese vendors to South African companies: increased managed services contracts, contestations for legitimacy, and weaknesses in the institutional framework. Drawing upon three months of field research, it concludes that the ICT sector should be prioritized by African governments, skills training should be implemented without delay, and Huawei and ZTE should address issues of legitimacy by seriously contending with the challenges of localization.

Media Training for Africa: Is China Exporting its Journalism?

By: Jákup Emil Hansen (Policy Brief 12/2016)

As part of its growing engagement in the African media sector, China leads training courses for African journalists. This has sparked debate in recent years, with some noting that China is ranked at the bottom of press freedom indices. This policy brief reports the results of a one-month field study in Uganda involving interviews with local journalists who attended Chinese training programs for African journalists. These interviews provide insight into the purpose and goals of the training programs, their possible impact on African journalistic practices, and the overall implications on freedom of the press and democracy in Africa.

How Chinese Money is Transforming Africa: It's Not What You Think

By: Jyhjong Hwang, Deborah Brautigam, and Janet Eom (Policy Brief 11/2016, updated April 31, 2016)

When, why, and how are Chinese banks really financing African development? This policy brief presents CARI researchers’ analysis of Chinese loans in Africa, drawing from data collected and cleaned by CARI since 2007. Between 2000 and 2014, the Chinese government, banks and contractors extended US $86.3 billion worth of loans to African governments and state-owned enterprises (SOEs). Angola received the most Chinese loans, totally $21.2 billion over the past 15 years, followed by Ethiopia ($12.3 billion) and Sudan ($5.6 billion). Transportation, energy, and mining are the three largest sectors financed by Chinese loans in Africa.

What Happened to China Development Bank’s $3 Billion Loan to Ghana?

By: Thomas Chen (Policy Brief 10/2016)

In 2010, Ghana secured a $3 billion loan from the China Development Bank to finance urgently needed gas projects. Six years later the agreement still faces major setbacks. This policy brief explores the factors behind these developments, and it outlines four key lessons from this experience. First, the brief concludes that it is important to garner the support of all stakeholders before approving a large-scale loan project. Second, inconsistencies between the loan financing agreement and existing regulations might have been avoided if Ghana had consulted with a third-party such as the World Bank. Third, institutional capacity is key to overseeing major infrastructure projects. Finally, when external fiscal conditions are favorable, Ghana should build external and fiscal policy buffers to mitigate against inevitable cyclical price shocks.

Looking Back and Moving Forward: An Analysis of China-Africa Economic Trends and the Outcomes of the 2015 Forum on China Africa Cooperation

By: Janet Eom, Jyhjong Hwang, Ying Xia, and Deborah Brautigam (Policy Brief 09/2016)

In early December 2015, Chinese and African officials met in Johannesburg at the sixth Forum on China Africa Cooperation (FOCAC) meeting. The 2015 FOCAC summit took place amid news reports of China’s economic slowdown, and concerns over how Africa would be impacted. In this policy brief, Janet Eom, Jyhjong Hwang, Ying Xia, and Deborah Brautigam of the China Africa Research Initiative at the Johns Hopkins School of Advanced International Studies (SAIS-CARI) situate the sixth FOCAC meeting in the context of China’s evolving economic relationship with the African continent.

Chinese Financed Hydropower Projects in Sub-Saharan Africa

By: Deborah Brautigam, Jyhjong Hwang, and Lu Wang (Policy Brief 08/2015)

This policy brief provides an analysis of Chinese practice in financing large—over 50 megawatt (MW)—hydropower projects in Africa between 2000 and 2013. Hydropower energy has benefits as a renewable and local source of power, but there can be significant social and environmental risks. These risks have made international banks and aid agencies reluctant to finance large hydropower projects in recent decades. This brief finds that, since 2000, Chinese construction companies and banks have shown sustained interest in 53 large hydropower projects in Africa. However, contrary to popular belief, there can be significant lags to Chinese finance, and many Chinese financiers require important environmental or social impact studies before starting a project.

Neither ‘Friendship Farm’ nOR ‘Land Grab:’ Chinese Agricultural Engagement in Angola

By: Zhou Jinyan (Policy Brief 07/2015)

Chinese-Angolan agricultural cooperation can be divided into two phases, beginning in 2004. In the first period, from 2004 to 2008, Chinese engagement focused on infrastructure construction. Since 2008, cooperation has centered on the development of comprehensive farm projects supported by credit from the China Development Bank. These projects are not intended to solve China's food security problem, but are instead aimed at improving Angola’s agricultural capacity and food production. This paper finds that the “Angola Mode” of cooperation challenges the common perception of an oil-centric relationship. However, Angola's needs and Chinese finance are not currently well-aligned, and the long-term sustainability of Chinese engagement is questionable.

Assessing the Impact of Chinese Investment on Southeast Africa’s Cotton: Moving up the Value Chain?

By: Tang Xiaoyang (Policy Brief 06/2015)

An influx of Chinese and other Asian investment in Southeast Africa over the last decade has had a significant impact on the cotton-textile value chain in the region. Increased investment has changed the structure of the region's cotton market, increased competition in local markets, introduced new challenges for cotton producers, and affected relationships with local communities. Meanwhile, although the textile sector remains relatively underdeveloped, it has the potential to add value to local cotton sectors if investment continues to increase. Based on extensive fieldwork, this research analyzes the impact Asian investment has had on Southeast Africa's cotton value chain, and identifies strategies for encouraging greater investment from Asian textile manufacturers.

Chinese Agricultural Entrepreneurship in Africa: Case Studies in Ghana and Nigeria

By: Yang Jiao (Policy Brief 05/2015)

Agriculture is an important area of Chinese economic engagement in Africa. Since the 1960s, China has provided aid, sent experts, and trained African farmers. However, there is still little empirical research on recent Chinese agribusiness investments in Africa. Drawing on case studies of a private Chinese agribusiness enterprise in Ghana and a Chinese state-owned enterprise in Nigeria, this brief explores the motivation, challenges, and initial social impact of Chinese agricultural investment in Africa.

Chinese Agricultural Engagement in Zambia: A Grassroots Analysis

By: Solange Guo Chatelard and Jessica M. Chu (Policy Brief 04/2015)

Recent focus on large-scale Chinese investments in African agriculture has fueled popular misperceptions of Chinese "land grabs" and has overshadowed another unexplored -and perhaps more significant-phenomenon: the rise of medium-scale private Chinese farmers and rural entrepreneurs. Despite growing research in the field, few reports thus far have examined what individual Chinese actors and investors are actually doing-or not doing-on the ground, or measured the implications of these activities for agricultural development. By examining the diverse scale and nature of Chinese agricultural investments in Zambia, and by situating these different forms of engagement within the broader context of the commercialization of agriculture, this brief reveals a complex picture of overlapping agricultural dynamics and interests.

Chiinese Training Courses for African Officials: a “Win-Win” Engagement?

By: Henry Tugendhat (Policy Brief 03/2014)

As part of its growing engagement in Africa, China has become one of the world’s largest providers of short-term agricultural training courses. China’s training course model differs from most other traditional donors in that it almost exclusively targets government officials. These courses aim to facilitate the transfer of knowledge and technology, increase trade opportunities, foster stronger political and economic relationships, and present a positive image of China. This research concludes that the courses appear to be achieving these goals, with different benefits for both sides.

Chinese Agricultural Investment in Mozambique: the Case of Wanbao Rice Farm

By: Sérgio Chichava (Policy Brief 02/2014)

The Hubei Gaza Friendship Farm was established in 2007 in Xai-Xai, Mozambique, and has been managed by Wanbao Africa Agriculture Development Limited (WAADL), a private Chinese company, since 2011. Critics see this project as a "land grab"; supporters argue that the investment is a positive force for agricultural growth and development. As discussed in this brief, the Wanbao rice farm case demonstrates the many obstacles to successful agricultural investment in Mozambique, which are exacerbated by tension between local civil society organizations, the Mozambican government, and Chinese investors.

The Political Ecology of Chinese Investment in Uganda: the Case of Hanhe Farm

By: Josh Maiyo (Policy Brief 01/2014)

How is Chinese agricultural investment progressing in Africa? Research reported at the SAIS-CARI conference in May 2014 suggests the topic is poorly understood and that investment is both far lower and far more problematic in implementation. In our first CARI policy brief, Josh Maiyo looks into Chinese private farming in Uganda. Media reports depict at least 12,000 hectares of private Chinese agricultural investment. Doing fieldwork in Uganda, Maiyo found only one farm, Hubei Hanhe, with 160 hectares. His story of the Hubei Hanhe Farm is a cautionary tale of a much more contentious, challenging investment environment than is often assumed.