Crossing Interests What is China’s Role in Africa? ESZTER POLYÁK 4TH PÉCS AFRICA CONFERENCE AFRICAN GLOBALTIES – GLOBAL AFRICANS JUNE 10, 2016

Why Chinese and why interests? China is a major player on the African field Interest in economic terms – strategic issue China in unavoidable part of African development „win-win cooperation by creating more converging interests and opening up more areas for cooperation” Xi Jinping, 2013 Moscow State University

The core issues and questions Analysis of recent available export, import and FDI data Case study of Special Economic Zones (Brautigam & Tang) Sub-Saharan Africa and Egypt How does it affect the countries? What is China’s most profound role in Africa? Trade partner, investor, role model, colonizer – aid donor?

Chinese interests in Africa Source of commodities Potential market Destination for migration Source of food (Engelberth, 2010) Market of: Export & import Infrastructure investments Implementing their economic model?

Trade with Africa China’s image as a colonizer – dominant partner on the continent? Second import-export partner – behind the EU 2009 – ahead of the USA The sum of trade is not the greatest, but the pace of growth rate is The share of Africa in Chinese import (4,5%) and export (6%) is relatively small Total Trade Volume of Africa, African Economic Outlook, 2015.

Post-1990 Chinese investment Unreliable FDI data – many commitments to invest Mixed feelings towards this kind of engagement Bad example: Kagera Eco-Cities Ltd., Uganda – Paradise International Investment, China 1.5 billion $ - biggest free trade zone Problem: bureaucratic barriers, Ugandan parliament Good example: Huawei – „Seeds for the Future”, Abuja, Nigeria education, telecommunication, end of Western monopoly Special Economic Zones and their roles in FDI flows

Case study – Special Economic Zones What makes a SEZ? – East Asia – Africa Chinese Ministry of Commerce – 2006, 11th five-year plan Egypt - Algeria Sub-Saharan Africa Government initiated zones – control over subsidies -> developmental state Zones established by businesses/provinces Government and businessess are interlaced – material and networking support

Brautigam–Tang, 2011

Case study – Egypt Suez Special Economic Zone – Initiated by President Mubarak Law of Suez SEZ, 2002 „the Authority… shall attract investments” Lower tax packages Infrastructure provided – Chinese companies Essential part of economic policy Manufactured export: 5,3 bn -> 25,5 bn Mostly local employees Problems: different business models, unable to communicate with locals

Conclusion What is the major economic role? Chinese interest African interests Overall impact Critical questions – institutes, political will

Thank you for your attention! Eszter Polyák