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- Convenors:
-
Dominik Kopiński
(University of Wroclaw)
Padraig Carmody (Trinity College Dublin)
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- Format:
- Panel
- Streams:
- Economy and Development (x) Futures (y)
- Location:
- Neues Seminargebäude, Seminarraum 21
- Sessions:
- Saturday 3 June, -, -
Time zone: Europe/Berlin
Short Abstract:
This panel seeks to explore the question of whether the Chinese investment in the continent leads to its structural transformation or whether Chinese firms merely help Africa diversify its dependence, without any meaningful structural shift.
Long Abstract:
Chinese investment in Africa has captured the interest of both academia and the wider policy world, with some postulating that Chinese firms have the potential to bring about a structural transformation of the continent. Some scholars have even gone as far as claiming that Africa may be turned into the 'next factory of the world'. More cautious commentators claim that on balance, the literature points to a positive role of Chinese firms. This panel will examine this very question by focusing on Chinese investment and its impact on African development and the continent's position in the international division of labour. It will also place these encounters in a broader context of industrial policy, macroeconomic impediments to growth caused by COVID-19 and now Russia's invasion of Ukraine, and general structural features of African economies, such as lack of supporting industries, poor infrastructure, weak industrial base, that may obstruct their much-needed restructuring. Ultimately, this panel seeks to explore the question of whether the Chinese investment in the continent leads to its structural transformation or, as some suggest, Chinese firms merely help Africa diversify its dependence, without any meaningful structural shift.
Accepted papers:
Session 1 Saturday 3 June, 2023, -Paper short abstract:
Africa is often considered too powerless and economically marginal to play a significant role in "the great game" of global power competition for many scholars of Western International Relations. What is Africa's place in China's grand strategy? Is it central or is it now being bypassed?
Paper long abstract:
Much has been written in recent decades about China's rising role in Africa and its global strategy. However these literatures remain largely disconnected. Africa is considered too powerless and economically marginal to play a significant role in "the great game" of global power competition for many scholars of Western International Relations. What is Africa's place in China's grand strategy? Is it central to it or is it now being largely bypassed for a more intense focus on more economically promising and powerful parts of Eurasia. This paper explores this question through an analysis of the ways in which Africa has served as a testbed for China's going out strategy and its reformulation in the era of the Belt and Road, which is largely focussed on Eurasia. As a result of China's changing geopolitical code new strategies of embedding and influence are being sought. Does shift in Africa prefigure a broader global shift in China's grand strategy and a softening of so-called "wolf warrior diplomacy" or does it bespeak a more geographically variegated and regionally tailored grand strategy. This paper explores these issues with reference to recent developments on the continent.
Paper short abstract:
"Global China" has generated several opportunities for economic transformation and especially revived the prospects for industrialization and associated job creation in some African countries. The vectors and outcomes are, however, variegated, and call for a comparative contrast exploration.
Paper long abstract:
The main thesis of the paper is that the expansion of ties between China and many African countries has generated several opportunities for economic transformation and especially revived the prospects for industrialization and associated job creation in some African countries. This dynamic is partly in response to economic transformations affecting China’s development trajectory in the last two decades, especially the saturation of its low-technology labour intensive manufacturing, and the growing appetite for a "Made in Africa" brand in global production networks (GPNs). Global China's contributions to economic infrastructure and industrial zones through finance and project contracting has also been a major force. However, outcomes vary considerably across Africa, and these are still early days also for countries like Ethiopia that have taken steps towards industrialization amidst political turmoil. Few countries have fully exploited these opportunities due to a combination of structural and policy reasons, but the relative strength and vision of national institutions (the state), particularly the ability of the state to discipline (foreign and domestic) capital, seem critical determinants of the success, failure or sustainability of current experiences of economic transformation helped by Chinese official finance and capital. Furthermore, the process of building an industrial workforce in countries lacking industrialization experience faces multiple obstacles and contradictions, and is likely to be more uneven and slower than expected, despite industrialization’s promise to generate large numbers of decent jobs. A contrast between Angola and Ethiopia is deployed to illustrate this variation in trajectories.
Paper short abstract:
The increasing prominence of Chinese-sponsored mega-infrastructure projects in Africa has elicited mixed reactions. This article examines the interactions between different Kenyan actors and Chinese contractors on the environmental controversies of two Chinese-sponsored infrastructure projects
Paper long abstract:
The increasing prominence of Chinese-sponsored mega-infrastructure projects in Africa has generated mixed reactions. This article examines the interactions between Kenyan civil society organizations (CSOs), the government, Western donors, and Chinese contractors on the environmental controversies of two infrastructure projects: the Lamu Port and the Standard Gauge Railway Phase 2A, demonstrating varying degrees of success in conservationists CSOs’ initiatives. We argue that the tensions on the ground are not so much the African people and CSOs against the Chinese, but about CSOs against local elites who facilitated the entry of the Chinese, gave the certificates to operate, and failed their supposed positions to stand for the interest of the citizens. The Western heritage of and support to African CSOs also illy-equip them to deal with businesses from authoritarian China and Chinese businesses find it unfamiliar to work with CSOs in African democracies. The empirical evidence is based on multiple trips of fieldwork in Nairobi and Lamu, Kenya between 2014 and 2021 where interviews and participatory approaches were used to collect data. Divergent from existing research that tends to perceive African CSOs as passive and lack of agency visà- is the state and external powers, this paper shows, with detailed empirical evidence, the agency of African CSOs in reaction to Chinese- and state-sponsored infrastructure projects. This argument also advances a research agenda of investigating the host country's domestic political dynamics in the study of China-Africa relations, the Chinese Belt and Road Initiative, and China’s global economic engagement in general.
Paper short abstract:
We investigate Sino-Tanzanian GPN friend-shoring amid crises and geopolitical tension through a recent soybean trade arrangement. Although such friend-shoring offers new opportunities, it typically demands substantial risk-taking in the form of sudden industrial realignment for all parties involved.
Paper long abstract:
Overlapping emergencies and geopolitical tension raise the question how states re-organize the geography of Global Production Networks (GPN) that are most essential to their economies. We investigate Sino-Tanzanian friend-shoring through the case of a recent soybean trade arrangement that links Tanzanian farmers with Chinese consumers. We analyze the motivations underpinning the agreement, the practices of implementation in Tanzania, and the circulating discourses about the long-term prospects articulated among Tanzanian stakeholders.
Empirically, we trace the historical-material conditions and motivations for China to diversify its soybean GPN away from US and Brazilian farmers amid the Sino-American trade war and the Covid pandemic. Further, we detail how the Tanzanian state leveraged this dynamic to initiate the transformation of its agrarian hinterland. Findings indicate that, although there is substantial potential to scale soybean production and couple with the soybean GPN, Tanzanian technocrats are concerned about technological and structural dependencies if soybean production occurs on the back of Chinese technology despite lacking domestic demand and value-added activities.
Conceptually, we make two contributions: we highlight the polycrisis as an explanatory driver for the reorganization of GPNs against all odds. GPN friend-shoring may then occur even if the historical-material conditions in place are marginal (e.g., production capacities, technological capabilities). Secondly, we show how global South governments may strategically leverage the polycrisis to transform principal coupling conditions to their favor. We conclude that, although crisis-driven friend shoring offers new opportunities, it typically demands substantial risk-taking in the form of industrial realignment for all parties involved.
Paper short abstract:
Since Chinese investors are often criticized for lacking social engagement, we examine the circumstances under which Chinese miners in Guinea and the DRC pursue corporate social responsibility (CSR) actions. Also, we discuss whether CSR contributes to structural transformation.
Paper long abstract:
Chinese companies have been at the forefront of the recent investment wave in Africa. Yet, critics complain that the Chinese investors pursue neocolonialism, thus exploiting natural resources while shirking social commitments. We challenge this stereotypic claim by examining the circumstances under which Chinese mining companies adopt corporate social responsibility (CSR) practices. We are particularly interested, along the lines of social movement research, in the link between contentious actions and CSR. Our cases comprise major investments from two mining hotspots: Guinea and the Democratic Republic of the Congo (DRC). As sources, we rely on interviews, company publications, and media and NGO reports. Tracing the processes of CSR adoption, we find that contentious actions indeed contribute to CSR practices by the Chinese miners. Especially broad-based and potentially violent local protest matters, alongside attention from international NGOs which creates supply chain pressure. However, regulation and industry standards matter too: the Chinese state and the governments of Guinea and the DRC have been pushing for CSR through increased regulation; at the same time, Chinese mining companies that cater global markets have strong economic incentives to respect the CSR standards of the mining industry. Hence, we find that diverse factors – many of which are familiar from Western investments – contribute to CSR adoption. In terms of structural transformation, however, we argue that CSR – as also familiar from Western cases – tends to reproduce rather than overcome existing political structures and inequalities.
Paper short abstract:
Chinese FDI to Africa has grown rapidly but unevenly across countries and sectors. The main drivers of investment depend on the varieties of Chinese capital and contextual factors in African countries. In addition, heterogeneity among firms is very significant, driven by a combination of factors.
Paper long abstract:
We developed this paper based on a combination of sources from our ESRC projects ("Chinese firm's employment dynamics in Ethiopia's and Angola's manufacturing and construction sectors (2015/19); "Learning to Manage the Factory Floor in Ethiopia: Skills, Work Cultures and Organisational Capabilities in Ethiopia's Light Manufacturing" (2019/21)), Weiwei Chen's own PhD thesis on Chinese private OFDI in Ethiopia, and an update of data (2019/21).
We argue that Chinese FDI to SSA has grown rapidly since the mid-2000s but unevenly across countries and sectors.
The main drivers of investment depend on the varieties of Chinese capital (SOE vs private and variations among private firms) and contextual factors in African countries, especially the role of the state (e.g. Ethiopia's industrial policy vs Angola's infrastructure boom). In addition, heterogeneity among Chinese firms is very significant, driven by a combination of factors: sector specificity; prime movers; provincial origin/business networks; scale; characteristics of entrepreneurs (family vs corporate business).
Moreover, we provide evidence on processes of adaptation, in relation to business practices, sector focus, domestic vs export orientation and labour regimes. The evidence of adaptation shows a certain degree of resilience as well as the capacity to respond to new imperatives, especially those driven by contextual factors in the host countries. We suggest that Chinese firms tend to adapt and shift as quickly it not more quickly than other comparator firms in the same sectors.
Paper short abstract:
Using a case study of the Chinese FDIs in Zambia, the author examines to what extent the Chinese investments in the local manufacturing sector contribute to the structural transformation. Finding suggests that the enclave character of Chinese FDIs have limited impact on structural transformation.
Paper long abstract:
For many years industrialisation polices and strategies have been high on the agenda for both the Zambian government and the international development institutions. This was mostly due to the fact, that scholars and politicians alike perceived development of the manufacturing sector as the key catalyst for structural transformation of Zambia. Yet, despite billions of dollars in capital inflows, the local manufacturing sector’s contribution to GDP remains stubbornly low and stagnant at circ. 9% in 2021 (the same level as in 1994). Most recently, due to increased activity of Chinese investors in the region (especially outside of the mining sector), hopes for structural shift have been rekindled. Using a mix of tax holidays, special industrial zones and other types of incentives, the Zambian government managed to attract over 600 Chinese businesses, which invested over $3 billion creating 50,000 local jobs.
This papers investigates the extent to which Chinese FDIs contribute to the structural transformation of the Zambian economy. Using a mix of qualitative (semi-structured in-depth interviews) and quantitative (surveys) methods the author the author examines the process of linkages formation and the absorptive capacity of local companies.
The findings suggest that, similarly to the mining sector, Chinese investments in the manufacturing sector, due to its enclave character, do not bring material spillover effects. Unfortunately, Chinese businesses investing in the Zambian manufacturing sector create limited linkages with their Zambian peers, therefore Chinese FDIs hardly contribute to the structural transformation of the sector and the local economy.
Paper short abstract:
This paper investigates the impact of Chinese construction projects on structural transformation in Angola, Nigeria and Ethiopia.
Paper long abstract:
This paper looks at Chinese construction projects in Angola, Nigeria and Ethiopia – the three countries that registered the highest cumulative value of construction projects completed by Chinese firms in sub-Saharan Africa between 1998 and 2018 as part of China’s ‘Going Out’ Strategy and later the BRI. This paper firstly shows that Chinese construction projects were an important catalyst for structural transformation. Beyond providing critical infrastructure for productive sector activities, the construction boom has spurred demand for and induced domestic manufacturing of building materials and second-round demand multipliers. The paper secondly shows that emerging capitalist interests in building materials manufacturing are shaped by and have (re)shaped domestic political economy dynamics. These domestic power relationships determine the nature of the ensuing accumulation processes and their dysfunctionalities. In Angola new business opportunities served to consolidate wealth and power of the ruling elite but foundered after the 2014/15 oil price shock in the absence of strategic industrial policy support and without efforts to consolidate demand structures. Nigeria has seen the emergence of successful large-scale monopoly capitalists – Dangote and BUA – but second-round demand multipliers were weak among other because the distributional dynamics in the leading conglomerates did not work to reinforce the growth of purchasing power in the Nigerian economy. To justify its political legitimacy, the former dominant faction within Ethiopia’s ruling coalition had a strong interest to implement strategic industrial policy to deliver fast output and employment growth but failed to overcome distributional conflict.
Paper short abstract:
Despite growing attention on China's distant water fishing, little is known about its potential to foster structural changes in host country. This paper unpacks China's variegated presence in Guinea-Bissau's industrial fishing and explores its (im)possibility to engender structural transformation.
Paper long abstract:
China’s distant water fishing (DWF) has attracted growing attention from both media and research community. Much of the existing literature, however, has been primarily devoted to investigating its scale and ecological implications. We still know very little about what exactly happens and how when it comes to the developmental impact of Chinese DWF engagement on coastal host countries. By zeroing in on the case of Guinea-Bissau—one of the very first countries that host Chinese DWF fleets since 1985, this paper first makes an empirically grounded attempt to unpack the homogeneity involved in the constitutive features of Chinese DWF engagement in Guinea Bissau – actors (e.g., state-owned enterprise, private entrepreneurs, brokers, and port builders), spatial forms, and practices. It then moves to explore whether this non-monolithic and variegated presence of Chinese DWF could lead to structural transformation in Guinea-Bissau’s fisheries sector. It argues that this maritime engagement remains heavily subject to the logics of elite capture and extraversion in Guinea-Bissau and present lacklustre prospects for structural changes.