Monday, October 3, 2011

African Response to Chinese Engagement with Africa

Elijah Nyaga Munyi, a PhD fellow at Aalborg University in Denmark, did a study released in September by the Centre for Chinese Studies at Stellenbosch University dealing with African policy responses for engaging China and enhancing regional integration. He argues that the time has come for African countries to develop common policy measures to manage China-Africa relations.

His proposals include creation by China of a trust fund administered by the African Development Bank that would supplement the existing China-Africa Development Fund, which is designed primarily to serve the interests of Chinese firms. He also calls for Chinese FDI to play a greater role in employment creation and technology transfer.

More specifically, Munyi suggested African countries should take the following steps:

1. Set clear minimum requirements on equity joint ventures and cooperative joint ventures for Chinese companies investing in certain strategic target sectors for enhancement of technology transfer.

2. Enact strict limits on the number of foreign workers that each Chinese company can bring into African countries.

3. Push China to consider voluntary export restraints on a continental basis as it did for a period of time in the case of textiles to South Africa.

4. Take steps to ensure that Chinese loans do not contribute to intolerable debt.
While these are good suggestions, history indicates that it is extremely difficult for 54 independent African countries to act collectively as they engage with China or any other major partner.
You can read the entire report here (pdf).

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