How China's Economic Might Is Reshaping World Politics

The World Economic Forum published in January 2016 a series of short papers titled "Geo-economics with Chinese Characteristics: How China's Economic Might Is Reshaping World Politics."

It includes the following contributions:
--Introduction by Mark Leonard
--China's Geo-economic Power by Wu Xinbo
--China's Geo-economic Outlook: 2016-2020 by Bert Hofman
--The Geo-economic Implications of China's Changing Growth Strategy by Douglas Rediker, Elizabeth Economy, and Michael Levi
--China's Infrastructure Alliances by Parag Khanna
--China in Eurasia by Sergei Guriev
--China's Geo-economic Power and the USA by Ian Bremmer
--China's Geo-economic Role in South Asia by Hina Rabbani Khar
--China's Geo-economic Role in Latin America by Evan Ellis
--China's Geo-economic Policy in the Middle East by Mahmood Saiolghalam
--China's Geo-economic Power: Africa's Case by Linah Moholo
--China's Geo-economics in Europe by Mark Leonard, Angela Stanzel, and Agatha Kratz
--China's Role in Asia-Pacific by Kishore Mahbubani

China’s agricultural investment in Africa

The South African Institute of International Affairs published a good study in November 2011 by Helen Lei Sun titled “Understanding China’s Agricultural Investments in Africa.”

While it stays out of the “land grab” debate, where there is more myth than fact, it documents Chinese FDI in Africa’s agricultural sector.

The paper analyzes the driving factors behind China’s agricultural investment in Africa, particularly from the perspectives of economic development and market factors, and concerns about food security. It considers the implications of China’s experiences in terms of institutions, productivity and technology. Finally, the paper addresses the issues of green technology in the context of China’s agricultural investment in Africa.

The report acknowledges that it is hard to assess the impact of China’s investment in Africa. It is, nevertheless, important to understand why China has accelerated its agricultural investment in Africa, and the extent to which China’s investment has had an impact on African agricultural growth.

Study on aid from non-DAC donors

The Center for Global Development in Washington released in November 2011 an interesting paper that discusses foreign aid offered by non-Development Assistance Countries (DAC) such as China, India, Brazil, South Africa, Venezuela, Turkey, Russia, Saudi Arabia, Kuwait, and UAE.

The paper, written by Julie Walz and Vijaya Ramachandran, divides these donors into three categories of aid delivery: the DAC model, the Arab model, and the Southern model. The study laments the lack of transparency in the aid programs of most of these countries.

In a comparative table that provides a lower and upper estimate for the aid levels of several countries, including China, I believe the paper does a disservice by providing an upper limit estimate for China of $25 billion of aid in 2009.

The paper notes that the upper estimate comes from an NYU Wagner School study that includes pledges of aid, loans, and government-sponsored investment projects. This is unfortunate as most of this engagement does not qualify as aid. It is misleading to suggest that it does constitute aid by using the $25 billion figure as the upper estimate. The legitimate figure for China’s global aid is about $4 billion.

Bräutigam calculated that China’s annual aid to Africa is now about $2 billion. It is generally agreed that almost 50 percent of China’s aid goes to Africa. It is reasonable to estimate that the rest of the world receives another $2 billion, making a total of $4 billion.

Analysis of Ethiopia’s economy

Shimelse Ali, an economist at the Carnegie Endowment for International Peace in Washington, offered a brief analysis of Ethiopia’s economy on 20 October titled “Ethiopia’s Imperfect Growth Miracle.”

Ethiopia: Planting Avocado Trees in Katbare. July 2011. Flickr/Trees for the Future.

He stated that since 2004, Ethiopia’s economy has grown on average by an unprecedented 11 percent. Per capita income has more than doubled over the same period, albeit from a very low base. Although the economy remains heavily reliant on agriculture, the service sector has driven recent growth, accounting for nearly half of GDP since 2004.

He concluded that despite the country’s remarkable growth performance in recent years, its record in promoting socio-economic development is mixed. Ethiopia has made significant strides in reducing rural poverty, improving life expectancy, and raising education levels. But these gains have come with rising urban income inequality and surging inflation.

"More U.S. Businesses Encouraged to Look At Africa's Potential"

Photo: VOA - N. Colombant

I'm quoted in Nico Colombant's Aug. 18 Voice of America story on U.S. investment in Africa:

Development experts say smaller companies which have something to offer for Africa's growing middle class and infrastructure needs should also take a close look. A former U.S. ambassador in Africa, David Shinn, says the U.S. government should do more to help nervous companies take their first steps.

"Part of it is cajoling the American private sector, having perhaps a major conference led by the Secretary of State or the Secretary of Commerce or the president even to bring in potential investors and encouraging them to go to Africa," said Shinn.

Congressional testimony on Somalia

I was invited to testify on Somalia 7 July, 2011 before the House Subcommittee on Africa, Global Health, and Human Rights and the Subcommittee on Terrorism, Nonproliferation and Trade.

My testimony (which Congressman Chris Smith posted on his site) covered the Obama Administration’s dual track policy, the role of counterterrorism and military strikes, contact with al-Shabaab, piracy, countering drought and potential famine, recognition of Somaliland and regional economic integration.

The transcript follows below.

Somalia - 2011 House Hearing

Wharton Asia business conference

The Wharton School of the University of Pennsylvania in Philadelphia is sponsoring the Wharton Asia Business Conference on Nov. 19.

I will be a member of a panel discussing “China Going Global: What the Global Emergence of China Inc. Means for the World Economy.” My remarks will focus on China’s role in Africa.

Economic report on Southern Sudan

Standard Bank of South Africa, which has branches around Africa, published a report titled "Southern Sudan: Future Potential Shines a Torch on Current Shortcomings."

The strength of the report is the economic data that it has compiled. While it points out the challenges facing Southern Sudan, it is generally upbeat about its economic prospects.

You can download the full report here.

China's expansion in Africa

I spoke with Reuters' Alistair Thomson about Chinese businessmen's investments and loans of tens of billions of dollars in Africa despite global economic problems. The article appears in Forbes. Here are the relevant paragraphs:

"China is in Africa for the long term, and strategically," said David Shinn, a former U.S. ambassador to Ethiopia and Burkina Faso who teaches at George Washington University's Elliott School of International Affairs. "They will not veer from this, in my view," he said. ...Shenzhen-based Huawei Technologies, China's biggest telecoms equipment maker, is pushing south from its established stamping ground in North Africa. "I see no reason why they would want to decrease their investments in the telecommunications sector, because that's profitable for them," said George Washington University's Shinn. "It will vary according to sector and country ... It's very dangerous to generalise about the China-Africa relationship," he said. "They will certainly make tactical retreats where the economy requires it."