The relationship between China and African nations such as Zambia is complicated, and tensions over the role of Chinese investors can play an important role in elections.
The Sino-Zambian Dilemma
In the September 2011 presidential elections in Zambia, Michael Sata won the election based on an platform of anti-Chinese rhetoric. The presidential vote was even referred to as a ¡°referendum¡± on China. President Sata has accused the Chinese companies in Zambia of exploiting the work pool and resources of the region in an effort to ¡°take over.¡± This claim is probably due to the fact that only ten percent of Chinese investment is directed toward industries outside of the mining sector (like agriculture, construction, manufacturing, and retail). His anti-China stance began back in the 2006 campaign and Western news sources dubbed Sata the ¡°anti-China force in Africa.¡±
Many are viewing Sata¡¯s recent election as the marked beginning of an adverse response to Chinese investment not only in Zambia, but perhaps across all of Africa. Sata has even earned the moniker ¡°King Cobra¡± for his forceful language and campaign style. Domestic frustrations have most certainly fueled this political shift because close to two-thirds of Zambians still live under the poverty line ($1.25 per day). Even so, copper miners increased strikes in October 2011, just two weeks after Sata¡¯s victory. Chinese copper mine managers struck back by claiming that these demonstrations were both illegal and counterproductive, because mine operators and unions are set to return to the negotiating table concerning wages in November 2011. This tense situation raises questions about the future of the Sino-Zambian relationship, but that connection is a long and involved one that far predates the recent issues raised by the election.
China¡¯s economic history with Zambia dates back to the construction of the TAZARA (Zambia-Tanzania) Railway from 1970 through 1975. The project was valued at $500 million (US), making it China¡¯s largest foreign-aid enterprise to date. Today, the Zambian capital of Lusaka is the first city to offer banking in Chinese currency on the African continent through a recently launched branch of the Bank of China. Most importantly, the Zambian cities of Chambishi and Lusaka are two of China¡¯s African Special Economic Zones (SEZs), and they have been designated as areas that Chinese companies will support in order to lure foreign investment through tax incentives and more liberal fiscal policies.
As the world¡¯s largest consumer of copper, China has a hugely vested interest in the largest copper-producer in Africa. In 2010 alone, Zambia produced $2 billion worth of copper. However, there have been instances of violence in the mining sector that have shaken Sino-Zambian relations. For example, the Chambishi Mine had an incident in which five Zambian workers were shot (but not fatally) by managers during a riot there in 2005. That same year, an accident at one of the mining company¡¯s explosives plants claimed the lives of 50 Zambians. Then, in 2010, two Chinese managers at the Collum Coal Mine shot and wounded a dozen Zambian miners that were among more protesters that were fighting for timely salary payments.
On the issue of diplomacy, China has a newly appointed ambassador to Zambia, Zhou Yuxiao, who swiftly visited Zambia to offer his congratulations to Sata after the election. Chinese President Hu Jintao has also extended an invitation to Sata to visit Beijing. Also politically significant, China has started many high profile undertakings in Zambia, including the construction of the +150 bed Lusaka General Hospital. Lastly, China defends itself from attacks on its financial ties with Zambia by pointing out that it is only the third largest importer of Zambian products, with South Africa being first and Switzerland being second. Why are these countries not under the same scrutiny when it comes to discussing Zambia¡¯s economy? While copper and cobalt account for 70 percent of Zambia¡¯s exports, only about 12 percent of that 70 percent are being sent to China.
The recent election outcome ends the 20-year leadership of Banda¡¯s Movement for Multiparty Democracy party (MMD) in Zambia. In 2007, it was Banda who brokered investment contracts to create the SEZs in Zambia. A question on most minds is whether or not Sata¡¯s opposition, Rupiah Banda, is being supported by Chinese financial contributions. There are claims that campaign lollipops given out by the MMD were produced in China, but these accusations are impossible to prove given the murky state of the political party financing of Zambia. Banda refuses to name his financial backers, but continues to deny that the Chinese are not funding his political campaign. Banda has also consistently maintained that Zambia needs a partner like China to sustain the economic growth, but some claim that Banda¡¯s defeat marks the start of a trend toward Chinese involvement in African elections (perhaps politically and financially).
This controversy in Zambia over Chinese investment is one of many challenges to Chinese influence that China is facing around the world. The Burmese government recently halted a large dam project after environmental and political protests took place regarding its construction. The Myitsone dam endeavor is valued at $3.6 billion, so Chinese Foreign Ministry representative Hong Lei reminded Burma to deal with the suspension of the project ¡°appropriately through bilateral friendly consultation.¡± Surprisingly, the dam project was halted after being strictly verified and planned and with the Burmese government set to receive $500 million each year. China National Petroleum Corp. (CNPC) also suffered a $188 million dollar loss in oil production in Libya when civil war broke out in the country.
The CNPC was forced to halt projects in Algeria, Niger, and Syria this year as well. As conflicts between Chinese investors and domestic interests continue to emerge on the African continent, two important questions are raised. First, is public opinion dramatically changing regarding China¡¯s development interests just in these individual countries of in the whole of Africa? Secondly, Is that evolving opinion going to manifest in local elections of already established and emerging democracies in Africa? The occurrences in Zambia could potentially be echoed in other countries with Chinese SEZs like Egypt¡¯s Suez economic zone or in Nigeria¡¯s Lekki or Ogun.
The True Outcome of the Zambian Election
In previous elections, Sata had threatened to expel Chinese investors from the country, but he has softened his stance during this recent voting season. It is impossible to ignore the +20,000 jobs created by $2 billion of Chinese investment there, but Sata insists that Chinese companies need to strictly abide by Zambia¡¯s labor laws. Just days after Sata¡¯s political victory, Zambian employees in the copper mines received raises from the Chinese mine companies. This is evidence that the Chinese investors have responded to the election results, but will this move be enough? Even still, the fact remains that Zambia has experienced great economic gains due to its affiliation with China. It has maintained a consistent six percent average annual economic growth rate in recent years and next year¡¯s rate is set to exceed seven percent. In addition to success, China¡¯s commitment in Zambia has remained firm amidst the 2008 global economic crisis when Western companies readily withdrew capital and business from the country.
The copper industry in Zambia would have both suffered more and not recovered as quickly without China¡¯s support. If Chinese companies have remained vigilant in Zambia during financial crises, then should China pay for the apprehension resulting from Western colonization of Africa when it never took part in such an offense? U.S. Secretary of State Hilary Clinton has repeatedly spoken of a China Threat theory when visiting Zambia and other African countries, but then-President Banda responded by voicing his opinion that Secretary Clinton was mistaken in her analysis. He is among many African leaders that believe that China has created opportunities where the West has failed and the West is inherently biased of its perceptions of the Sino-African relationship.
This article is also featured at www.sinoafrica.com/en
By Jessica L. Belk
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