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Download this week’s newsletter as a PDF here: CPW 15 (May 1-11)
Dear friends and colleagues,
New new world order
Xi Jinping’s first trip as President was to Africa (via Russia), and Li Keqiang took his first overseas visit of 2014 to the continent last week, visiting Ethiopia, Nigeria, Angola and Kenya last week.
Li’s recent visit reinforces the fact that China is the only major economy that takes Africa seriously. Unlike Western capitals, China has long given relations with Africa pride of place. As a result, annual Chinese investment in African infrastructure is nearly 20 times that of the United States and more than that of the World Bank and all Western governments combined. China has been Africa’s largest trading partner since 2009.
In response, the United States, Japan and others are trying to boost their engagement with the continent. The White House will host the first US-Africa Leaders Summit this August, although it is unlikely to match the triennial Forum on China Africa Cooperation (FOCAC) held since 2000. That the US and others seem to want to engage in response to China only enhances the feeling that Africa only matters as a geopolitical battleground and not in and of itself, much as it was during the colonial era and then the Cold War.
China works hard to differentiate itself from the former colonial powers. In his speech at the African Union, Li spoke of “common historical experiences” and “hav[ing] forged deep friendship in our joint struggle”, reminding his audience that China is also a developing country that has suffered at the hands of aggressive foreign powers.
China’s rhetoric is largely successful. While the Western media tends to paint China as a new colonial power, my experience traveling on the continent and talking with African officials, businessmen and intellectuals suggests that many view the Chinese presence positively. Part of this comes from a certain feeling of solidarity with another developing country, but most of the goodwill is simply because the Chinese tend to treat their African counterparts as equals. Instead of aid, they offer development; instead of lectures, they listen.
This contrast was evident over the past two weeks. US Secretary of State John Kerry was also in Africa, where he lectured his African audiences on corruption; Premier Li didn’t mention corruption, but did promise to quadruple investment in the continent. Li also gave a keynote address at the World Economic Forum on Africa, a meeting that no major Western statesmen bothered to attend.
What does this mean for multinational companies? In the short term, very little. Africa still represents a small portion of the global economy. But this will change in the coming decades; as Africa becomes more important, Chinese companies familiar with the market stand to benefit. As Managing Director of McKinsey Dominic Barton said at the World Economic Forum on Africa, “Africa represents our fastest-growing region in the world. If you want to be relevant, you need to be in this part of the world.”
In it together
It was barely noted in the Western press, but the head of the CPC International Department Wang jiarui met with US Secretary of State John Kerry in Washington last week. Such a meeting is very unusual as Wang holds no official government post. Wang is China’s point man on North Korea, so his visit was likely due to concerns on both sides of the Pacific that the North is looking increasingly aggressive and appears to close to another missile test.
Tensions certainly appear to be running high on the peninsula with South Korean Ministry of Defense saying on Monday that the North should “cease to exist.” This follows recent official statements by North Korea calling Barack Obama a “black monkey” and South Korean President Park a “prostitute.”
While Wang’s visit does not bode well for stability on the Korean peninsula, it does bode well for stability in US-China relations. It is encouraging to see that the two are working closely together on the issue. East Asia is filled with potential areas of conflict that could disrupt the global economy but the risk of such disruption is greatly minimized if China and the US can work together to achieve a working order. Let’s hope that cooperation on North Korea is a harbinger to mutual accommodation in the rest of the region.
|China Politics Weekly aims to keep business leaders, investors, diplomats, scholars and other China hands up to date on important trends in China.
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