Chapter 1 - Introduction


“Globalisation today is not working for many of the world’s poor. It is not working for much of the environment. It is not working for the stability of the global economy. The transition from communism to a market economy has been so badly managed that, with the exception of China, Vietnam and a few East European countries, poverty has soared and incomes have plummeted... The problem is not with globalisation, but how it is managed.”     

Joseph Stiglitz

Claude Kabemba's picture

Director of the Southern Africa Resource Watch (SARW)

October 3rd, 2012


“Globalisation today is not working for many of the world’s poor. It is not working for much of the environment. It is not working for the stability of the global economy. The transition from communism to a market economy has been so badly managed that, with the exception of China, Vietnam and a few East European countries, poverty has soared and incomes have plummeted... The problem is not with globalisation, but how it is managed.”     

Joseph Stiglitz

The People’s Republic of China (PRC) has prioritised Africa as a strategic partner at both the political and economic levels, while seeking to link African commodity and consumer markets to China’s growing economy. Two-way China-Africa trade has grown significantly in recent years, surpassing US$100 billion by the end of 2010. At the same time, China’s development assistance is expanding, while China’s investment footprint increasingly covers key economic sectors on the continent. Over the next few years (and possibly decades), African affairs will be significantly shaped, or impacted on, by China’s direct commercial involvement. China’s growing geopolitical influence globally and in Africa will have significant long-term consequences for the continent’s political and economic evolution.

Appropriate and effective policy responses (from both China and Africa) are required to ensure a mutually beneficial China-Africa relationship. This study suggests policy options and dialogue processes with a view to advancing a positive relationship and mutual economic development. The aim of this study is to investigate the China-Africa relationship specifically in the context of natural resource extraction. The project focuses on Southern Africa, particularly Angola, the Democratic Republic of Congo (DRC), Mozambique, South Africa, Zambia, and Zimbabwe.

Objectives and methodology

The major objective of this study was to assess the nature and scope of Chinese investments in the natural resource sector in Southern Africa, and how these activities affect the communities they operate in. Research teams in each country were expected to compile a paper which attempts to:

a)      examine and highlight practical experiences of selected Chinese investments in the mining sector in one Southern African country;

b)      identify the social, environmental and economic effects of Chinese companies, especially how they have contributed to the socio-economic improvement of populations around the areas where they are mining;

c)      identify and discuss consultation mechanisms with local stakeholders and communities by Chinese companies;

d)     formulate recommendations based on current experiences, which could be the basis for improving relations and ensuring that companies contribute to sustainable development in Southern Africa.

All the country teams fulfilled the brief and six country studies were submitted. In order to ensure a more coherent and digestible report, the material contained in the studies was integrated into six thematic chapters discussing the issues raised by China’s role in the extractive industries and proposing concrete changes.

This study employed a number of data collection tools, including a structured open-ended questionnaire which was administered directly or indirectly. Where it was used directly, the questionnaire served as an interview guide. The questions were consistent, though applied with varying degrees of emphasis depending on the nature of the respondent. The questionnaire was sent to top and middle management at various mining companies.

The study was supplemented with primary data from other stakeholders such as government departments, civil society organisations, local authorities, and people involved in the extractive industries. The study also used a literature review, accessing local and international studies relevant to the theme. It is worth noting that the researchers often faced limitations on access to specific company profiles (including limited access on parent institutions in China). The major limitation to this study is the non-response of management or its agents to appointments and the questionnaires. Direct observation was also effectively used, especially during field visits to some of the companies.

It is hoped that the outcome of this research will lead to modifications in China’s corporate behaviour in Africa’s extractive industries. For example, the Global Environmental Institute (GEI) has been influential in reforming China’s logging industry overseas. In 2005, GEI launched a programme in co-operation with China’s State Forestry Administration to introduce an “integrated policy package.” The programme suggested changes to relevant laws and policies governing Chinese logging companies operating overseas. GEI specifically aimed at convincing China’s State Forestry Administration to take responsibility for regulating Chinese forestry corporations operating overseas. It also sought to train forestry corporations on how to implement relevant laws and regulations. Its activities have helped to convince banks to adopt lending criteria for overseas timber extraction, such as requiring that environmental impact assessments be performed.

As a result of GEI’s activities, in August 2007, China’s State Forestry Administration intervened against Chinese illegal logging operations overseas. The State Forestry Administration issued new guidelines aimed at ensuring sustainability and biodiversity in Chinese logging operations. They have insisted that Chinese companies formulate sustainable forestry programmes to provide work opportunities for people in host countries and to improve the livelihood of local people. GEI’s guidelines now serve as a model for industry-specific standards, and are helping to improve prospects for logging and sustainable development in African countries.      

This study offers the empirical data to underpin specific suggestions and recommendations which could lead to changes in corporate behaviour, which in turn will foster increased economic development and improved commercial conditions for local communities. At the same time, building a stronger domestic economic environment would have advantages for Chinese investors and thus create a “win-win” situation, ensuring benefits for both China and Africa in the pursuit of mutual, co-operative economic development. The long-term objective is to assist African decision-makers in knowledge building which provides the foundation for policies intended to escape the “minerals curse” and resultant poverty trap.

SADC’s challenge is to ensure that its natural resources are used to promote pro-poor growth and progress towards achieving the Millennium Development Goals (MDGs). The effective management of these resources is critical in achieving these objectives. Innovative and constructive ways of engaging with and managing external actors (in this case China) could help to turn the resource curse into a source of economic development and prosperity. Ensuring that China’s intervention in SADC’s extractive industries is managed for mutual long-term benefit is the key challenge for regional decision-makers. This research seeks to inform, empower and encourage both Chinese and SADC decision-makers to craft policies, regulations, approaches and processes which produce progress towards achieving the MDGs, providing the foundation for regional economic growth and long-term prosperity.  

About the author(s)

Claude Kabemba is the Director of the Southern Africa Resource Watch (SARW). In 2006, the Open Society Initiative for Southern Africa (OSISA) asked him to spearhead the formation of SARW. He holds a PhD in International Relations (Political economy) at the University of the Witwatersrand (Thesis: Democratisation and the Political Economy of a Dysfunctional State: The Case of the Democratic Republic of Congo). Before joining SARW, he worked at the Human Sciences Research Council and the Electoral institute of Southern Africa as a Chief Research Manager and Research Manager respectively. He has also worked at the Development Bank of Southern Africa and the Centre for Policy Studies as Policy Analyst. Dr. Kabemba’s main areas of research interest include: Political economy of Sub Saharan Africa with focus on Southern and Central Africa looking specifically on issues of democratization and governance, natural resources governance, election politics, citizen participation, conflicts, media, political parties, civil society and social policies. He has consulted for international organizations such Oxfam, UNHCR, The Norwegian People’s Aid, Electoral Commissions and the African Union. He has undertaken various evaluations related to the work of Electoral Commissions and civil society groups interventions in the electoral process in many African countries. He is regularly approached by both local and international media for comments on political and social issues on the continent. His publication record spans from books (as editor), book chapters, journal articles, monographs, research reports, and newspaper articles.

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