Chinese Foreign aid Policies

Chinese foreign aid policies, from the scarcity of natural resources to a constructive and dynamic engagement with Africa.

Introduction:

Recently, the world has been witness to the steady Chinese booming economy. This nation has astonishingly benefited from a long-lasting and solid economic growth, becoming, therefore, the second largest economy worldwide in 2010. The economic push stemmed from implementing market reforms which enhanced the economy to be more internationally opened since 1978. Since then, the Chinese economy has been characterised by a steady economic growth path framed by an annual average rate fluctuating between 5,3% and 10,4% in terms of GDP between 1980 and 2010. Nowadays, China is responsible for the 75-100% of the global demand for minerals and other natural commodity exports such as petroleum.

As China has emerged as new hegemonic pole in the world economic context over the last decade, the previous international balance has been shaken. Instance of that can be traced to the analysis of Chinese investments activity in Africa since 2000s. Surprisingly, China has been providing more infrastructure projects and funds through low interest loans than the World Bank. Consequently, Sino-African trade has steadily increased between 2000 and 2011. The expenses dealt with are speculated to securitise and diversify access to natural resources as well as granting the entrance in new profitable developing markets.

Nowadays, China represents one of the most dynamic driver of the global economy. Although, it is expected to decline slightly in 2014-15, as the economy shift to a more sustainable path, Chinese growth is expected to remain strong in developing countries. Not surprisingly, China is competing with the US for the lead of the World economy. Hence, the effect of Chinese booming markets on the Western dominated global political economy presents both an opportunity and a threat for the latter drivers as well as the developing world.

Hypothesis Statement

Currently, the impact of the Chinese “peaceful rise” represents a key determinant of the new multilateral world setting. Therefore, it has become crucial to understand the effect that the rise of China will have on the traditional “North-South” relations. Thus, the evaluation of its growing relations with developing countries, especially the ones rich in natural resources but poor in governance standard, has been given special attention in order to fathom the possible outcome of a partnership which has been claimed to be based on mutual benefits. Indeed, the potential economic impact China might have on Africa represents a controversial aspect of evaluating China’s thriving domestic and international economic approach as well as the impact on the host economies.

Indeed, this dissertation pivots on China's growing engagement with Africa. The study aims at explaining the renewed interest of China in Africa since the 1990s, taking into account the striving competition between China and US to lead the World Market, and that Beijing’s peculiar FDI framework is controversially claimed to able to enhance a dynamic virtuous circle in both the national economy and within African markets. Hence, on the on hand it seems that Beijing and African interests has been aligned in setting and tightening economic partnership, especially after the establishment of the FOCAC in 2ooo. In this regards, African elites have been mostly enticed by the development model promulgated by China based on respect of state sovereignty, no conditionality attached to aid policies and freedom from ‘western hegemony’. However, it is becoming more evident that, as well as the case of the growing US foreign debt held by Beijing since 2008, the balance of trade flows with African markets is suffering an export deficit due to the flood of cheap Chinese imports. On the other hand, the establishment of strategic frameworks for pan-African socio-economic development such as NEPAD and African Union challenges the non-interference and good governance principles.

Indeed, the aim of the research is to answer the following question: is the pattern of Chinese foreign development policies able to enhance a dynamic virtuous circle in both the national economy and within African markets? Consequently, it will be assessed the overview of Chinese FDI in Africa, focusing on the nature, extent and possible impact of increased Chinese engagement with the region. Taking into account that China’s official stance on its relations with Africa is that they should be of mutual benefit, fostering an economic opportunity both for China and Africa, increased Chinese investment does seem, at first glance, to be a golden opportunity for Africa.

This evaluation will be based on 3 main hypothesis:

1. Chinese involvement in African economy is a way to gain access to natural resources and new markets for its manufacturing.

2. Chinese foreign investments on African infrastructure sector has been influenced by the expertise gained by the development stages it went through.

3. Chinese approach is more effective than the Western one in terms of bypassing crucial dilemmas and developing core economic segments which are mutually benefited by the Sino-African cooperation.

The analysis of Chinese growing engagement with Africa is an essential key for the understanding of the following points:

The development challenges Africa has been going through might be more easily overcome thanks to Chinese FDI which are claimed to be more efficient than the Western approach on the extent of fostering development as well as economic growth. However there is lack of empirical results within the current Chinese economic impact on Africa. Therefore, framing the effect and the character of Beijing’s involvement in African continent could offer valuable information which might foster policymakers’ activity.

Despite the fact that the literature on FDI is wide, especially in economics, study of related impact in Africa is limited. The research, thus, pursues a more comprehensive understanding of FDI flow to the region.

Theoretical framework and role of the theory

The main theories which are taken into consideration are the modernisation and the dependency ones. On the one hand the latter is a segment of the economic structuralism (Ferraro 2008:58-64), established as development paradigm in 1960s. This approach has framed African leaders’ scepticism towards FDI. Indeed, the leading pillar stems from the belief that wealthy capitalist countries (core) develop at the expenses of developing economies (peripheries), due to unbalanced political and economic relationships (Hunt, 1989). Consequently, foreign direct investments have a negative effect on economic growth because of the overreliance on foreign funds. Moreover, according to this perspective it is stated that too often FDI focus just on specific sector in host economies leading to uneven economic growth amongst all the other ones. Hence, self-sufficiency has been claimed to be a reliable remedy to prevent the previously outlined scenario (Upsall, 2002).

On the other hand, the modernisation theory represents the second approach whereby evaluating the occurring relationships between FDI and economic growth. The key tenets of this approach are provided by exogenous and endogenous growth theories. According to the exogenous growth theory, also called Neoclassical, capital investment is a crucial determinant of economic growth, because it enhances quality and quantity of labour force as well as technical development (Adams, 2009, Mankiw, 2003:81). Hence, as it is demonstrated by the Solow’s model (1956), the output per worker strictly depends on the amount of capital invested. More capital means more output, even though it is considered that the capital itself is subject to the law of diminishing returns, which entails that capital and output per worker will reach the same rate in the long run. Therefore, FDI is considered beneficial for economic growth due to the fact that it provides funds which alter capital-labour ratio leading to increase in output.

The limitation of this theory stems from the restrictive assumption inferred in the Solow’s model. In fact, it undermines the change in growth and technical development rate as well as the saving rate as a country develops (Perkins, Rodelet and Lindoner 2006). Besides, this approach takes for granted that developing countries attract foreign funds due to their low-cost labour and high-rate of return on investments (Todaro and Smith, 2003: 130-131).

By contrast, the endogenous theory assumes that in the long-run economic growth occurs (Romer 1986, Lucas 1988). Differently to the Neoclassical theory, it is assumed that increasing returns occur in the long haul (Mankiw 2003:222-225) because investments made in human and physical capital entail beneficial externalities that compensate the “diminishing return” effect (Harzer, Klosen and Nowak-Leheman, 2008) and allows persistent economic growth.

Therefore, capital is a key determinant of economic growth. FDI provides capital to developing nations enhancing a spillover effect which offsets the law of “diminishing returns”, ensuring a long-term growth.

The chosen theoretical framework has been provided in order to deliver a better understanding of the differences occurring between Western and Chinese approaches. The focus on the relationships between FDI and economic growth entails a critical and substantial perspective for evaluating the effectiveness of foreign direct investments as well as framing the diametric western and Chinese rhetoric.

Method of Investigation

The chosen method consists in evaluating quantitative and qualitative data from trade relations and official foreign policies. Thus, the following comparison with the Western approach means to understand the alternative path which Beijing has followed and how it overcomes dilemmas which undermines the Western framework effectiveness. The theoretical framework has been chosen as it delivers concepts of the relationship between FDI and economic growth, and specifically modernisation and dependency theories. This theoretical stream has been preferred because it provides a reliable source from which evaluating the overall effectiveness of both Western and Chinese approaches. The main findings suggests that there are substantial instances that China makes use of its own development path in providing foreign aid to African countries. Additionally, through the analysis of the determinants of Chinese FDI to Africa, it is highlighted which segments of the African economy attracts more foreign inflows. Thus, this study concludes that, on the one hand, Sino-African relations are not aligned with the misconceived, conventional perception of a mere exploitative Chinese purpose in engaging with Africa on the extent of not lying just in securitising and diversifying natural resources . On the other hand, Africa could profit by an increase in Beijing’s FDI inflows, even though the main challenge lies in properly allocating investments to enhance development spillover and highest possible growth.

Literature Review

As background to the study, the literature related to China’s engagement in Africa through aid, finance, trade flows, trade policy, has been selected with peculiar attention to FDI. Even though, if compared to aid flows from the DAC members (Development Assistance Committee), of whom China is member, a few authors (Wang 2007, Brautigam 2009, and Kragelund 2008) have engaged with a comprehensive evaluation of Chinese aid flows to Africa. Thus, the chosen literature is divided in 3 main streams, one related to the overall Chinese engagement with African economies along with foreign direct investments flows into Africa, another focused on the controversial outcome of FDI enhancing economic growth.

Literature on Chinese engagement with Africa

In order to achieve a better understanding of the occurring divergences between Western and Chinese approaches, it is crucial to start off by the most relevant literature related to the so called Beijing Consensus (Ramo, 2004) and Washington Consensus (Williamson, 2004). On the one hand, the former advocates flexibility as well as defence of national interests and borders (Ramo, 2004:29-31), aiming to “achieve and maintain power in an asymmetric power relation to the remaining superpower and the transnational capitals” (Xing, 2007). On the other hand, the latter promotes 10 Neo-liberal policy instructions stemming from Bretton Woods institutions (Williamson, 2004). Indeed, the 3 main theorems which the BJC is based on are innovation, self-determination and dynamic perception of growth. The first pillar deals with blockages of the development process, such as obsolescence of the host technology (Ramo, 2004: 11-12) and the second concerns the conviction that, as non-belligerent country, China focuses on avoiding conflict on the extent of pursuing its policies outsmarting competitors (Sun Zi in Ramo, 2004: 29). Finally, the third engages with the belief that growth is perceived in terms of stability, hence, government priority stems from reforms which ensure social stability in order to enhance economic growth (ibid. :23). Therefore, while the Beijing Consensus focuses on the individual and is more likely to adopt flexible solutions, the Western framework relies primarily on bankers and uniform solutions.

Literature on Chinese FDI flows to Africa

One of the main studies carried within the occurrence of policy reforms in SSA countries (Sub-Saharan Africa) is presented by Asiedu (2004). Indeed, the author finds out that they have failed to increase FDI inflows due to less competitiveness than other implementation set up in other developing countries. By contrast, as it is claimed by NEPAD (2001:37-39), the economic development program of the African Union aiming at accelerating economic co-operation and integration among African countries, FDI represents the “window of opportunity for Africa to provide (foreign) capital for bridging “finance gap”. Indeed, it has been found out that FDI played a key role in SSA countries because of the “resource gap”, on the extent of bridging the lack of domestic savings and investments as well as funds for development assistance (Asiedu, 2002). Moreover, it is both assessed the determinants of FDI within the case study and stated that in developing countries foreign direct investments are promoted by adequate infrastructure and openness to trade, even though the impact on SSA has been weaker. Therefore, Africa seems to be perceived as unstable by the international investments arena. This statement is supported also by Goldstein (2004) who affirms that FDI flow to Africa has been negatively influenced by the risk perceived in investing in the continent.

Literature on FDI effectiveness to enhance economic growth in Africa

The existing literature related to the relations between FDI and economic growth shows a controversial outcome (Kottaridi and Stengos, 2010). Indeed, from a firm-level perspective there is no instance of positive trends and spill-over effect. However, macroeconomic evaluations demonstrate the contrary, stated the existence of crucial preconditions. Therefore, in order to assess the actual outcome of Sino-African relations it will be taken the literature on macroeconomic studies between 1998 and 2010.

In order to narrow down the focus of the research to the occurring relationships between FDI and economic growth in Africa, Durham’s (2000) analysis represents a useful tool. Indeed, the author through time series analysis of capital flows to determinate growth regression in 9 developing countries, including 5 African ones, points out that FDI negatively influences economic growth in Zambia, Nigeria and Zimbabwe, with the only exception of Uganda. Besides, Akinlo’s (2004) research, based on error-correction model, do not find strong influence of foreign investments on economic growth in Nigeria between 1970 and 2001. By contrast, as it is showed by Lumbila’s (2005) panel study comprehending 47 African nations between 1980 and 2000, FDI has been positively affecting economic performances. Indeed, growth has been enhanced by the deployment of skilled labour force and a stable as well as investor-friendly environment. Similarly, the vector correction model presented by Fedderke and Romm (2006) demonstrates that in the long haul domestic and foreign investments tend to compensate each other leading to technology spillover from foreign to domestic capital in South Africa, even though it has been found that foreign firms are more likely to crowd out national ones in the short term. Equally, Ndikuma and Verick (2008) through a robust OLS in 38 SSA between 1970 and 2005 reveal that FDI enhanced crowd in effect in domestic investments, that is to say it positively affects economic growth.

In conclusion, whereas the literature on FDI is vast, the one on foreign direct investment in Africa is limited. However, both show controversial results depending on methods, variables and period of time evaluated. Stated this, the general consensus seems to suggest that FDI enhances growth in Africa, thanks to its absorptive skill. Hence, FDI is generally considered to be beneficial for African countries especially whether the host economy is able to profit from positive externalities occurring with foreign direct investment inflows. However, theoretically it does not seem feasible that an increase in Chinese investment in Africa can benefit the continent.

Outline of the study

The research is organised as it follows. The first chapter provides background information about the developing Sino-African economic partnership along with the critics arisen by the “Washington Consensus”. The second chapter offers a review of China engagement with the African continent focusing on official data on Sino-African trade, aid flows and especially FDI in African “rentier ” and fragile states as it develops the discourse about Western and Chinese framework in engaging with developing countries .

The following section assesses the debate over Chinese development assistance effectiveness presenting an overview of flows of funds to Africa through the lens of a global perspective on the performance in being positively affected by FDI inflows.

Key words: Key words: Sino-African relations, Chinese foreign direct investment, Beijing Consensus, Washington Consensus.

Framing Sino-African relations

The current image that Chinese activities in African continent has created throughout the Western rhetoric cannot be defined as positive (Condon, 2012). Indeed, the latter has been characterised by a negative tone, which to some extent has been framed by conspiratorial indictments, speculating exploitative purposes behind Beijing’s engagement with the continent (Walsh, 2006: Behar 2008: Brautigam 2011). Thus, China has been blamed of prioritising its economic interests rather than focusing on human rights issues and environmental degradation (Human Rights Watch, 2013 pp. 41-50). However, the occurrence of a new competitor in the formerly Western monopoly of the international “donors market” has provided to African countries a wide room for manoeuvre. By contrast, the New Strategic Partnership established by China in 2006 does not consider as key tenet for the extension of its sphere of influence good governance performance. For instance, while the Dutch government suspended its aid deployment to Kenya in 2006, Chinese National Offshore Oil Corporation (CNOOC) was securing an oil exploration agreement with it (Hurst, 2006).

Historical development of Sino-African ties

Since the birth of People’s Republic of China, Beijing managed its domestic consumption of oil thanks to the internal reserves located in the northern borders. China has started facing the condition of net-importer of natural commodities since 1993, when the reserves of petroleum within the country were no longer sufficient to deal with the national demand for oil (Brautigam 2009:78, Cabestan 2010:8, Nedergaad 2011: 14-15). Therefore, the contemporary Sino-Africa relationship, established by formal diplomatic ties with Egypt in 1956, did not mean satisfy any peculiar exploitative “thirst” rather than try to fit in the international systems framed by cold war politics, although the same year China concluded an economic agreement with the new born Sudan which was furthered by a mutual exchange of goods, in the specific case of cotton for textiles in 1958 (Ali, 2006).

Thus, because of the international ostracism framed by the Cold War politics aiming at isolating Taiwan, China has firstly engaged with Africa as a diplomatic partner (Bates 2007: 4). On the other hand, Sino-African trade volume increased from $12 to $250 million between 1950 and 1965. Indeed, the friendly cooperation with African countries has witnessed annual growth of 3.6 percent on average. Hence, both Africa and China pledged for political mutual support, focusing on anti-colonialism and anti-imperialism as tenet of their partnership within an international environment dominated by power politics. For instance, Beijing commitment to Africa can be found in political and military support provided through building Tazara railway linking Zambia to Tanzania, which was crucial for helping Zambia in diversifying its trade routes due to the sea lines dominated by white-minority ruled Rhodesia.

Chinese renewed foreign policy was sanctioned as thriving when Beijing became a permanent member of the Security Council in 1971. In this regard, Chinese foreign policies has been influenced by Den Xiaoping’s economic modernisation programmes which enhanced an unprecedented high growth rate thanks to the “social market economy” whose key tenant is represented by the “open door policy” in 1980s (Brautigam 2009:9: Cohen 2009:53). By contrast, it should be mentioned that the Chinese framework presented some exceptions such as the case of Angola where Beijing had to face the dilemma in supporting the Angolan government or the South African one which intervened in the neighbouring and already complex civil war in October 1975 (Jackson, 1995).

Hence, China, since 1978, has been undergoing the need for foreign investments and improvement of technical expertise. After the unfortunate outcomes of “the Leap Outward” program, China shifted its sphere of interest to the industrialised developed West for its solid expertise in managing massive capital in the 1980s. Chinese businesses started to flourish in Africa since 1988, when Beijing would try to manage the expected emergence of the U.S. hegemony, pointing to multipolarity as framing an international environment within which any form of absolute hegemony would have been contained. On the other hand, the soft power rhetoric in China dates back to the Tiananmen Square crackdown in 1989. The liberal political values inherent to the terminology of “soft power” was used by China to overcome the international ostracism on the extent of reconciling “universalistic values” and “socialism with Chinese characteristics” (Li and Rønning, 2013). Therefore, Beijing started to frame a new foreign policy-making characterised by a less aggressive approach towards regional and global affairs, launching the “going out” policy. The outbreak of the financial crisis in Asia in 1997 pushed the Chinese outward-oriented economy to reconceptualise its (inter)national interests pointing to more broadly engage in foreign policy. Therefore, China’s tightening involvement in the African continent would be a part of a wider policy framework comprehending also South America and Middle East.

However, instance of the primary importance that Sino-African relationships has been gaining is showed by the establishment of the Forum for China-Africa Cooperation (FOCAC) in 2000, through which bilateral trade skyrocketed from $106.84 billion in 2008 (Xinhuanet, 2009) to $172.8 billion in (Feifei, 2014). Since 2009, China has become the first African trading partner, reaching 16% of share in the total foreign trade of Africa (Xinhuanet, 2009). In this regards, Nigeria, Angola and South Africa have been the most favourite partners, with South Africa alone accounting for 31 % of the total Sino-Africa trade. Not surprisingly, the bilateral trade established with Eritrea and South Sudan has hit 197.3 % and 190.2 % respectively in 2013. In the same year, China has showed a deeper commitment in countries without rich energy resources such as Togo, Djibouti and Benin (Feifei, 2014). Thus, the statement whereby Beijing addresses Africa as “all-weather-friend” (Large, 2010:89), states officially a long term commitment as well as not a sudden withdrawal (Brautigam 2009:77-78). The core tenants of this peculiar approach stems from the so called “Beijing Consensus” (Ramo 2004:29-31) which involves the occurrence of a new path for other developing countries to “fit in the international order” (Ramo, 2004:3). In order to achieve this goal China has based its foreign policies on “sovereignty doctrine” and maximising mutual profits gained through a balanced economic partnership (Ibid.).

Addressing Chinese “thirst” for natural resources: the Washington Consensus

Sino-African relations has exponentially increased, but so is China’s demand for natural commodities which is considered to be essential to sustain the booming economy growth (Large 2010:96). This perspective has led to negatively label Chinese growing engagement with Africa, deeming that further cooperation will strengthen corruption (Hanauer and Morris ,2014 pp. 50-53) and worsen the “resource course” syndrome already experienced by many resource rich African countries (Lawson-Remer and Greenstein, 2012). In this regards, China has been blamed to lack of transparency within its foreign aid programmes undermining the actual outcomes of engaging with Africa. Thus, this issue is claimed to stem, on the one hand, from the deficiency of a unitary institute which leads aid policies, on the other hand due to the discretional power the fragmented institutions have to run their own budgets (Pehnelt, 2007). In this regards it is argued that Chinese FDI is undermining the Western human rights agenda in developing countries set in response to the negative impact of mainly Western transnational corporation (Sceats and Breslin, 2012:43), that is to say Chinese “Going out” policy works outside the Western agenda. Not surprisingly, from this perspective Beijing has secured arms trade to African governments, “stretching from the Democratic Republic of the Congo to Ivory Coast, Somalia and Sudan” (Lynch, 2012), as well as Burma and Zimbabwe. However, China’s White Paper on foreign aid in 2011, highlights the persistency of “Five Principles of Peaceful Coexistence” and “Eight Principles of Economic and Technical Aid” (Opoku-Mensah 2009:75) as leitmotiv to engage with other developing countries, even though instances of dichotomies stem from occurring pressures to discourage recognition of Taiwan as well as Tibetan and Uighur exiles’ issue (Sceats and Breslin, 2012:44).

Therefore, China delivers its financial partnership regardless of poor governance and human rights performances. This has been skilfully used by Beijing to mark its foreign policy which does not imply any pressure for political reforms which in turn are demanded by Western powers, once coloniser of those developing countries. Indeed, critics have arisen amongst those who support a diametric engagement with Africa. The so called “Washington Consensus” means to focus on conditionality and selectivity in engaging with developing countries, in order to provide a direct economic support, especially microfinance for the poor and educational and health programmes (Williamson, 2004). Therefore, the former approach clashes with the latter perspective on human rights violation and non-interference principle when funds, as it is in the case of Foreign Direct Investment, are deployed in non-responsible governments, undermining the main objective of the Western attached conditionality. Consequently China is becoming more aware of the damage to its international reputation caused by economic actors overseas (Kleine-Ahlbrandt and Small, 2008). However, it is controversial whether the Ministry of Foreign Affairs has been able to intervene, taking into account that the Ministry of Commerce outranks the former in the rigid vertical bureaucratic authority. Furthermore, the same pattern is applied to the State-owned Assets Supervision and Administration Commission which controls large state-owned enterprises (SOEs) operating overseas, within which “particularly those in the energy sector were reported to be too strong to be controlled even by the Ministry of Commerce” (Sceats and Breslin, 2012:43). Indeed, despite the fact that China is current member of DAC[1] (Development Assistance Committee), the actual blur division occurring between ODA (Official Development Assistance) and investments agreements prevents a comprehensive evaluation of flow of funds to Africa (Condon, 2012). Therefore, as a member of this committee, Beijing is expected no just to deliver a development co-operation programme, but also to provide a system through which evaluating and monitoring their aid efforts and policies to be included in the Development Co-operation Report (Development Co-operation Directorate (DCD-DAC).Indeed, it is consistently questioned whether China engages with Africa through direct investments, project finance, economic aid and development policies.

However, China has also showed a shift within its economic and political interests in engaging with fragile developing countries. Hence, in order to securitise it assets and labour force abroad, Beijing seems to have become more cautious in backing unpopular regimes as it is in the case of the “The "New Deal" for engagement in fragile states” developed through the forum of the International Dialogue for Peacebuilding and State building (Library of the European Parliament, 2013), especially after the crisis faced in Burma and Darfur as well as nuclear issues involving Iran and North Korea (Kleine-Ahlbrandt and Small, 2008). However, nowadays BRICS countries have been pivotal in addressing Syria’s humanitarian crisis, opposing any military resolution within and outside the UN Security Council. Hence, even though Brazil has called for the end of flow of arms into Syria, and as early as 2011, it issued a joint declaration along with South Africa and India to achieve an ‘all-inclusive, transparent, peaceful political process’ to end the ongoing war, pre-existing diplomatic and security ties as well as trade agreements prevent any effective measure (Allouche, 2014). In this regards, China, which is Syria’s main importer has seen its bilateral trade increasing to almost US$2.5 billion in 2010, that is to say nearly 12 per cent over the first year of war.

In this regards, China can fear the potential backlash to its relations with Europe and United States. On the one hand, Europe has been gaining international strategic importance especially after the launch of a comprehensive EU-China Investment Agreement in 2013. This Agreement would firstly implement bilateral investments through a progressive liberalisation of investment securitised by a new legal framework, and secondly, it is predicted a long-term access to respective economies (European Commission). On the other hand, “China is now one of the fastest growing U.S. export markets”, increasing by 90% between 2007 and 2013 (US Department of State, 2014) as well as the biggest foreign holder of U.S. Treasury debt. This exponential increase in bilateral trade stems from the establishment of the Strategic Economic Dialogue (SED) in 2006, aiming at discussing “long-term strategic challenges, rather than seeking immediate solutions to the issues of the day,” in order to pursue concrete results within existing bilateral economic dialogues (U.S. Treasury Department, 2006).

Chinese foreign policies are claimed to be more efficient that the Western one in terms of enhancing development and economic growth within the region. As the World Bank’s report shows the SSA daily trend rate in 2005, the number of poor has almost doubled from 200 million in 1981. Hence, the persistence of such tendency threatens that a third of the world’s poor will live in Africa by 2015 (Chen, 2008). Stated this, the widespread poverty affecting Africa would need higher growth rate than other regions to similarly alter poverty reduction. Therefore, Beijing’s involvement in the regional markets could concern a spillover effect within economic segments of African countries, resulting in overall improvement of the standards of life and dynamic markets. Moreover, the Chinese approach, due to the fact that it does not consider conditionality as discriminant for deploying funds, manages to overcome the Western Aid Dilemma on the extent of bypassing the involvement of local governments which could misuse the financial support received. Indeed, it becomes crucial to critically assess Chinese engagement with the African continent, as it is in the case of fragile states such as Angola and Sudan, focusing on official data on Sino-African trade, aid flows and FDI. The latter because it develops the discourse about Western and Chinese framework in engaging with developing countries.

Critical evaluation of China- Africa economic relations

Chinese “peaceful rise” has been claimed to be beneficial both for Africa and China (Nicet-Chenaf and Rougier, 2009; Naihr- Reichert and Weinhold, 2001; et al). However it is hard to discern on what extent the definition “beneficial” would just mean international business transactions by which only elite’s figures benefit (Asche and Schüller, 2008; Kaplinski, McCormick and Morris, 2006) or a concrete continental development ranging from human rights empowerment to a decisive improvement of people standards of living (UNCTAD, 2008; NEPAD, 2001:37-39). Indeed, from a positive perspective it is advanced that Beijing commitment to Africa, in terms of aid flow to the continent and bilateral trade, has boosted both African infrastructure and markets (Zafar, 2007; Broadman, 2007; Minson, 2008). This thriving approach is fostered by the official claim that unlike traditional donors, China repudiates any neo-colonial practice by no requiring “strings attached” backed by the “non-interference” principle. However, although the previous argument can be true because Beijing engages with sovereign states, it is questioned Chinese commitment to fragile states such as Sudan, Angola and the Republic of Congo (McCormick, 2008; Penhelt, 2007; Condon, 2012).

Sino African relations: beyond the Angola “model”

Nowadays, Sino-African relations have become more complex than ever. In this regard, China has been matching soft power to pursue political objectives, such as the “2012 Africa Focus” and The 2012 Beijing Action Plan, aiming at showing a façade diametric to the one labelled by the West (Li and Rønning, 2013), to neo-colonial economic foreign policies on the extent of aiming at securitising energy supplies especially from fragile states, as it is in the case of Angola, Sudan and Congo-Brazzaville accounting for the 82% of Crude oil imports from Africa (U.S. Energy Information Administration, 2013). Hence, in the case of Angola, the regime, due to the pressure from the IMF for a major transparency in exchange for funds to rebuild after the end of the civil war in 2004, turned to China when EXIM BANK proposed a 2 billion dollar loan in exchange for 70% of future substantial construction contracts (Fosters et al., 2008).

Indeed, oil exports to China have increased sevenfold since 2002 (twice the growth rate of Angolan oil exports to the United States over the same period). China has extended three multibillion dollar lines of credit to the Angolan government so far: two loans of $2 billion from China Exim Bank in 2004 and in 2007 to finance projects on energy, water, health, education, fisheries, and communications., as well as one loan in 2005 of $2.9 billion from China International Fund Ltd. administered by the GRN. Since then, Angola economy has experienced a rapid expansion between 2003 and 2008 backed by high oil production and price in the global market which enhanced growth rate in gross domestic product (GDP) by 17 per cent (IMF Executive Board, 2009). After the economic contraction due to the global financial crisis in 2008-2010, Angola saw again its economy thriving off both public investment to non-petroleum sector such as China’s latter engagement with Angola’s construction sector of new city (Benazeraf & Alves , 2014) and increased oil prices (US Energy Information Administration, 2014). However, oil still account for 95 per cent of total exports and almost 80 per cent of fiscal revenues (OPEC, 2014). Furthermore, the national road network is still inefficient along with the electric and hydro ones, which in turn undermine positive spill over from investments in non-petroleum sector (Benazeraf & Alves , 2014). Similarly, low good-governance performances prevent the achievement of crucial social objectives as well as the eradication of misuse of public funds (Condon, 2012). However, there are evidences of a shift towards a more accountable governance as it is demonstrated by the publishing of oil incomes/outcomes on the Ministry of Finance’s website (Ibid.). Nowadays, Angola is Africa’s second biggest oil producer, whose economy has grown by 5.1% in 2013, below the hoped for 7.1%. Angola’s extra gross domestic product (GDP) came mostly from the non-oil energy, agriculture, fisheries, manufacturing and construction sectors. Growth is projected to reach 7.9% in 2014 and 8.8% in 2015 as major public infrastructure investment kicks in (Muzima and Mazivila, 2014).

Therefore, Angola's petroleum reserves have not just provided a stable inflows of revenues into government assets, but also significant challenges due to the rentier state syndrome which prevents a substantial economic diversification along with macroeconomic stabilization. In this regard, the oil industry has improved services in related sectors, such as finance and hospitality, but is has also enhanced an high level of misuse of public funds which accounted for almost 19 per cent of GDP within 2002 and 2007 (Human Rights watch, 2010). Thus, on the one hand, it is claimed that Angolan institutions have remarkably helped the economy to become more stable reducing war statistics of national debt and inflation (IMF, 2008). On the other hand, it is questioned an unexplained gap of US$32 billion had emerged in the government’s accounts from 2007 to 2010 - equivalent to 25 percent of Angola’s GDP (Wroughton, 2012) even though he African continent’s global share of foreign destination investment (FDI) has grown from 3.2% in 2007 to 5.6% in 2012, and Angola has been one of the largest recipients of those capital inflows. In this regard, it is blamed especially by the Western side that the Angolan government has grown closer to China at the expense of its other diplomatic relationships. However, Western investors, ranging from France to India to the United States, mainly in the oil-extraction sector, are widely involved in many projects in Luanda and Angola, some of them offering credit lines to the government, albeit smaller than Chinese ones (Hanson, 2008). By contrast, Chinese development packages represent a more valuable resource due to lower interest rates, longer repayment as well as infrastructure investments, although there are concerns about the government's ability to maintain Chinese projects after they are completed (ibid.).

Further controversies stemming from non-interference policy in Africa can be traced to the study case of Sudan. China intervened in Sudan through the CNPC after the departure of North American and Canadian firms due to a not favourable national environment (Condon, 2012). The end of the civil war sanctioned by The 2005 Comprehensive Peace Agreement between principally Muslim North and the mainly Christian South, represented a valuable “window of opportunity” for China to gain access to oil reserves. For China's part, the involvement to protect both its extensive investments and the energy security has accrued since Western companies abandoned Sudan in 1996. Therefore, the lack of competitors was furthered by the CNPC's willingness to continue operations in Darfur, even though the ongoing humanitarian crisis and the concurrent allegations that the Chinese government was supplying weapons to the Sudanese military. In this period it is estimated that China accounted for 58, 2 % of Sudanese exports (mainly oil related) and 21,87 % of imports (mainly food and manufacturing ) (Sebastian, 2008), as well as $ 1,3 billion in infrastructure. According to Amnesty International: “China has transferred military, security, and police equipment to armed forces and law enforcement agencies in countries where these arms are used for persistent and systematic violations of human rights.” Indeed, China has been supplying the Sudanese government with the weaponry needed despite the ongoing Darfur crisis. This is because of China’s primary concern of protecting economic interests in the region, which are represented by the Greater Nile Petroleum Operating Company, holding the 40% share of Sudan’s largest oil venture. Similarly, the Chinese NOCs have increased their operations in the war-torn country. However, despite the fact that China is a major weapons exporter, it has not taken any international commitment that prioritise human rights principles over trade (amnestyinternational.org), as it is furthered by the case of the sale of arms between Ethiopia and Eritrea (Walsh, 2006).

Thus, as it is showed by the previous examples, China has seemed to develop a sort of “Angola model” (Sebastian 2008) in engaging with fragile states, that is to say heavily investing in the infrastructure sector through offering packages deal in terms of technology and capacity building and resources exploitation. Not surprisingly, Exim Bank secured $4.5 billion loan to Angola in 2004 in exchange for oil supplies, $3 billion to Gabon in 2006 in exchange for manganese exploration rights, and $9 billion to the DRC in 2007/08 in exchange for cobalt mining development. Indeed, the previously outlined process involves firstly an intergovernmental framework agreement which sets the standards of the loan, and secondly a loan agreement at interest rate of 3.6 %, a grace period of 4 years, and a maturity of 12 years, which is directly paid to Chinese Companies through EXIM Bank sided by the the Ministry of Commerce (MOFCOM) to select benefitting enterprises (Sebastian, 2008). Therefore, Chinese aid package bypass crucial Western dilemmas on the extent of being faster in delivery, not requiring any commitment to conditionality attached and overcoming occurring externalities such as misuse of public funds thanks to direct deployment of credit to Chinese companies than OECD countries.

Furthermore, debt relief plays a crucial role in shaping advantages in engaging with China as economic partner. In this regard, Chinese push to African countries income growth and exports plays a key role in fostering positive externalities stemming from the favourable lending framework (Reisen, 2008). In fact, it has been found that, while China has a positive impact on debt tolerance through stimulating exports and GNP, the policy of “no-conditionality attached” do not manage externalities laying in the “resource curse” such as increase in corruption. However, China has not showed to have fostered corruption in the case of Angola and Nigeria, and since 2007 it deleted Nigeria and Sudan from the list of resource-rich countries it is encouraging companies to invest in due to profound “governance issues” (Riesen, 2008). Therefore, the most remarkable feature of the evolution of Sino-African relations it is the dynamic multi-dimension partnership established, within which FOCAC has been representing a key tenet.

Deepening and widening the “South-South” dialogue

Nowadays, Sino-African partnership is still an ongoing process dealing with the widening the deepening of common objectives and the shaping of a more balanced interdependent economic partnership. Indeed, on the one hand, China has pointed to deepen its “South-South” dialogue with Africa showing both a more responsible behaviour especially in fragile states, even though the lack of transparency and accountability still undermines the actual flow of funds to the Continent, and the willingness to bridge culture gaps (Li and Rønning, 2013). On the other hand, China engagement with the African continent has become widespread, demonstrating a shift from economic interest promotion to economic interest protection within the Going Global Strategy. Hence, Beijing has started to pay attention to good governance performance of recipient countries in order to prevent that negative externalities might affect Chinese foreign policy framework in fragile states, also called “Angola model”. However, these achievements need to be fostered by a shift from asymmetrical to symmetrical Sino-African interdependence to gain concrete relevance within Western donors’ critics. In fact, nowadays China- Africa relations are asymmetrically interdependent on the extent of Africa being more reliant on Chinese “peaceful rise” within the evolution of their relations, especially in fragile/rogue states, and China thriving off African resources, which sometimes lay in countries wrecked by civil wars and humanitarian crisis, of which is becoming more dependent.

Therefore, several are the challenges which Sino-African partnership has to face to be “mutually beneficial”. However, the majority of them can be traced to the Western incapacity to mend the wicked effects of its colonial legacy (Nicolaidis, Maas and Sebe, 2014), which in turn have shape the emergence of sovereign states as fragile as each life has been lost due to poverty, civil wars and humanitarian crises so far. Hence, if China is deemed by the Western donors as new-hegemonic power which threatens the pre-established and self-oriented world setting, where the 15% of the world’s population is poor (World bank, 2012) and concentrated within the continent which suffered the (De)Colonisation, it can be argued that the critiques arisen are just a strategic misconception of Chinese entrepreneurial dynamism whose negative externalities -previously proven- in dealing with emerging countries, lose their significance if compared to the past and present Western hegemonic legacies (Nicolaidis, Maas and Sebe, 2014).

In fact, although the 85% of African exports to China originate from five oil-rich countries (Angola, Equatorial Guinea, Nigeria, the Republic of Congo, and Sudan) (Hanson, 2008), China’s current holding of African oil reserves are still limited if compared to Western ones (KPMG Africa, 2013), accounting for almost 2% and representing the 3% of all companies operating in the continent (Downs, 2007). Therefore, Chinese entrepreneurial interests are geographically not restricted to oil producing nations, with more than 800 companies operating in 49 African countries as of 2007 (Alden, 1997). On the other hand, African exports skyrocketed by 110% between 2006 and 2008 along with a net increase in national incomes affecting 32 out of 54 African countries (Brautigam, 2009: 97). Furthermore, China’s exports do not generically crowd out domestic production, but they do provide technological capital as the half of them consists in machinery and high-tech products (Barboza, 2006). Hence, there are more Sub-Saharan African countries which thrive off Chinese exports than those which lose (Stevens and Kennan, 2006.).

However, it has been found out that over relying on natural resources contributes to the emergence of “rentier state” symptoms as the natural commodity markets fuel corruption and misuse (De Soysa, 2000). In fact, underdevelopment in terms of political institutions can lead to misappropriation of public revenues which heavily affect occurring conflict. For instance, Sierra Leone’s conflict was sponsored by the “blood diamonds” market as well as DRC’s civil war. Similarly, Tanzania, Nigeria and Ivory Coast have faced resource problems respectively related to fishing industry, oil and cocoa (Rich and Recker, 2012). Therefore, an increase in resource revenues, regardless national or international exploration and extraction, does not mean the society as a whole would benefit from them.

More generally, Chinese activities in the African continent are source of opportunities and challenges. On the one hand, Chinese entrepreneurial dynamism is growing in scope and depth. On the other hand, African countries are no longer passive recipients of international investments although economic development it is not a shortcut for dealing with persistent structural weaknesses affecting the continent. In fact, nowadays Sudan and Angola are still amongst the lowest ranked country in terms of Ibrahim Index of African Governance (IIAG, 2014) despite the Chinese involvement in the extraction of resources and construction of infrastructure. Hence, these countries has been heavily affected by the occurrence of the World financial crisis as the GDP growth decreased in Angola and the IIAG has worsened in terms of Safety and Rule of Law, Participation & Human Rights and Sustainable Economic Opportunity in Sudan.

Therefore, the natural slowdown of Chinese booming economy between 2010 and 2014 threatens the sustainability of African economic development. However, in the same period seven African countries has become amongst the 10 fastest growing economies (Tafirenyika, 2012), showing the occurrence of a further development in Sino-African relations towards a more balanced partnership and the emergence of a new developing countries.

Indeed, the renewed façade Africa is showing is more likely to entice the traditional powers’ strategic concerns. Instances of that can be traced to the revival of Japan’s TICAD and the EU-Africa Summit, the establishment of South Korea-Africa Summit and the Turkey-Africa Summit. In this regard, China has adopted some countermeasures to face these new challenges (Chun, 2012). Thus, China has been shifting from “hard” infrastructure projects, introduced within the 3rd and 4th FOCAC Ministerial Conference, to “soft” ones in order to promote emotional intimacy. For instance, during the 5th FOCAC Ministerial Conference Action Plan (2013-2015), it has been mentioned the creation, strengthening and institutionalisation of 10 sub-fora, five of them related to Chinese soft power in Africa (Jintao, 2012). Furthermore, it has been stressed the need to securitise Beijing’s overseas rights by launching the ‘Initiative on China-Africa Cooperative Partnership for Peace and Security” (Wheeler, 2012). This program aims at consolidating cooperation with African countries and African union through financing the African Standby Force along with peace-keeping missions lead by the African Union in the continent. Not surprisingly, China is currently the most generous sponsor within the UNSC P5 as it involved in six out of seven UN peacekeeping mission in the African Continent and it has employed more than 1500 peacekeepers (Chun, 2012).

Consequently, Beijing seems to pledge for enhancing a more sustainable development to promote symmetrical interdependence rather than merely exploiting African natural commodity exports. In this regard, it has been also stated that Sino-African relations will also foster the achievement of the Comprehensive African Agricultural Development Program (CAADP) along with an increase in the China-Africa Development Fund to $5 billion, the implementation of the Program for Infrastructure Development in Africa, and last but not least the Millennium Development Goals (ibid.).

Towards a more Constructive and dynamic partnership

Nowadays, approximately 800 Chinese businesses are operating throughout the African continent. This esteem is comprehensive of state owned enterprises along with firms which are only trading and not investing in the region. Nonetheless, the most significant stake of investment in the continent is administered by national companies (SOEs), such as CNOOC, China National Petroleum Corporation (CPC), China Nonferrous Metal Mining (CNMC), SINOPEC and China National Electronics Import and Export Corporation (CEIEC) (Sebastian, 2008). However, it is also evident the growing role played by China’s middle class as it is increasingly purchasing Africa's light manufactured products, household consumer goods, thanks to the increase in incomes and purchasing power (ibid.). On the other hand, it is worthwhile remarking the growing African interests in Chinese markets. For instance, South African firms’ investments in China account for US$700-million circa and are comprehensive of assets from SABMiller, media group Naspers, petrol manufacturer Sasol, and various mining companies including Anglo American, Kumba Iron Ore, Anglo Gold Ashanti and Gold Field (Sebastian, 2008).

Indeed, within the shift towards a more balanced partnership, the Beijing Action Plan (2013-2015) reports further detailed commitments related to the evolution of Sino-African relations. Differently to the previous FOCAC, it has been mentioned to “continue to support African countries' effort to combat illegal trade and circulation of small arms and light weapons” (FOCAC, 2012…). This, in turn, has resulted in the establishment of the Africa-China-EU Expert Working Group on Small Arms and Light Weapons in association with the Africa Peace Forum (APFO) and the Chinese Arms Control and Disarmament Association (CACDA) (Wheeler, 2012). Hence, peace and stability are key achievements which China is attempting to obtain also through the forthcoming “Initiative on China-Africa Cooperative Partnership for Peace and Security”. This might be beneficial on the extent of institutionalising, formalising and regionalising African ongoing and potential conflicts rather than involving pre-existing bilateral channels which operate through ad hoc conferences. Furthermore, the new action plan aims at supporting “democracy and good governance” performances although the non-interference principle still represents a key feature of Beijing’s foreign policy. Except for the countless visits made by China’s Special Representatives on African Affairs in Sudan and South Sudan over the four years, the new action plan along with Chinese overall foreign policy do not advance anything new related to conflicts in other hotspots on the continent. In fact, according to the belief that African countries have the right to make their own political decision, Beijing has been blamed to back the authoritarian regimes of Mumur Gaddafi in Libya and President Robert Mugabe in Zimbabwe (Hofmann 2007). Not surprisingly, Beijing posed the veto on the West’s resolution on Zimbabwe’s political crisis within the UNSC in 2008.

Critical evaluation of the Beijing Consensus

Western policymakers have addressed China as “rogue donor” which “couldn’t care less about the long-term well-being of the population of the countries they ‘aid.’” (Naím,2007: 95). The Washington Consensus perceives Chinese activities in the African continent as merely being led by self-oriented purposes, such as pursuing a global economic hegemony through securing access to natural resources and enhancing a more favourable political environment to foreign investments (Manson, 2012). Thus, it is questioned to what degree and how Chinese development foreign policy affects African human development and economic growth. African policymaker are divided on the matter. While the former President of Senegal, Abdoulaye Wade[2] stated that “China’s approach to our needs is simply better”, the extreme end of the spectrum is represented by Zambian President Michael Sata who has addressed Chinese investors as “infesters” (BBC News 2011; Conway-Smith 2011). Overall it is questioned “that some governments in Africa may use Chinese money in the wrong way to avoid pressure from the West for good governance” (Swann and McQuillen2006). Unfortunately, the lack of reliable and comprehensive statistics about Chinese development assistance undermines an actual evaluation of the previous diametric opposition.

However, scholars, policymakers, journalists have been diametrically divided about the assessment of Chinese aid and investment practices. On the one hand sceptics of Chinese development finance focus on the negative impacts. In this regard, Beijing domestic pressure to meet internal demands for natural resources (Vines et al. 2009; Taylor 2009) has lead China’s aid and investment (Berthélemy 2011; The Economist 2008; Mohan 2008; Marysee and Geenen 2009) to untapped natural resources in countries such as Angola, Sudan, and Nigeria where it is needed foreign investments for exploration and extraction of natural commodity as well as infrastructure building (Foster et al. 2008). By contrast, Dreher and Fuchs (2012) find no robust evidence that China’s aid allocation is driven by natural resource endowments through presenting an econometric model of Chinese aid allocation[3], although Chinese FDI outward aligns with the presence of natural resources (Cheung et al., 2011). Consequently, it is questioned whether the PRC’s foreign policy of mutual non-interference, including to refuse to exploit aid to interfere in recipient countries “internal affairs or seek political privileges for itself” (PRC,2011), has bankrolled African authoritarian regimes (Naím 2007; Pehnelt 2007; Traub 2006). In this regard, The Beijing Declaration of the Forum on China-Africa Cooperation (2000), mainly in relation to the “ the politicization of human rights” through conditionality (Human Rights Watch 2007), has been seen as the only way for China to compete with traditional Western donors in Africa due to its need of natural resources. Hence, it questioned if loans with “no strings attached” can prevent good governance performances and anti-corruption reforms (Pehnelt, 2007; Collier, 2007) as it is showed in the debated case studies of Angola[4] (Lombard, 2006; Marques de Morais 2012), Zimbabwe[5] (Reuters, 2010) and the Democratic Republic of the Congo, (Mthembu-Salter 2012). By contrast, “there is no evidence at all that in Africa Beijing prefers to cooperate with poorly governed, authoritarian governments instead of democratic regimes” (Berger, Bräutigam, and Baumgartner, 2011) as well as that China is preventing the West’s use of conditionality to support human rights and governance initiatives by investing only in undemocratic regimes (Dreher and Fuchs, 2012).

However, China’s “Going Global” has been addressed as a potential threat in terms of debt sustainability. In fact, critics of Beijing’s approach in developing countries focuses on how this strategy jeopardises the successes of the Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI) through offering favourable bilateral deals without consulting other multilateral or bilateral donors. For instance, in 2008 the Democratic Republic of the Congo sealed a deal with China to establish a joint venture in infrastructure building through a loan worth almost the 100% of its GDP in exchange for access to mining titles (Jansson 2011; Mthembu-Salter 2012). This , in turn, has happened when the DRC had failed to secure large-scale debt relief from the World Bank, the IMF, or the African Development, due to the fact that it did not manage to achieve the HIPC Completion Point and to deal with a huge public debt (IMF 2009). By contrast, from Beijing perspective, the concerns and critics related to the scale and opacity of the deal are unjustified because, differently to the Washington Consensus’ Debt Sustainability Framework (DSF), China’s “development sustainability” lays in the evaluation of a country’s debt repayment capacity and ability to generate additional revenue through natural resource exploitation (Africa Confidential 2007), rather than in macro-economic indicators such as GDP, services and import-export activities (Li 2006; Christensen 2010). However, as it is showed by the Sino-Congolese Cooperation Agreement, the lack of reliable specific data on the terms and amount of Chinese FDI flows undermines the achievement of a credible and shared appreciation of the debt sustainability implications.

In this regard, it is criticised the fact that the “Beijing Consensus” pays no attention to environmental and labour standard within infrastructure and natural resource development projects (Peh and Eyal 2010). Thus, it is advanced that “[e]gregious violations ofinternational labor and environmental standards, particularly in the mining sector, have been uncovered in Chinese-led investments in the Democratic Republic of the Congo, Angola and Zambia” (Human Rights Watch, 2011), Sierra Leone (BBC, 2008) and Sudan (Bosshard 2008). However, there is not empirical evidence in terms of sub-national or trans-national studies which associate Chinese development assistance to an increase in labour violations and environmental degradation (Strange et al., 2013).

Finally, it is criticised the fact that China’s aid development assistance is not enhancing a concrete sustainable growth in terms of quality of technology and infrastructure provided. First and foremost it is blamed the link between Chinese finance to projects with a weak link to growth, such as new hospital without the proper staff and equipment (Marques de Morais 2012), and the quality of Chinese construction, such as a Chinese built road in Zambia which was disrupted by rain shortly after it was finished (The Economist 2011). By contrast, it is proven that China’s framework provides tangible results through demand-driven assistance in in a relative short period of time (Zafar 2007; Moyo 2009; Wade 2008) and it works complementary to Western aid institutions (Moss and Rose, 2006: 2) as it provides capital where the “Washington Consensus” is less likely to do due lack of information or concerns about corruption.

A new dataset to assess China’s “peaceful rise”

AidData’s pilot media-based data collection (MBDC) methodology represents a valuable tool to assess China’s “peaceful rise” in Africa and related critics, in other words to evaluate Beijing’s aid commitments as defined by the OECD-DAC (Strange et al., 2013). The chosen database is comprehensive of 1,673 non-investment projects (whose 15 % is represented by unsubstantiated verbal commitments accounting for 251 projects worth US$ 25.9 billion ) to 50 recipient countries over the 2000-2011 period excluding Official Investments and Military Aid without development purpose. Indeed, the 62% of this projects, which can also be classified as ODA-like, reports data relative to the amount of official flow of assets, accounting for US$ 75.4 billion (ibid.), although their monetary value varies substantially. Hence, it is found a high and increasing correlation between China’s official finance and number of projects, the former divided in six categories: in-kind contributions (25%), monetary grants (excluding debt forgiveness, 23%), loans (excluding debt rescheduling, 21%), freestanding technical assistance (8%), scholarships and other training (4%), vague grants (4%), and debt forgiveness (4%) (ibid.).

The study highlights an increase, albeit fluctuating, in monetary values in ODA-like projects and vague official finance[6], the former aligning with the US ODA to Africa since the early 2000s (Ibid.:29). Consequently, since the FOCAC had been established in 2006, China has been increasingly supplying Africa with twice the US ODA and almost 1/3 of ODA coming from OECD-DAC combined. Indeed, over the gap of time taken into consideration, Beijing delivered US$ 75 billion in official flows to Africa, representing 1/5 of the total OECD-DAC funds. However, if “Vague Official Finance” are excluded by the gauge, Chinese ODA is remarkably restricted. In fact, it is estimated that Beijing has committed to Africa only the 3% of the total OECD-DAC and the 15% of what the US has provided.

Furthermore, it is gauged the sectors attracting the majority of the projects. In this regard, although almost the 12% of all the projects traced lack of sufficient information, Government and Civil Society have been the most targeted sectors. However, differently to Western donors who focuses more on supporting anti-corruption institutions, strengthening the management of public assets and promoting “good governance” (Lyne et al. 2009; OECD 2012), the “Beijing Consensus” has resulted in public infrastructure, Health (174 projects), Education (136), and Transport and Storage (103). Hereof, the sectors which have been attracting the biggest stake of investments in term of project size and monetary value are transport and storage projects (US$ 16,673 million), Energy Generation and Supply (US$ 14,702 million) ( Strange et al.:30). There has not been found any project related to “General environmental protection”, while the largest number of Chinese aid projects is focused primarily on health (149 projects accounting for US$ 676 million) Government and Civil Society (133, US$ 170 million), Education (103, US$ 71 million), and Agriculture, Forestry and Fishing (71, US$ 981 million).

Peculiarly China has been heavily investing in three of the top ten recipient countries where OECD-DAC members and US are engaged with (Nigeria, Sudan, and Ethiopia), as well as nations which the West generally ignores such as Mauritania and Zimbabwe. In this regard, the distribution of Chinese official finance to African countries between 2000 to 2011 shows the fact that Chinese investment projects have been directed mainly to the east and south of the continent, primarily to coastal countries, comprehending Zimbabwe (104), Ghana (64), Liberia (59), Kenya (58), Sudan (55), and Ethiopia (54)(ibid.:34). Not surprisingly, there has not been found any Chinese project in nations which do not have diplomatic relations with the PRC, such as Burkina Faso, Swaziland, the Gambia, and São Tomé and Príncipe (ibid.:35). Lastly, if it is taken into consideration China’s official finance by recipient country as a share of the recipient’s gross national income (GNI)[7], it emerges the fact that Chinese official finance does not tend to be particularly high compared to African countries’ economic size except for Mauritania (12.7%), Equatorial Guinea (5.7%), Ghana (5.3%) and Zimbabwe (4.1%).

More generally, China’s official finance is spread all over the African continent, although it is strictly related to the acceptance of the “One China” policy. In this regard, the recipient countries which received the largest flow of funds are Ghana, Nigeria and Mauritania. Furthermore, China has showed to be active all over the economic sector in the continent, although privileging “Government” rather than “Civil Society” projects, and excluding “General environmental protection” ones. Hence, Chinese increase in financing development projects is nowadays comparable to the US ones, although if it considered ODA-like flows, Beijing is notably behind it. However, this cross-checked analysis shows that 86 official finance projects called “Developmental Food Aid/Food Security Assistance” and “Emergency response” have been provided by China in terms of humanitarian assistance projects.

To conclude, global development finance is increasingly driven by suppliers operating outside the international aid regime (the Washington Consensus). As the world financial crisis has shaken the pillar of the global economy, non-DAC members framed an alternative pattern through which dealing with other developing countries and underdeveloped ones. In this regard, the main supplier of official finance to Africa among non-DAC donors is China, which still lack of a comprehensive official dataset of its activities in the continent. This in turn, has shaken the global aid reporting regime, as it is proposed by IMF and World Bank, as well as scholars and policymakers’ understanding of such a diametric approach. However, the critiques advanced by the West lack of a critical appreciation due to a different framework framed by distinct variables, methods and tenets. Whether the West blames China to “turn a blind eye” to humanitarian issues in engaging with developing countries, DAC members can be argued to “turn a blind eye” to the pillars and proven outcomes of the Chinese pattern.

Conclusion

China, as a forthcoming world economic power, can be said to require to expand its markets and create competitive worldwide trademarks, as well as secure energy and food supplies for its booming economy and immense population. This country, is clearly a strategic player within the pre-established economic world-setting whose thriving approach is rising concerns amongst traditional economic powers due to the diametric framework whereby Beijing engages with developing countries. Hence, China has been addressed as new hegemonic power, seeking to exploit Africa’s persistent structural, institutional and economic deficiencies in order to sustain its booming economy regardless the long-lasting Western commitment in fostering human and economic development in the region through multilateral institutions, such as WB and IMF. In this regard, this study has attempted to demonstrate that the critics advanced by the “Washington Consensus” lays in the misconception of the pillars of the “Beijing Consensus”. Indeed, not conditionality and selectivity but “south-South cooperation” along with aid ( mainly infrastructure) in exchange for natural resources are the core tenets of Chinese aid development finance. However, the lack of a comprehensive dataset about Chinese FDI in Africa undermines a critical appreciation of the actual outcomes of this long-lasting partnership. Therefore, this study has attempted to bridge the theoretical gap between Western and Chinese framework through advancing empirical data on positive and non-positive externalities occurring in the deployment of Sino investments in the African continent.

In order to do so, the main argument has been divided in three sections. The first chapter provides background information about the developing Sino-African economic partnership along with the criticisms arisen by the “Washington Consensus”. Indeed, it is shown that Sino-African partnership is not a new phenomenon framed by Beijing “thirst” for natural resources nor a fixed pattern shaped by the so-called “Angola model”. The second chapter offers a review of China engagement with the African continent focusing on official data on Sino-African trade, aid flows and especially FDI in African “rentier ” and fragile states as it develops the discourse about Western and Chinese framework in engaging with developing countries. Thus, it is demonstrated that China has not fostered corruption in the case of Angola, Sudan and Nigeria, as it deleted Nigeria and Sudan from the list of resource-rich countries it is encouraging companies to invest in due to profound “governance issues” in 2007. However, this partnership is still an ongoing process which needs to be more interdependently balanced to gain concrete relevance within Western donors’ critics. The last section assesses the debate over Chinese development assistance effectiveness presenting an overview of flows of funds to Africa through the lens of a global perspective on the performance in being positively affected by FDI inflows. In this regard, after having critically addressed the main critics on China’s “peaceful rise in Africa arisen by the West, AidData’s pilot media-based data collection (MBDC) methodology argues that Chinese development financial aid to Africa is both in countries that represent strategic interests for the Chinese economy due to their oil and mineral resources, such Angola, Sudan and DRC, and in its “all weather friends” such as Egypt, Ethiopia, Mali and Tanzania. Thus, China as an emerging power is bringing financial capital, business expertise and new models of development and diplomacy to the continent. In this regard, Africa represents a valuable export market, a pivotal political ally, a resource partner and a geopolitical space where Beijing can expand its influence. Therefore, evaluating Sino-African relations is fundamental to understand Africa’s increasing significance as a market in the pre-established international order and its relevance in the global supply chain. However, the persistency of structural and institutional weaknesses may prevent Africa from benefitting the revenues of its unfulfilled potential. Thus, the peril stems from the possibility that African states will fail to take advantage of the international responsiveness within the chance to boost the continent’s development by framing a new role for Africa in the international setting through capitalising on natural resources.

As this study underscores, Sino-African partnership is still an ongoing process which presents both opportunity and challenges to the pre-established world economic-social-political setting, including China’s and Africa’s one. In the specific case of African states, the main challenge lays in becoming significant multilateral actors with their own distinct economic, social, political and diplomatic identity, independent from both their old colonial master, now self-proclaimed paladin of human rights and sustainable development, and new emerging powers. In fact, while China’s economy expands at an average of 8.4%, the 50% of African population still lives below the poverty line. Thus, overall Africa’s sluggish growth rate rises concerns, especially within the Washington Consensus, on the continent ability to achieve the Millennium Development Goals of decreasing poverty by half by 2015. The Beijing Consensus fosters the continent in the effort to settle conflict through peaceful means and to promote unity and solidarity in the manner of African people’s choice. Thus, like traditional donors, China’s involvement in Africa is trying to “modernise the continent in the image of China”, although this process needs to be implemented in terms of upgrading the role played by the whole civil society in regional, national and continental development. However, while the Washington Consensus has been engaging with African independent states as donor for more than 50 years through peaceful and belligerent means in order to look for redemption after its colonial legacies, China has been increasingly economically and politically as well as peacefully committed to Africa for no more than 30 years showing that another pattern to development is possible.

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[1]The Development Assistance Committee (DAC) is an international forum made of donors country operating within the Organisation for Economic Co-operation and Development (OECD). The DAC gathers and processes development data and provides a forum where the world’s major bilateral aid donors meet to discuss, review, and coordinate aid policy with the objective of expanding the volume and effectiveness of official resource transfers to developing countries. Nowadays, 29 out of 34 OECD are DAC members along with the World Bank, the International Monetary Foundation (IMF) and UN’s Development Programme (UNDP) as observer. It is DAC that sets the international standard for defining and registering public development assistance, ODA, and it is the only reliable source of comparable data on the development assistance of the OECD countries. Aid effectiveness – which includes both quality and quantity – is a major theme (Ministry of Foreign Affairs Denmark). Organisation for Economic Co-operation and Development (OECD) is an international organisation of 34 countries founded in 1961 to promote policies that will improve the economic and social well-being of people around the world through a forum of countries committed to democracy and the market economy (OECD). [2] who represented the main political figure fighting against the one-party system in place since the country's independence from France (BBC, 2011) [3] This model draws on novel sources of aid information from CIA intelligence reports, the World Food Programme, the China Commerce Yearbook, media reports. [4] Lombard (2006) stresses how the Chinese EXIM Bank, through providing an interest-free loan to the Angolan government has allowed the latter to deal with the IMF pressure for oil revenue transparency. Marques de Morais (2012) focuses on how China’s support for Angolan President José Eduardo dos Santos has helped him to stay in power for more than 33 years. [5] Similarly, Robert Mugabe of Zimbabwe, who has been in power for 25 years (Reuters 2010) and Joseph Kabila, the President of the Democratic Republic of the Congo, who has been in power for 12 years, are believed to have been heavily supported by China. [6] category for projects lacking of enough features to be defined as ODA-like flows. [7] This link is usually used to assess the recipient economy’s aid dependency.