Trade and Aid
Does Africa need Aid from China?
Very recently in the past decade, China has been offering aid to Africa. This has been very controversial, and many people have mixed feelings about this. People are saying that China is using Africa to get resources and that China is replacing the United States in terms of aid. So in this leaflet, we will find out the good and the bad of China’s aid, and if it is actually necessary.
Is China replacing the US when it comes to trading?
First of all, let’s clear up the myth that China is replacing the United States in terms of aid. We can see why people are saying this, as China accounts for 30% of infrastructure projects going on in Africa. This is more than other donors (such as the United States).
However, the United States still provides far greater aid than China. In 2009, as assistance to Africa, China gave an estimated $1.4 billion. But the United States gave $8 billion, $6.6 billion more than China. Plus, the aid from China and the United States were aimed at different sectors.
Africa does need Aid from China.
Although people’s opinions are divided, many think that Africa does need aid from China. First of all, Chinese firms made large investments into the infrastructure segment for many years now. This is great as it produces and opens up many jobs for locals. The way this works is Chinese workers are hired to build buildings (such as shopping malls), and then the locals work in them when they’re done. This is because the Chinese are more efficient in building, and so this opens up jobs quicker. This also means that fewer people are in poverty quicker.
But China’s aid doesn’t just include the infrastructure segment. Chinese investment to Africa not only covers infrastructure, but also the IT and education segment. Chinese embassies in African countries in the past have provided scholarships for children. This is great as these children have the potential to change the future of Africa.
The level of wealth and comfort has increased since China offered aid to Africa. Since China made many exports to Africa, it has allowed access to inexpensive goods to locals mainly being electronics and toys. The building of cinemas and hospitals has also improved the living standards.
But it’s not just physical things that have improved since Africa has received aid from China. China’s aid to Africa can date all the way back in 2000, and in the same year, the GDP of Angola (a nation in southern Africa) was US$656. In 2008, the GDP of Angola was US$4596. A US$3913 increase in just 8 years and Angola’s current GDP is still on the rise now and shows no signs of stopping. The rise in GDP has meant that Africans have more financial power and results in fewer families being in poverty.
Africa doesn't need Aid from China.
Despite this, however, many people are saying that China is just manipulating Africa just to improve their global image. Although the Chinese are building infrastructure to create future jobs for locals, they have also been taking away many jobs since as well.
One of many examples of the latter is with chicken farmers. There are many chicken farmers in Africa who sell chickens for many purposes; for eggs or food. But since China offered aid to Africa, the Chinese too have been selling chickens in Africa. From then on, everyone were buying chickens from the Chinese farmers rather than the African farmers, because the chickens the Chinese were selling were bigger. However, it was found that the Chinese had been adding things to their chickens to make them grow faster and bigger. Despite this, it still took away another form of business that Africans live off.
In addition, one study found that Chinese competition forced 28% of African domestic producers into bankruptcy, and 32% of them to downsize their activity.
You can further tell that China is using Africa when you realise that in the past 10 years, Africa received about a quarter of a trillion dollars for infrastructure such as oil pipelines. And, more than two-thirds of Africa’s exports to China consist of crude oil.
And even though many countries have offered and given aid to Africa, as the government is very corrupt, most of the money that was sent through has not been put into good use, and has not benefited the locals in any way.
In the future, we predict that some parts of Africa will become colonised by China. This is because of how Africa is currently dependent on China, and needs it in order to create jobs for its people. China may take advantage of this, and suddenly decide to stop giving aid to Africa, shortly before taking over Africa. This may result in many wars between the two parties afterwards.
Another possible scenario we predict is that Africa will no longer be a developing nation. This is very probable, and may happen in the space of a few decades. This is because of all the aid Africa is getting, and how it has a strong partnership with many places such as the United States and China and also because of how fast Africa is developing. As we have seen in the pro’s section of this leaflet (Why Africa Does need Aid from China), Angola’s GDP is ever increasing, and it is the same in many other parts in Africa.
In the past weeks, we have learned all about Trade and Aid and how it affects us, the world, and everyone involved. We have learned the pro’s and con’s of China’s contribution to Africa, and have also found that it can benefit the country offering aid. Although trade and aid sounds good, it can have its negative effects on the country receiving aid too.
We don’t think that this issue affects us, because, Hong Kong doesn’t have a huge history of trading and aiding, so, even if China’s finance goes wrong it won’t affect us, as we are technically not part of China.
“6 Surprising Facts about Chinese Aid to Africa.” ONE. N.p., 2013. Web. 15 Nov. 2015. <http://www.one.org/us/2013/04/30/6-surprising-facts-about-chinese-aid-to-africa/>
“Africa's Elite Exploit Chinese Development Aid, Study Reveals.” EurActiv. Web. 15 Nov. 2015. <http://www.euractiv.com/sections/development-policy/africas-elite-exploit-chinese-development-aid-study-reveals-310770>
“China's Growing Role In Africa: Myths and Facts.” Carnegie Endowment for International Peace. Web. 15 Nov. 2015. <http://carnegieendowment.org/ieb/2012/02/09/china-s-growing-role-in-africa-myths-and-facts/9j5q>“Mmegi Online :: Govt Moves to Eliminate Trade Barriers.” Mmegi Online. Web. 15 Nov. 2015. <http://www.mmegi.bw/index.php?aid=54528&dir=2015/october/02>