By Farwa Sia
August 12, 2024
Source: ROAPE
China mall on the spintex Road, Accra, Ghana
‘Europe’s new external investment strategy needs to reconnect with historical business models we are going back to white elephants of 1970s – because that’s what partners want.
– G7 official in a speech on Trade and Finance.
‘The era of Western dominance has indeed definitely ended’
– Josep Borrell (2024), High Representative of the European Union for Foreign Affairs and Security Policy / Vice-President of the European Commission.
On 28 January 2024, three members of the Economic Community of West African States (ECOWAS), Niger, Mali and Burkina Faso, announced their withdrawal from ECOWAS. Created in 1974, ECOWAS is a regional economic community serving as a large trading bloc, to enhance the regional integration and economic cooperation of its 15 member countries. The three countries’ decision to leave the trade-bloc so forthrightly, was related to a series of ECOWAS-imposed sanctions on their military governments and the countries’ objection to French influence in the bloc.[2] Long-standing dissatisfaction with the ECOWAS was also an overarching factor; member countries include some of the most resource-rich nations, but on the whole members barely made any progress on socio-economic indicators linked to the ECOWAS promise of prosperity through regional integration.
Political uncertainty in the trade-bloc further deteriorated in mid-February 2024, when the Senegalese President Macky Sall, unilaterally postponed the country’s presidential elections and was later ousted. Faced with such existential challenges, ECOWAS lifted sanctions on Niger and other countries within a month of their imposition. While the potential breakdown of ECOWAS and the general trajectory of some African countries into authoritarianism, may not seem like a radical shift in the continent’s history, the incendiary global context, which compelled ECOWAS to lift sanctions is unprecedented. The neo-colonial drivers of the current crumbling political order in Sudan and the Congo as well as the ongoing genocide in Palestine, indelibly expose the reality that we are entering into an era of naked colonial violence. Backlash to US-centred imperialism is growing. In March 2024, Niger suspended all military relations with the US, citing issues related to US encroachment upon its sovereignty.[3] Embedded in this evolving situation, the episodic and ad-hoc de-linking of Global South countries from Global North countries and their dominance in blocs such as the ECOWAS is representative of a broader shift in Africa’s resistance against political and economic subordination to G7 countries.
Against this background, the Western powers’ new and evolving development strategy in Africa offers important insights into how the G7 countries are failing to register the transformative changes in Africa. [4] In a closed-door speech on investment, trade and finance forum, a G7 official described Europe’s new external investment strategy as one that harkens back to the White elephants of the 1970s. While the speaker was using the term ‘White Elephant’ to signify the EU’s interest in funding hard infrastructure, imbued with a promise of investment and growth for recipient countries, he clearly failed to grasp its meaning. A ‘white elephant’ is an overly expensive infrastructure asset, which fails to generate value for the economy.
Considered in light of the correct definition of the term, the West’s new development strategy does seem to be going towards expensive infrastructure projects, spurred by a reactionary, performative but ultimately imagined competition with China. I make this point through a comparative analysis between the G7s contemporary development strategy vis-à-vis the Chinese development model as it unfolds within the broader demise of US-led imperialism.
Delineating Origins: Historical Imperialism vs. Bipolar World Order
Most comparative literature on Western and Chinese development strategies in Africa, fails to ground the colonial and neo-colonial reality of African development. This central omission engenders a hollow comparison, which ultimately forgoes the question of temporality and the historical nature of a unipolar imperial world order. Centring the agency of African countries entails a historical mapping, which not only connects the past to the present but is also cognizant of when and how path dependencies are ruptured. Three facts are key to any comparative analysis of Western-Chinese competition in Africa.
Firstly, China’s current global developmental model, which can be continuously traced to the early 2000s cannot compare to the 100-year history of European imperialism in Africa. This temporality is central to the analyses, not a mere addendum. This is because Europe never left Africa. Chinese engagement with African countries took place in conjunction with European and Western economic and political interference in the region. China’s rich history of supporting anti-imperialist struggles in Africa as well as leading South-South cooperation initiatives under Mao Zedong have been extensively documented and present a very different vision of development rooted in third world solidarity. [5] However, this historical analysis is completely ignored in most mainstream analysis and China’s engagement with Africa and the Global South since the 2000s is placed on par with the Western imperialist model.
As others have argued more concretely, the notion of imperialism is embedded in a historical structure of global capitalism, which cannot be abstracted and selectively applied to the new bi-polar world (Capasso & Kadri, 2023;[6] Ajl 2024, Yeros 2024). While Chinese investment projects must be subject to scrutiny and critique, the notion, context and nature of imperialism, old and new, must be based on the systemisation of global capitalist extraction. A starting point here is to note that China’s ‘going out’ or external investment strategy emerged in the aftermath of its remarkable achievement of alleviating domestic poverty. The Chinese development experience was thus not predicated on a model of imperial extraction, which has been the modus-operandi of most Western developed nations.
Secondly and aligned with the first point, the nature and scale of Chinese investments in Africa within this short period has been transformational in its focus on infrastructure and emphasis on the systemisation of productive capacities in African countries. The Chinese state-led ‘going out’ strategy, approached development from a holistic perspective, centring productive investment and infrastructure as the key to enabling inter-sectoral and cross-sectoral linkages. This was possible owing to China’s capacity to maintain control over the entire value chain of development: from providing financing through its state banks to the mapping, completion and execution of projects.
This model of development-investment has not been the nature of Western investments, which have largely focused on “soft development” since the late 1990s (explained below). Most importantly, countries categorised as low-income and least developed were considered extremely risky for Western capital and therefore not a desirable investment destination. The huge influx of Chinese investment into these countries in fact addressed this obstacle for Western capital. China’s risk-taking capacity engendered and facilitated other investment strategies. Therefore, the rise of Western infrastructure connectivity projects- such as roads, bridges must be located as derivative of China’s ‘going out’ strategy.
Thirdly and building upon the two points above, while the very purpose of a comparative analysis is to juxtapose differences and similarities between approaches, mainstream analysis a priori assumes an overlap between Chinese and Western development strategies based on a superficial semblance. This assumption can be observed in the equivocation of two very different financing models in journalistic reporting as well as mainstream academic literature. A forced similitude between a neoliberal financing model (US/EU) and a state-led financing model (China) thus reverberates endless confusion as opposed to producing any real analysis. As Samir Amin (2018) reminds us
Deng Xiaoping said that you should start from looking at actual facts. It is exactly what the conventional professional “economists” – all of them, including the Chinese “experts” trained in the USA and brainwashed – do not do. [7]
To overcome this limitation, the analysis must start from comparing the nature of Chinese and Western development strategies.
Calibrating Development and Conditions
A basic definition of ‘international development’ is the financial and technical transfer of resources from some countries to others, to the ends of empowering the latter. While the 1948 Marshall Plan for Europe was premised on the reconstruction and the reorientation of European markets to be better aligned with the hegemony of US capital, the evolution of Western development strategies in the Global South took on a markedly different form. The 1980s was the beginning of this transformative period, whereby Western development strategies and aid models laid an exclusive emphasis on targeting social indicators in Global South countries. Public goods such as health and education were major recipients of soft grants, however, these grants were often conditioned on the implementation of a privatisation roadmap as well as harmonising tools of liberal democracy such as ‘Good Governance’, exclusive funding for initiatives such as transparency, as well as monitoring and reform of electoral processes.
In addition, this financing model remained unaccompanied by investment in public spending, fiscal consolidation to promote developmental policy making, industrialisation in productive sectors and the reform and deepening of the financial sector to achieve financial autonomy. This created an artificial wedge in the very meaning of development: aid-led dependency was designed to separate and prioritise ‘soft infrastructure’ at the expense of ‘hard infrastructure.’ Donor dependency based on the soft development agenda accompanied by a marketization of public goods therefore accelerated the hollowing out of many Global South countries. Privatisation successfully transformed the political model of governance in these countries: converting citizens into consumers.
In contrast, from the very beginning, China’s ‘going out’ strategy in the 2000s was premised on the strengthening and expansion of productive investments and public services, making no artificial distinction between ‘hard’ infrastructure and ‘soft’ infrastructure. The primary focus was on the construction of infrastructure project tools including bridges, hospitals and roads albeit complemented by transfer and sharing of knowledge such as in medical training, civil service training for public bureaucrats and strengthening of public institutions. China’s emphasis on skill development, technology transfer and knowledge sharing is often ignored by most accounts comparing Chinese and Western development strategies. The fact that such knowledge sharing comes outside of the framework of Intellectual Property governance became much more visible after China’s distribution of Covid-19 vaccines to Global South countries during the Covid-19 pandemic. The distribution of vaccines as a public good was also accompanied by humanitarian assistance to some countries, highlighting the necessity of an alternative approach to development especially as western pharmaceutical companies enjoyed quadrupling profits through the sale of their vaccines.
An important and often repeated point of comparison between the Western and Chinese model is the specific nature and role of conditionalities. While the construct of ‘conditionality’ as a necessary requisite for development assistance including grants, concessional flows and technical assistance is explicitly associated with Bretton Woods Institutions and Western bilateral development strategies emerging in the late 1990s, it has deeper roots in colonialism.
Western development strategy has been conditioned towards ensuring that the West remains distant from its historical past: in Africa’s case this essentially means the evasion of the Western countries’ reparative responsibility to African countries. Germany’s agreement to pay reparations to Namibia in 2021 was a historic shift but the modality and actual implementation of these reparations remains contested as some consider it ‘tokenistic’ in nature. Beyond this case, Western development policies, exemplified by the EU have been explicitly conditioned upon Africa’s compliance in enabling the free trade of resources, goods and commodities to the EU whilst simultaneously curbing African migration through the externalisation of European border militarization.
In comparison, albeit without colonial baggage, China’s contemporary development model is also concerned with access to commodities, raw materials and market creation for the absorption of Chinese surplus. However, unlike Western development strategies, this model is not linked to demands for better governance, interest in regime change for better compliance with Chinese investments, the implementation of sanctions and the imposition of penalties when conditions are not met. While select conditions are attached to China’s project procurement and contracts for goods and services as well as in cases of debt restructuring, the pattern which emerges in the impact of these conditions is markedly different from conditions embedded in the West dominated global financial architecture. China’s approach to conditions is largely concerned with ensuring the longevity and guarantee of economic investments and has produced both positive as well as adverse results for Global South countries.
However, these conditions are not egregious enough to immobilise countries, such as those observed in the historical and on-going impact of IMF and World Bank conditionalities. The incompatibility of conditionalities in both Western and Chinese development strategies does not absolve a criticism of China, however it is equally important to ascertain the nature and context of Chinese conditions in Global South countries. The global impact of Western sanctions, rise of Western protectionism and competition between the West and China, in every possible realm has certain repercussions for China including in the realm of multilateralism and debt reform. These need to be carefully researched.
In summary, a comparative analysis between western development strategies and the Chinese development model necessitates rigour in differentiating between the historical and structural origins of their approaches. Western conditionalities have ultimately resulted in the gradual erosion of sovereignty in Global South countries, repressing any avenues of third world solidarity and South-South cooperation. China’s development strategies do not replicate this model.
The new Scramble for Africa: By Whom and How?
The comparative grounds for Western and Chinese development in Africa have gradually taken a new turn through a competing series of infrastructure connectivity models. These models have some variation in their discrete proposals however the aim is to mobilise private finance and invest replacing traditional aid and concessional finance. More importantly, the strategies are traditional alliances between ‘like-minded partners’, including the US, South Korea and Japan. US commercial investors and multilateral development institutions under the auspices of the US-led Partnership for Global Infrastructure and Investment (PGII) ensure the continuation of the failing US-led neoliberal order.
While different models now focus on enhanced coordination between Export Credit Agencies (ECAs) to effectively create an environment for domestic investments to be subsidised through export credits and development financing it is important to note that China’s development model has always combined financing and trade with China’s Eximbank being at the centre of its global investments. The Western turn towards hard ‘infrastructure’, use of export credits for development suggests a superficial emulation of characteristics which mark the Chinese development. This is because beyond cosmetic shapeshifting, the Western corporate sector remains the determinant factor shaping the new development strategies, while the Chinese development model remains state-led under the direction of the Chinese communist party. While China continues to face a combination of different internal and international pressures, the Chinese State supersedes China’s domestic iteration of the private sector. In contrast, vessels like the EU are not simply promoting the interests of the EU private sector but strengthening the private sector of G7 countries to the ends of ensuring the continuation of the US-led neoliberal order.
This is most starkly visible in the EU’s recent attempt to balance its multiple goals of controlling migration through claims to “securing” its borders, supporting the genocide in Gaza and broader colonization of Palestine and partnering with US-aligned Gulf capital to extend neoliberal policies throughout the region. In March 2024, the EU provided a €7.4 billion ($8.06 billion) funding package to Egypt for the period 2024-2027. The EU support complemented the IMF’s expanded $8 billion loan deal with Egypt in the same month and was also complemented by a $35bn investment deal between Egypt and the UAE for developing the Ras al-Hekma peninsula.[8] Egypt is therefore a site for the West’s new unfolding development agenda, which seeks to securitise EU borders against African and Palestinian migrants as the EU and the West continue to support Israel militarily.
As the Western order declines, the EU and developed countries are under pressure to invest and deliver on greater distributional gains, especially when it comes to serving Global South elite interests. From this perspective, China’s developmental model is also not entirely immune to the contradictions of capitalist development. These contradictions must be analysed from the duality of China’s national or domestic experience as well as its external development model. China continues to experiment with select liberalisation and privatisation with an overarching retention of state ownership.
China’s experimentation with Public-Private Partnerships (PPPs) on a domestic level[9] and the initiation of PPPs in recipient countries is one such example.[10] Other examples include the nature of Asian Investment and Infrastructure Bank (AIIB) investments in Global South countries, China’s adoption of private finance instruments created by Bretton Woods Institutions and China’s role in reforming the sovereign debt architecture. The pressures of operating in a neo-liberal world order, playing on the ‘openness’ of countries, which have free trade agreements with Western markets and integration into the development finance architecture creates a host of issues for China and recipient countries. These issues require scrutiny, critique and reform especially concerning their impact on Global South countries.
A critical approach to Chinese investment also means a concrete understanding of China’s global rise, which initiated as an interplay with the existing hegemonic order but has been subject to China’s vigilance in disciplining its companies and curbing rentierism, both at the national level as well as in its international projects. In 2021, China launched the Global Development Initiative (GDI), which is designed to complement the BRI but embeds a vision of development based on China’s own development experience with an enhanced focus on knowledge sharing, technology transfer and South-South development.[11] The initiative is free of patents and dominance of intellectual property rights and rent seeking. Although it is too early to predict the developmental impact of the GDI, China’s focus on a more communal approach to development, such as in the case of Covid-19 vaccine distribution needs to be contextualised and reflected in the GDI model. China continues to adapt, evolve and regulate its economic rise. Nonetheless, it is ideologically, structurally and materially a different development model, which necessitates engagement on its own terms, even when these terms appear superficially comparable to the development models of traditional imperial powers like the US and the EU.
Conclusion
As Western blocs such as the EU transform into a full-fledged war economy strengthening NATO,[12] proposing the use of its public banks like the European Investment Bank (EIB) to lend to the defence industry[13] as well as exploring the option of a new EU army,[14] it is becoming increasingly clear that the Western constructs of ‘development’, ‘investment’ and ‘security’ can no longer remain in their siloed guises.
This is not merely a turn towards Keynesian warfare – it is a continuation of Western history and a symbol of the West’s political woes, as its countries succumb to domestic fascism. Meanwhile China continues its strategy of deepening the Belt Road Initiative (BRI) at a pace of its own, subject to the contradictions of capitalist development including dealing with issues of problematic projects in recipient countries. The paradigm of development as a comparative ground for Western and Chinese is not external to these formations but embedded within these changes. As detailed above, the grounds for a comparative analysis between the West and China must extend from their historical engagement with Africa to the current situation of escalating violence and the decline of US-led Western order.
African agency between such powers lies in securing the interests of its people through a combination of strategies including stronger criteria for partnerships, de-linking with US-led imperial conduits and an enhanced focus on perpetually increasing its bargaining power through strengthening its domestic productive capacities.
END NOTES
[1] Borrell Josep (2024) Munich Security Conference: the four tasks on the EU’s geopolitical agenda https://www.eeas.europa.eu/eeas/munich-security-conference-four-tasks-eu%E2%80%99s-geopolitical-agenda_en. Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy / Vice-President of the European Commission.
[2] The sanctions first implemented on Niger and then applied selectively to Mali and Burkina Faso included trade bans, freezing of financial transactions, closure of borders between the ECOWAS and the three countries as well as travel bans on select individuals.
[3]Al Jazeera (2024) Niger suspends military cooperation with US: Spokesman. https://www.aljazeera.com/news/2024/3/17/niger-suspends-military-cooperation-with-us
[4] The Group of Seven (G7) is an informal forum that brings together the advanced industrialised economies of Italy, Canada, France, Germany, Japan, the United Kingdom and the United States of America. The European Union also participates in the group. The G7 is home to 776 million people and the aggregate domestic product (GDP) of G7 member states represents about 30 percent of the global economy.
[5] Yu, G. T. (1977). China and the Third World. Asian Survey, 17(11), 1036–1048. https://doi.org/10.2307/2643352; Mao Zedong (1959) Africa’s task is to struggle against imperialism. Available at the Wilson Centre Archive https://digitalarchive.wilsoncenter.org/document/mao-zedong-africas-task-struggle-against-imperialism#_ftn0; Taylor, I. (2018) ‘Mao Zedong’s China and Africa’, Twentieth Century Communism, 15, 47+, available: https://link.gale.com/apps/doc/A626124559/AONE?u=anon~54c4395&sid=googleScholar&xid=3300da19
[6] Capasso, M., & Kadri, A. (2023). The imperialist question: A sociological approach. Middle East Critique, 32(2), 149–166 ; Ajl, M. (2024). Palestine’s Great Flood: Part I. Agrarian South: Journal of Political Economy, 13(1), 62-88. https://doi.org/10.1177/22779760241228157; Yeros, P. (2024). A World Will Only Be Possible by the Intervention of the “Sixth Great Power”. Agrarian South: Journal of Political Economy, 13(1), 14-40. https://doi.org/10.1177/22779760241230679
[7] Samir Amin (May 2018) – Financial Globalization: Should China move in? Defend Democracy press. https://www.defenddemocracy.press/22137-2/
[8] New Arab News (2024) Egypt economic crisis: What is Ras al-Hekma and why is Cairo ‘selling it’ to UAE? https://www.newarab.com/news/egypt-economy-what-ras-al-hekma-cairo-selling-uae
[9] Lydia Jones & Michael J. Bloomfield (2020) PPPs in China: Does the Growth in Chinese PPPs Signal a Liberalising Economy? New Political Economy, 25:5, 829-847, DOI:10.1080/13563467.2020.1721451
[10] China South Global Project (2024) China Could Fund Kenyan Rail Through Public-Private Partnership: Kenyan President https://chinaglobalsouth.com/2023/12/19/china-could-fund-kenyan-rail-through-public-private-partnership-kenyan-president/
[11] Ministry of Foreign Affairs of the Republic of China (2022) Jointly Advancing the Global Development Initiative and Writing a New Chapter for Common Development. https://www.fmprc.gov.cn/eng/zxxx_662805/202209/t20220922_10769721.html
[12] Somdeep Sen, NATO and the global colour line, International Affairs, Volume 100, Issue 2, March 2024, Pages 491–507, https://doi.org/10.1093/ia/iiae012
[13] Euractiv (2024) EIB ready to ‘stretch’ lending criteria as it prepares for EU Council’s call to arms https://www.euractiv.com/section/economy-jobs/news/eib-ready-to-stretch-lending-criteria-as-it-prepares-for-eu-councils-call-to-arms/
[14] Defensenews (2024) EU member countries push back on Italy’s call for European army https://www.defensenews.com/global/europe/2024/02/05/eu-member-countries-push-back-on-italys-call-for-european-army/
China mall on the spintex Road, Accra, Ghana
‘Europe’s new external investment strategy needs to reconnect with historical business models we are going back to white elephants of 1970s – because that’s what partners want.
– G7 official in a speech on Trade and Finance.
‘The era of Western dominance has indeed definitely ended’
– Josep Borrell (2024), High Representative of the European Union for Foreign Affairs and Security Policy / Vice-President of the European Commission.
On 28 January 2024, three members of the Economic Community of West African States (ECOWAS), Niger, Mali and Burkina Faso, announced their withdrawal from ECOWAS. Created in 1974, ECOWAS is a regional economic community serving as a large trading bloc, to enhance the regional integration and economic cooperation of its 15 member countries. The three countries’ decision to leave the trade-bloc so forthrightly, was related to a series of ECOWAS-imposed sanctions on their military governments and the countries’ objection to French influence in the bloc.[2] Long-standing dissatisfaction with the ECOWAS was also an overarching factor; member countries include some of the most resource-rich nations, but on the whole members barely made any progress on socio-economic indicators linked to the ECOWAS promise of prosperity through regional integration.
Political uncertainty in the trade-bloc further deteriorated in mid-February 2024, when the Senegalese President Macky Sall, unilaterally postponed the country’s presidential elections and was later ousted. Faced with such existential challenges, ECOWAS lifted sanctions on Niger and other countries within a month of their imposition. While the potential breakdown of ECOWAS and the general trajectory of some African countries into authoritarianism, may not seem like a radical shift in the continent’s history, the incendiary global context, which compelled ECOWAS to lift sanctions is unprecedented. The neo-colonial drivers of the current crumbling political order in Sudan and the Congo as well as the ongoing genocide in Palestine, indelibly expose the reality that we are entering into an era of naked colonial violence. Backlash to US-centred imperialism is growing. In March 2024, Niger suspended all military relations with the US, citing issues related to US encroachment upon its sovereignty.[3] Embedded in this evolving situation, the episodic and ad-hoc de-linking of Global South countries from Global North countries and their dominance in blocs such as the ECOWAS is representative of a broader shift in Africa’s resistance against political and economic subordination to G7 countries.
Against this background, the Western powers’ new and evolving development strategy in Africa offers important insights into how the G7 countries are failing to register the transformative changes in Africa. [4] In a closed-door speech on investment, trade and finance forum, a G7 official described Europe’s new external investment strategy as one that harkens back to the White elephants of the 1970s. While the speaker was using the term ‘White Elephant’ to signify the EU’s interest in funding hard infrastructure, imbued with a promise of investment and growth for recipient countries, he clearly failed to grasp its meaning. A ‘white elephant’ is an overly expensive infrastructure asset, which fails to generate value for the economy.
Considered in light of the correct definition of the term, the West’s new development strategy does seem to be going towards expensive infrastructure projects, spurred by a reactionary, performative but ultimately imagined competition with China. I make this point through a comparative analysis between the G7s contemporary development strategy vis-à-vis the Chinese development model as it unfolds within the broader demise of US-led imperialism.
Delineating Origins: Historical Imperialism vs. Bipolar World Order
Most comparative literature on Western and Chinese development strategies in Africa, fails to ground the colonial and neo-colonial reality of African development. This central omission engenders a hollow comparison, which ultimately forgoes the question of temporality and the historical nature of a unipolar imperial world order. Centring the agency of African countries entails a historical mapping, which not only connects the past to the present but is also cognizant of when and how path dependencies are ruptured. Three facts are key to any comparative analysis of Western-Chinese competition in Africa.
Firstly, China’s current global developmental model, which can be continuously traced to the early 2000s cannot compare to the 100-year history of European imperialism in Africa. This temporality is central to the analyses, not a mere addendum. This is because Europe never left Africa. Chinese engagement with African countries took place in conjunction with European and Western economic and political interference in the region. China’s rich history of supporting anti-imperialist struggles in Africa as well as leading South-South cooperation initiatives under Mao Zedong have been extensively documented and present a very different vision of development rooted in third world solidarity. [5] However, this historical analysis is completely ignored in most mainstream analysis and China’s engagement with Africa and the Global South since the 2000s is placed on par with the Western imperialist model.
As others have argued more concretely, the notion of imperialism is embedded in a historical structure of global capitalism, which cannot be abstracted and selectively applied to the new bi-polar world (Capasso & Kadri, 2023;[6] Ajl 2024, Yeros 2024). While Chinese investment projects must be subject to scrutiny and critique, the notion, context and nature of imperialism, old and new, must be based on the systemisation of global capitalist extraction. A starting point here is to note that China’s ‘going out’ or external investment strategy emerged in the aftermath of its remarkable achievement of alleviating domestic poverty. The Chinese development experience was thus not predicated on a model of imperial extraction, which has been the modus-operandi of most Western developed nations.
Secondly and aligned with the first point, the nature and scale of Chinese investments in Africa within this short period has been transformational in its focus on infrastructure and emphasis on the systemisation of productive capacities in African countries. The Chinese state-led ‘going out’ strategy, approached development from a holistic perspective, centring productive investment and infrastructure as the key to enabling inter-sectoral and cross-sectoral linkages. This was possible owing to China’s capacity to maintain control over the entire value chain of development: from providing financing through its state banks to the mapping, completion and execution of projects.
This model of development-investment has not been the nature of Western investments, which have largely focused on “soft development” since the late 1990s (explained below). Most importantly, countries categorised as low-income and least developed were considered extremely risky for Western capital and therefore not a desirable investment destination. The huge influx of Chinese investment into these countries in fact addressed this obstacle for Western capital. China’s risk-taking capacity engendered and facilitated other investment strategies. Therefore, the rise of Western infrastructure connectivity projects- such as roads, bridges must be located as derivative of China’s ‘going out’ strategy.
Thirdly and building upon the two points above, while the very purpose of a comparative analysis is to juxtapose differences and similarities between approaches, mainstream analysis a priori assumes an overlap between Chinese and Western development strategies based on a superficial semblance. This assumption can be observed in the equivocation of two very different financing models in journalistic reporting as well as mainstream academic literature. A forced similitude between a neoliberal financing model (US/EU) and a state-led financing model (China) thus reverberates endless confusion as opposed to producing any real analysis. As Samir Amin (2018) reminds us
Deng Xiaoping said that you should start from looking at actual facts. It is exactly what the conventional professional “economists” – all of them, including the Chinese “experts” trained in the USA and brainwashed – do not do. [7]
To overcome this limitation, the analysis must start from comparing the nature of Chinese and Western development strategies.
Calibrating Development and Conditions
A basic definition of ‘international development’ is the financial and technical transfer of resources from some countries to others, to the ends of empowering the latter. While the 1948 Marshall Plan for Europe was premised on the reconstruction and the reorientation of European markets to be better aligned with the hegemony of US capital, the evolution of Western development strategies in the Global South took on a markedly different form. The 1980s was the beginning of this transformative period, whereby Western development strategies and aid models laid an exclusive emphasis on targeting social indicators in Global South countries. Public goods such as health and education were major recipients of soft grants, however, these grants were often conditioned on the implementation of a privatisation roadmap as well as harmonising tools of liberal democracy such as ‘Good Governance’, exclusive funding for initiatives such as transparency, as well as monitoring and reform of electoral processes.
In addition, this financing model remained unaccompanied by investment in public spending, fiscal consolidation to promote developmental policy making, industrialisation in productive sectors and the reform and deepening of the financial sector to achieve financial autonomy. This created an artificial wedge in the very meaning of development: aid-led dependency was designed to separate and prioritise ‘soft infrastructure’ at the expense of ‘hard infrastructure.’ Donor dependency based on the soft development agenda accompanied by a marketization of public goods therefore accelerated the hollowing out of many Global South countries. Privatisation successfully transformed the political model of governance in these countries: converting citizens into consumers.
In contrast, from the very beginning, China’s ‘going out’ strategy in the 2000s was premised on the strengthening and expansion of productive investments and public services, making no artificial distinction between ‘hard’ infrastructure and ‘soft’ infrastructure. The primary focus was on the construction of infrastructure project tools including bridges, hospitals and roads albeit complemented by transfer and sharing of knowledge such as in medical training, civil service training for public bureaucrats and strengthening of public institutions. China’s emphasis on skill development, technology transfer and knowledge sharing is often ignored by most accounts comparing Chinese and Western development strategies. The fact that such knowledge sharing comes outside of the framework of Intellectual Property governance became much more visible after China’s distribution of Covid-19 vaccines to Global South countries during the Covid-19 pandemic. The distribution of vaccines as a public good was also accompanied by humanitarian assistance to some countries, highlighting the necessity of an alternative approach to development especially as western pharmaceutical companies enjoyed quadrupling profits through the sale of their vaccines.
An important and often repeated point of comparison between the Western and Chinese model is the specific nature and role of conditionalities. While the construct of ‘conditionality’ as a necessary requisite for development assistance including grants, concessional flows and technical assistance is explicitly associated with Bretton Woods Institutions and Western bilateral development strategies emerging in the late 1990s, it has deeper roots in colonialism.
Western development strategy has been conditioned towards ensuring that the West remains distant from its historical past: in Africa’s case this essentially means the evasion of the Western countries’ reparative responsibility to African countries. Germany’s agreement to pay reparations to Namibia in 2021 was a historic shift but the modality and actual implementation of these reparations remains contested as some consider it ‘tokenistic’ in nature. Beyond this case, Western development policies, exemplified by the EU have been explicitly conditioned upon Africa’s compliance in enabling the free trade of resources, goods and commodities to the EU whilst simultaneously curbing African migration through the externalisation of European border militarization.
In comparison, albeit without colonial baggage, China’s contemporary development model is also concerned with access to commodities, raw materials and market creation for the absorption of Chinese surplus. However, unlike Western development strategies, this model is not linked to demands for better governance, interest in regime change for better compliance with Chinese investments, the implementation of sanctions and the imposition of penalties when conditions are not met. While select conditions are attached to China’s project procurement and contracts for goods and services as well as in cases of debt restructuring, the pattern which emerges in the impact of these conditions is markedly different from conditions embedded in the West dominated global financial architecture. China’s approach to conditions is largely concerned with ensuring the longevity and guarantee of economic investments and has produced both positive as well as adverse results for Global South countries.
However, these conditions are not egregious enough to immobilise countries, such as those observed in the historical and on-going impact of IMF and World Bank conditionalities. The incompatibility of conditionalities in both Western and Chinese development strategies does not absolve a criticism of China, however it is equally important to ascertain the nature and context of Chinese conditions in Global South countries. The global impact of Western sanctions, rise of Western protectionism and competition between the West and China, in every possible realm has certain repercussions for China including in the realm of multilateralism and debt reform. These need to be carefully researched.
In summary, a comparative analysis between western development strategies and the Chinese development model necessitates rigour in differentiating between the historical and structural origins of their approaches. Western conditionalities have ultimately resulted in the gradual erosion of sovereignty in Global South countries, repressing any avenues of third world solidarity and South-South cooperation. China’s development strategies do not replicate this model.
The new Scramble for Africa: By Whom and How?
The comparative grounds for Western and Chinese development in Africa have gradually taken a new turn through a competing series of infrastructure connectivity models. These models have some variation in their discrete proposals however the aim is to mobilise private finance and invest replacing traditional aid and concessional finance. More importantly, the strategies are traditional alliances between ‘like-minded partners’, including the US, South Korea and Japan. US commercial investors and multilateral development institutions under the auspices of the US-led Partnership for Global Infrastructure and Investment (PGII) ensure the continuation of the failing US-led neoliberal order.
While different models now focus on enhanced coordination between Export Credit Agencies (ECAs) to effectively create an environment for domestic investments to be subsidised through export credits and development financing it is important to note that China’s development model has always combined financing and trade with China’s Eximbank being at the centre of its global investments. The Western turn towards hard ‘infrastructure’, use of export credits for development suggests a superficial emulation of characteristics which mark the Chinese development. This is because beyond cosmetic shapeshifting, the Western corporate sector remains the determinant factor shaping the new development strategies, while the Chinese development model remains state-led under the direction of the Chinese communist party. While China continues to face a combination of different internal and international pressures, the Chinese State supersedes China’s domestic iteration of the private sector. In contrast, vessels like the EU are not simply promoting the interests of the EU private sector but strengthening the private sector of G7 countries to the ends of ensuring the continuation of the US-led neoliberal order.
This is most starkly visible in the EU’s recent attempt to balance its multiple goals of controlling migration through claims to “securing” its borders, supporting the genocide in Gaza and broader colonization of Palestine and partnering with US-aligned Gulf capital to extend neoliberal policies throughout the region. In March 2024, the EU provided a €7.4 billion ($8.06 billion) funding package to Egypt for the period 2024-2027. The EU support complemented the IMF’s expanded $8 billion loan deal with Egypt in the same month and was also complemented by a $35bn investment deal between Egypt and the UAE for developing the Ras al-Hekma peninsula.[8] Egypt is therefore a site for the West’s new unfolding development agenda, which seeks to securitise EU borders against African and Palestinian migrants as the EU and the West continue to support Israel militarily.
As the Western order declines, the EU and developed countries are under pressure to invest and deliver on greater distributional gains, especially when it comes to serving Global South elite interests. From this perspective, China’s developmental model is also not entirely immune to the contradictions of capitalist development. These contradictions must be analysed from the duality of China’s national or domestic experience as well as its external development model. China continues to experiment with select liberalisation and privatisation with an overarching retention of state ownership.
China’s experimentation with Public-Private Partnerships (PPPs) on a domestic level[9] and the initiation of PPPs in recipient countries is one such example.[10] Other examples include the nature of Asian Investment and Infrastructure Bank (AIIB) investments in Global South countries, China’s adoption of private finance instruments created by Bretton Woods Institutions and China’s role in reforming the sovereign debt architecture. The pressures of operating in a neo-liberal world order, playing on the ‘openness’ of countries, which have free trade agreements with Western markets and integration into the development finance architecture creates a host of issues for China and recipient countries. These issues require scrutiny, critique and reform especially concerning their impact on Global South countries.
A critical approach to Chinese investment also means a concrete understanding of China’s global rise, which initiated as an interplay with the existing hegemonic order but has been subject to China’s vigilance in disciplining its companies and curbing rentierism, both at the national level as well as in its international projects. In 2021, China launched the Global Development Initiative (GDI), which is designed to complement the BRI but embeds a vision of development based on China’s own development experience with an enhanced focus on knowledge sharing, technology transfer and South-South development.[11] The initiative is free of patents and dominance of intellectual property rights and rent seeking. Although it is too early to predict the developmental impact of the GDI, China’s focus on a more communal approach to development, such as in the case of Covid-19 vaccine distribution needs to be contextualised and reflected in the GDI model. China continues to adapt, evolve and regulate its economic rise. Nonetheless, it is ideologically, structurally and materially a different development model, which necessitates engagement on its own terms, even when these terms appear superficially comparable to the development models of traditional imperial powers like the US and the EU.
Conclusion
As Western blocs such as the EU transform into a full-fledged war economy strengthening NATO,[12] proposing the use of its public banks like the European Investment Bank (EIB) to lend to the defence industry[13] as well as exploring the option of a new EU army,[14] it is becoming increasingly clear that the Western constructs of ‘development’, ‘investment’ and ‘security’ can no longer remain in their siloed guises.
This is not merely a turn towards Keynesian warfare – it is a continuation of Western history and a symbol of the West’s political woes, as its countries succumb to domestic fascism. Meanwhile China continues its strategy of deepening the Belt Road Initiative (BRI) at a pace of its own, subject to the contradictions of capitalist development including dealing with issues of problematic projects in recipient countries. The paradigm of development as a comparative ground for Western and Chinese is not external to these formations but embedded within these changes. As detailed above, the grounds for a comparative analysis between the West and China must extend from their historical engagement with Africa to the current situation of escalating violence and the decline of US-led Western order.
African agency between such powers lies in securing the interests of its people through a combination of strategies including stronger criteria for partnerships, de-linking with US-led imperial conduits and an enhanced focus on perpetually increasing its bargaining power through strengthening its domestic productive capacities.
END NOTES
[1] Borrell Josep (2024) Munich Security Conference: the four tasks on the EU’s geopolitical agenda https://www.eeas.europa.eu/eeas/munich-security-conference-four-tasks-eu%E2%80%99s-geopolitical-agenda_en. Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy / Vice-President of the European Commission.
[2] The sanctions first implemented on Niger and then applied selectively to Mali and Burkina Faso included trade bans, freezing of financial transactions, closure of borders between the ECOWAS and the three countries as well as travel bans on select individuals.
[3]Al Jazeera (2024) Niger suspends military cooperation with US: Spokesman. https://www.aljazeera.com/news/2024/3/17/niger-suspends-military-cooperation-with-us
[4] The Group of Seven (G7) is an informal forum that brings together the advanced industrialised economies of Italy, Canada, France, Germany, Japan, the United Kingdom and the United States of America. The European Union also participates in the group. The G7 is home to 776 million people and the aggregate domestic product (GDP) of G7 member states represents about 30 percent of the global economy.
[5] Yu, G. T. (1977). China and the Third World. Asian Survey, 17(11), 1036–1048. https://doi.org/10.2307/2643352; Mao Zedong (1959) Africa’s task is to struggle against imperialism. Available at the Wilson Centre Archive https://digitalarchive.wilsoncenter.org/document/mao-zedong-africas-task-struggle-against-imperialism#_ftn0; Taylor, I. (2018) ‘Mao Zedong’s China and Africa’, Twentieth Century Communism, 15, 47+, available: https://link.gale.com/apps/doc/A626124559/AONE?u=anon~54c4395&sid=googleScholar&xid=3300da19
[6] Capasso, M., & Kadri, A. (2023). The imperialist question: A sociological approach. Middle East Critique, 32(2), 149–166 ; Ajl, M. (2024). Palestine’s Great Flood: Part I. Agrarian South: Journal of Political Economy, 13(1), 62-88. https://doi.org/10.1177/22779760241228157; Yeros, P. (2024). A World Will Only Be Possible by the Intervention of the “Sixth Great Power”. Agrarian South: Journal of Political Economy, 13(1), 14-40. https://doi.org/10.1177/22779760241230679
[7] Samir Amin (May 2018) – Financial Globalization: Should China move in? Defend Democracy press. https://www.defenddemocracy.press/22137-2/
[8] New Arab News (2024) Egypt economic crisis: What is Ras al-Hekma and why is Cairo ‘selling it’ to UAE? https://www.newarab.com/news/egypt-economy-what-ras-al-hekma-cairo-selling-uae
[9] Lydia Jones & Michael J. Bloomfield (2020) PPPs in China: Does the Growth in Chinese PPPs Signal a Liberalising Economy? New Political Economy, 25:5, 829-847, DOI:10.1080/13563467.2020.1721451
[10] China South Global Project (2024) China Could Fund Kenyan Rail Through Public-Private Partnership: Kenyan President https://chinaglobalsouth.com/2023/12/19/china-could-fund-kenyan-rail-through-public-private-partnership-kenyan-president/
[11] Ministry of Foreign Affairs of the Republic of China (2022) Jointly Advancing the Global Development Initiative and Writing a New Chapter for Common Development. https://www.fmprc.gov.cn/eng/zxxx_662805/202209/t20220922_10769721.html
[12] Somdeep Sen, NATO and the global colour line, International Affairs, Volume 100, Issue 2, March 2024, Pages 491–507, https://doi.org/10.1093/ia/iiae012
[13] Euractiv (2024) EIB ready to ‘stretch’ lending criteria as it prepares for EU Council’s call to arms https://www.euractiv.com/section/economy-jobs/news/eib-ready-to-stretch-lending-criteria-as-it-prepares-for-eu-councils-call-to-arms/
[14] Defensenews (2024) EU member countries push back on Italy’s call for European army https://www.defensenews.com/global/europe/2024/02/05/eu-member-countries-push-back-on-italys-call-for-european-army/
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