The stark warning from the US Secretary of State Hillary Clinton on the creeping “new colonialism” in Africa during her three-nation tour of the continent in June has reignited a fresh round of ideological tussle between the West and the East, with China replacing Russia in the boxing ring. Clinton’s pointed remarks on how foreign governments are only interested in extracting natural resources to enrich themselves draw parallels with the old colonial times, when “it is easy to come in, take out natural resources, pay off leaders and leave” (Clinton, Associated Press, June 11, 2011). This appears to be the general perception in the West that China practices neocolonialism in Africa at the expense of genuine development for the good of the local people, that China allows corruption to grease the elites and protect authoritarian regimes. Rarely acknowledged is the fact that the US is also supportive of non-democratic countries in Africa, such as Gabon, Angola and Chad, in exchange for their oil resources. How neo-colonialism differs from the old school in substance and form is not the interest of this discussion. Rather, the author would like to start a discourse on a new form of ideological struggle, the Washington Consensus (WC) versus the Beijing Consensus (BC). By contrasting these two development approaches, the author wants to refute Hillary Clinton’s claim that China’s investment in Africa is preventing genuine progress in the recipient countries.
The WC was coined in the late 1980s after the end of the Cold War. Questions were asked on how to promote development in post-crisis developing states. Many international political economists, such as John Williamson from the Institute for International Economics and Joseph Stiglitz, the Nobel Prize winner from Columbia University, advocate that real economic development in under-developed states cannot simply rely on international aids from the IMF or the World Bank. Instead, structural reforms have to be implemented as pre-conditions for aids. The package includes democratization, trade liberalization, privatization and deregulation. Consequently, the US African Growth and Opportunity Act (AGOA) of 2000 states that countries will only receive trade preferences if they follow the WC stipulations on reforms. Not surprisingly, not many African countries benefit from the AGOA (UNCTAD 2003:1-2). For the selected few that benefited from AGOA, about 80% of the financial aids that they received were tied to buying US goods and services (IPS2004; OECD 2005). As the president of Zambia frankly put it, “the developing world continues to subsidize consumption of the developed world, through an iniquitous trade system. The existing structure is designed to consign us to perpetual poverty and underdevelopment” (Chiluba 2000).
In contrast, China is engaging Africa with just one condition attached – upholding the one-China policy. Under the Chinese model, known as the Beijing Consensus, China’s investments in Africa require no structural reforms and without any interference in the recipient country’s internal policies. In exchange for oil and other natural resources, China provides finance for infrastructural projects, builds schools and hospitals in countries like Zambia, Ethiopia, Kenya and the Democratic Republic of Congo. Trade flows between China and African states follow the principle of comparative advantage and the predictions under the Heckscher-Ohlin theory of factor specialization, with China exporting capital and labour-intensive manufacturing goods, while Africa exports raw materials. Many analysts, therefore, believe that the trade and investment from China have eased Africa’s dependence on the West and are mutually beneficial (Itano 2005; Li Yong 2003; China-Africa Business Council 2006).
Sierra Leone’s ambassador to China said in 2005, “The Chinese are investing in Africa and are seeing results, while the G-8 countries ….. don’t see very much.” Secretary of State Clinton’s remark on neo-colonialism cannot reflect the truth because colonialism in any shape of form is not welcomed, but China’s investment is actually greeted with open arms by African countries. Suffice to say, both the US and China’s investments and aids in Africa come with political agenda, however, the Chinese non-interference model provides an alternative to the US style of force-restructuring. In doing so, the Chinese model is less disruptive to the local culture while at the same time provide immediate reliefs to the desperate states. The difference between WC and BC is not merely about neo-liberalism against social-capitalism, it is about hard power versus soft power, and it manifests the reluctance of developing countries’ leaders to accept homogeneous universalism that will inevitably lead to hegemonism.