Chinese Foreign Direct Investment in Africa: Scaling Back Expectations?

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The Arab Spring has unsettled more than just the political establishment in the Middle East with dictators in Africa falling to change as well. Events like the fall of Muammar Qaddafi’s regime and Michael Sata’s ascendency in Zambia have upset the traditional stability African leadership has enjoyed for decades – a stability that is both loved and depend upon by the resource hungry Chinese state. Michael Sata’s victory in Zambia over Rupiah Banda ended the decades long rule of the Multi-party Democracy Party. Zambia is Africa’s largest producer of copper and supplies China with a large portion of its haul. Michael Sata’s campaign relied upon anti-Chinese feelings and he even went so far as to recognize the independence of Taiwan. Though Chinese foreign direct investment in Zambia has been substantial, totaling some $2 billion, tensions between Chinese and Zambians have emerged due to the increasing presence of Chinese nationals in Zambia brought in by their companies to work. Local Zambians blame these immigrants for lack of jobs and increasing prices for basic foodstuffs. Sata is proactive when it comes to fixing corruption and has started with tightening controls over Zambia’s copper exporters which now must run all transactions through the central bank to insure fair market values and weights. Unions for NFC Africa Mining – owned by China Nonferrous Metals Mining Corporation – and others at Sino Metals have taken advantage of Sata’s election and walked off the job demanding higher wages. Increasingly, China’s investment under the MMD’s reign is becoming a liability to future relations with Zambia. Another point of concern is the People’s Republic of China’s close relationship with Zimbabwean dictator Robert Mugabe whose health is failing.


[The Diplomat]