Business

China plants seeds of economic colonialism within Africa

Colonialism, in the traditional sense, was about establishing more than a presence in a foreign land. It was about creating a trade path that was specifically designed with the colonizer in mind, with the development of the colonized as an afterthought.

This trade path consisted of mainly two macroeconomic trends: to utilize colonized natural resources to further the colonizers’ complex goods and to provide an immediate consumer base for the complex goods that the colonized couldn’t replicate due to a lack of machinery and training.

China’s involvement in Africa is the perfect example of economic colonialism. The country is shifting its investments into African economies and is gaining more control over its development and resources.

With China’s recent movements in Africa — investing over $60 billion in aid and loans — the concept of China encroaching on Africa’s growth potential and using the continent to its advantage is not an unrealistic outcome.

As an economic powerhouse and one of the most populated countries on the planet, China views Africa as a valuable resource base to further expand its economic growth.

Furthermore, Africa serves as the perfect growing consumer base ­— the continent is unable to replicate the product or price margins that Chinese companies can easily offer.

Africa is known for its mining of rare metals, often at the hands of overworked children with no safety equipment.

These precious minerals, which encompass much more than the infamous diamond trade, are often a necessity for smartphone and technological creations. This is quickly becoming more and more prioritized as China’s economy becomes increasingly tech- and service-based. With Africa’s large stores of gold, cobalt, tin, tungsten and more, the continent is increasingly valuable as natural resources are claimed by global technological conglomerates.

It’s interesting to speculate how China will enter these foreign markets, given that its domestic markets often protect domestic companies with domestic capital.

This is not a reality within Africa, where both corporate organization and large-scale capital for economic development are hard to find. China supplements this with large aid and loan programs, which increase its presence in foreign markets.

With Africa’s history of political corruption, these programs likely encourage legislators to write China-friendly legislation for further mining production.

However, the issue goes beyond capital and politics. With China’s patriarchal culture and the recent end of its one-child policy, there is a surplus of males within China.

Furthermore, property in China is quickly becoming more unaffordable for many of their low-income residents who are feeling the cost-push inflation of urbanization. Africa, a growing market with huge investment potential, provided China with a location to expand into and provided a solution to this issue.

Easier investment opportunities are given to Chinese investors so they can further their business exploits into Africa. By doing this, China is seizing more control of African economies, supervising what money goes in and out.

China’s recent actions in Africa follow all the macroeconomic trends of economic colonialism. However, the country’s usage of surplus capital acts as the catalyst to its involvement rather than the violence associated with colonialism in the past. This accompanied by the large-scale investment of China into remaking the world’s trading infrastructure is putting it in a good position in the world’s
economy.

November 5, 2018

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Christopher Santos


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