China supports rogue states

Challenge: Through Chinese bilateral support, trade and investments, China's engagements have provided rogue states in Africa with a viable trap-door from pressures to reform their political, economic and social institutions.

A host of literature has noted and applauded the improvements in Africa's political and economic management over the past few years. Nevertheless, pockets of resistance remain and China's passive stance, based on non-interference in Africa's domestic affairs, has been accused of leading to a proliferation of human rights abuses, unchecked environmental degradation and exploitive labour standards. Therefore, China's investments in countries like Somalia and the Sudan have been particularly challenged by the international community.

Western aid that typically attached to pro-market, economic, social, institutional and political reforms heightened during the structural adjustment programme of the 1990s. However, in the aftermath of the general failure of structural adjustments to mete out development gains, many African policymakers contest that the conditions to which loans are bound are excessive, impinging on the fiscal space required to carve out a development path that suits any country-specific needs. Absent of augmented conditionalities, Chinese capital has stolen a march on traditional donors. The argument stresses that Chinese financial assistance undermines attempts by the IMF and World Bank to use bilateral support to encourage anti-corruption and good governance measures (Le Pere, 2008a).

Angola is frequently presented as a caricature of how high-level bilateral relations between China and Africa have the potential to stymie good governance, democracy and freedom. Human Rights Watch estimates that approximately USD4 bn of Angola?s oil revenue was siphoned from public accounts between 1997 and 2002 (Kurlantzick, 2006a; 2006b). As a result, the IMF was attempting to negotiate a "monumental aid deal" in 2008 which would attach important transparency measures in oil revenue accounting practices. However, the China Export-Import Bank entered the fray and provided Angola with a USD2 bn concessional loan absent of such conditions (Besada et al., 2008). The IMF deal was shelved and, as the argument goes, so were the reforms. Moreover, what has become known as the "Angola Mode of Finance" – the practice of tying loans to commodity exports – which China has meted-out across the continent, contradicts existing lending practices set forth by Organisation of Petroleum Exporting Countries (OPEC) agreements (Gill et al., 2007). An extreme version of this reasoning argues that China hides behind its principled non-interference to go where no other countries may follow because of political constraints (Kurlantzick, 2006a:5).

Kaufman, Kraay and Mastruzzi (2008) present data estimates for government effectiveness5 for 212 countries around the world. The blue line in Figure 4 represents each country?s estimate. Interpretation of the figure is straight-forward: the higher the estimated value, the more superior and effective a government is considered. Therefore, South Africa has the most effective government out of China?s top-ten export destinations, import recipients and largest receivers of Chinese investment and aid. In contrast, Guinea and Equatorial Guinea have the least effective governments. The thin vertical lines represent standard errors around these estimates for each country in a world-wide sample. Finally, the black and red dots reflect the change in government effectiveness between 2000 and 2008. Naturally, the further the dot is from the blue line, the larger the change in government effectiveness over the period. The figure illustrates that only Egypt and Guinea?s measured governance effectiveness has declined since 2000. More specifically, while Angola, Nigeria and Sudan are relatively weak in terms of governance, none of them have actually deteriorated as Chinese engagement has intensified.

Lending credence to the assertion are Freedom House data, which measure the change in political and civil liberties in a few key African countries. Once again, neither of the controversial countries attached to Sino-African relations have reported deteriorating freedoms, which would reflect as an increase in the reported figure, between 2000 and 2009. In fact, most have expanded freedoms.

To be sure, China has bilateral relations with a number of nations considered unfree – most notably, Angola, the Democratic Republic of Congo (DRC) and Sudan. China has indeed experienced robust bilateral trade growth with a host of African nations that have seen a deterioration in freedoms – albeit that the volume of trade is small in scale. The most prominent of these are the DRC, Mauritania, Zambia, Cameroon and Gambia. However, for the most part, China?s largest trade partners, with whom it logically wields the greatest influence, have either made improvements or stayed constant in terms of political freedom since 2000.

Transparency International's Bribe Payers Index measures the likelihood of the world?s 30 leading trading countries paying bribes when operating abroad. Lower scores reveal a higher propensity for companies from the country in question to offer bribes, while the larger the standard deviation, the larger the range of responses. China along with India, Russia, Taiwan and Turkey make up the group of leading global traders most likely to pay bribes (Transparency International, 2006). Compounding the scenario, China Exim Bank does not have an official policy on corruption or any mechanisms to ensure that the projects it funds are absent of corruption (Le Pere, 2008a). Furthermore, China's companies are often poor performers in terms of labour standards. In response, China has issued its "Nine Principles to Encourage and Standardise Enterprise Overseas Investment", which requires Chinese companies operating outside of China to abide by local laws, bid for contracts transparently, adhere to labour rights and protect the environment (Gu & Humphrey, 2008).

A particularly relevant flash-point concerns the difference between the West and China in their interpretations of the importance of democracy. Historically, democracy was exported through dialogue and discourse. However, since 1945, it has become increasingly commonplace to export democracy using some sort of coercion. Few disagree with the constructive end of expanding individual freedom, but many do object to the means by which attempts are being made to coerce others to embrace democracy. According to Archibugi (2008), since World War Two, only Panama and Grenada have been successfully converted into democracies by coercive measures. Despite numerous attempts, interventions in internal affairs have been almost entirely unsuccessful in trying to convert countries into democracies, which suggests that attempting to expand the jurisdiction of democracy by non-democratic means is likely to be unproductive. Therefore, it is plausible to argue that democracy can only be imported, while self-governance can be exported. This is a crucial distinction that favours enhancing choice, but not prescribing the choice.