Is China influence growing at the expense of America?

 Tuesday, November20, 2007   

             By Francis W. Nyepon

PR China’s direct investment in Africa has grown exponentially from $5 million in 1991, to over $50 billion to date. Its appetite for Africa’s raw material and market for finished products has indeed grown substantially, since President Sirleaf came to office, and the pace of PR China’s investment in Liberia shows no sign of slackening.

Liberia is witnessing a steady acceleration in Chinese investment activities, which many in the Sirleaf administration are quick to broadcast as great for Liberia’s recovery, causing many Liberian business people to view PR China as the new vehicle for Liberia’s prosperity. But many policymakers come to the table without a study of PR China’s African policy and investment practices around the continent. Even the president has been prudent not to completely wrap herself around PR China’s African policy of "mutual benefit" and "win-win cooperation", even though her administration has rightfully returned Liberia to its original ‘One China Policy’.

This author presents herein a provocative look at PR China’s presence in Liberia, whilst contrasting its behavior on the continent with a stroke of neo-colonialism. As PR China’s influence grows in Liberia, one wonders whether or not its investment would potentially boost its leverage within the Sirleaf administration, and increase its presence above that of the United States. This author believes that PR China has the potential to bring either great promise or great harm to Liberia’s quest to reduce poverty, rebuild its destroyed infrastructure and transform its social order. This is the double edge sword, and tight rope which many in the Sirleaf administration must master with strategic thinking and tactical execution.

However, by sounding the alarm bell now, this author believes it would avert potential policy blunders of monumental proportions for Liberia in the future. For example: Chinese potential competition on Liberian entrepreneurs and exports will eventually emerge as a serious challenge to Sino-Liberian relations. In such likelihood, one can envision Chinese traders doing business in Liberia and obtaining consumer goods from China more cheaply through their networks than Liberian entrepreneurs, which would undercut Liberian ventures and breed resentment; thereby not igniting social transformation as the Sirleaf administration hope. Understandably, this is a catch 22 situation. Nonetheless, PR China’s voracious appetite for raw materials and its generous investment package for Liberia are helping to push the Sirleaf administration towards policy initiatives that are driving our immediate recovery needs, which eventually may not improve our economic situation at all, but instead hurt local entrepreneurs and sustainable development goals. 

This essay is a clarion call for caution and vigilance. The possibility exists that PR China could potentially use its investment in Liberia to facilitate corruption, and negotiate lopsided contracts to again reinforce a patronage system without intending to do so. For example, its generous investment programs in Liberia could give politicians a potential leeway to manipulate institutions to preserve their own power base from which to build political status, personal wealth and prestige. This author wonders about good governance and what would happen to President Sirleaf’s anti-corruption agenda when evidence eventually mounts that Chinese firms are all too eager to bribe their way to lucrative contracts or directly into the pockets of officials.   

This author believes that the Sirleaf administration’s fancy cartwheel over Chinese investment spree must give way to sober reflection so as to prevent another one-sided exploitation of our natural resources, which was used by a select group of unscrupulous individuals in our recent past to fuel bloody conflicts, and amass disproportional wealth at the expense of ordinary Liberians. Right or wrong, the administration’s key policymakers on China do not comprehend PR China and its policy towards Africa as others have found out the hard way in Zimbabwe, Sudan, Angola, Zambia and DR Congo. For example: during President Sirleaf’s visit to Beijing, the visiting Liberian delegations interacted primarily with Chinese Africanists and aid specialists based at the Chinese Academy of Social Sciences, a think tank without the Liberians recognizing this essential strategy. At the Academy, the Chinese portrayed their country as a selfless friend of Africa frequently referencing PR China's Cold War aid programs and support for African liberation movements, which the visiting Liberians share no appreciation.

A concern to be prudent and meticulous is not a suggestion that the Sirleaf administration is not painstakingly being careful and resolute in developing an effective Sino-Liberian relationship. However, PR China’s business interests should not be allowed to follow the usual pattern of big powers that have traditionally treated Africa mainly as a source of raw materials, cheap labor, market for finished goods, and policies which undermined efforts to nurture democracy and improve human rights. The Sirleaf administration should not be fooled and allow Liberia’s future to be entrapped by PR China’s Cold War antics and public relations rhetoric. Liberia’s China specialists should come to the realization that PR China has a reputation for promoting policy which provides state-owned companies with subsidies to forgo short-term profits in pursuit of long-term strategic national interests.

 The Sirleaf administration angst, impatience and drive to jumpstart the economy have allow PR China to expand its footprints from the Samuel Kanyon Doe Stadium, to an investment package that include a mixture of outright cash, cheap credit, technical expertise and training, including in-kind benefits such as roads, medical and educational facilities, agriculture, telecommunications and aviation. So, policymakers in the Sirleaf administration better take the hint and become wiser before PR China’s business practices leave much to be desired, since there is a common practice and high degree of tolerance by the Chinese for corruption and low standards in the workplace and environmental regulations. 

This author understands the motivation of the enthusiasm over PR China frantic interest in Liberia and  the borrowing restrictions placed on our country’s credit, debt and bond rating by international banks in the United States and Europe; debt forgiven by multilateral institutions though HIPC; and the near total lack of funding for infrastructure from the U.S.. The position taken by western governments and institutions provides PR China and its state-owned companies with a broad window of investment climate and business environment in Liberia where most American investors seem to be avoiding. However, given the US historic relationship with Liberia, it needs to move more aggressively to encourage heavy investment in Liberia especially in strategic areas. For example: An interest-free credit guarantee that would allow US-base companies to invest in infrastructure development, would be an excellent platform from which such an American initiative can be launched. 

Another example is that of AFRICOM, which could cement a strategic posture in our historic relationship. The lesson for the United States should be one that says it is okay to have a more "normal," interests-based foreign policy with Liberia, one which transcends the traditional humanitarian rhetoric.

 China is fast becoming one of the main sources of project financed for infrastructure development in Liberia, which threatens to surpass activities sponsored by the United States.  Given the policy direction with PR China, one wonders if Liberian policymakers have asked themselves, why PR China has such growing interest in Liberia. Would this interest increase its influence and access to Liberia vast natural resources? What opportunities is PR China offering Liberia to sustain development? Is Liberia in the position to effectively take full advantage of the new opportunities that China expanded commitment to Africa offers? How might Liberia’s historic relationship with the United States and international financial institutions change as a result of this grand embrace of PR China? What effects will the massive economic activities by PR China have on our investment climates via the US and EU? Will the Sirleaf administration’s engagement with PR China produce fair and balance trade to our country? Are we prepared for China to become the most dominant player in our economy? Would Liberia’s PR China’s policy provide much needed employment and training for average Liberians? These questions are pertinent to our post-conflict recovery, so lets embrace them strategic thinking.

Kudos must however be given to the United States because since President George W. Bush came to office, America has been undergoing a strange metamorphosis in its Liberian policy. Relations have moved beyond the strains of previous years, with support in key sectors that include security reform, education, health and minor infrastructure projects. The US investment in education through the return of the Peace Crops, Liberia Teacher Training Project and President Bush’s new Basic Education Initiative are impressive and excellent. 

However, it needs to be strengthened further through the engagement of several US-based universities to partner with institutions in Liberia to assist Liberian youth who were deprived of a meaningful education over the past 20 years. America should come full cycle in embracing vocational education in as much as traditional education to strengthen sustainability. If the US is to become serious about having a significant and strategic impact in Liberia, than it should commit itself to education by having a goal of training 15,000 Liberian primary, secondary and vocational teachers over the next five years. Another area where American policy towards Liberia could be cherished by average Liberians is promoting sanitary environment through effective sanitation waste management, safe drinking water, public health and hygiene promotion to change behavior and serve as a baseline platform from which recovery can be enhanced. 

Francis Nyepon is managing partner of DUCOR Waste Management in Liberia. He is a policy analyst and vice chair of the Center for Security and Development Studies, and serves on several boards of humanitarian, environmental and human rights organizations in the United States and Liberia. He can be reached at francis.nyepon@Gmail.com