Will Africa be able to compete successfully with China?

By Mark Kapchanga Source:Global Times Published: 2013-4-25 18:38:01

Illustration: Liu Rui/GT
Illustration: Liu Rui/GT

It is indisputable that China is the world's most competitive economy. Its industries boast high-level technology, a highly trained workforce, innovation and operational efficiency. The country's businesses are known to outcompete their rivals in new regions through low pricing and low production cost.

However, China's command of the global market came into question recently when Central Bank of Nigeria Governor Sanusi Lamido Sanusi called on Africa to see China not only as a development partner but also as a competitor. He even criticized that some Chinese practices in Africa are similar to those of traditional Western colonizers. He stressed on the need for Africa to capitalize on China's rising labor costs which could inhibit its burgeoning economic influence.

Sanusi's call brought back memories from the 1990s when Africa outrivaled Asia as a manufacturer of standardized garments. At the time, African agricultural products, furniture and leather products had a significant niche market in China.

But with its dilapidated roads, costly and erratic power supplies, political instability, ill-trained workforce, corruption and bureaucracy, Africa has today been reduced into a net importer of products that should be manufactured locally.

Worse, its main share of manufactured exports is now concentrated in a few countries such as South Africa, Tunisia, Morocco, Egypt, Mauritius and Algeria. Such a trend has forced African countries to spend over $74 billion every year in buying Chinese-made machinery, electrical, consumer goods, clothing and footwear.

As a matter of fact, Africa is endowed with huge resources and large tracts of arable land. Regrettably, they are under-exploited.

The continent ranks high in quantities of global reserves of bauxite, cobalt, gold, diamond and phosphate. China, a country whose main mineral is coal, is thirsty for these vast mineral resources. Its industries cannot flourish without oil, minerals, timber and cotton from Africa, too.

But even with these opportunities, can Africa compete favorably with China?

It might sound peculiarly ambitious for the continent to see China as a competitor. Africa lacks the financial muscle, machinery, essential technology and innovation that propel China's economy.

But in order for it to compete with China, it must first recognize it as a development partner. It must also work tirelessly on strengthening this bond. This is already being witnessed in the infrastructural sector. China has poured billions into the modernization of roads, ports and railways across Africa.

It is due to such a friendly business environment that Ethiopia, for instance, has gained control of the domestic market and established itself as a credible exporter of leather shoes to China, Europe and North America.

Africa can also easily rival China in terms of food production. More than 60 percent of Africa's population is involved in agriculture.

Its abundant arable land, estimated at over 300 million hectares, and the largely favorable climate could help China feed its growing population, especially at this time when the country is experiencing massive shrinking of arable land.

Indeed, the UN recently questioned the Chinese government's long-term self-sufficiency, claiming the country could experience another famine, like the one in the early 1960s.

More importantly, Africa should partner with China in setting up processing plants throughout the continent.

These factories will transform Africa's raw materials, add value to the exports, create manufacturing jobs to the local population and transfer skills to Africans.

It is ironical that to date, resource-rich nations such as Angola, the Republic of the Congo and Gabon are still in extreme poverty.

It may not be early to see China as a competitor, but Africa needs to re-look at such a stance. It will be imperative for the continent to engage the Asian nation more in strengthening the local capacity and infrastructure before such a move is made.

China should also remain committed to raising Africa's standards of well-being. Otherwise it will be seen by some Africans just like other Western colonial powers which haemorrhaged Africa without providing support for economic and social development.

The author is a journalist on African issues based in Nairobi, Kenya. mkapchanga@gmail.com



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