Accidental twins?
When it comes to Africa, the US and China share more than a healthy dose of pragmatism
In 2009, the clash of giants finally seemed to happen. No lesser battleground than the Democratic Republic of Congo, largest country in Sub Saharan Africa and home to rebels, guns and vast amounts of natural resources was chosen. On the one side the Chinese, armed with a US$ 9bn infrastructure for minerals deal. On the other side, the US controlled World Bank promising debt relief of US$ 12bn (2/3rds of Congolese GDP). The following fight delivered as promised, including all attributes of superpower diplomacy: Heated debates about norms of sovereignty, proxy wars in the courts of Hong Kong and changing deal terms that don’t really follow much commercial logic.
Since then, competition between the US and China about the right approach to Africa only seems to have intensified. Loans from Bretton Woods institutions come at low cost but with significant political intervention and largely follow funding cycles of the international community. In contrast, Chinese money usually has few strings attached beyond a (comparatively) high price tag and the need to employ Chinese companies. As long as the commercial logic works out, purse strings appear pretty loose (if not, deals get rejected as recently happened in Ghana).
China’s willingness to fund airport projects is often seen as a key example of this: While the World Bank has invested less than US$ 0.5bn since 2000, China’s Export Import Bank has been ready to fill the gap, putting US$ 700m, US$ 150m and US$250m in airport projects in Sudan, Togo and Ethiopia to name just a few.
But aviation is also where the neat contrast between the US and China ends: For an airport needs planes. And in many cases those planes come from Boeing, financed by the Export Import Bank of the United States. Ethiopia is not only the third largest recipient of Chinese development funds in Africa, it also has the largest portfolio with the US EXIM bank on the continent. And while Sinohydro, big in the business of building airports, takes the majority of China EXIM’s financing in Africa, Boeing makes up over half US EXIM’s loan guarantees. For aviation it takes at least two to tango, and both the US and China seem quite happy partners in the venture.
The parallels go beyond individual industries: the two countries don’t only spend a remarkably similar 0.1% of GDP on development, they also both use alignment of countries in votes at the UN general assembly as helpful parameter for distributing financial support.
All of this doesn’t really indicate that the US and China like to work together though. Direct contractual relationships might just be a step too far for actors coming from such different backgrounds. Looking at procurement data of the World Bank tells a different story: Chinese companies execute 15% of Bank funds in Africa, far more than anybody else. Sinohydro, China EXIM’s darling, is also the largest implementer of World Bank projects:
Maybe the two superpowers aren’t so far apart after all. Wielding political influence and making money seem pretty important objectives for both. Where that requires collaboration and compromise, the US and China have a fairly pragmatic approach. In the case of the DRC, that made for a rather anti-climactic ending: Instead of a grand solution indicating a new order of sorts, the Chinese accepted some downsizing to the financing package and the withdrawal of a government guarantee. The IMF then fixed the rest, calculating concessionality of the Chinese loan in a way that made it fit their conditions. And just a year after signing the record breaking deal with China, the DRC was granted US$ 12bn in debt relief.
