The Specter of Global China

Politics, Labor, and Foreign Investment in Africa

By Ching Kwan Lee

The University of Chicago Press

Copyright © 2018 The University of Chicago
All rights reserved.
ISBN: 978-0-226-34083-8

Contents

List of Abbreviations,
Preface,
1 Unnatural Capital: Chinese State Investment and Its Travails in Africa,
2 Varieties of Accumulation: Profit Maximization and Beyond,
3 Labor Bargains: Regimes of Exploitation and Exclusion,
4 Managerial Ethos: Collective Asceticism versus Individual Careerism,
5 Contesting Capital: Aspiration and Capacity from Below,
6 Eventful Global China,
Appendix: An Ethnographer's Odyssey: The Mundane and the Sublime of Researching China in Zambia,
Notes,
Index,
Figures,

CHAPTER 1

Unnatural Capital: Chinese State Investment and Its Travails in Africa

A specter is haunting the world — the specter of "global China."

An economic powerhouse of vast proportions, China has reached an expansionist moment after more than three decades of sustained growth. Overcapacity, falling profit rates, underconsumption, shrinking demand from traditional export markets, and scarcity of strategic resources are major imbalances that have driven Chinese corporations, workers, and entrepreneurs to go abroad in search of new opportunities. Since the early 2000s, encouraged by Beijing's "going out" policy, Chinese outbound direct investment has grown from virtually nothing to about US$100 billion per year in 2015, making China the world's third-largest source of foreign direct investment (FDI).

The rapid pace and massive volume of this outward flow of capital and labor have cast China's miraculous economic growth in an ominous light. The country's recently announced infrastructure initiative "One Belt One Road," which promises construction of roads, railroads, and ports spanning Southeast and Central Asia, the Middle East, and East Africa, to be financed by a China-led multilateral bank, conjures up in many people's minds Chinese predation and threat on a global scale. Nowhere is the specter of a "Chinese scramble" more salient and controversial than in sub-Saharan Africa. "China in Africa" has become a popular subject of global media reporting and think tank publications, a burgeoning new field of academic studies, and even a focus of dedicated research institutes and programs. Being singled out and problematized, Chinese capital is widely perceived as "unnatural" in a neoliberal world order that otherwise naturalizes the market and upholds the principle of free capital flow as sacrosanct. No other national source of investment has stirred a comparable level of concern and consternation in Africa, where some of the world's fastest-growing economies in the past decade are located andwhich therefore has become a popular destination of FDI from a wide range of countries.

A cursory glance at a few statistics illustrates the curiously disproportionate attention Chinese investment has attracted. Despite being the most visible and discussed, China is emphatically not the leading investor in Africa, whether in terms of stock, flow, or rank order of capital from the global North or the global South. The growth of Chinese FDI in Africa is real: it increased 46 percent per year, on average, from 2000 to 2010. From a stock of $56 million in 1996, Chinese FDI in Africa rocketed to $3.2 billion in 2011, with an accumulated stock total of $16.24 billion by 2012. But China's FDI stock in Africa represents only 3.82 percent of the country's total outward FDI stock. China accounted for only 4 percent of FDI flowing to Africa by the end of 2011, according to a World Bank report. A 2013 report from the United Nations Conference on Trade and Development (UNCTAD) ranked China the sixth-largest source of investment in Africa by accumulated stock (behind France, the United States, the United Kingdom, Malaysia, and South Africa, in that order), and fourth by flow (behind France, the United States, and Malaysia, in that order) at the end of 2011. Analyzing central bank data from forty African countries, African Economic Outlook confirmed that the European Union and the United States were still the dominant sources of investment, contributing about 85 percent of FDI to Africa from 2000 to 2005, and 83 percent from 2006 to 2010. As this book went to press, World Investment Report 2016, published by UNCTAD, found that China's FDI stock in Africa ($32 billion), despite a threefold increase from 2009 to 2014, trails behind that of the United Kingdom ($66 billion), the United States ($64 billion), and France ($52 billion).

In the global public media, these systematic longitudinal statistics are routinely drowned out by more sensationalist, blatantly flawed journalistic reports. Deborah Brautigam wrote two monographs dispelling the many myths about China in Africa growing out of widely circulated but erroneous reports by reputable media outlets. These errors range from overestimating the size of Chinese loans, as when a reporter mistakenly substituted the term US dollar for the Chinese currency yuan, to relying on false rumors as evidence for the existence of Chinese land grabs. In response to the perceived magnitude and success of Chinese investment, a global rhetorical battle has emerged between a largely Western discourse of Chinese neocolonial plundering and blatant disregard for human rights, on the one hand, and Beijing's lofty claim of promoting South–South cooperation, free of hegemonic aspirations or World Bank–style conditionality, on the other. As articulated by politicians, policy makers, and public opinion leaders on both sides, these attention-grabbing discussions of China in Africa often conflate China's ambition and its accomplishments, misconstrue Chinese capital as a quantifiable thing rather than as a set of contested processes, and impute "Chinese-ness" to Chinese investors without comparing them with non-Chinese ones.

This book reinstates these critical but repressed issues: what has Chinese state capital actually done, through what processes and mechanisms, and how does it compare with other types of foreign investment? "Is Chinese capital a different kind of capital?" is a globally significant question that cannot be answered by rhetoric or statistics. I broach this question with a comparative ethnography of Chinese state capital and global private capital in Zambia's copper and construction industries. Specifically, I ask: What are the distinct mechanisms, interests, power, and limits of Chinese state capital in Zambia? For African states and labor, under what conditions will Chinese state investment become an alternative to global private capital?

Understanding the "China Difference"

I should be clear from the outset regarding what I mean by Chinese investment and Chinese state capital in this book. The global discourse about China in Africa has been hampered by most writers' generic use of the term Chinese investment, glossing over its significant internal diversity and the lack of control by the Chinese government over many companies originating from China. In Zambia, for instance, there is no official or institutional representative for Chinese investors individually or as a group. The two top Chinese officials posted in Lusaka by Beijing are the Chinese ambassador, sent by the Ministry of Foreign Affairs, and the economic and commercial counselor, sent by the Ministry of Commerce. These two officials do not have legal authority...