Category Archives: resource extraction

Domestic Issues In China’s Development Model

There were several important points Wenran Jiang made in “Fueling the Dragon: China’s Rise and its Energy and Resources Extraction in Africa.” Jiang examines Sino-African relations through the lens of the Chinese development model, arguing that “China’s ‘miracle’ growth of GDP has come with heavy price tags on wages, workers’ welfare, the eco-system and political reforms” (2009:37). What are these costs?

1) China consumes 31 percent of the world’s coal, 30 percent of iron, 27 percent of steel, 40 percent cement, 20 percent copper, 19 percent aluminum and 10 percent electricity. Hence, the imperative to extract resources from the African continent. It’s worth noting that India, Canada, Switzerland, and other countries are involved in similar endeavors. In Zambia, for example, Mopani Mines is owned by Canada’s First Quantum Minerals, Swiss firm Glencore International and the Zambian government. Zambia’s biggest mining company, Konkola Copper Mine [KCM] is an Indian company based on London and listed on the stock exchange.

Heavy demands for raw materials and resources have contributed to a destruction of the environment both at home and abroad. In China, this is manifested in its pollution rates; 70 percent of rivers and 90 percent of city rivers are polluted. This lack of concern for the environment, though increasingly attended to in recent years, transfers over to their projects in African countries. Failure to enforce environmental regulations, as Jiang argues, is also part and parcel of the weakened African state to put protective structures in place.

2) The modernization program in China relies on the supply of migrant workers. Jiang writes, “Thirty years of reform has transformed China into a cut-throat, competitive capitalist market economy featuring severe exploitation of workers, especially migrant workers with sustained low wages. It is thus difficult to imagine that Chinese entrepreneurs and companies used to such domestic conditions would go to Africa and treat workers there any differently” (39). This point encapsulates the thrust of my research on labor relations.

Jiang’s point is a comment on our bounded conceptions of “Sino-African” relations. He urges researchers to reach deeply into our understanding of China’s domestic policies towards workers and their role in the strengthening of Chinese civil society. On an optimistic note, Jiang writes that Chinese leadership is paying more attention to the negative outcomes of the modernization efforts and have addressed these problems through greater protection of workers’ rights, implementing new procedures of work safety and transparency in civil allegations. What Jiang makes clear is that Sino-African relations is directly tied to what is happening at home. “If China’s cut-throat capitalism continues to externalize its negative aspects to Chinese practices in Africa, only corrupt regimes in some of African countries will benefit instead of ordinary people. And there will certainly be more backlashes of local resentment against Chinese presence” (58).

“Chinese practices” is heterogeneous and may produce unintended effects, in some instances, providing upward mobility to locals, especially in capital-intensive and highly skilled (meaning, less replaceable) sectors. It’s hard to tell at this point. I believe a proliferation of ethnographies can illuminate for us potential benefits and costs to China’s increasing presence on the continent.

India’s Engagements in Africa

Sanusha Naidu’s informative article in A Scramble for Africa delineates deepening involvement in resource extraction, entrepreneurial activities, diplomatic initiatives and strategic alliances.

According to Naidu, India is expected by 2030 to become the world’s third largest consumer of energy, surpassing Japan and Russia. Africa, particularly Nigeria, supplies 11 percent of India’s oil demands. Much of India’s involvement in Africa has been overshadowed by the Chinese, but it is quite apparent from Naidu’s discussion that it is a key player. For example, India’s national oil corporations are dispersed throughout the continent. In Cote d’Ivoire, a conglomerate of various Indian companies have invested over $1 billion. In Nigeria, the National Thermal Power Corporation has invested $1.7 billion, the Indian Oil Corporation $3.5 billion in oil refinery and $2 to $4 billion in liquefied natural gas plant and oil refinery. In Sudan, Videocon Group has invested $100 million.

Indian companies have also become involved in uranium exploration. Naidu mentions that in 2007, the government of Niger provided 23 permits to 3 Canadian firms, 3 British firms and an Indian company named Taurian Resources to excavate uranium in the country. In total, the firms invested $55 million.

In 2008, the outcome of an India-Africa summit included agreements that outlined commitments by the Indian government to provide $500 million in development projects across Africa in the next five years, creating an India-Africa peace corps dedicated to development projects, and doubling trade from $25 t0 $50 billion by 2011. Indian companies have assumed a significant presence in Zambia, with Vendanta Resources investing $750 million in copper mining. The Tata group also operates widely on the continent, committing to $800 million renovation of the Taj Pamodji Hotel in Lusaka, a vehicle assembly plant in Zambia, construction of a $12 million instant coffee processing plant in Uganda and more projects in Ghana, Mozambique, Malawi, Namibia, South Africa and Tanzania.

Naidu argues that the Indian government is strategically presenting itself as an advocate of Africa with comparable presence to China with a similar aim of exploiting Africa’s resources for its own economic development.