By Amb. Emmanuel Mwamba
From 1405 to 1433, Chinese mariner, diplomat, explorer and fleet admiral, Admiral Zheng He, from the Ming Dynasty, carrying the world’s largest fleet of ships with 63 junks and 28,000 men conducted expeditionary voyages to South –East Asia, Western Asia and horn of Africa and East Africa.
To his guests, he brought tea, chinaware, silk and technology and in return received such novelties and trophies as Ostriches, Zebras, Camels, Ivory and a special Giraffe from Malindi in modern-day Tanzania.
Despite this unprecedented imperial might, Zheng’s journeys were not of conquest but of trade, exploration and diplomacy.
Zheng did not occupy an inch of foreign land, nor did he take a single slave!
This cannot be said of later and similar voyages by the Portuguese, Spanish, French and the English.
Zheng’s exemplary conduct evolved into a culture that has taken deep-root in the minds and hearts of Chinese people of all generations.
Imperial China took no colonies, no slaves, no territories even when it could.
It is therefore, not about to take new colonies.
China’s foreign policy and relationship with Africa is founded on a relation steeped in mutual development, shared values, solidarity and offers assistance without any political conditions or strings.
Recent annual trade between Africa and China reached an all-time high in 2014, when it capped at $215billion with Angola, South Africa, Congo DR, Nigeria and Egypt being among the largest exporter to the Asian country, but weak commodity prices have recently reduced the value of exports to about 128billion a year.
In the last 18 years, China has disbursed over $136 billion in loans and grants for projects to African governments and state-owned enterprises, with Angola said to have been the largest beneficiary since 2000 followed by Nigeria and South Africa. To support trade, China has also extended lines of export credits, supplier’s credits and commercial financing.
China has also helped finance some of Africa’s recent largest infrastructure projects that include; the 1,344km Lobito-Luau Railway in Angola, Addis Ababa Light Rail Transit in Ethiopia, Kigamboni Bridge 680km connecting the Creek and Dare-es-Salaam, the Abuja-Kaduna railway project in Nigeria, the Ethiopia-Djibouti railway linking the Port of Addis-Ababa to the port of Djibouti
During the third Forum on China-Africa Cooperation(FOCAC) 2018 held in Beijing, President Xi Jinping pledged $60billion in concessional loans, grants and export lines of credits to Africa, a similar amount pledged during the FOCAC 2015 held in Johannesburg, South Africa.
China has in recent times, emerged as Africa’s biggest contributor to its infrastructure development and has built; roads, rails, bridges, harbours, airports, ports, stadiums, prestige presidential palaces and government offices all over Africa and has provided thousands of scholarships for young students every year.
CHINA-ZAMBIA RELATIONSHIP- A brief history
On 11th November 1965, Ian Smith declared the Unilateral Declaration of Independence of Rhodesia entrenching the continued white supremacist illegal rule and an affront to the prospect of independence aspiration for its majority people.
Zambia’s founding president, Kenneth Kaunda denounced the new regime and its illegal rule and pledged to adhere to sanctions imposed on the Ian Smith regime.
This action alone attracted severe economic consequences and adverse effect on the young and vibrant economy.
Zambia had been until recently part of the Central African federation comprising Southern Rhodesia, Northern Rhodesia and Nyasaland and although the federation was abolished in 1963, the economy was inter-twined to that of Salisbury.
During this period, Zambia’s economy was performing very well posting high growth rates averaging 7.7%, enjoyed low level unemployment, low inflation rate with a GDP per capita being the highest in the sub-region at $950.
Southern Rhodesia was Zambia’s largest trading partner and the main supply route to the sea. The imposition of sanctions against Southern Rhodesia complicated matters as the country was surrounded by white minority states in Angola, Southern Rhodesia, South-West Africa, Mozambique and apartheid South Africa.
This forced the country to invest in large capital projects such as the Great North Road, Tazara, Tazama and Indeni Refinery and amounts to re-route its import and export trade through Dar-es-Salaam instead of Durban in South Africa, Beira in Mozambique or Lobito Bay in Angola.
Further at the height of the liberation movement in Southern Africa in the 1970s and 1980, Zambia hosted the ANC of South Africa, FRELIMO of Mozambique, SWAPO of Namibia, ZAP and ZANU of Southern Rhodesia, and Angola’s MPLA, UNITA and FNLA.
Zambia was forced to invest in military hardware to fend off aggression as it frequently suffered military raids by forces from Ian Smith or apartheid South Africa or Portuguese army running what they referred to as overseas territories (Mozambique and Angola) pursuing liberation camps.
Further it had to offer logistics to the liberation movements and host refugees, exiles and displaced persons from these countries
It is during this dark period that China’s support is remembered mostly by its support to the monumental projects of a road, railway and pipeline to re-route Zambia’s access to the sea from Durban, Lobito Bay and Beira; to Dar-es-Salaam.
This resulted in the construction of an all-weather tarmac road, the Great North Road (which was gravel road known as the Hell-run), the Tanzania-Zambia Railways (TAZARA), a 2000km railway line and district Railway Stations from Dar-es-Salaam to the central town of Kapiri Mposhi and a 2000km oil-pipeline from the port of Dar-es-Salaam to Ndola known as the Tanzania- Zambia Mafuta (TAZAMA).
THE IMF, WORLD BANK AND THE WEST
After a dalliance with socialist policies in the 1969- 1990, Zambia returned to multiparty democracy in 1991 and embraced liberal democracy and policies and now looked to the West again.
At the behest of the World Bank and the International Monetary Fund, Zambia was forced to restructure its economy, abandon subsidies, abandon its state-owned enterprises in a policy of accelerated privatisation program.
Zambia was forced to sell both its loss, and profit-making parastatals numbering over 375 companies. This policy alone saw a thriving manufacturing and industrial base wiped out leaving only those in lucrative commodities such as sugar, cement, and brewery thriving-but in private hands.
It saw the death of its national airline as Zambia Airways was liquidated although loss-making had an extensive asset base to support a restructured turn-around.
The clearest negative impact of privatisation was in the mining sector were the mining giant ZCCM was placed in private hands and the sectors contribution to GDP fell significantly as profits and benefits served the new owners of large scale mine houses based in foreign capitals.
With new owners, having negotiated long-term mining development agreements that accorded them paying low corporate tax, tax exemptions and benefits, the mining sector was now a marginal industrial contributor to taxes in Zambia.
The worst impact was felt on the Copperbelt were towns became almost ghost towns and social amenities such as roads, hospitals, play parks, clinics, sports stadiums and facilities previously supported by ZCCM almost collapsed as new owners could not commit similar investment and the facilities were handed back to the state or communities.
Similarly, support industry to the mining sector, died as procurement of equipment, machinery and supplies were done abroad with only paltry value procurement done locally. Even foundry, fabrication and machinery products that had been sourced locally for decades was now supplied by foreign companies.
In August 2002, global mining giant, Anglo-American pulled out of Zambia and abandoned copper mining. This paused a serious financial blow to government. Just 22 months before, Anglo had acquired the KCM assets. The mining giant favoured an absolute buy of the former ZCCM conglomerate but the government of Frederick Chiluba unbundled the parastatal mining giant.
Anglo-America stated that the prospect of turning around KCM, which was still the largest copper producer after unbundling, was no longer feasible.
This was a big blow especially the constant threat of loss jobs for thousands of workers.
Although liberal policies set a foundation for better economic prospect of the country, the speedy and wholesome privatisation exercise left the country reeling in rising unemployment, poverty and a decimated industrial and manufacturing base.
It is during this difficult period that China Non-Ferrous Metals (CNMC) acquired another smaller mine facing closure-Chambeshi Copper Mine for $27million in 1998. The company saved thousands of jobs.
CNMC proceeded to rehabilitate the mine, built a munition factory and invested over $130million in a new extractive and processing smelter.
China also pledged to invest in the textile industry by investing $200million in Mulungushi Textiles based in Kabwe.
But the textile industry has been a difficult sub-sector with the flood of, coincidentally, cheap clothes from China, and second-hand clothes from the USA making un-competitive for the local textile industry.
From then on, Zambia increasingly looked to the East for its development agenda.
CHINESE FUNDED PROJECTS IN ZAMBIA
Since then, the relationship between Zambia and China has been taken to a higher level with bilateral trade jumping from $100million a year in the year 2000 to now about $3.5billion annually.
A combination of loans, grants and aid has seen Chinese projects in Zambia take centre stage especially for the country’s ambitious infrastructure projects.
The country is for the first time enjoying, infrastructure development seen only since the boom years of the early 1970s. New projects in roads, bridges, airports, hospitals, stadiums, hydro-power, digital migration, telecommunication towers and housing projects have been done with project finance, loans and grants from China.
It is these loans associated with these projects that have raised a stormy and robust debate in Zambia and elsewhere, and the now recent claims of colonialism in the event that the country defaulted.
Off course this is ridiculous as Zambia’s debt to China is only about $3billion. If China has not taken over state owned enterprises or state assets in Angola (where the bilateral loans and project finance was in excess of $42billion), Nigeria, Egypt and South Africa where far higher amounts have been disbursed, how can it do it to Zambia.
ZAMBIA’S PLACE IN AFRICA
Zambia is located in the midst of Southern Africa, and offers central gateway to East Africa and the great Lakes.
It holds 40% of fresh water in Southern Africa and is endowed with mineral resources such as Copper, Cobalt, gold, manganese, Uranium, and coal.
Cobalt is now trading at $90,000 per tonne at the London Metal Exchange (LME), driven by fresh demand for battery technology in electric cars and electronics. There is a new international rush for cobalt found primarily in Democratic Republic of Congo (DRC) and Zambia.
Zambia also has special gemstones such as emerald (and holds the largest emerald mine in the world after Columbia), gold, silver, amethyst, and tourmaline.
It also has industrial metals such as lime, gypsum, aggregate and clay
Zambia has a favourable climate and some of the best soils in Africa and the country, although currently using only 10% of its arable land, is suitable for large-scale and commercial farming making it possible to be bread basket of Africa.
The country also hosts the seventh wonder of the world- the Victoria Falls. It also has over 13 spectacular waterfalls to almost rival the Victoria Falls.
It has a unique feature as the country’s wild life that include the big five, and rare species of birds remains in its natural habitat.
It has peace, security and stability so rare in Africa that its nascent democracy has seen power transfer done peacefully, has never been to war, has never had civil or military conflict.
To harness this excessive potential of natural resources and wealth and taking advantage of its geolocation, the country has embarked on diversifying its economy to be Southern and East Africa’s hub in trade, transport, aviation, and exporter of energy resources to the region.
Hence its keen partnership with China and all those states and multilateral institutions that share its ambitious goals.
HOW MUCH DOES ZAMBIA OWE CHINA?
Minister of Finance Margaret Mwanakatwe has conducted a debt management assessment and revised Zambia’s foreign debt from $7.9billion to $9.37billion.
Domestic debt stood atK51.87 Billion ($5.87billion) and arrears of $1.39billion.
From the above, Zambia’s debt to China is about 30% of external debt or 18.9% of total public debt.
Zambia ought to prepare more for the Eurobonds totalling $3billion with the $750million maturing or due in 2022.
Zambia issued the ten-year bonds in 2012($750million), in 2014 ($1billion) and 2015 ($1.25billion).
Government has announced that various redemption strategies are being pursued that include a sinking fund, a debt-buy-back and the refinancing of the current out-standing bonds. A debt management strategy has also been put in place.
However, two particular debts; the project finance of the hydro schemes and digital migration that has attracted most attention with claims that China had taken over the power company ZESCO and the public broadcaster, Zambia National Broadcasting Corporation(ZNBC).
Government does not offer state owned enterprises to any lender as collateral security. Further Government has stated that no default of any loan has occurred.
Government has stated that the loans from china are bilateral and the security is sovereign guarantee and insurance from SinoSure.
China Export &Credit Insurance Corporation (SINOSURE) is a state funded insurance company that supports China’s foreign economic trade, trade and development and cooperation. It provides risk protection for export of goods and services and as well as overseas engineering projects.
The loans being disbursed for the development of hydro-power projects of Kariba North-Bank and Kafue Lower projects, independent companies not related to ZESCO.
Government has also dismissed assertions that the country was in discussion for a debt swap with any lenders including China over state-owned enterprises or any other state assets.
CHINESE NATIONALS IN ZAMBIA
The biggest of Chinese nationals came during the construction of TAZARA Railway line and TAZAMA pipeline projects but most of them left shortly after the completion of the projects. Over the decades, others have come with the various construction projects.
Zambians have expressed concern especially the presence of non-skilled or low skilled workers such drivers, bricklayers and builders found in this projects.
But it’s the Chinese individuals or family members who have come into the country as emigrants and run small and medium enterprises; in retail shops, farming, poultry, brick-making and become the face of China in communities etc. that have attracted the most social media disdain.
Zambian politicians from across the divide have not helped matters by explaining who these new settlers are, but charge that this was not the type of investors they expected.
The anti-Chinese feelings are regularly inflamed especially for political purposes; and sometimes reach dangerous xenophobic incitement as seen in 2006 and now recently.
Other voices continue to urge government to ban the presence of Chinese SMEs in retail shops, poultry, brick-making, fruits and vegetables and other small sub-sectors deemed suitable or exclusive to Zambians only.
I find these arguments disconcerting and troubling as Zambians and other foreign nationals living in South Africa suffer similar dangerous sentiments!
We should be careful that we do not incite ill-feelings against foreign nationals living in our country which might quickly descend to xenophobic discourse as seen in South Africa.
The People’s Republic of China is the second world’s largest economy by nominal GDP and the world’s largest economy by purchasing power parity. China also has the largest total banking sector assets in the World.
China is also the largest lender to the USA with the USA debt to China in excess of $1.18trillion as of June 2018 held in treasury bills, notes and bonds.
China has the largest population in the world and it has made strategic decisions to provide resources to its industrial and manufacturing base and also feed its people.
It is imperative that Zambia keeps her relationship with China and secures its national interests but addresses the concerns.
The Belt and Road Initiative (BRI) development strategy adopted by China to promote connectivity through telecommunication, road, rail, ports and maritime to open up sea, road, air trade routes, offers an opportunity to Zambia to leverage its own infrastructure development ambitions.
While the rapidly rising fortunes of China has benefited Africa, and as it looks and locks its future with China’s ambition and reality, it should remember that the past grip of the West on Africa and its waning influence will not submit or yield to this new world order easily or without a fight.
The Author is Zambia’s High Commissioner to the Republic of South Africa, with Extra Accreditation to the Kingdom of Lesotho and Madagascar