Obama sees no threat in China rivalry for Africa business

Pretoria: The US does not feel threatened by the growth of trade and investment in Africa by China and other emerging powers, US President Barack Obama said on Saturday.

Suggestions that he has allowed China to steal a march over the US in doing business with Africa have dogged Obama’s three-nation swing through the continent, but he said the increased Chinese engagement was beneficial for all.

“I don’t feel threatened by it. I feel it’s a good thing,” Obama told a news conference during a visit to South Africa.

The more countries invest in Africa, the more the world’s least developed continent can be integrated into the global economy, the first African-American US president said.

“I want everybody playing in Africa. The more the merrier.”

China has greatly expanded its reach in Africa since the start of the new century. It overtook the US as Africa’s largest trading partner in 2009, a February report by the US Government Accountability Office (GAO) showed.

China’s advantage in trade stems mostly from how much it sells to Africa. Chinese exports to the continent in 2011 were almost triple the level of US exports.

When it comes to investment flows, however, the picture is different. Data for 2007-2011 suggest US foreign investment flows to the region were larger than China’s, the GAO said.

“China’s role as an investor, aid donor and financier is not outsized,” Johns Hopkins University China scholar Deborah Brautigam wrote recently.

“Although Western countries fret about China’s growing role in Africa, the US alone disbursed more official finance to African countries than China did in 2010.”

Still, China’s influence looms large over the continent, partly because it has been so aggressive in its courtship.

Beijing and Washington should be partners in Africa to foster development and peace, said an official Chinese commentary after Obama’s made his remarks.

Obama’s stops in South Africa and Tanzania mirror a visit in March by then newly named Chinese President Xi Jinping, which could be seen as rivalry between the two superpowers on the African continent, state-run news agency Xinhua said.

“This mentality belongs to the past. It results from the West’s biased perception of China’s role in Africa,” Xinhua said. “It also misses the bigger picture in which Beijing and Washington, instead of being competitors undermining each other’s efforts, can actually work as partners in promoting Africa’s development.”

Resting On Its Laurels?

Obama’s visit to Senegal, South Africa and Tanzania will bring to four the number of countries in sub-Saharan Africa that the US president has visited in the last four years. He stopped briefly in Ghana in his first term.

In contrast, Chinese presidents and vice-presidents have visited 30 African countries over the same period, said Mwangi Kimenyi, a senior fellow at the Brookings Institution in Washington.

There is also a sense that the US may be resting on its laurels.

“There hasn’t really been a presence of the US companies since 1994, taking advantage of the new opportunities,” Haroon Bhorat, a professor at the University of Cape Town said recently, speaking of South Africa.

“So, you’ve seen new emerging markets entering into other emerging markets like South Africa and taking advantage of economic opportunities in a way where the US, already with a foothold, arguably hasn’t done enough.”

Obama’s aides have argued that he has had two wars and a deep economic crisis to deal with since he took office in 2009.

Obama has also said that US interactions with Africa have included goals of social and political development, unlike those of China, which he said were more narrowly focused on commercial benefits.

“A lot of people are pleased that China is involved in Africa,” he told reporters travelling with him on Friday.

“On the other hand, they recognise that China’s primary interest is being able to obtain access for natural resources in Africa to feed the manufacturers in export-driven policies of the Chinese economy.”

That relationship makes Africa an exporter of raw materials but does not create jobs in Africa and is not a sustainable model over the long-term, he added.

In Pretoria on Saturday, Obama urged African nations to be tougher negotiators in accepting investments from abroad.

“You produce the raw materials, sold cheap and then all the way up the chain somebody else is making the money and creating the jobs and the value,” he said.

“Make sure that whoever you’re dealing with ... you’re getting a good deal that’s benefiting the people here and that can help to spur on broad-based development.” Reuters