CSIS ROUNDTABLE ON CHINA-AFRICA

C O N F I D E N T I A L SECTION 01 OF 04 SHANGHAI 007122

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SUBJECT: CSIS ROUNDTABLE ON CHINA-AFRICA

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CLASSIFIED BY: Mary Tarnowka, Chief, Political/Economic Section
, U.S. Consulate Shanghai.
REASON: 1.4 (b),(d)




1. (C) Summary: During a December 1 discussion between members
of the Johns Hopkins Center for Strategic International Studies
(CSIS) and Shanghai scholars, and representatives from BHP
Billiton and other Shanghai-based economic consulting firms,
participants disagreed about the impact of China's increased
involvement in Africa. CSIS delegation members noted that there
was a great deal of exuberance about Africa in Beijing, but
questioned whether China was prepared to deal with Africa's
problems. CSIS delegates noted that Chinese officials did not
appreciate the role of NGOs and ignored the issue of human
rights, and seemed oblivious to the negative impact of Chinese
trade and investment on the local population. Shanghai
participants noted the allure of the China development model for
African countries and said China was trying to play a positive
role in the region. Shanghai scholars said while China's
involvement in Africa was currently focused on energy issues, it
would become more pro-active on human rights in the future. End
Summary.




2. (SBU) A delegation from CSIS provided a briefing on their
recent trip to Beijing to Shanghai scholars, and representatives
from BHP Billiton and other Shanghai-based economic consulting
firms at a round-table organized by Australian-headquartered
global resource company BHP Billiton on December 1. The
delegation had participated in a conference on China in Africa
sponsored by the Ministry of Foreign Affairs and the China
Institute for International Studies on the margins of the
China-Africa Development Forum in Beijing and had met with a
number of Chinese African experts earlier that week. The
delegation consisted of representatives from prominent NGOs,
academia, and businesses, including International Republican
Institute President Lorne Craner, Oxfam America President
Raymond Offenshesier, National Defense University Senior Vice
President and Former U.S. Ambassador to Kenya William M.
Bellamy, Manchester Trade Ltd. Vice President Anthony Caroll,
CSIS Africa Program Director J. Stephen Morrison, and CSIS
Freeman Chair in China Studies Bates Gill.



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Exuberant Interlocutors

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3. (C) According to Morrison, the delegation arrived in Beijing
just three weeks after the China-Africa Summit and interlocutors
showed a great deal of exuberance and had a certain romanticism
about Africa. Interlocutors repeated over and over again the
same talking points when discussing China's relationship with
African countries. First, China and its development model were
very alluring to Africa. China was able to transform itself
from a chaotic, poor country into a developed, stable country.
China also had a legacy of solidarity with African nations and
had never been involved in a conflict in Africa. In addition,
China's non-interference policy meant that it provided
assistance with no strings attached. This was in contrast to
Western countries which were too developed and had been involved
in conflicts in Africa.




4. (C) Interlocutors also stressed that the recent summit was
the most important China-Africa summit since these summits were
launched in 2000. This summit cemented the relationship.
Chinese experts also stressed that Africa itself had crossed a
threshold and was now in a period of enduring stability. While
interlocutors acknowledged that there were cultural and language
problems, they were upbeat overall about the relationship and
the prospects for future cooperation.



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Problems?

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5. (C) According to Morrison, delegation members were concerned
with several aspects of their discussions. First, Chinese
interlocutors seemed to have a simplistic view of African public
opinion. According to the interlocutors, everyone in Africa
loved China and there was no differentiation in the opinions of
African people. This did not seem genuine. Later in the
conversation, Manchester Trade Ltd. Vice President Anthony
Carroll said he had talked to many African trade ministers who
often complained that China was flooding the African markets
with counterfeit textiles. This had caused the textile sector
to collapse and hurt domestic cotton production. African trade
ministers told him that they did not raise this issue with their
Chinese counterparts because they did not want to anger China.
They believed China was a potentially valuable economic ally and
were looking past these irritants to maintain the relationship.




6. (C) Second, there was a great absence of data about how
projects would be implemented. Interlocutors could not provide
detailed information on targets for cooperation, where the money
would go, or the priorities for cooperation. Third, China did
not appear to be prepared to deal with any future conflict.
Although Africa was currently in a period of stability, this
stability needed to be consolidated and the situation could
quickly deteriorate. At a later point in the conversation,
Craner noted that by the second day of discussions,
interlocutors appeared to realize that China would encounter
problems in Africa in the future and were more open about
discussing how to deal with them.




7. (C) Fourth, delegation members, many of whom came from NGOs,
were disappointed with Chinese interlocutors' lack of knowledge
about NGOs or civil society. Oxfam America President
Offenhesier said it was hard to have discussions with Chinese
officials about NGOs as they did not have a "common vocabulary."
A delegate from the Open Society Policy Center noted that
Chinese interlocutors only discussed issues from the government
perspective. To resolve problems in Africa, there needed to be
people from all sectors at the table. Delegates noted the
reluctance of interlocutors to discuss human rights and Craner
said it was clear that China's Africa policy was dominated by
strategic considerations.




8. (C) Fifth, Morrison said it was unclear whether the Chinese
government was coordinating the actions of its companies or was
aware of the damage the companies were causing through corrupt
business practices, and lack of adherence to international labor
and environmental standards. A business sector delegate said
that there appeared to be competition among these companies for
resources in Africa and it was not clear if there was any
coordination. There needed to be more transparency in this
area. He was also concerned that interlocutors did not have an
appetite to discuss how to deal with conflicts if they broke
out. Chinese companies would likely face the same problems as
Western companies who have had to deal with civil violence and
attacks on their installations.




9. (C) Some delegation members noted that there was a lack of
understanding by PRC companies of the concept of Corporate
Social Responsibility (CSR). During the delegation's meeting
with a CNOOC Vice President, the Vice President said CNOOC
aspired to be an international, globally responsible company.
However, when the delegation pushed him on this issue, he could
not provide a clear definition on what this meant. According to
Carroll, the Chinese government was vulnerable to criticism
because of the rapacious business practices of some Chinese
companies and needed to be more active in supervising these
companies.



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China Model Suitable for Africa


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10. (C) BHP Billiton China President Clinton Dines said that
the Chinese development model was indeed alluring, and, perhaps,
more relevant then the Western model to African countries.
Chinese companies and the government were very proud of their
model and had no doubts that China would continue to expand. In
addition, Chinese companies were able to build factories and
goods very cheaply. While these products might not be better
then Western products, their price made them suitable for
developing country consumers. For example, a Chinese company
could build a factory at a third of the price and twice as
quickly then a company like BHP Billiton. While the factory
might not have all of the "bells and whistles" of a BHP Billiton
factory, it would be able to get the job done. Dines added that
frankly, Western involvement in Africa had been undistinguished
and it was understandable for African nations to want an
alternative model.




11. (C) According to CLSA China Macro Strategist Andy Rothman,
China's Africa policy was not solely driven by strategic
considerations, since there were real commercial interests in
Africa. In particular, Chinese companies were interested in
becoming global players and looked to places like Africa and
Venezuela as attractive places to invest. Unlike Western
countries, African countries welcomed Chinese investment. He
noted that the Chinese government had also become savvier about
monitoring companies investing overseas. The government
provided many of these companies with loans to go abroad. In
the past, there were few repercussions for companies who
defaulted on loans. Now, if a company defaulted on a loan, the
government would no longer lend to it. Finally, the Chinese
government's involvement in Africa was driven, in part, by its
desire to become a responsible stakeholder. It was trying to
improve relations with all of its neighbors and saw Africa as a
place where it could demonstrate that its policies were
constructive.




14. (C) Paul French, an analyst from Access Asia, added that
some Chinese companies did understand CSR and were taking on
some CSR concepts. He said as Chinese companies became more
global, they began to pay more attention to their images. These
companies understood that consumers did not want to buy products
from a company that had bad business practices. Therefore, some
companies such as Haier had become increasingly involved in
charities and paid attention to environmental issues.



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Shanghai Scholars: Energy Needs Driving Policy

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15. (C) Shanghai Scholars noted the important role played by
African nations in the UN. Jiaotong University Center for
Rim-Pac Studies Vice Director Zhuang Jianzhong said that China
owed Africa because many African countries supported its bid to
become a member of the UN. Fudan Center for American Studies
President Shen Dingli added that African votes were needed to
defeat attempts by Taiwan to join the UN General Assembly and
were critical in overcoming Japan's attempts to become a
permanent member of the UN Security Council. Both scholars
touched on human rights issues. Zhuang said China still viewed
the world as a state-based system and therefore was reluctant to
interfere in other countries' affairs. For example, China had
not interfered in Darfur because the Sudanese government opposed
international intervention. He added that China also believed
that every country had its own democratic process and agenda
which should not be decided by outside countries.




16. (C) Shen said that, for the present, China was focused on
its own economic development and cared less about value-added
international relations issues such as human rights. China
needed energy resources to sustain its growth and for this
reason countries such as Angola and Sudan had become very

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important. China did care about human rights and, in the long
term, would become more active in this area. Shen added that
this mercantilist attitude had led some African countries to
criticize Beijing for implementing a "new colonialism." Shen
said that this was an important message and China needed to
improve its Africa policy. First, while China still believed in
non-interference, it had been active in encouraging African
nations to act responsibly. For example, during the
China-Africa Summit, President Hu Jintao had a one-hour meeting
with the President of Sudan on the domestic situation in the
country. Second, the government had strengthened its
supervision of Chinese companies in the region. If a company
embarrassed the Chinese government, then the government would
become involved to try to correct the situation. Finally, the
Chinese government understood that it could not just exploit
African countries, but also needed to help these countries
develop their economies.




17. (C) A BHP Billiton Chinese-national analyst criticized the
delegation as being too U.S. centered and asked why the
U.S.-China relationship should dominate the China-Africa
relationship. Africa could be the next largest market for
Chinese consumer goods and China could help Africa to develop
quicker and better than could the West. He added that China was
still in the process of developing and improving its own human
rights. It was not qualified nor did it desire to teach Africa
any human rights lessons. Human rights should not be a
pre-condition to development. Another BHP Billiton
Chinese-national analyst said that there was no need to panic
about Chinese companies. These companies had just begun to
invest in Africa and it was too early to determine what effect
they were having on African countries.
JARRETT