China in the DRC: development or exploitation?

26 February 2014 | Victoria Waldersee

Victoria is a BA Chinese and Economics student at SOAS, University of London. Issues of globalisation, foreign trade and international justice are her main areas of interest; more specifically improving the relationship between Chinese, Western and domestic organisations in developing countries. As well as studying full-time, Victoria manages the website and volunteer programmes of the Rural Development Society, a community-based organisation aimed at improving livelihoods in Shan State, Myanmar (Burma). In addition she is an assistant teacher for New Turn’s School programme, conducting workshops on Diplomacy and Conflict in state schools in London

The China-Africa relationship is arguably one of the most contentious topics in development today. Some hail China as the pioneer of a new development paradigm, creating capital and jobs where the West has created dependency and debt. Yet China makes no secret of its aims to secure natural resources for its own economic growth, avoiding interference in domestic political affairs – an approach welcomed by many African leaders tired of conditionality-ridden loans.

DRC Agrees To Sino-Congolese Co-op

DRC Agrees To Sino-Congolese Co-op

The Democratic Republic of Congo is a country with a turbulent history of colonialism, violent civil war, food insecurity, and one of the highest incidences of rape worldwide. In 2007, a joint venture between SinoHydro, China Railway, China Exim Bank, and Congolese state actors created Sicomines, a six-billion dollar mining project set to generate $54 billion in revenues over the next 25 years, three times DRC’s current GDP. Half the original investment will go towards building roads, hospitals, hydroelectric dams, and health centres. These will be built on loans on interest varying between 4% and 6%, though $1.07 billion of the money is interest-free. Supporters expect the project to bring real growth to a country which, in spite of decades of aid and co-operation run according to Western paradigms, is still branded the world’s most underdeveloped nation.

However, as with many of China’s investment projects in Africa, countless ambiguities remain. Recent estimates doubt the mine will create as much revenue as originally hoped; China EximBank has already pulled out, Inconsistencies prevail regarding accountancy, taxation, and sharing of profits. The lack of adequate contracts, trade unions, wages, and clear-cut plans on how and when the promised infrastructure will be built are yielding the usual damnations of China-Africa investment as an exploitative, neo-colonialist, and purely self-interested endeavour.

This is an oversimplification of the facts. The Chinese are increasingly aware that their poor track record of environmental and social responsibility is damaging their reputation, and are taking active steps to amend this. The percentage of Chinese businesses in the Fortune 500 who considered social impact an important part of their strategy went from 36% to 75% between 2009 and 2011. Government policy depicts corporate social responsibility (CSR) not as a moral imperative, but an economic one, showing that improving employment conditions and sustainable practices can have positive effects on long-term productivity.

The DRC sits on 24 trillion dollars’ worth of mineral wealth – 40% of the current global economy. Sicomines represents an economic model which could turn that wealth into jobs, infrastructure, schools, and hospitals. Serious problems of transparency, wealth distribution, and working conditions remain and must be addressed; however, if that were to happen, the Congolese may finally be able to benefit from the wealth which lies under their feet.

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