Photo Gallery: African Ambivalence About Chinese Investments

Foto: ? Thomas Mukoya / Reuters/ REUTERS

Billions from Beijing Africans Divided over Chinese Presence

Chinese companies have pumped billions into Africa to secure access to natural resources, boosting countries' economies along the way. Ordinary citizens aren't reaping the benefits, though, and have become increasingly wary of the new investors.

In a three-part series, SPIEGEL is exploring fundamental changes occurring in Africa -- a continent the West has long written off, but is now being embraced by other countries. This is Part I of the series. An introduction can be read here , while Part II  explores the digital revolution's tranformative impact on the continent and Part III  shows how women in Africa are making great strides.

Everything is as it has always been: decayed rows of houses, weathered doorframes with intricate carvings, potholed dirt roads, fishing boats rotting on the beach and, in the middle of it all, the Boma, a stone fortress built by the former German conquerors in Bagamayo, a sleepy coastal town in Tanzania.

Bagamayo was the capital of the colony of German East Africa from 1888 to 1891, when the administrative seat was moved to Dar es Salaam because the shore in Bagamayo was too shallow for a real seaport. Since then, time seems to have stood still.

"But soon nothing will be as it once was in Bagamayo," says Marie Shaba, "because now the new rulers of the world, the Chinese, are coming."

The 65-year-old radio journalist is wearing a bright, mango-yellow kitenge, the traditional dress worn by Tanzanian women. She calls herself a cultural activist. For years, Shaba has been fighting to have Bagamayo, an important arena for the slave trade in the 19th century and for colonial history, declared a United Nations World Heritage Site.

But now Shaba fears that the sleepy town will disappear in the waves of progress.

This spring, Bagamayo was the focus of a story in international business news, when more than 400 newspapers worldwide reported that China  was making a low-interest loan of $10 billion (€7.4 billion) available for the construction of a modern container terminal 15 kilometers (9 miles) south of the city, and also planned to fund the establishment of a special economic zone in the hinterlands behind the port.

"This is good for Tanzania, very good. It's a poor country that will be making a giant step forward," says Janson Huang, 36. It's also good for him and his company. Huang manages the local office of Chinese construction company Group Six International in Dar es Salaam. A short, wiry man with a sparse moustache, he is dressed casually in an open, gray-and-white striped shirt and dark slacks. Huang speaks English well, and he speaks openly and directly.

This is unusual, as Chinese investors tend to shy away from the media. All other inquiries SPIEGEL made with Chinese companies registered in Tanzania were either rejected or not answered at all.

A Win-Win Situation?

The Group Six headquarters, in the Mikocheni industrial area, was not easy to find. The unpaved access road hadn't been named yet. The company is housed in an inconspicuous complex behind high walls topped with barbed wire. Across from the materials warehouse are two red Chinese lanterns, marking the entrance to the uninviting dormitory for the Chinese foremen. The manager's office next door is sparsely furnished with imitation leather armchairs and filing cabinets.

Huang, an engineer, has been working in East Africa for a decade, first in Kenya and then in Tanzania. He likes his new home and wants to stay here with his family. He would like to have a second child, preferably a son.

It wasn't easy to gain a foothold in Tanzania, he says, "but we Chinese are not afraid of taking risks. We see Africa  with different eyes than the West, not as a rotten continent, but as an economic region with enormous potential."

Huang's privately owned company has had a hand in constructing many buildings. Most recently, it built the Crystal Tower in downtown Dar es Salaam. "We invest and create jobs. It's a win-win situation for both sides," he says.

The only decoration in Huang's office consists of framed photographs on the wall, which depict him during the presentation of company donations for humanitarian purposes. He is especially proud of a group photo with President Xi Jinping. Huang, a young economic pioneer from China, is standing directly behind China's first lady.

'A Galloping Lion'

The photo was taken during Xi's state visit in late March, when China's newly chosen president signed the investment agreement for the Bagamayo port and special economic zone, as well as 17 other bilateral agreements. The president and party leader had just come from Moscow, and it was no accident that the second stop on his first trip abroad was in Africa.

China, Asia's economic superpower, is hungry for natural resources , energy, food and markets for its products. Africa can offer all of these things: about 40 percent of global reserves of natural resources, 60 percent of uncultivated agricultural land, a billion people with rising purchasing power and a potential army of low-wage workers.

"Our relations are at a new historic beginning," the Chinese president told his Tanzanian hosts. He noted that Africa is one of the world's fastest-growing regions, pressing forward like a "galloping lion."

Xi reminded his hosts of the warm relationship between the Great Chairman Mao Zedong and Tanzania's first president, Julius Nyerere. He also praised the two countries' shared struggle against imperialism and invoked the common interests of all developing countries. "We are true friends," he said. "We treat each other as equal partners."

Before giving his speech, Xi had made a symbolic gesture of handing over a monumental conference center, built by a Chinese construction company in the commercial capital Dar es Salaam, to the Tanzanian president. After his visit, he traveled to the BRICS summit in Durban, South Africa, to do business with representatives from the other states in this group: Brazil, Russia, India and South Africa.

'History Is Repeating Itself'

Tanzania is one of the focal points of the Chinese globalization strategy in Africa. In 2011, a large Chinese company invested $3 billion in coal and iron ore mines in the country. The enormous natural gas reserves off the Tanzanian coast -- an estimated 40 trillion cubic feet -- are of strategic interest. The China National Petroleum Company is currently installing a 532-kilometer (333-mile) pipeline from Mtwara, a port city in southeastern Tanzania, to Dar es Salaam.

When the pipeline is finished, supertankers docking at the new Bagamayo port will load liquefied natural gas, cooled to temperatures of minus 164 degrees Celsius (minus 263 degrees Fahrenheit), and transport it to the Far East. Mineral ores and agricultural products from Tanzania, Zambia and Congo will also be shipped from the port. The Chinese are also reportedly planning to build a naval base to protect their economic interests along the Indian Ocean.

"History is repeating itself," says Shaba, the journalist and cultural activist. "In the past, ivory and slaves were exported through Bagamayo. Today, it's natural resources."

Slaves once dubbed this town Bagamayo, which means "throw your heart away." Anyone who had not managed to escape the slave traders en route to the coast was lost by the time they reached Bagamayo.

China's economic offensive in Africa began before the turn of the millennium. At first, it was very gradual and inconspicuous. But, since 2000, trade volumes between China and Africa have grown twentyfold, reaching $200 billion in 2012. China has surged ahead of the old major powers - France, the United Kingdom and the United States -- to become Africa's most important trading partner.

A Chinese 'Irruption'

For years, China has engaged in an intensive campaign of visiting the continent. Presidents, heads of the government and ministers have traveled to almost all sub-Saharan countries that support China's policies and do not recognize Taiwan. They have forgiven debt, granted billions in loans, sealed defense deals and handed out generous aid packages. Most of all, however, they have secured access to Africa's natural resources.

China's "irruption onto the African scene has been the most dramatic and important factor in the external relations of the continent -- perhaps in the development of Africa as a whole -- since the end of the Cold War," wrote Christopher Clapham of Cambridge, England-based Center of African Studies.

There are now more than 2,000 Chinese companies and well over a million Chinese citizens in sub-Saharan Africa. They can be encountered in the major cities, in mining centers and oil fields , on plantations and even in the most remote jungle villages. They include managers and military advisers, doctors and agronomists, engineers and importers, itinerant traders, small business owners and contract workers employed on countless construction sites.

The Chinese are building conspicuous signs of their presence everywhere: presidential palaces, ministries, military barracks, conference centers, museums, stadiums, broadcasting companies, hotel complexes and large-scale agricultural operations. They are renovating railroad lines, paving thousands of kilometers of roads and building airports, dams, power plants and hospitals. Indeed, the Chinese are modernizing a large segment of the continent's infrastructure.

The Washington-based Center for Global Development estimates that, between 2000 and 2011, China provided about €75 billion in aid to Africa for a total of 1,673 projects, or roughly as much as the United States did in the same period. However, it is sometimes hard to tell where profitable investment ends and altruistic initiatives begin.

The competition from the West is often left empty-handed. Chinese state-owned companies operate with less bureaucracy, are faster and cheaper and, as a rule, provide financing for projects with low-interest loans from state-owned banks.

In return for developing the infrastructure, the Chinese receive lucrative licenses to exploit natural resources and fossil fuels. For instance, Angola, a war-torn and marginalized country until not too long ago, has become one of China's key oil suppliers, competing with Saudi Arabia for the top position.

An Unequal 'Marriage'

Other newly industrialized countries -- such as Brazil, India and Turkey -- have also discovered or rediscovered Africa. But no country is making its presence felt as strongly, from Khartoum to Cape Town, as China. Lamido Sanusi, the governor of the Central Bank of Nigeria, already sees a "whiff of colonialism" in China's activities.

Senegalese intellectual Adama Gaye is even more concerned, warning of a second wave of conquest. In his polemic "China-Africa: The Dragon and the Ostrich," China, the voracious dragon, and Africa, the naïve ostrich, face off as an extremely unevenly matched duo. "They take what they can get," says Gaye, referring to the Chinese. He even accuses them of creating "an apartheid-like culture" through social segregation.

Azaveli Lwaitama, 61, takes a more relaxed view. "The Chinese keep to themselves and are just doing their thing," he says. A lecturer in philosophy, Lwaitama speaks on behalf of the Vision East Africa Forum, a think thank dedicated to the future of East Africa. "We are being globalized at the moment and are experiencing an accelerated battle for a share of our resources." In his view, this is merely capitalism with a different, "Chinese face."

It's hard to understand what Lwaitama is saying due to the deafening noise coming from a nearby Chinese construction site, where pile drivers are pounding steel posts into the ground. Dar es Salaam is one big construction site, with skyscrapers, office complexes and bank towers sprouting up from the ground. The streets are constantly congested, and half of the pedestrians are walking around with mobile phones in their hands.

"We have arrived in the modern world. It all looks promising, but we shouldn't be fooled," says Lwaitama. Despite an economic growth rate of about 7 percent in 2012, the majority of the 45 million Tanzanians haven't benefited much from the upturn. On the contrary, Lwaitama says, the gap between rich and poor has only grown wider.

"The African leaders have married China, the most attractive bride on the world market, and now the West is complaining about its unwanted rival," says Lwaitama. But, he adds, the Chinese are just as motivated by profit as the Americans and the Europeans. "However, they have a key advantage: They are tougher than the whites. They come from poverty and can survive under the most difficult conditions."

Growth Trumps Freedom

The concept of "West is best" is now a thing of the past. Disappointed by Europe and America, where their continent has often been written off as a hopeless case, Africans have instead looked to the Far East. There, they have found a strong ally, one that is mainly interested in doing business and doesn't interfere in their internal affairs. China attaches no political conditions to economic cooperation, unlike the West, which, at least on paper, demands good governance, the rule of law, anti-corruption measures and protections for human rights.

This is one of the reasons that despots like Zimbabwean President Robert Mugabe hold the Chinese in such high regard. Cooperating with China fills their empty coffers and enables them to secure their hold on power. And Africa's dictators are not badgered when they oppress and prey on their own people.

For example, Beijing wasn't overly troubled when the regime in Sudan waged a criminal war of forced displacement in Darfur. It continued to supply the Sudanese government with weapons and blocked resolutions in the United Nations Security Council. Beijing's primary concern was that Sudanese oil would continue to flow. Next to Angola, Sudan is China's second-most important source of oil in Africa.

With Chinese economic dominance, the West's political influence is gradually being eroded. In authoritarian countries like Ethiopia, Rwanda and Uganda, the model of the Chinese development dictatorship, which prioritizes growth over freedom, has long been a welcome alternative to liberal democracy.

At the same time, Europe's and America's cultural influence is waning. China's Xinhua state news agency now has 28 offices in Africa, more than any Western competitor. The state television broadcaster CCTV, which opened a new headquarters in Nairobi last year, is gaining more and more viewers. Instead of airing the usual disaster reports, the station tends to broadcast "good news" from Africa and portrays China as a "true friend."

Growing Resentment and Violence

Nevertheless, there is growing resentment in South Africa, where there are reportedly already 250,000 Chinese. In the townships, the new immigrants are berated as "yellow masters." Among South Africans, the Chinese are often seen as greedy, ruthless and racist, as people who are exploiting Africa, flooding its markets with cheap products and ruining an already weak domestic industry.

Union leaders in Angola complain that Chinese companies are creating too few jobs for local workers. There are rumors in the capital, Luanda, that the Chinese are using prisoners as forced laborers on construction sites.

In Zambia, there are frequent protests against the starvation wages and inhuman working conditions in Chinese-run coal and copper mines. Chinese guards have repeatedly fired on striking miners in recent years, causing bloodbaths. One of the miners, after being struck by a bullet in July 2006, said: "They simply don't see us as human beings." Angry workers killed a Chinese manager during a wage dispute in August 2012.

In Zimbabwe, Chinese products are called zhing-zhong, or junk products that don't last. Chinese vendors were recently attacked in the Kariakoo market in Dar es Salaam. "They undercut every price and are spoiling our business," says a woman who runs a shop at the market.

A Gold-Rush Mentality

"What's all the fuss about? There's free competition everywhere in the world," says Janson Huang, the manager of the Chinese construction company in Tanzania. "We use our opportunities and are doing exactly what the West has done for centuries." The accusation that Chinese companies only hire Chinese workers is unfair, says Huang, noting that his company employs about 1,000 local workers and 50 Chinese in management positions. He says he encourages them to learn the official language, noting that it's important to adjust to the local culture.

Huang contradicts the cliché of the predatory Chinese pouncing on Africa. But now Huang has to cut our conversation short, as both of his smartphones are buzzing. The calls are about major projects in Bagamayo, where bids are being solicited. His company is expecting lucrative contracts.

India's Kumar Group plans to build a gas-fired power plant in Bagamayo, while a Japanese consortium has already submitted designs for the port facility. In recent years, HeidelbergCement, a German company, has invested $130 million in its subsidiary in Wazo Hill, a town in the special economic zone.

The gold-rush mentality is creating mixed feelings in Bagamayo. "People are anxious because they're not getting any information at all. Even the city administration doesn't know what lies ahead," says Baraka Kalangahe, 53, a project manager for a small environmental organization that is trying to protect the fragile ecosystem along the coast.

"Young people are hoping to get work, but many no longer believe it'll happen," Kalangahe says. She talks about fishermen worried about their future and about a small coastal village that was recently emptied out. "The government simply relocates people, offering little compensation in return," Kalangahe says. But, she adds, at issue is a project of continental importance, by far the largest port in Africa, which is projected to handle 20 million shipping containers a year.

But will it be a success story for Tanzania? The most recent Africa Progress Report serves as a warning to the government. In it, a panel headed by former UN Secretary-General Kofi Annan concludes that Africa would lose about $38 billion a year due to non-transparent natural resource deals and tax avoidance, a loss far greater than the development aid it receives.

Winners and Losers

In the current boom, which is primarily driven by China's offensive, the old asymmetry is still in place: Africa remains a supplier of natural resources, while added-value creation occurs somewhere else.

"A small clique gets rich, while the masses remain poor. That's the curse of the natural resource bonanza. But we have the opportunity to change this," says Godwin Nyelo, 52, a geologist and adviser to the Tanzanian government on mining issues and a member of the board of an Australian uranium company. He lives in Wazo Hill, where the newly established special economic zone is practically at his doorstep.

Nyelo often travels abroad to dispel doubts and recruit investors. In a PowerPoint presentation called "East Africa: The Big Leap Forward?" he shows a chart that looks like a colorful treasure map. His country's resources are identified on the map: gems, gold, copper, nickel, cobalt, magnesium, phosphate, kaolin, coal, iron ore, uranium and natural gas -- all the things the global economy desires.

"The government is planning a transparent resource-management system," Nyelo explains. "We aim for sustainable development, and we want all Tanzanians to benefit from prosperity."

In the coastal city of Mtwara, where the Chinese-financed gas pipeline is to begin, people already feel cheated. They want a gas processing plant to be built in the region, which would provide jobs. When riots broke out about six months ago, the government sent troops to Mtwara, and several demonstrators were killed. Eyewitnesses spoke of "civil war-like conditions."

The Tanzanian government is promising a rosy future, but the wananchi, or ordinary citizens, have become suspicious. A government-appointed commission estimates that corrupt politicians and businesspeople have already deposited about $5.9 billion in illegal earnings into foreign bank accounts.

Shaba, the cultural activist, fears that the cunning negotiators from China and other countries will take advantage of the naïve and corrupt government officials. "It's very tempting for them," she says, "because we're like chickens, which can't fly." Africa is in the process of being divided up a second time, she adds, just as it was at the 1885 Berlin Conference attended by European colonial powers.

Shaba is standing at the jetty in Mbegani, gazing out at the mangrove islands in the turquoise-colored bay. Soon this idyllic scene will have to make way for the new port. Then giant ships will put out to sea from Bagamayo, loaded with the riches of Africa.

Translated from the German by Christopher Sultan
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