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China, India beating U.S. in race for Africa
Posted By F. Michael Maloof On 10/21/2012 @ 5:37 pm In Front Page,Money,U.S.,World | No Comments
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WASHINGTON – China and India have their own border disputes and are competing in the East and South China Seas, but now the two largest populated countries of the world are vying for influence in a new economic battleground – East Africa, according to a report from Joseph Farah’s G2 Bulletin.
The countries of East Africa are readily accessible from the Indian Ocean and account for an estimated 70 percent of India’s expanding export market in Africa.
Analysts say East Africa is regarded by India as a natural extension of its domestic business activities not only in corporate business but also for acquiring raw materials and production at very cheap labor costs.
In terms of development projects, India’s African investment is exceeding that of China.
India is primarily interested in energy extraction, manufacturing, financial services, agriculture and infrastructure development on which China also is focusing in spreading its own influence in Africa.
According to the open intelligence company Stratfor, India is expected to expand its business activities, including relocating corporations in Africa due to the slowing of growth in India itself.
Given East Africa’s close connection to southern Africa, India’s trade is expected to increase significantly in years to come, challenging China’s growing influence on the continent.
The effort by both countries has been increasing for a few years, with the effect that Chinese and Indian investments and trade are beginning to crowd out American and European firms in Africa’s emerging markets.
One American company involved in infrastructure work in Africa, General Electric, complained that Chinese and Indian construction companies have been undercutting job proposals by up to 60 percent.
A spokesman for the company said that its costs and profit structures “are simply too high” compared to Chinese and Indian companies. India’s Tata Motors and China’s Great Wall cars, for example, are more prevalent than U.S. cars. Indian companies are providing Internet service in East Africa with with new fiber-optic connections.
In mobile telecommunications, it is the Chinese firm Huawei that just came under scrutiny by the House Intelligence Committee for alleged electronic spying and potential espionage of telecommunications systems. Huawei and another Chinese company, ZTE, have denied the allegations but still may be discouraged from investing in the U.S.
“Unlike the standard Western doom-and-gloom analysis of the African condition, China and India hold the view that Africa is a dynamic continent on the threshold of a development take off, with unlimited business opportunities that would serve Chinese, Indian and African interests,” according to Fantu Cheru, research director of the Nordic Africa Institute.
As China’s economic opportunities grow, so does its military investment to protect its economic interests, which also could set the stage for Chinese and Indian confrontations on the African continent. China has entered into numerous bilateral defense and military exchange arrangements with African countries where it has the greatest investments and access to vital resources. Beijing also has become increasingly involved in collective security operations under United Nations auspices on the African continent.
“The deeper China ventures into the resource-abundant African continent, the more it stumbles upon various security challenges,” said the European Commission’s Jonathan Holslag, who outlined Beijing’s potential interests and concerns for Africa in an article titled “China’s New Security Strategy for Africa.”
The security challenges includes an increase of U.S. power on the continent, by almost double, while its arms sales also increase.
India similarly is increasing its military presence in Africa, especially along the East African coast, and has signed defense agreements with Kenya, Madagascar and Mozambique. It also has various training programs in these countries, including Tanzania and South Africa.
“Its naval dominance in the strategic maritime shipping lanes around Africa in particular makes Chinese security analysts worry about the safety of Chinese supply routes,” Holslag said. “Delhi has convinced island states such as Madagascar, Mauritius and the Seychelles to cooperate on maritime surveillance and intelligence gathering.”
In addition, India has increased its fleet presence in the Indian Ocean and has become one of the most powerful naval forces, with submarines, aircraft carriers and surface combatant ships.
China’s chief concern will be any attempt either by Western powers and India to block the straits through which vital resources transit.
“China’s growing military might and diplomatic assertiveness may lead to a more strident and unilateral security policy” in Africa, Holslag said. The one thing that could disturb that prospect would be the vulnerability of its long supply lines that will prevent China from resorting to unilateral diplomacy.
But just as China has become more assertive in its own region of the East and South China Seas, it could – but probably won’t for now – set aside any security cooperation in Africa because of what it sees to be challenges to its strategic standing on the continent.
Instead, it could decide to continue cooperation and collaboration with other countries in the region for now to help safeguard its vital economic interests in Africa.
“Unlike any other external power,” Holslag said, “it is in China’s interest to turn regional actors into flexible and globally supported organizations and by demonstrating strategic leadership and conflict management while doing so.”
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