The Rise of the Chinese Empire

Strategic analysis

1st Oct 2010


Something interesting is happening. Only specialist strategic entities have been examining it, but the world is changing in a profound way – something that may have a profound effect on Australia in the coming decades.

The rise of the Chinese Empire is under way. It is an Empire the likes of which China has not before developed, being an international Imperium. Some parts of this Empire are temporary, others will be longer lasting. Unlike the Second British Empire it is not a voluntary association of independent Dominions with a second tier of directly governed Colonies, and a subordinate sub-continental Empire. It combines aspects of the Belgian Empire in the Congo and of the Italian Empire, although it carefully conceals its colonial nature by utilising the venality of African power-elites. Crucially, it is converting them into Chinese satraps.

The focus of this Empire is in Africa. This continent, perennially short of labour, investment and good governance, is now being exploited for resources in a focussed way. Right across the continent, new transport corridors and their nodes are being built: railways, highways, pipelines: ports, rail yards and airports. The contracts for the resources are being signed, with payments to rent-seekers in the local power-elites. This establishes the machinery of colonial rule and establishes Chinese advisers in all levels of government. It works to provide preferential deals on Chinese trade and military equipment and implants military advisors and targeted money to buy all tiers of the power-elite.

This is not the first Chinese African adventure. During the Cold War, the Chinese built the 1,160 mile Tazara railway. Now decayed, it runs from Dar-es-Salaam to Kapiri Mposhi. In the 1960s, the United Nations surveyed the rail routes to link Dar-es-Salaam to the copper belt. However, the line was not economically feasible. The Chinese decided to construct the Tazara from 1970 to 1975 to serve the needs of the Presidents of Tanzania (Julius Kambarage Nyerere) and Zambia (Kenneth Kaunda), anxious to develop their nations and avoid dependence on either old colonial powers or the USSR. The cost was high, US $100 million when China was both poor and suffering through the bloodbath of the Cultural Revolution.

The grand Tazara plan was to be the spine of an agricultural corridor approximately 35km wide. The aim was efficient agricultural exports. The line was to open southern Tanzania’s resources, and allow land-locked Zambia to avoid the need to transit through economically flourishing, modern and well-governed (and then white-ruled) Rhodesia, now the failed Marxist totalitarian dystopia of Zimbabwe.

The scheme failed. By 1985 the seventeen trains per day was down to two, maintenance had collapsed and incompetence, corruption and lack of skilled personnel had reduced the railway to its current status. Tanzania and Zambia reportedly have maintenance debts of over US$500 million. The Tazara has 10% of the locomotives it needs, and 15% of the 2,000 wagons needed. This, for what was once the third-largest African infrastructure project, after the Aswan and Volta Dams.

There are many such examples of government-organised industrial disasters in Africa. Examination of colonial history shows that African colonies were always critically short of labour, especially skilled labour. What it had (and has) is vast areas of fertile land, which cannot be used due to lack of labour, investment, and good governance. Also foreigners who use land more profitably than the locals are disliked. This was clearly identified within Tazara. The project included rural electrification, local education and road building projects. A rural credit system, agricultural education program and fertilisers, machinery and modern seeds underpinned the agricultural project. None of it occurred – but China has learned from long, careful study of what did and did not work in European colonial experience in Africa.

Colonial examples and Settlement Schemes

The Chinese have been studying the experience of Belgium in the Congo, Italy in Libya (especially their 1930s colonial settler programs in the Benghazi-Derna region: Roman Cirene, a breadbasket of the Empire), and Rhodesia, which was the greatest economic and social success story in sub-Saharan African history.

The Chinese have learned that agricultural settlement by Chinese nationals will be difficult due to local resistance, but provides the greatest long term success and best governance outcomes, but Rhodesia was not saved by having the best government services, most reliable rule of law and cleanest government in Africa. The lesson? A ruling elite, no matter how well it performs, may be destroyed and replaced with a corrupt local kleptocracy if it lacks an Imperial protector. Finally, the Belgian Congo shows how to pillage African nations of their resources, but only if no long-term Imperial presence is desired.

The Chinese have a problem. Their one-child policy has left them with 20 million more young men than young women (the exact figure is a state secret). Unsurprisingly, Beijing wants to export labour. According to the Strategic Review for Southern Africa, Chinese males labour in construction and manufacturing in Kenya, Namibia, Botswana, Angola, Uganda, Sudan, Nigeria and Zambia.

Beijing also wants to settle colonists in Africa. About 12,000,000 Chinese villagers were displaced by the Three Gorges Dam alone, and even 10% of them would change the face of Chinese colonialism in Africa. However, land acquisition and mass migration on this scale is a ‘hot button issue’. While small numbers of Chinese farmers have been flowing into Africa for decades acquiring small farms and working them as Chinese-style market gardens, mass migration is different. A glimpse of Chinese intentions was obtained during the November 2006 China-Africa Summit in Beijing. There, Beijing undertook to double African aid by 2009, organise preferential loans, forgive debts and give African nations preferential trade relations with China. Jintao also promised to develop ten large agricultural demonstration stations promoting intensive agricultural methods, to improve local diet and promote exports.

In June 2009, the Chinese weekly ‘Economic Observer’, stated that China faced future pressures on food security and was planning to rent or buy land in foreign countries. In 2008, Beijing announced that US$5 billion had been set aside for African agricultural land, focussing on dry-land rice and grain production. Subsequent announcements indicate that China may be developing a long-term national food security plan similar to their national energy security plan 2000-2100.

This is hot, and Beijing has already been burned. In 2006 they announced a plan for a $2 billion ‘soft’ loan to Mozambique for a dam on the Zambezi, to irrigate a vast fertile area. Included was an agreement to settle 3,000 Chinese there. Local opposition started and nothing has been heard since. But this Italian-style ‘foreign settlers’ meme has legs in China, In September 2007 the head of China’s Export-Import Bank (Mr Li Ruogui), was quoted in the South China Morning Post as saying “Chongqing is … experienced in agricultural mass production [agri-business], while in Africa there is plenty of land but food production is unsatisfactory … Chongqing’s labour exports have just started, but they will take off once we convince the farmers to become landlords abroad.” This was followed by comments regarding financial support for such projects, but nothing has been heard since.

However, some unusual negotiations in Zimbabwe were reported in 2009, and the Marxist dictator Robert Mugabe has shown himself willing to massacre opposition tribes and take their land. His army slaughtered 25,000 Ndbele in Matabeleland after he took power during Operation Gukrahundi (Shona for ‘the early rain which washes away the chaff’), and there have been more such operations. The chairman of the ‘Crisis in Zimbabwe Coalition’ (Mr Arnold Tsunga) has described Mugabe’s activities as “smart genocide”. By this NGO calculation, some two million Zimbabweans seem to have vanished. There are three million Zimbabwean refugees in South African, and a million elsewhere, leaving about fourteen million, not the twelve million Mugabe’s government claims. China is Mugabe’s major supporter; their embassy even provided the giant cake for his recent 83rd birthday celebrations. Mugabe has turned prosperous, well-fed Rhodesia into a cesspit. If anyone would be willing to sell China large areas of land for settlement, Mugabe would be, and the victims would be the Ndbele he has already slaughtered.

Economic Colonialism

China buys about 70% of Sudanese oil. Sudan is a place where the Chinese-influenced and armed government is orchestrating genocide in oil-rich southern Sudan. Canadian public opinion was so upset that Canadian companies were forced to sell their oil interests in southern Sudan.

China purchased them.

About 30% of Chinese oil needs are met by African producers. They own equity stakes in new Nigerian and other oil and gas projects. Like Japan and South Korea, China has and is working to a 100-year national energy security plan. Unlike Japan and South Korea, China’s focus is on Africa. Unlike the old European colonial powers, the Chinese accord to long term plans, thinking in terms of over a century. Chinese policy documents clearly show that they have been studying the Imperial German Mittel-Afrika scheme of the 1890s. The pattern of their investments shows that they are engaged in opening up the east-west middle of the continent. Their strategy is clearly long-term. In view of the failure of every indigenously-ruled sub-Saharan state to deliver long term improvements to their populations, and the cataclysmic fate of the once-prosperous Rhodesia, their plan seems rational.

19th Century colonial history shows that Africa is dominated when the supply chains and transport infrastructure are dominated. The competitors for influence before1914 were the British ‘Cape to Cairo’ and German ‘Mittel-Afrika’ strategic plans. While the British won, the German scheme is being completed now by Beijing. At the heart of which are two railways: a southern one from Dar-es-Salaam to the Atlantic, and a northern one from Dar-es-Salaam to the Atlantic. The Germans completed a northern line from Dar-es-Salaam to Moshi in 1912, but never built something like the Tazara.

The German scheme needed cooperation from Belgium and Portugal to get trains across the Congo and Angola. They did not receive this, but from 2005 to 2010 the Chinese have. They rebuilt the Angolan Benguela railroad and have acquired permissions and land for rail/highway networks in Congo, Zambia, Tanzania and Angola. Beijing will not build turnkey operations for African governments – they have well learned the lessons of Tazara. They will work in joint venture partnerships where Beijing has the controlling interest, and where a significant amount of ownership is invested in the local government: much of this is the personal property of the local power-elite, making them dependent.

One crucial prize is access to the southeast edge of the African copper belt, at Kapiri Mposhi. North lies Congo, where massive resource projects centre on the mining city of Lubumbashi, which has a population of some 1.5 million. Congo received a Chinese investment package of US$9.3 billion in 2008. Chinese companies are re-opening, refurbishing and building copper and cobalt mines. These demand about 3,200k of railways and 3,800k of roads. Civil infrastructure construction includes hundreds of schools, hospitals and rural clinics: and two new universities. Beijing’s pay-off to 2035 is eleven million tons of copper (with associated lead and zinc) 620,000 tons of cobalt, control of the education of the next generation, and monetary control of Congo’s corrupt political system. Will Congo be an independent country or a Chinese economic satrapy in 2035?

What is happening in Africa now is unparalleled in intensity. Chinese resource companies are involved in oil and gas development in Sudan, which is already under pervasive Chinese influence. Sudanese Janjaweed are not driving black Muslims from Darfur into Chad for nothing, they are clearing them from oil and mineral prospects. Chinese companies are acquiring hydrocarbon exploration blocks in Nigeria, Angola and Algeria as well. Others are acquiring mineral leases and mines in Congo, Zambia and Zimbabwe. What is touted to investors as the biggest iron ore mine in the world is being built by the Chinese in Gabon, and they are looking to develop uranium mines in Niger. Transport systems for these developments are underway. Quietly, behind the scenes, they are looking to lease or buy land for large-scale agribusiness – using Chinese settlers.

Following the February 2009 visit by President Hu Jintao, when Tanzania’s new, Chinese-funded, 60,000-seat national sports stadium was opened, the University of Pretoria noted that China was Africa’s largest infrastructure builder, with China-Africa trade exceeding US$100 billion. The flow is resources to China and manufactured goods back, and it is expanding.

As in the Pacific, China focuses on trade and stays out of ‘domestic politics’. This means that the most repressive African kleptocracy opens itself to the Chinese. In turn, this enables the Chinese to build influence inside such regimes. Chinese investments are not linked to government reform because the investment is used as a way of suborning that government. So far, this is working well, and there has even been some ‘trickledown’, with per capita income in sub-Saharan Africa increasing by 1.8 (reliable figures are difficult to obtain) between 1997 and 2008 from the resources boom. Things are different from the earlier booms, when corruption, debt, and war terminated economic hopes. The corruption, debt and war are now being used as tools with which to dominate African governments by making the minority power-elites dependent for survival on Chinese money, security and infrastructure.

Conclusion

China is a rising hegemonic power in Asia, and plans various levels of domination out to the first, second and third island chains. Africa is of great importance to Beijing and it plans a different hegemony there. This will be based on European colonial models, modified by effective control through dependent local power elites. This approach offers control with plausible deniability. The West is helpless against it because the West insists on tying assistance to governance reforms inimical to the local power-elites. The Chinese exploit this. They have no interest in democracy, and after a dictator like Mugabe ruins a prosperous nation, China can potentially step in, prop up his regime, suborn his power structure and exploit local resources including land. The job is even easier in another fractured, corrupt and resource-rich country like Congo. By Western standards, much of post-colonial sub-Saharan Africa has proven to be unable to rule itself effectively. Beijing has worked out how to exploit the abysmal governance of much of the region. The second colonial era in Africa is underway. How it works out this time remains to be seen, but the early signs are favourable to Beijing.

The strategic impact on Australia is not favourable. If the Chinese can exploit resources within their African empire, they may obtain access to iron ore, coal and gas at rates that undercut Australian producers. However, it will be a generation before the success of this fascinating new experiment in Empire-building can be judged.
 

APDR at a glance