Chapter 7 - China’s Engagement of Mozambique through the Macau Forum

7.1. Introduction

The dimension of China’s economic involvement in Mozambique herein presented pertains to a specific instance of the multiple and increasingly specialised diplomatic channels used by China and Africa in their mutual engagement. The Forum for Economic and Commercial Cooperation between China and Portuguese Speaking Countries (FECCCPSC), henceforth the “Macau Forum” had its first formal meeting in October 2003 in Macau. From the start, the Forum was an institutional investment, not just directly targeting Mozambique but in fact a vaster group of important economic partners to China of which Mozambique was a part of. The Macau Forum and the actions of Mozambique within the Forum will be presented in the context of other alternative channels in order to understand what exactly is different, or not, about the Forum and how it shapes Mozambique-China relations. This chapter is composed essentially of three main sections. The first will provide a brief overview profile of what the Macau-Forum is and has achieved since it has been created. Secondly, a theoretical discussion will be carried out whereby the possibilities and limitations of the Forum are assessed by means of a review of how and why it came about in this particular point in time of the history of China and Africa and their relations. The Forum’s position as a hybrid actor will be presented and discussed as a possible framework for understanding how Mozambique can make further use of the Forum for the benefit of its own economic development. Lastly, the chapter will move into a discussion of the specific instances where the Forum has assumed a role as a moderator, an arena and a conductor for China-Mozambique relations and for Mozambique’s development.

7.2. Profile of the Forum

The Macau Forum is in essence a multilateral organization composed by Portuguese Speaking Countries (PSCs) and China with São Tomé e Príncipe as an observer due to its recognition of Taiwan. It is financed in its entirety by China and has met five times since its creation in 2003. Chronologically, the meetings have taken place in: Portugal, Angola, Mozambique, twice in Macau and Cape Verde. As an institution it does not have an autonomous agenda and remains, at its very best, the sum of its parts, i.e. of its member states’ agendas. In other words, the Forum begins and ends in state-led initiatives of its members and the secretariat is considerably limited in these matters. The Forum has an inherently material and economic agenda, it seeks to do so by creating political and diplomatic channels for investment and promoting each country’s investment-products.

China sees great economic complementarities between its economy and those of Portuguese-speaking countries and, accordingly, took the initiative of setting up the Macau Forum to explore these synergies. In so doing, China also seeks to foster the role of Macau as a linking platform facilitating access to these countries and promoting more intense relations between China, Macau and PSCs. The Macau Special Administrative Region holds a special role and is at the apex of the Macau-Forum for historical and “geo-cultural” reasons. In effect, Macau has long had cultural and language ties with PSCs that have endured the test of times, with Macau having, for example, both Chinese and Portuguese as official languages practised in its local media and learning institutions. It also has, for instance, a judicial system and code of law that has a markedly European influence (Zengyi, 2004). This can be a significant asset in terms of know-how, learning and ability to influence the capacity of businesses. It means that they can potentially operate more successfully across the geographical, bureaucratic and political dimensions of the Macau Forum and more effectively bring these markets together.

Initially the Macau Forum presented more rhetorical apparatus than outcomes as its practical reality still fell markedly short of the original goals. The Forum initially set out to meet every three years at the ministerial level in the areas of economy and commerce as well as with personalities from international organizations and commercial and business associations. It started by having an unambitious agenda of assessing and debating areas for further cooperation and has progressively become more pro-active and practical in its goals:

· Human resources training by organizing seminars, colloquiums and training courses for the authorities and technicians of Portuguese Speaking countries, including Mozambique;

· Stimulate Business exchanges;

· Promote and organize High level diplomatic visits;

· Promote and improve commerce between China and Portuguese Speaking Countries through advisory and information provision, namely in banking services, opening up of aerial and maritime route, etc. (Macau Government, 2007).

It has, nonetheless, witnessed a noteworthy reform in 2008 which Mozambique can make the most of in order to push through its development agenda. The Forum frequently finds itself being dominated by the secretary-general which used to be Wang Cheng An, an orthodox Communist party hardliner which had strong connections with the anti-imperial African liberation movements. His profile was not welcomed by some of the members of the Macau-Forum, namely Portugal and Brasil but also Mozambique, which saw him as constantly centralizing the workings of the Forum and allowed little room for agenda-setting and other forms of actual agency for Mozambique and other members. The Forum worked pretty much as a visible face for China's “do-good” charm offensive, another channel for its “diplomatic marketing”. As political and diplomatic exchanges occurred making this reality increasingly evident, China replaced Wang Cheng An by Zhao Chuang, a technocrat, and someone with a more suitable profile to carry out the Forum original intentions (Personal communication – interview A; B; Dr. Moisés Silva).. Since 2006, the Forum has sought to assess and review the procedural and work rules of the Permanent Secretariat, in view of fulfilling and coordinating more effectively the Action Plans for Economic and Commercial Cooperation, signed by the Ministers responsible for economic and commercial affairs from China and PSC countries (Macauhub, 2006). Nevertheless, the very centralizing mechanisms and rules of the Forum will still need to be reviewed and revised for it to actually have a more balanced and effective role in fostering economic relations between its members.

Another of the most significant changes has been for the Forum to assume in its strategy less a stress on intergovernmental political exchanges, but rather a greater emphasis on creating the right environment for business and entrepreneurs to assume the initiative as central drivers of the institution, as was claimed by Manuel Amante da Rosa, vice-director of the Forum secretariat (Ping, 2008). The annual event of the Macau International Fair is also a recurring initiative promoted by the Forum. It gives an opportunity for businesses from Macau and PSCs to exhibit their products and services. In addition, during the three days that it is held, sourcing and business matching activities are carried out and business deals are signed.

China's creation of the Macau Forum should also be understood within three particular changes of China's foreign policy after 1978. According to Lampton (2001) and (Le Pere & Shelton 2007: 30) China has, since then, been pushing for a greater professionalization of its diplomatic elites, and for corporate pluralisation, and has allowed for a gradual decentralization of power to the provinces and local structures. Such professionalization, “which includes a higher level of specialized knowledge among the Chinese elite and the development of expertise in bureaucracies concerned with decision-making” is also sought after in institutions such as the Macau Forum. The Forum is a concrete institution that contributes to this through its initiatives generating specialized elite. Corporate pluralisation will in turn mean a greater number of different perspectives regarding policy-making, and the “spread of organizations, groups, and individuals” in these policy-making processes. Lastly, the creation of the Forum with its headquarters and permanent secretariat in Macau should be understood within the “gradual decentralisation of power to the provinces and local structures” (Le Pere & Shelton 2007: 30). Such decentralisation fits the new trend towards the emergence of hybrid actors discussed below.

The Forum and Mozambique's behaviour within this organization mirror the tendencies of China's ascending importance within the Portuguese speaking world. Dr. Moisés Fernandes (Personal Communication by Dr. Moisés Silva), even suggests that in the long‑run the Forum find itself replacing the Community of Portuguese Language Countries (CPLP), an organization of the Portuguese-speaking world which has the same members as the Macau-Forum except for China. The reasons he provides are essentially of an economic nature. The Forum, in contrast to the CPLP, is very practical and economic in nature, tending to be less ideological. This gives it a more adaptable and economically attractive edge in the current context of competition and commercial economic diplomacy in international relations as noted in the section below. The membership and sponsorship of one of the major emerging powers in the international order, China, is also undeniably important.

7.3. Theoretical discussion regarding Economic Diplomacy and how the Macau Forum fits within new trends

The institution of the Macau Forum can also be seen as concrete example of the importance of hybrid actors and also of how African countries can advance their development through the platforms they offer (Michelmann & Soldatos, 1990; Henders, 2001). Through these actors China has another channel through which to be convinced to focus on absolute gains benefiting a wider range of internal and external actors. The “hybrid actors” conceptualization, for the case of the Macau Forum, refers to the propagation of the characteristics of federal states in the Macau Special Administrative Region. This autonomy has meant that it has been in the interest of Macau authorities themselves to advance and encourage a “special” connection China should have with PSCs. This will in turn provide Macau, a tiny territory of China in relative terms, with a unique status as well as a political and economic comparative advantage within China itself. Going back to Chris Alden’s typologies, a hybrid-actor, like Macau, also benefits from China having more of a development partner commitment to Lusophone Africa in detriment of an economic competitor stance. This is so because Macau’s aspirations as a commercial and economic platform are dependent upon long-term sustained commitments by the Chinese and Lusophone actors it seeks to serve.

That being said, state owned companies themselves resemble more and more hybrid actors. Take Exim-Bank for instance, which as an organization it is able to make the most of its affiliation to China's central government while simultaneously having as a guiding principle its self-sustainability as a financial institution and its individual business performance. This has occurred since the bank has acquired new characteristics from the private sector which also gives it a hybrid nature. Indeed, according to a Mackinsey quarterly report from 2008 (Woetzel, July 2008):

(…) for many years, the West has viewed China’s state-owned enterprises in black or white. But these companies, like China itself, are diverse. Many of them would make better partners for multinationals than some of their private-sector counterparts. Openness, not ownership, is the key

This hybridity made evident both in SOEs and the Macau Forum is due to the technical bureaucratic centripetal necessities that push and ask for China to devolve some of its control, even if just partially. As for the notion of economic diplomacy, it alludes to a trend in the last decades in which traditional diplomatic channels and processes have become more porous and have now opened up to input from non-governmental and other alternative actors. Commercial diplomacy on the other hand describes the work of diplomatic missions in support of the home country’s business and finance sectors in their pursuit of economic success and the country's general objective of national development. It includes the promotion of inward and outward investment as well as trade. Important aspects of a commercial diplomat’s work is the supply of information about export and investment opportunities and organizing and helping to act as hosts to trade missions from home. In some cases, commercial diplomats could also promote economic ties through advising and support of both domestic and foreign companies for investment decisions. Indeed, according to Saner and Yu (2003:12, 20) one of the primary tasks of contemporary diplomats is now to “influence political, economic and social policies to create the right conditions for economic development taking into account the needs and aspirations of other stakeholders”, a task that is not only inherently economic by nature but also one that encourages engagement with a multitude of actors outside the traditional “state-boxed” diplomatic spheres.

These alterations also encompass a vast change in the very content and pace of diplomatic engagement, something which has rendered criticisms to the inadequacy in training of a great number of diplomatic corps (Saner & Yiu, 2003:5), including Mozambique’s. Assuming this, China’s relations with Mozambique through the diplomatic channel of the Macau Forum demonstrates these very trends, reflecting as they do three of China’s foreign policy enhancement concerns discussed in the previous section (professionalization, corporate pluralisation and decentralization).

As was noted when framing the Macau Forum within the hybrid actor conceptualization, the multilateral institution of the Macau Forum represents evidence of a trend towards the devolution of power, through several methods, from central government to geographic and political sub-units. Such devolution and autonomy, within which Macau and the Macau Forum fit, gives such sub-units greater room for advancing particular economic and political interests that they did not have the capability or the legitimacy to do before. On top of that there is now an increasing number of business communities that “put forward their own white papers stipulating preferred policy positions” (Saner & Yiu, 2003:8). It is not literally the case that Chinese business communities like those in Macau put forward a white paper diplomacy-making document to central government. Instead, and very much thanks to the acknowledgement by the same central government of the complexity and the new demands of economic diplomacy, these business communities and often, semi‑nationally owned business actors, tend to gain increasing autonomy and have a greater say in the content of China’s actions abroad.

An illustrative event is how Fujian province wants to make use of Macau’s position, using it as a platform for its investment in PSCs. The provincial secretariat of the Chinese Communist Party has been in liaison with Edmund Ho (the Chief Executive‑elect of Macau) in order to organize for investment canvassing in PSCs through the Macau Forum as well as the organization of visits from PSCs to its region with view of presenting business opportunities. Fujian is part of the Pearl River Delta, a region in which Macau is also included. It is very dynamic and economically vibrant and includes Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Hainan, Sichuan, Guizhou and Yunnan. The region holds a third of China’s population, roughly the same population as the European Union and a third of the country’s GDP. Macau has, for the last decades, been establishing a closer relationship and integrating its economy with its surrounding region meaning that it is in a privileged position to be a link between the massive economic potential of a province like Fujian with that of Mozambique and PSCs (Macauhub, 2008).

An additional example is how Millennium BCP, a Portuguese Bank has already acknowledged the potential of Macau as a hub in its strategy. It signed an MoU with the China Africa Business Council in 2007 aiming at using its presence and subsidiaries in Africa and in Macau to offer credit opportunities to Chinese investors in Mozambique and Angola, and also, to supply credit for potential African investors from Mozambique and Angola in China (Diário Económico, 2007). Macau and the Macau Forum are at the centre of coordinating these packages given its strategic characteristics, with the deal including the provision of loans, “cash-management”, and bank guarantees among other financial services to Chinese and African businesses.

7.4. The Macau Forum and Mozambique's development - Initiatives of the Macau Forum that concern Mozambique

What the Macau Forum offers, in practice, is then an additional channel of communication for Mozambique. As the name itself indicates, a Forum for Mozambique to “brand” and commercialize its economy as it seeks investment and to improve upon its political and diplomatic “capital”. It is the outcome of a materialization of an elite-driven political process started in 2003 which is of a top‑down nature. It means that, in the case of Mozambique’s development concerns, the Forum will only work towards it to the extent that Mozambique’s delegates are able to advance and attract economic support, investments and projects to strategic sectors and projects opted for in the PARPA.

The Macau Forum is thus a multilateral arena where Mozambique can project its development strategy and seek to find the channels through which to fulfil it. For this to happen however, Mozambique then depends on:

  • how the Forum will generally evolve as an institution, if it will be able to accomplish its essentially practical and economic ambitions
  • if Mozambique is able to organize itself successfully in diplomatic terms so that it can coordinate effectively between the wishes of its infant private sector as mentioned in Chapter 4, its development strategy and the opportunities that the Macau Forum generates
  • if Macau is able to affirm itself successfully as a platform for economic and political exchanges between China and the Portuguese-speaking world
  • and if China is able to definitively “let go” of its initial overly zealous “grip” on the organization

This section will look with greater detail at what has been done and can further be achieved from the Mozambican side. Therefore the focus will be in the second bullet point in the previous list. In what concerns Mozambique the Forum has brought about several measures to promote contact between tourism, banking, infrastructure and law stakeholders with several deals having been signed. Above all, to make the most out of the opportunities in the Forum, Mozambique should take into account the previously discussed particular characteristics of Macau as an economic hybrid actor which functions as the geopolitical hub of the Forum.

For instance, between the 18th and 19th of April 2007, the Macau Forum organized a high level meeting for Businesses from its member states in Maputo. The meeting was hailed as a great success for Mozambique and the Forum at a number of different levels. With more than 600 participants, eighteen deals were signed and governance institutions of Mozambique were actively involved, among them the Institute for Export Promotion of the Centro Para o Investimento (Centre for Investment) and the National Institute for Statistics. For many of China's businessmen, it was one of the first times they had ever been in Africa and, on the record, stated that they had been pleasantly surprised with the range of business opportunities they encountered in the continent (Centro de Informação Comercial e de Mercados, 2007). The meetings showed just how much importance Mozambican authorities assign to the Forum as the business meeting initiative was opened at the very highest level by Prime-Minister Luísa Diogo. It has also been through events organized by the Macau Forum that some faint but important first hints of a wish from the side of Mozambique’s businesses to invest in China's markets has been witnessed. Successive series of high level meetings and press statements show that stated interest is at least frequently and formally expressed from the side of Mozambique. For example Fernando Sumbana Júnior, the Tourism Minister of Mozambique in 2008, claimed that much attention was being given to attracting investors from Macau to invest in the gambling industry in the country, hence helping fulfil its tourism potential. Such declaration was made in a seminar in Macau entitled “Investment Opportunities in the Tourism Area in Mozambique”, a Macau-Forum sponsored initiative (Angola Press, 2007). Aires Ali, Mozambique’s Minister for Education and Culture corroborates this thought. He supports the view that tourism is an area in which cooperation with China, through Macau can be most useful. Macau itself, as an autonomous administrative region, has great experience with its very own thriving tourism and gambling industry (Ping J. g., 2007).

Nevertheless, going back to the 2007 meeting in Maputo, despite claims of success ,and 16 MoUs being signed between Chinese and Mozambican entities, a great deal of the issues discussed concerned the compliance of previous deals. This points to problems in following up commitments agreed upon in Macau-Forum promoted meetings. It also shows the will, expressed by many delegates for there to be concrete actions and measures to arise out of the Forum. Many of the delegates asked for mechanisms of verification and legislation that would oversee and observe the consummation of previous deals to be set up. Moving beyond good intentions and well-staged economic and political marketing acts is therefore the big challenge.

Also, the last events of the “contact scholarships for business”, an exchange program for business professionals, have already provided some important experience to Mozambique businesses. One of the participants, Maria José do Carmo from AETEC-MO, an Architecture and Engineering company, in the third meeting in Maputo notes that the initiative has demonstrated Mozambique businesses how they must improve their product placement. She claims the meeting served to show businesses in Mozambique how they should set out specifically in their business plans, exactly what their comparative advantage to other investors and business partners is (Centro de Informação Comercial e de Mercados, 2007). Before the meeting in Maputo a task force was brought into action by the government which joined together the Ministry of Tourism, Planning and Development, of the Interior, Finance, Transport and Communication, Foreign Affairs and Cooperation, the Chamber of Commerce, the Centre for Investment Promotion and the Confederation of Economic Associations. This task force was given the responsibility to coordinate all the preparatory work for the Summit. This was an occasion where the bureaucratic and organizational capacities of the government of Mozambique were tested and provided greater experience in organizing and managing an event of such nature. Maputo’s diplomatic corps can, to a certain extent, benefit from the learning process and specialization such occasions offer.

Opportunities for Mozambique within the Forum also abound. After the “plan of action for Economic and Commercial cooperation”, 1200 workers and trainees of the PSCs took part in training and research programs carried out in China between 2003 and 2008.

An interesting development has been how China Exim Bank wants to push for a mechanism of financial cooperation between the actors of the banking sectors of the PSCs in a colloquium promoted by the Macau Forum after the 2nd Ministerial Meeting of the Institution. Mozambique’s national bank would stand to benefit from being part of a financial platform and consortium able to finance projects with dimensions that, the national bank by itself, would not have the capacity or know-how to manage otherwise. The sponsorship of contact scholarships is one of the favourite methods by which to stimulate international collaboration between the private sectors. Exim Bank can supply precious know-how and experience when it comes to the financing of projects of an international dimension. There are instances of similar institutional cooperation across PSCs before, namely in the case of the association of Lusophone Insurance Supervisors. The Monetary Authority of Macau has been carrying out some important work in this area, negotiating a series of preliminary protocols with Mozambican financial partners as well as with those from other PSCs. (Ping J. G, 2007). In addition, the Government of Mozambique can stimulate synergies between China and other members of the Forum towards joint investment initiatives in the country. To that regard, João Gomes Cravinho, Portuguese Foreign Secretary of State, the Chinese vice Minister of Foreign Affairs and Manuel Chang, Mozambique’s Finance Minister have already expressed availability and interest for joint projects, articulated through the Macau Forum, bringing together Chinese and Portuguese entrepreneurs investing in Mozambique’s infrastructure sector (Macau Government Information Bureau, 2007). On the 30th of November 2007, a China-Mozambique chamber of commerce was created in Maputo, a sign of growing legal and commercial demands between the countries and also a necessary response to the growing exchanges between the two. Such an organism is not only supposed to supply quality information on government policies and rules for Chinese investors interested in Mozambique but also to link the two communities through other initiatives, namely through cooperation with the Macau Forum (Macauhub, 2007). Lastly, Mozambique can use the exchanges promoted by Macau Forum to gain a deeper understanding of China's development model, and particular success stories. This can be in the form of, for example, a visit to a trans‑frontier business park between Macau and the delta of the Pearl River region (Jornal Tribuna de Macau, 2007) in which Chinese entrepreneurs and businessmen introduce to their peers the particular strategies of economic development used.

7.5. Conclusion

The Macau Forum, since its creation in 2003, has been symptomatic of a rise in intensity and commercial and political interest of China in the Portuguese speaking world in general and Portuguese Speaking Africa in particular.

China’s initial choice of Wang Cheng An for secretary general, an old coordinator of China's support for liberation movements in Africa did not suit the cutting edge, and non-ideological underpinnings and objectives of the centre. The subsequent substitution of Wang Cheng An by Zhao Chuang in the 1st of March 2008 is set to bring to the Forum a new dynamic and a more practical and pro-active tendency. Dr. Zhao Chuang had previously been the Director General of the Institute for the Ministry of Commerce.

At the onset there are at least three observed possible ways in which Mozambique can use the Forum:

  • first, as is its mandate, the Forum will stand as an outlet for Mozambique to sell its commercial brand and as a centre for canvassing economic and investment interest in the country;
  • second, Mozambique can make use of the exchanges within the Forum to gain a greater understanding of the experience and tools used by China in its development path; and
  • third, the Forum will provide further motivation and incentives for Mozambique to organize and improve its bureaucracy and specialized diplomatic corps.

The Forum stands, at the very least, as an additional consultative mechanism for China to carry out a much needed dialogue with Africa, a dialogue which is turn focused on business and economic exchanges which Mozambique can really make the most of.

China’s relation with Mozambique as that of China with Africa is a case in hand of how “professional boundaries between business and diplomacy have gradually become blurred especially after the end of the Cold War period” (Le Pere & Shelton 2007:22), and the modus operandi of the Macau Forum so far has provided further evidence of this. This discussion has put into perspective the greater complexity and coordination difficulties that diplomatic corps both from Mozambique and China have to grasp. The Macau Forum can be an important arena for Mozambique to “guide” China towards its development goals and strategy. For that to happen, there is a need for greater symmetry between the objectives delineated in the PARPA of Mozambique and the initiatives pushed for in the Macau Forum.

Departing from these definitions of economic diplomacy, one can characterize the Macau Forum as an institutionalized version of an idealized economic diplomat and an institution which seeks to train and carry out specialized services and activities with such focus. It is an organization which has had China as the patron and Macau as the articulating geopolitical hub and link but has now been progressively been given greater autonomy and leeway from China’s central government.

As is suggested for the other case of another institution, FOCAC (Le Pere & SheltonChina”. The economic and political potential of the Macau Forum has been acknowledged to such an extent that it is now even seen as a strong organizational competitor of the CPLP and its foreseeable substitute. 2007: 159), African countries also need to look at the Macau Forum as an “interactive process and not as an assistance package offered by by China”. The economic and political potential of the Macau Forum has been acknowledged to such an extent that it is now even seen as a strong organizational competitor of the CPLP and its foreseeable substitute.

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