Conclusion - China's economic involvement in Mozambique - prospects for Development

Chapter 8 – Conclusion

8.1. Introduction

This chapter consists on a review of the questions the paper has posed at the start, reassessing them with respect to the previous analysis and findings. It seeks to revisit the central problem statement: “What are the dimensions of China’s economic involvement in Mozambique as reflected in major recent processes and what conclusions could be drawn on their possible effect on Mozambique’s development?”

Final observations will be advanced, with respect to the wider context of Africa-China relations. These are followed by a conclusion suggesting areas of future research both regarding the specific cases approached and China’s wider engagement with Africa. The unprecedented rise of China as an emerging market, presents a set of simultaneously delicate and complex challenges and opportunities for Mozambique. An effective divide in the developing world is evident when the characteristics of a large economy like China’s is comparatively analysed to that of a small country like Mozambique. China first and foremost advances its particular interests and plays the game of constituency-economics at the international negotiation table. This means that, because some African economies are particularly sensitive to tremendous competition from “giants” like China, they will now tend to try and find a more concerted bargaining position in trade negotiations vis-à-vis the developed world. The shift in the global political architecture of power, in great part pushed by China, has allowed for this situation and provided developing countries with greater autonomy when designing their particular economic policies. At the same time, and because China sometimes poses economic threats herself, this global shift has brought about challenges requiring greater agency from African economic stakeholders. This is the current scenario, one which demands greater concerted action when a state like Mozambique designs its strategy and contributes to form Africa’s response.

8.2. Can China develop Mozambique?

From the previous analysis, the most prominent dimensions of China’s economic engagement of Mozambique comprise investments by China in the infrastructure sector, manufacturing and agro-forestry. To these one can add the dimension of economic engagement through the Macau-Forum. The Forum constitutes an institutional innovation in economic diplomacy between the two countries. After observing the empirical examples and coming to grips with the recent dimensions of China’s engagement, a perhaps obvious yet significant conclusion is that China is not singlehandedly capable of developing Mozambique. There are important externalities affecting the process. In addition, the impact of the engagement and the benefits of China’s presence are directly dependent upon the strategic handling, channelling, managing and regulation by Mozambican governance actors.

Furthermore, it is important to note the importance of the regional dimension of China’s approach to Africa as observed in the case of the Mphanda Nkuwa Dam. Evidence from the previous chapters showed that the Chinese presence in Mozambique signals a response to the general fluidity in the international political landscape and an awareness of the inviting conditions abroad and at home for China to reach out. This presence can potentially affect Mozambique’s development positively. Less evidence supports the view of a strategically orchestrated and state-sponsored new scramble for Africa. Although not without its transgressions as in the logging industry, Chinese stakeholders seem to be, in contrast to the ballistic notion of “scrambling”, playing according to the rules of the global economy in Mozambique. Thus, the Government of Mozambique can and should tap into this engagement for the benefit of its development. For so to happen, Mozambique will need to strengthen its governance, law enforcing capabilities, as well as its bureaucracy. In a nutshell, it must become more pro-active in the business practicalities in a post-setting up phase. Mozambique and Africa’s stakeholders at all levels need to embrace the situation and advance their governance and development interests in the current global economic situation.

The Mphanda Nkuwa Dam showed just how Chinese stakeholders are in fact open to change, as well as liable to being wrangled into deals and structures they did not initially set out to seek. This is noteworthy as it means that different investment models can be pushed for and actively pursued by local African governance institutions. For that to happen, governments will have to focus in moving from being “transmission belts” for China’s transnational capital to becoming “facilitators of development”. In the case of China’s involvement in the infrastructure sector, as a whole, there have not been any preferential procurement policies. At the same time Mozambique has had to recurrently rely upon external financing to carry out its projects. This funding in turn arrives with varying degrees of strings attached, formal and informal. Nevertheless, China essentially presents an additional option for external financing and investment, as well as an additional array of offers and opportunities for Mozambique to consider. When it came to general trade and investment between the two countries, it seemed like trade remained complementary. However, the future success of the trade and investment seems to be tied to the wider strategy of China’s SEZ’s in Africa, as well as to the expansion and development of Mozambique’s private sector. The agriculture sector in turn showed both great potential for cooperation with China and the gravest instances of harmful and illegal economic activities carried out by Chinese private actors. The problems are associated with a lack of institutional capacity by the Government of Mozambique. If the government is able to overcome its bureaucratic capacity deficit it will be in better position to tap into China’s tendency of pushing into Africa for its food security.

Greater synergetic ties between economic stakeholders and the diplomatic corps are essential. This must occur not only at the national level but also at the level of the regional and international spheres. For instance, South Africa should care, know and enter in dialogue with Mozambique about the strategic implications of a dam being built in the Zambezi with Chinese involvement.

8.3. How China-Mozambique relations inform the more general China-Africa debate

Is China actually set to challenge ideology and consensus, creating an alternative engagement to the current status-quo in Mozambique? It generally seems to be the case that China’s diplomatic behaviour is not as free-floating as sometimes portrayed. The integration of markets and economic actors has locked international agents into a system with a set of rules now deemed, albeit not always explicitly, good and natural not just by the US and its Western partners, but also by emerging powers such as China. Coerced, as was the case during the opium wars, or seduced by profit opportunities, China is now part of this economic global polity (Ougaard & Higgot 2002). It entered the game of economic development by agreeing to the rules of a game that had been previously defined by others but is now taking these rules and is actively seeking to reinvent and re-adjust them. Evidence collected from Mozambique supports this new international push, particularly in the case of the Macau-Forum. A multilateral organisation set up by China to encourage privileged investment exchanges between China and Portuguese Speaking Countries. In addition, the impacts of trade and resource extraction in the environment and labour regulation are, as seen in Chapter 5 the kind of transnational problems that need to be increasingly tackled. Thus, furthering policies for environmentally friendly resource extraction and labour regulation could more suitably take place through the formulation of continent-wide conventions for foreign investment.

China’s pragmatism has also become clear in the previous observations. Except perhaps for the issues of arms trade and peacekeeping, there has been a low salience of security issues in influencing relations between China and Mozambique. At least when it comes to conventional military power-play, force has played a small role in defining the current relations. Complex interdependence appears to be helpful in theorising why there has been a certain degree of fluidity when it comes to the hierarchy of issues defining China-Mozambique and China-Africa relations. Although in the wider context of China-Africa relations the one-China policy has usually been an overarching conditionality in the diplomatic agenda, this issue starts to lose significance as other economic concerns become more important. Trade, resource security or other international diplomatic issues have become more salient and any ‘issue-area’ can now be at the top of the international agenda at any given time (Keohane & Nye 1989:24). Mozambique needs therefore to understand how it can influence and push for the issues areas most suitable for its development concerns.

China is growing while making active use of international institutions to promote the country’s development of global power status. There are indeed many cases in which institutions do matter. Africa and Mozambique should now also actively seek such protection and some glimpses of such happening are already evident in the initiatives of the Macau-Forum. Mozambique has started playing an increasingly important role in this Forum as was the case in the business meeting organised in Maputo. The country needs however to further explore, within the Forum, initiatives that will support the specific strategic lines present in the PARPA strategy plans.

Many developing countries in Africa appear to be on the cusp of a significant economic upturn. This is positive news but one should bear in mind the old truthful cliché that, although a ‘precondition for it’, growth does not automatically translate into development. Another frequent problem with the current outlook is that a considerable part of growth is primarily commodities-based, which can be problematic and dangerously uncertain in the longer term (Farfan 2005). Conversely, the persistence of what can be called “constituency‑economics”, originally reflected in Putnam’s two-level game theory (Putnam 1988), also plays a role. It is present when traders, investors and policy-makers allude to their home constituencies as having insurmountable interests in need to be upheld and defended on the international stage. The term “constituency-economics” alludes to the Neo-Realist inspired persistence of a “zero-sum” game in the politics of international trade, whereby home constituencies press governments to sign off to trade deals that provide them with relative gains in relation to the other signatories. This phenomenon has been illustrated, for example, in the work of Krugman (1997) and has been present in China-Mozambique trade calculations as well as in all policy decisions by Mozambique which try to prevent China from acting like an economic competitor in the country. The problem of “constituency-economics” can be also used to explain, for example, why South Africa placed as much political pressure as could be mustered to encourage China to voluntarily impose quotas on its export of textiles to South Africa (Burke, Naidu, & Nepgen, 2008: 17-18). Mozambique too needs to be aware of this on the course of its engagement with China.

Does a look at China’s pattern of behaviour in Africa reveal the signs of a new hegemonic power in the making? This understanding would look at what China is doing in Mozambique as following the dependency logic of, for example, IMF’s past relationship with the continent. In the same way that the IMF has had for many years the belief that what suits in Iowa suits in Mozambique, now China would be seen as advancing the belief that what suits in Guangdong suits in Mozambique. Africa and Mozambique would then simply be shifting their preferences in the “structure of domination”. The presentation of the “China model of development” may very well be in itself an expression of this hegemony, as S. Gill (1991:47) puts it “hegemony would be fully achieved when major institutions and forms of organization - economic, social and political - as well as the key values of the dominant state become models for emulation in other subordinate states”. An element that also supports this argument is how China has so far been privileging its relations with state elites. This situation might however change in the future, with the increasing importance of “transnational civil society links between the Chinese peoples and the African peoples” (Chidaushe 2007:122) among other factors privileging non-state actors.

As opposed to Neo-Realism, under a Neo-Liberal perspective the interdependence that arises in China’s engagement with Africa goes from being a dependent variable of realpolitik power-politics to becoming an independent variable which defines and affects the behaviour of the actors. This is where the Neo-Realist take on China’s hegemonic scramble for Africa falls through. The engagement is not static. There is, at the end of the day, one not often mentioned factor for China that takes precedence over all of the above, and that is stability. Stability is essential for all of the current economic engagements and is becoming ever more vital as investments are changing from short-term to long-term in nature. Mozambique is a prime example. Despite being bottom in many economic development indexes, Mozambique has, since 1992, consistently been a politically stable country, drawing China’s attention accordingly. This also means that, for example, it is not for the benefit of China to have turmoil in Sudan or in Zimbabwe as it is sometimes implied: something observed for instance in a conference report by Institute for Security and Development Policy in Sweden (Marklund & Odqvist 2008). China is, on the onset one of the major beneficiaries of a stable Sudan. Evidence of this is slowly mounting. The case of Sudan is illustrative of the paradoxes and dilemmas regarding the evaluation of China’s foreign policy towards Africa but presents in the end its ultimate concern for stability. This concern is evident if one looks at how China managed to balance its traditional non-antagonizing, minimum interference diplomacy with its strategic necessity to keep an economic partner politically stable. The diplomatic “gymnastics” Beijing carried out in Khartoum had its paramount in China’s important low-profile role in convincing Khartoum to accept a UN intervention in the region (Dowden 2007). Yes, China does give a clearer lifeline than Western countries to not always the most human rights-friendly African states. However, its policy is not as one‑dimensional and restricted to the one-China policy issue as sometimes it is argued. As investment mounts, stability becomes more and more important and, again, in the process, China’s international relations modus operandi is being challenged while slowly evolving and adapting.

If Mozambique and Africa seek to use China’s engagement to “move beyond their traditional reliance on single-commodity exports” (Broadman 2008), they will have to design strategies accordingly. This means that lethargic and passive governance can result in a repeat of previous structural mistakes. A mishandling of this engagement can still have other malign ramifications by means of negative reactions from labour markets, commerce and industries. African economic stakeholders, ranging from small to big businesses and to regional organisations should rethink their approaches. African businesses in turn need to have the capacity to effectively lobby China to open up its protectionist trade policies (Broadman 2008) and, at the same time, have the autonomy to experiment with innovative, value-added projects and alternative investment models.

8.4. Suggestions for Future Research

The previous exercise observing China’s engagement of Mozambique shows just how much the overlapping international, regional and national mechanisms affecting the economic development of the continent have been “shaken up” by this recent resurgence. China’s arrival brings sector-specific, region-specific, nation-specific and even project-specific problems and opportunities and it is precisely more focused and detailed research that needs to be carried out. Such will enable greater insight into precisely what practical policy-making options can be made for the benefit of economic development. These policy making option have to be complemented by an awareness of what actors, given its capacities and responsibilities, should actually be taking them.

Having said that, there is still room for greater analytical refinement of the China-Africa body of literature, namely in understanding what the smaller narratives of the relationship represent for the claims being made in the wider debates. What is also missing in the discourse is the ability to find an intellectual framework that assesses the rise of China within the context of the East's dominance in the period before Christ and whether the re-emergence of China as a powerful economy in the global system is being witnessed - a return of history (Alvarenga, Jansson, & Naidu, 2008 incoming). As for work further required in terms of specific China-Mozambique relations there are particular areas of relations which remain under-researched. These comprise military relations as well as the particularities of Mozambique’s diplomatic relations with China which are much more party-to-party than many of other relations of China with African countries. These nuances have interesting ramifications into the economic relations, representing a fascinating field for further work. In conclusion, it seems like that, in the context of the global economy, what Mozambique needs is greater agency. Looking at “if” and “how” China provides this is a key issue in need constant reassessment in future China-Africa literature.

8.5. Conclusion

Some of the most significant political and economic intricacies of China’s unfolding engagement of Africa have been described. China is revolutionising the strategies used by economic and diplomatic stakeholders of the African continent and Mozambique while riding the current wave of change in the power relations within the international political economy. Between China and Mozambique trade is up, investments are up, diplomatic visits and dialogues are up and the implications are vast. China retains a distinct modus operandi in its engagement, encouraged by its unique place in the dynamics of the global political economy, the historical links to Mozambique as well as by its conditions at home. The analysis of these unfolding relations concludes that Mozambique, as Africa, is now at an economic and diplomatic crossroads in which broad strategic choices have to be made, a set of decisions which will significantly determine the ultimate nature of the engagements. This study has provided an overview of China’s engagement with Mozambique and outlined some of the opportunities and risks that shape this engagement based on four focused examples. It has made an analysis which is not so much within the current discourse of the scramble debate, but rather framed within the changing rules of contemporary global political. Nevertheless, this does not mean all insights from the scramble argument were discarded. Rather, a discourse that is more reactive to Mozambique's interaction with China was opted for.

To this end, the promises being made to Africa through the FOCAC Commitments and now with the Macau-Forum provide Mozambique with a significant opportunity to break through the bottlenecks in infrastructure development and other structural weaknesses. These are however one-time events. Mozambique must understand that China is not going to be the panacea of its development challenges. Instead, it needs to shape the engagement as well. In his magnus opus, The Wealth of Nations, Adam Smith talked of an 'enlightened selfishness' that states need to entrench to become globally competitive. China has understood this and is moving towards this 'enlightened selfishness' with great speed (Alvarenga, Jansson, & Naidu, 2008 incoming). But what is Mozambique’s 'enlightened selfishness'? How Mozambique responds in protecting the interests of its own marginalised constituencies is important. For Mozambique's engagement with China to be a sustainable strategic partnership, it has to be a pragmatic engagement that pushes beyond the current bilateral relations to include a multilateral framework endorsing the AU, NEPAD and the Macau-Forum as primary actors in this regard. At present it seems that the permanent interests of African states are to keep the first two institutions weak, which does not bode well for the favourable conditions that African leaders point to when assessing their engagements with China i.e. that it facilitates the continent's greater integration into the global economy.

At the end of the day, one needs to find “a tolerable median between uncritical acceptance and knee-jerk rejectionism” (Obiorah 2007: 53) and China should be criticized for all of its wrongdoings. Looking at China through Mozambique’s eyes however, has demonstrated that the situation is very often more complex and multi-layered than it has been sometimes portrayed. Much of the relationship is there ready to be shaped by Mozambique to the benefit of its economic development and strategies.


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