Thursday, May 1, 2014

China in Africa--Two Faces

China's engagement in agriculture in Africa is depicted to the rest of the world as a magnaninmous "south-south" aid program. For domestic audiences, Africa is a source of food for a Chinese population that has ravaged its own resource base.

The dual messages are evident in two articles posted on Chinese websites this week.

In one article, "China-Africa Cooperation in Agriculture Mutually Beneficial," cooperation between Chinese and African governments in agriculture is described as part of a growing collaboration that many Chinese companies view as a profitable investment opportunity. The investment is described as "south-south" cooperation that addresses the lack of infrastructure and low-tech nature of Africa's agriculture, and creates jobs for Africans. The article describes a strategy emphasizing use of fertilizer and pesticides, seed breeding, and pest-prevention in a four-way collaboration between universities in Uganda and Guangzhou, the Uganda agriculture ministry and a Guangzhou company. Ironically, excessive use of chemical fertilizer, toxic pesticides and weak seed-breeding are big concerns expressed in China's description of domestic agricultural policy this year.

A second article, "Xiamen Encourages Companies to Plant Grain in Africa," describes a government-industry partnership to procure grain supplies for a big city in China. Xiamen--a large coastal city in Fujian Province--signed an agreement with the Southeast Africa Common Market (COMESA) for five Xiamen companies to produce grain in the 19 member countries. The companies will set up large-scale production of rice, wheat, soybeans and other crops and build grain storage facilities to address "Xiamen's food security problem."

The program involves five companies tied to Xiamen's grain bureau system. The article emphasizes government-company partnership as an inherent part of the strategy. The director of the Xiamen grain bureau reveals that this venture is intended to meet the revived "governor's rice bag" responsibility system with mandates that local leaders figure out how to supply their citizens with grain. The rhetoric also reveals that this is part of China's strategy of "two kinds of markets, two kinds of resources" to set up tightly controlled overseas channels to fill its food deficit.

The chairman of a Xiamen rice company described the venture as "our responsibility" to grow rice in Africa and ship it back to Xiamen. Describing it like a rice pipeline from Africa to Xiamen, he emphasized their control over the entire supply chain: "the rice is ours, under our control; our control begins in the fields."

The strategy of Chinese companies producing grain in Africa is odd, since companies have little or no experience actually producing crops in China. Nearly all of China's grain is produced by small-scale rural household farms. These companies are involved in storing and transporting grain at the behest of government officials and are notoriously inefficient at it. China appears to be bringing the most inefficient, clunky parts of its economy to Africa.

The Xiamen Grain Bureau director said, "This is a great leap, showing we have grasped the initiative on food maintain the rice bag." He described the venture of Xiamen companies going out as "the first of its kind," implying that this is a model other Chinese cities will follow.

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