The Chinese Business Interests in Africa - Admission/Application Essay Example

The two articles, “China and Oil-backed Loans in Angola: The Real Story” by Alec, Russell and Deborah, Brautigam’s “Human Rights Watch Report on Chinese-Owned Mines in Zambia” analyze the Chinese business interests in Africa through an in-depth scrutiny of their operations. The Chinese have vast economic undertakings in a number of African countries with enormous investments in agriculture, mining, infrastructure development, and energy sector among others. Whereas this provides huge economic opportunities for the Chinese, there is increasing criticism on the conduct of business and the impact it has on the African workers, the natural environment, and economic development of the host countries on one end and the gains to the Chinese on the other. Economic issues raised in the articles With projects ranging from copper and other minerals exploitation in Zambia, oil drilling in Angola, agriculture and allied industry in South Africa and Ethiopia to infrastructure and real estate development in Kenya and Tanzania, China is currently the biggest foreign trading partner to Africa as a whole. Authors of the articles focus more on highlighting the unseen shortcomings of increased Chinese involvement and control of the African markets. The major cross cutting issue in all articles on this subject is the exploitation of African labor at far dilapidating conditions and poor wages. In advancing their viewpoint, the authors point to several cases including fatalities incurred by African workers especially in the mining sectors of Zambia and Angola. Further, the workers normally earn little in wages often having to work long hours under unfriendly conditions. Provision of safety and protective clothing is according to the author of the articles a struggle that takes months if not years. On the other hand, the Chinese gain a lot in terms of raw materials and finished products that they export back home, since their companies or jointly owned firms with the local governments win the contracts. The articles also point out several cases of corruption and malpractices that result to unfair competition favoring Chinese firms over the local firms as well as any other foreign companies. As pointed out in the case of oil exploration in Angola, Chinese companies mining oil obtain the resource at cheaper prices and then sell to their government and other buyers at the prevailing market prices. Other issues alluded to in the article include the quality of work that Chinese companies do. For instance, the author refers to a hospital block constructed in Luanda, Angola, which started exhibiting structural weaknesses within a short period after its completion by a Chinese company. There are also concerns over the social impacts and environmental degradation caused by the activities of the Chinese, which the article describes as wanting owing to lack of commitment to corporate social responsibilities. However, the articles deliberately ignores the positive side of the trade between China and Africa as observed by critics of the analysis presented in the articles who view the authors as majoring only on exaggeration of negative impacts. They point out that many local citizens as well as the policy makers at government levels view the entry of China in Africa as a reprieve from the wide spread unemployment and stalled economic development that the continent has undergone over the years of western aligned trade. There is also the view that African economies are exhibiting significant growth owing to increased funding of development projects and revival of industries curtsey of the Chinese. All these assertions are justifiable in individual respects using economic concepts to interrogate the whole issue. Discussion Analysis of the issue of China and African economic integration focuses on both micro economic and macroeconomic models and concepts. Microeconomic aspect of it focuses on the individual parts of the whole economy particularly on such items as individual economics, wages and salaries, particular households or firms, certain products and the like. Macroeconomics on the other hand focuses on the study of the economy as a whole whether for a country, region or the entire globe. Relation to economic concepts and models In respect to labor and exploitation in many trade arrangements, there are several concepts that come into play; there exist a very wide spread unemployment within many African countries creating major social and security concerns that negatively undermine economic growth. Initiation and funding of projects by the Chinese although creating situations of underemployment, has helped a lot in addressing this issue, a factor that leads to a growing demand for the their products and services despite the shortcomings they present. It is therefore convenient for the African governments and their citizens to embrace their economic ties with the Chinese to check the problem of unemployment among their youthful populations. Further, on issues of quality in the projects undertaken by Chinese companies, the authors are poised to exaggeration since natural calamities like floods and mudslides always have devastating effects in any part of the world. However, a majority of countries including Zambia and Angola, which had almost collapsed transport networks and other key infrastructure facilities in the mining zones, have benefitted enormously from Chinese funded interventions. Infrastructure development plays a key role in stimulating economic development in the local and national levels through opening up of markets and access to raw materials. This cannot endear the Chinese any further to the African countries. The prevailing scenario illustrates the concept of demand and supply; the Chinese have identified a demand for infrastructural development and revival of vital economic sectors in Africa and set out to supply the market through various projects agreeable to the host nations. On the issue of competition and market structures, the relation between China and African countries has produced mixed results in that although many mineral products end up in China as exports, they do not fetch the best prices possible because the same companies that do the mining take them in their raw form, hence loosing on competitive determination of prices. On the other hand, Chinese products have flooded the local African markets with the effect of killing small and medium firms in similar trade. All these factors have greatly changed market structures in favor of the Chinese there by making the African markets not benefit from the trade with China, instead resulting to their low productivity. The concept of economic growth and GDP features prominently on the manner in which both China and its African trading partners have grown in their respective gross domestic product. Prior to Chinese activities on the African continent, many of the countries they are trading with were recording negative economic growths. However, induction of grants and loans from Chinese agencies alongside development in infrastructure and revival of industries has seen them make great strides towards ensuring sustained growth of their respective economies. On its part, China stands to benefit in many ways by creating markets for its domestic products and technologies as well as opening foreign employment opportunities for it burgeoning population. In this regard, all parties in this trade arrangement have benefitted in undisputed terms. The concept of economic growth and GDP features prominently on the manner in which both China and its African trading partners have grown in their respective gross domestic product. Prior to Chinese activities on the African continent, many of the countries they are trading with were recording negative economic growths. However, induction of grants and loans from Chinese agencies alongside development in infrastructure and revival of industries has seen them make great strides towards ensuring sustained growth of their respective economies. On its part, China stands to benefit in many ways by creating markets for its domestic products and technologies as well as opening foreign employment opportunities for it burgeoning population. In this regard, all parties in this trade arrangement have benefitted in undisputed terms. Evaluation of the articles The argument advanced in the articles is not wholly agreeable, due to over emphasis on the negative implications of trading with China, without paying due attention to the positive aspects on the respective African economies. The authors bring closer home the situation that African workers put up with in Chinese mining sites, which is untenable under the international labor organization standards of work. The overall assessment is that there are benefits accruing to both parties in this trade and therefore the labeling of Chinese activities in Africa as exploitative is unbalanced. Forces of supply and demand determine employment rates although governments may regulate on the minimal wages for certain industries. In conclusion, proper evaluation of the situation is in reference to free market trade, whereby forces of supply and demand determine the market prices and trade relations that exist between parties. The existence of demand for a commodity or service in a given economy creates an opportunity for suppliers to fill the gap and make profit in the process. However, this should be in accordance to the set rules and regulation that govern national and international trade. Compliance with health and safety standards should be among the key aspects considered before entering into any employment arrangement all over the world. Chinese companies therefore, ought to be compelled to meet the basic requirements in this regard if they are unwilling to take the initiative on their own. Work cited Alec, Russell. China and Oil-backed Loans in Angola: The Real Story. China Africa Story. Web 7 Dec. 2011. Deborah, Brautigam. Human Rights Watch Report on Chinese-Owned Mines in Zambia. China Africa Story. Web 7 Dec. 2011. Read More