CHINA’S AID TO AFRICA: THE CASE OF CAMEROON

MSc. Thesis for Chinese Area Studies, Development and International Relations

Department of Culture and Global Studies

Aalborg University

Denmark

STUDENT

EYONG ETA MBUAGBAW

SUPERVISOR

PEER MOLLER CHRISTENSEN

MAY 2015

Table of Content

Preliminary Pages

Title page

Table of content

Abbreviations

Abstract

Chapter 1 Pages

1.0 Introduction-------------------------------------------------------------------------------------------------- 7

1.1 Sino-Africa Relations -------------------------------------------------------------------------------------- 7

1.2 Sino-Cameroon Relations --------------------------------------------------------------------------------- 10

1.3 Effectiveness of Aid ---------------------------------------------------------------------------------------- 11

1.4 Problem Statement ------------------------------------------------------------------------------------------ 15

1.5 Research Question --------------------------------------------------------------------------------------------16

1.6 Objective of the study ----------------------------------------------------------------------------------------16

1.7 Aims of Study -------------------------------------------------------------------------------------------------16

1.8 Research Focus ------------------------------------------------------------------------------------------------17

1.9 Structure of the study -----------------------------------------------------------------------------------------17

Chapter 2 Pages

2.0 Methodology ------------------------------------------------------------------------------------------------- 18

2.1 Research Design -------------------------------------------------------------------------------------------- 19

2.2 Research Strategies ----------------------------------------------------------------------------------------- 19

2.3 Case Study ---------------------------------------------------------------------------------------------------- 19

2.4 Data Sources -------------------------------------------------------------------------------------------------- 20

2.5Document Review -------------------------------------------------------------------------------------------- 20

2.6 Method of analysis ------------------------------------------------------------------------------------------- 21

2.7 Use of Theory ------------------------------------------------------------------------------------------------ 21

2.8 Limitation of Study ------------------------------------------------------------------------------------------ 23

2.9 Sub-Conclusion ---------------------------------------------------------------------------------------------- 23

Chapter 3

3.0 Literature Review -------------------------------------------------------------------------------------------- 24

3.1 OECD and Chinese Definition of Aid -------------------------------------------------------------------- 24

3.2 China’s Aid to Africa ---------------------------------------------------------------------------------------- 25

3.3 Measuring Chinese Aid --------------------------------------------------------------------------------------- 26

Chapter 4

4.0 Theory --------------------------------------------------------------------------------------------------------- 29

4.1 Economic Liberalism and Trade --------------------------------------------------------------------------- 29

4.2 Economic Development ------------------------------------------------------------------------------------- 31

4.3 Social Development ----------------------------------------------------------------------------------------- 33

4.4 Critique of the theory ---------------------------------------------------------------------------------------- 34

4.5 Dependency Theory ------------------------------------------------------------------------------------------- 35

4.6 Economic Development -------------------------------------------------------------------------------------- 36

4.7 Social Development ------------------------------------------------------------------------------------------- 37

4.8 Critique of the Theory ---------------------------------------------------------------------------------------- 40

4.9 Interdependency Theory -------------------------------------------------------------------------------------- 40

Chapter 5

5.0 Findings and Analytical Discussion ------------------------------------------------------------------------ 44

5.1 Sino-Cameroon Trade ---------------------------------------------------------------------------------------- 44

5.2 Chinese investments and infrastructural Development --------------------------------------------------- 55

5.3 Analysis of Chinese investments in Communication sector --------------------------------------------- 58

5.4 Chinese Aid in the Health Sector ---------------------------------------------------------------------------- 60

5.5 Hydro-Electrical Dam project and Economic Development -------------------------------------------- 62

5.6 Agricultural sector --------------------------------------------------------------------------------------------- 63

5.7 Infrastructural Development and Economic Development -----------------------------------------------63

Chapter 6

6.0 Conclusion ----------------------------------------------------------------------------------------------------- 66

References ---------------------------------------------------------------------------------------------------------- 68

Abbreviations

AFRODAD: African Forum and Network on Debt and Development

DRC: Democratic Republic of Congo

DAC: Development Assistance Committee

FOCAC: Forum on China-African Co-operation

GDP: Gross Domestic Product

ODA: Official Development Assistance

OECD: Organization for Economic Co-operation and Development

ODF: Official Development Assistance

IMF: International Monetary Fund

LDC: Less Develop country

USAID: United States Agency for international Development

UN: United Nations

W.TO: World Trade Organization

ABSTRACT

China surge in the global political economy and entrance as a major aid donor is one of the most challenging debates in the donor community. This has altered the balance of power in favor of African countries with different alternatives to the western model of aid. Chinese aid to Africa has received a mixed appraisal from friends and foes of this relationship and has thumped up world attention. Foes of this relationship argued Sino-African relation is exploitative in nature. Pointing to the fact that cheap Chinese manufactured goods has been detrimental to the growth of African home industries. Similarly, Chinese Firm’s preference for Chinese labor has raised serious doubts on Chinese genuine intentions. However, friends of this relationship argued that China aid has offer a different alternative of western aid which has helped to spur economic growth and has enhanced African self-reliance.

Nonetheless, a lot of aid assistance has been provided to Africa by the aid donor community geared towards economic development to enable African countries to meet developmental goals. However, African is still facing lots of developmental challenges despite huge aid assistance which has led to the perception that aid assistance to Africa specifically Cameroon has not had the desired outcome. In the light of the above assumption this research seeks to investigate the consequence of Chinese aid in Cameroon.

The analysis of this study was done in conjunction with appropriate theories relevant in investigating Chinese aid in Cameroon. Economic liberalism theory was selected to provide an insight of the beneficial nature of the Sino-Cameroon trade, whereas, dependency theory was selected because it provides a critical aspect of the Sino-Cameroon trade relations. While, interdependence theory was selected since it portrays the dependent nature of Sino-Cameroon relationship.

In conclusion, according to relevant data collected and investigations carry out on Chinese aid in Cameroon, this study concludes that Sino-Cameroon relations is “Win-Win” for both parties in this relationship.

China’s Aid to Africa: The Case of Cameroon

1.0 Introduction:

This section examines the Sino- African relationship and evolving nature of this relationship.

1.1 Sino- Africa Relations

The government of China has always maintained a cordial relationship with Africa; this union is built on mutual trust and interest. China needs Africa natural resources and a market to sell manufactured products to sustain its fast growing economy. According to Li Xing et al, (2013) during the cold war, this relationship was centered on ideological motives in which Chinese government supported African independent struggles and in return Africa governments supported Chinese agenda in the international arena, like the vote to claim the seat of Taiwan in 1971 in the United Nations. African States supported Chinese application for entry into World Trade Organization and Chinese desire to host 2008 Olympic in order to attract Chinese aid and investments in Africa, (Rotberg, 2008: 2) both shared a historical familiarity of being colonized by the West. The government of China uses both cards in the international arena, when dealing with Africa States Chinese government portrays itself as a developing nation and when dealing with the West and NATO as a developed nation, (Zafar, 2007) as cited by Li Xing et al, 2013:28).

Presently, the Sino-African relationship has moved from an ideological standpoint against imperialism to a more pragmatic and co-operative relationship. The government of China desires African friendship to support its agenda in the international arena and respects African Countries as equal partners. Chinese government has built mutual trust with African countries in comparison to European countries which do not respect African countries as equal partners, (Rotberg, 2008:2). The government of China wants African support for its global dominance and African governments are in need of Chinese aid to meet developmental targets and Chinese model of aid is longed-for by African governments (Li Xing, 2013). Chinese huge demand for natural resources has escalated commodity prices; Nigeria was able to pay its outstanding debt by trading with China. Sudan over a few years went from an oil importing country to an oil exporting country due to huge Chinese financial investments in the oil sector, in Sudan (Anshanl. L, 2008: 39). Marks, (2007) states this relationship can be analyzed from the perspective of South to South cooperation as one developing nation helping another developing nation. China as a nation has undergone and is still undergoing most developmental challenges and is better place to direct the African states. Chinese aid model which focuses on infrastructural development is appreciated by African governments as a more effective model of aid as compared to the western model of aid which place a lot of conditions before aid is granted. Such assessment of Chinese aid was further echoed in the Tokyo International Conference on African development in 1993.In that conference, African governments expressed their support for aid which focuses on development and production and argued it was more effective than traditional western aid which places conditions before aid is approved[footnoteRef:1]. Chinese aid model, unlike the Western aid model, is helping African countries to obtain self-reliant skills vital to sustain economic growth (Liu, 2010: 62) as cited by (Li Xing et al, 2013: 28). The Chinese model of aid is established on the following principles: low interest loans, mutual benefits and respect of both partners, aid without attachments or conditions, equality in aid relationship, faster projects with results, respecting State sovereignty, technology transfer by training locals, empowering recipient countries to be self- reliant, providing material and equipment’s to do these projects (State Council, 2011). [1: Zhang Zhixin, “Carrying out New Principles Of Foreign Aid to open Up a New Phase,” in Ministry of Foreign Trade and Economic Cooperation, Almanac of China’s Foreign Economic Relations and Trade 1994/95 (Beijing, 1995) 62. ]

Right now, Sino- African relationship is more pragmatic in terms of economic and political goals in an era of globalization where countries are more interconnected, (Thompson, 2005) as cited by (Li Xing et al 2013:24). The combination of good policy reforms, hard work and good economic directives China has witnessed a growth rate of more than 8 percent for the past decade which is the envy of the world, (Zafar, 2007). When the world’s most populated nation with a growth rate of 10- 11 percent needs raw materials to sustain its fast growing economy, it has to suck up resources all over the globe including Africa to sustain its fast growing economy and no nation, not even the colonial powers has such an appetite for natural resources (Rothberg, 2008: 1).

Recently, the highlight of this union was reaffirmed in a strategic meeting between China and African in 2006 and 2012, (FOCAC). African countries were invited for a strategic meeting on the cooperation between China and Africa. Zhang (2011) as cited by (Li Xing et al, 2013) coined the union of having reached the “partnership phase” Li Xing, et al, (2013:25).The Chinese government by 2005 had offer scholarship to more than 18,000 Africans to study in China, financed more than 720 projects in Africa, posted Chinese medical personnel’s who treated 170 million patients in Africa, (Yao, 2006) as cited by, (Li Xing, 2013). By 2009, African states had greater access to Chinese markets and Beijing had cancelled debt worth (US$2.7 Billion) for 35 African nations, most in the form of zero- interest loans and abolished tariffs on more than 440 lines of African import to China, (State Council, 2011) as cited by (Li Xing, et al,2013: 25). African leaders were assured by Chinese President Hu Jintoa in 2006 when he reaffirmed China commitment to Africa by forging a new strategic partnership. He commitment to doubling Chinese aid to Africa, cancelled more African debts, (Li Xing, et al, 2013: 25). Some researchers have called such a strategic relationship between Africa and China as the “The Year of Africa” (Alden et al, 2008: 2). Nowadays, when delegations from China and Africa visits one another, the delegation is consist of Cultural consultants, entrepreneurs, investors, financiers (Thompson, 2005) as cited by( Li Xing, et al,2013:25) providing opportunities for both partners in this relationship.

Though, these figures of Chinese aid to Africa are impressive and this union is in a strategic phase, many valid questions need to be raised about Chinese increase presence in Africa. Western rhetoric is loud; the media and critics point to the fact Africa is bless with abundant natural resources and Chinese huge appetite for raw materials and Africa’s wiliness to supply China with raw materials to sustain its economy making the relationship exploitative in nature, (Marks, 2007). According to Marks, (2007) Chinese government support of repressive regimes and its principle of non-interference have derailed international efforts of good governance and not a good sign for the consolidation of democracy in Africa. He argues that the notion that Chinese companies are not bound by western standard of good governance has led to human right infringements and exploitation of African workers and is counter-productive to the growth of workers’ rights in Africa (Ibid). A good example is the case of Zambia where workers in Chinese- owned mines, were protesting against inhumane working conditions and demanded answers about the death of their colleagues who died in a mining accident killing 46 miners. In response, Chinese security forces opened fire on the protesters, killing six of the protesters which led to massive criticism of Chinese presence and way of conducting business in Zambia (Arnold, 2009:70).

According to (Brautigam, 2011) cheap Chinese imported products are affecting the sustainability of African home industries. African industries do not have technology skills and competitive edge to compete with Chinese firms. This criticism of Chinese businesses was better expressed by Moelestsi Mbeki, when he explains in a conference organized by Chinese parliament the effects of cheap Chinese imported products to African home industries he said, Sino-Africa trade relations does not favor African countries since China exports finished products to Africa and import natural resources from Africa. Such a scenario is risky for African nations since it locks their economies in the primary industry which is not sustainable since Africa’s need to keep its natural resources for its own industrialization, (Mbeki, 2006)[footnoteRef:2]as cited by Marks, ( 2007: 5). [2: M. Mbeki (2006) South African Journal of International Affairs, 13(1): 7.]

1.2 Sino- Cameroon Relations

After achieving independence in 1961, Cameroon established diplomatic relations with Taiwan. Nonetheless, Cameroon diplomatic relations with Taiwan lasted for ten years since in 1971 Federal Republic of Cameroon disconnected relations with Taiwan, and recognized China. This relationship has transformed into a strategic partnership in social and economic collaboration (Khan and Baye, 2008). According to Jansson (2009) the 1st high- level high official meetings between the two countries occurred in August 1972 when Cameroon Minister of Foreign Affairs, Vincent Efon visited China to open diplomatic ties. Likewise, the first Chinese high-ranking officials to visits Cameroon was in 1978. Chen Muhua, the then Vice- Premier of the State Council visited Cameroon Jasson, (2009: 4). Cameroon attended the inaugural meeting of (FOCAC) in 2000. In 2007, Hu Jintao, President of China visited Cameroon and numerous economic co-operation agreements were signed (Jasson, 2009: 4). Cameroon partnership with the government of China greatly captures Chinese approach of mutual respect. Illustrated in, (FOCAC) in 2000, 2006 and 2012 respectively where Chinese officials reiterated the strategic importance of Sino-African relationship based on equality and mutual respect (Ibid).

Sino- Cameroon relationship covers an array of sectors which comprises of trade, investments in infrastructural sector: roads, bridges, dams and natural resources. Similarly, the Chinese government is constructing hospitals and schools in all regions of Cameroon, cancelling of debts worth millions of dollars and the provision of interest- free loans. This model of aid which focuses on production and infrastructural development is welcome and applauded by Cameroonian government, (Khan and Baye, 2008).Chinese aid to Cameroon follows the pattern of concessional loans, debt cancellation, scholarships and technical assistance with the first of such notable gifts being the construction of the Congress Hall and the Presidential Place, in 1977. The government of China has constructed many schools and hospital in almost all regions in Cameroon, provided scholarships to Cameroonians to study in Chinese universities and opened the Chinese language center in 1997 to facilitate the learning of Chinese language and culture (Khan and Baye, 2008).

It is worth noting that Chinese aid to Cameroon follows the same patterned of Chinese aid principles, which consist of, mutual respect, equality and non-interference in domestic politics of recipient’s countries. This principle of mutual respect and non-intervening in domestic policy was reiterated when Hu Jintao the President of China visited Cameroon in 2007. He reiterated Chinese government’s commitment to Cameroon by explaining that China will never impose her beliefs, social patterns and approach of economic development upon others (Ibid). The government of China has provided substantial aid relief to Cameroon which takes the form of debt cancellation; the first of such cancellation happened in 2000 in the, (FOCAC) conference where China cancelled US$ 34 million worth of Cameroonian debts owed to China. The second cancellation occurred when Hu Jintao the President of China visited Cameroon in 2007; US$ 32 million worth of debts was cancelled (Cameroon’s Ministry of Economics and Financial Report, 2007).

Nonetheless, critics of this union argued this relationship is exploitative in nature since China is interested in Cameroon’s raw materials to fuel its growing economy and a market to sell manufactured products, (Khan and Baye, 2008). The government of China needs African support in the international arena and Cameroon is willing to offer such support in return for Chinese aid and investments.

1.3 Effectiveness of Aid

Discussion about the usefulness of aid is a highly contested one. According to Boone (1996) there exist a correlation between the positive effect of aid and the relative size of the government. Nonetheless, there are studies which indicate a negative connection between development and aid. Empirical studies by Burnside and Dollar (2000) established that if the beneficiary country has sound monetary and fiscal policies with a vibrant civil society, foreign aid will have a positive impact. Similarly, this position was supported by Paul Collier (2008) in his book The Bottom Billion, he argues that from empirical studies he conducted in Africa demonstrates aid contributed to the minimal growth of African countries and without aid African countries would not have experienced any economic growth. He further explains foreign aid has helped to maintain the minimal growth in Sub-Saharan African which has helped Sub-Saharan African governments to meet developmental targets, (Ibid). Nonetheless, empirical studies by Easterly and Roodman (2003) found no correlation of foreign aid and economic development even in recipient countries which have sound financial and monetary policy. But a recent study by Akramov (2012) indicated aid ensures a helpful influence in financial output of a beneficiary nation when certain sectors are targeted such as agriculture, and infrastructures. Nevertheless, in that study they also came to the conclusion that if such aid is given to sectors such as health and education, such aid would not contribute to the beneficiary country meetings its developmental targets country (Ibid). Nevertheless, another firsthand study conducted by Morrisey and White (1996) indicates that foreign aid is less effective when compared to the role exports can contribute to economic growth. Exports contributed more in terms of economic growth to the recipient countries and are more helpful to the population than foreign aid.

The various discussions regarding usefulness of aid have given rise to persistent paradoxes of the impact of foreign aid. These paradoxes were first acknowledged by Mosley, (1987). He could not establish the correlation between aid and development since foreign aid allocated to developing nations went to fruitless public sector disbursements. His perspective was supported by Peter Boone (1996) in an empirical study he conducted with 95 countries in less developed countries in which he concluded that there was a link between aid and development. He argues further that most aid allocated to developing countries goes to consumption which does not contribute to the development of these nations.

Aid donor countries have adopted different approaches to determine the effectiveness of aid, one of such approach is the recipient country must meet certain conditions before such aid can be disbursed. Traditional aid donors such as OECD members States and international aid agencies such as World Bank, IMF and USAID have all put certain conditions before aid is approved.

According to Radelet and Bhavani, (2004) different approaches or modalities of foreign aid have different outcomes with respect to the influence of aid. They argued that aid granted to beneficiary countries which focuses on productive investment like the constructions of roads; bridges, have a short term effect on economic growth hence limiting its effectiveness. They further argued that aid given as technical assistance to promote good governance; democracy and aid that focus on sectors such as education and health will contribute to a nation meeting its developmental targets.

Zambian Economist, Dambisa Moyo argues that developmental aid has not been beneficial to Sub-Saharan African; she remains a fierce opponent of developmental aid and depicts foreign aid as encouraging corruption in Africa preventing African countries meeting developmental targets, (Moyo, 2009). Dambisa Moyo argues bilateral aid between aid donor’s countries and Sub-Saharan African countries which takes the form of budget support has only helped to promote corruption, mismanagement and aid dependency which has profited corrupt government officials and is detrimental to the overall growth of African economies (Moyo, 2009). Furthermore, she argues foreign aid has led to massive corruption and a motive for politicians in African to cling to power because of the incentives from aid money entering the continent from donor agencies and countries (Ibid).

Nevertheless, the view of Moyo, (2009) has been vigorously contested by other researchers. Paul Collier, (2008) in his book, The Bottom Billion, elucidates the link between aid and development. He explains that without foreign aid Sub-Saharan African economies would not have experienced economic growth. Similarly, two prominent economists of the World Bank Rajan and Subramanian, (2005) demonstrated a link between aid and development in countries which have sound public institutions and vice versa. They also argued that aid which comes with conditionality and has a political motive limits its effectiveness. However, they emphasize the need for a better management of aid. The diagram below highlights the various types of Chinese aid flows.

Diagram 1: Categories of Chinese aid flows

Source: Global Development Finance by Deborah Brautigam (2011)

The diagram overhead illustrates the various flows of Chinese aid which comprises of three channel of distribution. Firstly, the government of China provides aid via interest- free loans to developing nations to meet developmental challenges.

Secondly, the government of China provides aid in the form of grants which targets the infrastructural sector.

Thirdly, the government of China provides aid through concessional fixed low- interest loans and debt relief. It is worth noting the Chinese model of aid is different from the western model of aid since the government of China does not place conditions before aid is approved to developing nations. Likewise, Chinese companies operating in developing countries benefit from debt relief, to give a helping hand to Chinese companies investing in Africa.

The effectiveness of aid is definitely an empirical question and one that this study seeks to address. This study will employ the most relevant and recent data on Chinese aid to analyzed the impact of Chinese aid to the lives of Cameroonians.

1.4 Problem Statement

The ultimate aim of aid is the eradication of poverty which is geared towards self-sufficiency. Likewise, aid is meant to assist in the stabilization of the economic output of recipient countries. Proponents of foreign aid such as Paul Collier, (2008), argue that foreign aid is vital for the economic development of Africa and that aid has contributed to the minimal growth rate of African countries. Paul Collier, (2008) states that foreign aid is vital for developing countries to meet developmental goals. Nevertheless, other researcher such as Brautigam, (2011) argues that Sino-African relationship has been detrimental to the growth of African home industries since they do not have the necessary skills and knowledge to compete with Chinese manufacturing firms. She expounds Chinese aid to Africa through trade promotes the dumping of cheap Chinese manufactured products in African markets which have been detrimental to the growth of African home since they cannot compete with cheaper imports from China. Equally, Marks (2007) is of the opinion China existence in African is detrimental in the advancement of democracy in the continent and has derailed international hard work to encourage democracy. The government of China is supporting or conducting business with undemocratic nations. Furthermore, Arnold, (2009) is also supportive of the view that Chinese companies doing business in Sub-Saharan African is counterproductive to the promotion of human right and good governance and has stalled the progress of human right in Africa. He argues the fact that Chinese companies do not follow international working standards and conditions of work has led to many African workers’ rights being exploited by Chinese companies.

According to Lundsgaarde Erik, (2005) there is persistent calling by advocates of foreign aid for aid to be increased. He is of the opinion that without foreign aid, developing nations will not have sufficient funds to tackle developmental challenges of the 21st century. Cameroon, like most African countries, is highly dependent on foreign aid to meet developmental targets. Cameroon has been a huge benefactor of foreign aid since she gained her independence in 1960. Traditionally, Cameroon receives aid from Europe and USA, international organizations such as UN, IMF, World Bank (Mbaku, 1994). However, over the last decades China is becoming an important player in the international aid system and with its new status is forging a new relationship with African states. With this in mind, this study seeks a detailed investigation of Chinese aid in Cameroon.

1.5 Research Question

Intrigued by, Chinese huge appetite for raw material to sustain its robust economy, Chinese dependence in Africa as a vital partner for supplying natural resources. Chinese government over the last decades has significantly increased its aid to Africa to forge a new strategic partnership. Considering the above circumstances, the research question of this study is:

1 What are the impact of Chinese aid, trade, and investment in Cameroon?

To comprehend the research question other sub-questions will be relevant to support the main research question:

· What are the opportunities and challenges of this relationship?

· Is this relationship a win-win or a zero sum game?

· The impact of Chinese aid to the economic development of Cameroon?

1.6 Objective of the Study

· To add to the body of knowledge on the ongoing debate of Chinese aid in Cameroon.

· To investigate how Chinese aid has impacted the lives of Cameroonians.

1.7 Aims of the Study

· To examine the impact of Chinese aid in Cameroon.

· To examine the impact of Chinese aid to the economic development of Cameroon.

· To examine the challenges and opportunities of this relationship.

1.8 Research Focus

· To examine the impact of Chinese aid in Cameroon.

· To examine the Sino-Cameroon relationship.

· To examine the challenges and opportunities of this relationship.

1.9 Structure of the Study

To improve the readability of this study, I have incorporated a brief summary of the structure of this study. Chapter one, compromises of a brief introduction of the topic area, the problem statement, research question, and the objective of the study. Chapter two, compromises of methodological consideration. Chapter three encompasses literature review. Chapter four presents theories. Chapter five consists of findings and analysis of this study. Chapters six, consist of the conclusion of this study.

Sub-Conclusion

This chapter has provided a detailed background of the Sino-African relationship. Presently, the Sino-African relationship is centered on mutual respect and equality which has moved into a strategic partnership. Furthermore, this chapter has also provided a synopsis of the opportunities and challenges of this relationship. The next chapter will dwell on the methodological considerations relevant in collecting data for this study.

2.0 Methodology

This chapter outlines the methodological platform appropriate in answering the research question. It comprises of philosophical considerations, use of theory, data sources, case study, research strategy, research analysis and limitations of the study.

Diagram 2: An outline of the structure of the Study

Research field:

China´s Aid to Africa : The case of Cameroon

Research question;

Impact of Chinese aid, trade, and investments in Cameroon

Methodology

Error! Objects cannot be created from editing field codes.

Secondary Data: qualitative and quantitative

Data Analysis; Interpretation

Dependency theory

Economic Liberalism

t

Interdependence theory

Cameroon as a case study;

Findings and Analysis

Conclusions

2.2 Ontological Consideration,

2.1 Research Design

According to Bryman, (2008) research design is imperative in formulating the research questions in social research science. This study will adopt the research design approach of interpretive to comprehend Chinese aid in Cameroon. Interpretive is best suited for this study as social reality is based on how individual members of the society construe realities in which they participate. Social reality has significance for individual members of the society and these social realities and connotation are access through human interaction, observation and through interpretation of the text, (Bryman, 2008:17). To acquire data relevant in answering the research question, this study will employ secondary sources, which includes Newspapers, government documents, journals, data from government departments in Cameroon like National Institute of Statistics, Autonomous Public Debt Repayment Fund.

2.2 Research Strategies

According to Alan Bryman, (2008) there is a clear difference between qualitative and quantitative data collection methods in social research because of the diverse ways of collecting data. A qualitative research method of collecting empirical knowledge deals with any data that is non-numerical and describes the collecting process which includes in-depth interview, written documents review, and direct observations. Whereas, quantitative data collecting research methods deals with data which is numerical in nature and is verifiable (Ibid). Quantitative data collecting method includes collecting techniques such as participant observations; interview with closed- ended questions, questionnaires. This study employs both the qualitative and quantitative methods of data collection to help in analyzing the impact of Chinese aid, trade and investments in Cameroon.

2.3 Case Study

According to Bryman,( 2012) there are five applicable research strategies when conducting a social research study which include case study, survey, experiment, archival analysis and history. To offer an accurate picture of the impact of Chinese aid, trade and investments in Cameroon, this study will adopt the case study strategy. Bryman, (2012) defines case study as an investigation approach to study difficult entities. This study adopts a case study designed because case study offers the researcher a means of studying complex units comprising of several variables in a real life scenario. Furthermore, the case study’s designed strategy provides the researcher with a holistic view of the realities on the ground of the impact of Chinese aid, trade and investment in Cameroon. Similarly, case study design is well suited for this research to provide the relevant knowledge in analyzing the impact of Chinese aid, trade and investment in Cameroon. Furthermore, another reason for choosing case study design is that China is providing aid to many African countries to get a clear perspective of the impact of Chinese aid, trade and investment in terms of developmental aspect. It is imperative to narrow it to a single country, to verify the impact of Chinese aid in Africa.

2.4 Data Sources

· To provide all-inclusive picture of the first-hand knowledge on the impact of Chinese aid in Cameroon. This study employs several data collection techniques which include:

· Document review

· Data interpretation

· Content analysis

· Use of theories

· Limitation of the study.

2.5 Documents Review

In any research, document review is very vital in providing a clear picture of the research area. Consequently, an exhaustive overview of the works of earlier researchers will provide valuable data on the research topic. Secondary data was collected from government institutions in Cameroon: National Institute of Statistics Cameroon, Autonomous Public Debt Fund Cameroon, local and international newspaper like Cameroon Tribune, China Daily, Financial Times and World trade atlas. Equally, books, journal and articles of other researchers who have written extensively on the topic area have been of much assistance in analyzing the impact of Chinese aid, trade and investments in Cameroon.

2.6 Method of Analysis

The most appropriate methods of analysis to provide a holistic investigation of Chinese aid in Cameron is both qualitative and quantitative data analysis methods. According to Bryman, (2012) a qualitative analysis is how the researcher constructs reality by interpreting a text through coding of the text. Furthermore, this study will also adopt a quantitative data analysis. According to Bryman, (2012) quantitative data analysis involves interpreting the numerical aspect of social research. A quantitative data analysis is best suited for this study since it offers an objective analysis because of the numerical aspect of such an analysis. In this study data is collected from both qualitative and quantitative methods in order to create themes to demonstrate the impact of Chinese aid, trade and investments in Cameroon.

2.7 Use of Theory

In this study, the researcher wants to find out which theory is best suited for analyzing the impact of Chinese aid in Cameroon. Therefore, the researcher will use different theories in the field of international relations to determine which theory is best suited for analyzing the impact of Chinese aid in Cameroon. Economic liberalism, dependency, and interdependence are the three theories best suited in analyzing the research question. The diagram below displays theories applicable for the analysis of this study.

Use of Theory Diagram

The Impact of Chinese Aid, Trade, and Investments in Cameroon.

The diagram overhead displays three different philosophical approaches in analyzing the nature of the Sino-Cameroon relationship. Supporters of economic liberalism argue free trade is the greatest engines of prosperity and is the best mechanism to lift people out of poverty. Similarly, David Ricardo explains that the capitalist mode of production base on free market principle is good for the efficient management of a nation economic productivity, when he formulated the idea of Comparative advantage. He explains that a country that produces a particular product at a higher cost at home is better off importing that product from a country that produce that product at a lower cost[footnoteRef:3]. Whereas, proponents of dependency argue that development center on free trade is not good for developing nations, due to the exploitative nature of free trade. On the other, proponents of interdependence theory illustrates that both actors in this relationship are dependent on each other, China needs African resources to sustain its fast growing economy and African countries are in need of Chinese aid to meet developmental goals. [3: Library Economics liberty. Available online at: http://www.econlib.org/library/Enc/bios/Ricardo.html. Accessed on 5/25/2015.]

2.8 Limitation of the Study

It is worth mentioning that due to time constraint, this study relies solely on secondary data. According to Bryman, (2012) secondary data has many shortcomings. It is data collected for a different purpose and might lead to troubles in interpreting the data. Nonetheless, with the availability of books, articles on the topic, data from the government of Cameroon, Word trade atlas and other related sources, offer valuable data to investigate the impact of Chinese aid, trade and investments in Cameroon.

Another limitation of this study is it focuses solely on Cameroon, it would have been appropriate to include several African countries to offer a better representation of the Sino-African relationship. However, by limiting the Study to Cameroon, it has provided a genuine insight into the impact of Chinese aid in Cameroon.

2.9 Sub-Conclusion

Secondary data is the main data collection technique of this study with emphasis on content interpretation in order to get a holistic analysis of Chinese aid, trade and investment in Cameroon. It is important to mention that there are different methods in collecting and interpreting knowledge in social science research. This study will adopt the interpretation of texts to get a wide-ranging analysis of the impact of Chinese aid, trade and investments in Cameroon. Similarly, the next chapter will dwell on relevant literature available on the impact of Chinese aid in Africa.

3.0 Literature Review

There exists a wide range of data on foreign aid. Beneath is the two main demarcations of aid as purported by China and OECD?

3.1 OECD and Chinese Definition of Aid

OECD defines aid as any monetary contributions gear towards the improvement of living conditions of recipient country and must have a grant component of 25 percent, (OECD, 2009).

The overhead definition, it is clear aid engulfs debt cancelation, relief operation, transfer of cash, the deliverance of goods, financing developmental projects to recipient countries. The definition of aid via OCED was agreed upon by, (DAC) comprising of 23 members which includes USA, UK, Japan, Belgium, Italy, France, Australia, Austria, Norway, Greece, Canada, New Zealand, Ireland, Finland, Denmark, Luxembourg, Portugal, Netherlands, Spain, Switzerland, Sweden, Germany and the Commission of European Communities. Similarly, it is worth mentioning OECD approaches aid in two dimensions, firstly as, (ODA) which comprises of credits aim at encouraging economic development and well-being of the recipient nations (Wolf, et al, 2013). Secondly as, (ODF) which includes, non –concessional developmental lending by international institutions like IMF, World Bank and USAID (Ibid). OECD procedures of providing aid are in conformity with the principles of Bretton Wood institutions of placing conditions before aid is approved. Nonetheless, with the entering of China as an important actor in the giver community the approach of OCED member with regards to placing conditionality before aid is approve is witnessing great alterations since China is providing aid to African countries without conditions.

According to Davies, (2011) the government of China does not have a clear agreed definition of aid since Chinese government definition of foreign aid comprises of both (ODA) flows and (ODF) creating difficulties in differentiating aid from trade. Chinese aid to developing nations focuses on economic and technical collaboration. It is worth mentioning the Chinese model of aid is different from western aid since China does not place conditions before aid is approved. Chinese aid is based on mutual respect and equality which is appreciated by African governments, (Li Xing et al, 2013).

3.3 China’s Aid to Africa

According to Brautigam, (2011) Chinese aid is delivered through various schemes and channels. Chinese aid takes the form of low- interest- free loans, equity support to Chinese companies and firms investing in Africa. Similarly, Chinese government also provides aid through grants and concessional loans to fund infrastructural developments such as roads, bridges, dams, sport complex, hospitals, and schools, which are the most standard methods of Chinese aid, (Brautigam, 2011: 205). Likewise, most Chinese aid to Africa is provided through interest- free loans, debt cancelation, and concessional loans fiancé by Exim Bank of China.

Chinese aid to Africa has been received with a lot of mixed feelings. Mark, (2007) is critical of Chinese policy of non-intervening in the domestic policies of recipient Countries and argues it has been detrimental to the international efforts to promote good governance, which has derailed international efforts to promote the Rule of Law and democracy in Africa. He explains that governments like Sudan and Zimbabwe whose human right stance is questionable, still benefit from Chinese political and economic backing, which has led to mass human right violations which is not good for human improvement in Africa.

Another criticism of Chinese aid is the aspect of dumping of cheap Chinese manufactured products into African markets, which is detrimental to African home industries. A good example is the textile industry which has lost majority of its sales to cheap imported Chinese textile products, (Brautigam, 2011). The effects of cheaply imported Chinese products has led to local companies and business shutting down which has contributed to declining employment opportunities.

Nonetheless, there are some positives aspects of the Sino-African relationship. According to Li Xing et al, (2013) Chinese aid in the infrastructural sector is appreciated by African governments since it places emphasis on infrastructural development. Furthermore, Li Xing states for aid to be sustainable and effective it must include financial support training. According to Nour, (2010) Sudan has moved from an oil importing country to an oil exporting country because of huge Chinese investments in the oil sector. The Sudanese government has profited from Chinese aid in the oil sector through Chinese finance, equipment and knowledge transfer.

The impact of Chinese aid in Cameroon has a received mixed appraisal from researchers. Researcher such as Khan and Baye, (2008) portrays that the relationship is a complex but gutted with opportunities. The government of China is searching for a market to sell its manufactured products and Cameroon offers such a market. Whereas, Cameroon is in need of Chinese investment in the infrastructural sector and aid money to meet developmental goals. Nevertheless, Khan and Baye, (2008) states Chinese aid in Cameroon cut across the broad spectrum such as investing in infrastructural projects such as roads, dams, bridges, sports complex. Another, element of Chinese aid in Cameroon is allocating scholarship to Cameroonian students to study in Chinese universities (Jansson, 2009). The government of China has provided aid assistance in educational and health sectors in Cameroon by donating health equipment’s, renovating hospitals across the country and constructing schools. Nonetheless, he argues that Chinese businessmen and companies are affecting the output of local companies and business in Cameroon, (Khan and Baye, 2008).

3.4 Measuring Chinese Aid

There are numerous agencies accountable for Chinese foreign aid disbursements; foreign affairs ministry, Commerce ministry. Likewise, another vital component of Chinese foreign aid is Exim Bank which finances most infrastructural projects. Similarly, another important actor with regards to private financing is China Development Bank (CDB), founded in 1994.It finances commercial undertakings by Chinese companies and firms in Africa, (Dreher and Fuchs, 2011). Furthermore, according to Brautigam (2011) numerous agencies and Ministerial Departments are also involved in the decision- making procedure of Chinese aid.

There are no concrete figures concerning Chinese aid to Africa because of the secrecy in which Beijing disburses aid funding. Approximately, the amount of aid China has disbursed to Africa varies significantly. According to (Dreher and Fuchs) in 2006 Chinese Premier Wen Jiabo estimated China’s foreign aid to about US$ 5.6 billion from 1949-2006. Nonetheless, this figure is considered by most Chinese scholars as inaccurate. For example, Exim Bank provided concessional loans in 2007 to the amount of 8-9 billion, (Manning, 2007: 7). Furthermore, Kurlantzick, (2006) valued that about 2.7 billion dollars of aid was provided to Africa in 2004. Similarly, according to the Financial Times (2011), China is the biggest supplier of loans to developing countries; such loans are financed through the Exim Bank to the sum of 110 US$ billion in 2010[footnoteRef:4]. [4: “China’s lending hits new heights” Financial Times January, 17, 2011 ]

Due to international criticism of the way China provides its aid figures and the secrecy nature of its aid figures lead the Chinese government in 2011 to publish a White Paper to provide information on Chinese foreign aid, (State Council, 2011). According to the State Council (2011) 161 countries have profited from Chinese aid. Until 2009, most of these beneficiaries of Chinese aid are from developing countries consisting of 123 out of 161 (Ibid). China has provided aid to the sum of US$ 38.54 billion, mostly in the form of grants 41.4 %, 28.7 % concessional loans, 29.9 % in the form of interest- free loans (Ibid). Table 1, displays the announcement of Chinese aid to Africa by Chinese leaders to demonstrate Chinese commitment in Africa.

Table 1: Announcements of Aid by Chinese leaders.

Source: Deborah Brautigam (2011: 208)

Table 1 overhead demonstrates Chinese aid to African is constantly increasing from 2008 which was 313 million dollars to 10.8 billion dollars in 2011.This demonstrates China’s commitment in forming a strategic partnership with African nations. Similarly, table 1displays Chinese aid is provided through different mechanisms such as concessional loans and investments in infrastructures.

Sub-Conclusion

The impact of Chinese aid to Africa has received a mixed appraisal from researchers. Researchers such as Marks, (2007) is very critical of Chinese aid model of not intervening in internal politics of recipient countries has derailed international efforts to promote good governance in Africa. Similarly, Brautigam, (2011) argues that Chinese trade in Africa is disastrous to the growth of home based industries. Nonetheless, other researchers such as Li Xing, (2013) argued that African governments appreciate Chinese model of aid which focuses more on infrastructural development. The next chapter of this study will dwell on the theoretical consideration relevant for the analysis of this study.

4.0 THEORY

A glut of theories in international relations have flourished in enlightening the effectiveness of aid stretching from world system theory, constructivism, idealism, classical realism, dependency theory, and constructivism, all in a bid to explain the effectiveness of aid. Nevertheless, this study will adopt Economic Liberalism and Dependency theory which are two opposing theoretical standpoints employ by researchers to investigate Sino-African dealings. Similarly, this study will also adopt interdependence theory to portray dependency nature of Sino-African relationship.

4.1 Economic Liberalism and Trade

According to Adams, (2001) economic liberalism is a free market system with limited government interference and regulations. In such an economic system, commerce operates with limited government interference and regulation. The idea of an economic system based on limited government interference and less regulation was better coined by Adam Smith as the “invisible hand”. He explains limited government intervention in commercial activities will spur prosperity (Library of economics and liberty, 2013). Nonetheless, he explains the State is allowed to interfere in the economic activities in order to provide basic services to citizens such as water, schools, electricity, hospitals, and roads. According to Brown, (2005:39) economic liberalism does not support socialism or mixed economies and it is against all forms of tariffs and protectionism.

David Ricardo was a huge advocate of free trade. He formulated the idea of comparative advantage, an appropriate notion which is the key argument in support of capitalist system. He explains that a country is better off importing cheaper goods produce abroad and exporting locally cheaper goods abroad.[footnoteRef:5] This idea is based on the notion of opportunity cost; which means when a country is producing certain goods it automatically loses on producing other goods. [5: Library of economics and liberty, 2013): Available online at: //www.econlib.org/library/Enc/bios/Ricardo.html.Accessed on5/25/2015. ]

According to Gomes, (2003: 36) the cost of producing good A is not measured in term of financial costing but in terms of number of good B that would have been produced exploiting the same production abilities.

Using the example of two countries, he further enlightens this notion, two countries producing the same goods wine and cloth which are demanded in the same country.

Cost of Production:

Cloth Wine

Portugal 80 70

England 90 110

From the above, Portugal produces both cloth and wine cheaper than England and one might presumed that Portugal will be better off not importing for England. Nevertheless, the wine production cost is very high in England as compared to Portugal and the English prefer to import wine than producing it locally and such an opportunity can be exploited by the Portuguese by concentrating in producing wine and exporting wine to England and England will concentrate on the production of clothes and exporting to Portugal. Thus, Portugal will pay a higher price for clothes produced in England than if these clothes were produced domestically but the overall profit from selling wine to England will cover for that and the volume of trade between the two nations will increase Gomes,( 2003 :55)

The nature of the Sino-African relationship is complex since Africa is a huge continent made up of diverse countries with varied socio-political history. Consequently, Chinese trade with African nations should be evaluated from individual cases. African Countries exports natural resources, agricultural products and imports finished goods from China that is the nature of the Sino-African relationship, (Alden, 2007).

According to Hanson, Kararach and Shaw, (2012) Africa’s future in the 21st century is promising due to increase trading and collaboration with China in a host of important issues that is going to shape the 21st century. African trade with China improved from US$ 10.5 billion in 2000 to US$ 29.5 billion in 2004. Subsequently, a dramatic increase from 40 billion US dollars in 2005 to 55 billion US dollar, by 2007 there was an increase of 25 percent of Sino-African trade to the amount of US$ 32 Billion Alden, (2007: 11). During this period African trade with its traditional trading partners OECD countries witnessed a drop in trade, at the same time Sino- African trade increase from 1.3 percent in 1995 to 9.3 percent in 2004 (Ibid) This illustrates Chinese trade with Africa is rising at an alarming rate whereas African trade with the Europe is dwindling.

4.2 Economic Development

The increase Chinese demand for raw materials to sustain its fast -growing economy has increased commodity prices predominantly oil and metals which has given a lift to African economies, (Kaplinsky and Morris, 2009). China huge appetite for raw materials to fuel its economy has retained minimal economic growth in Sub-Saharan Africa despite global financial crisis. Increased commodity prices due to huge Chinese demand have contributed in a lift in GDP of Sub-Saharan African. A boost in GDP in Sub-Saharan African because of increased trade with China has enabled African governments to provide basic services such as clean pipe borne water, electricity, roads, hospitals and schools which have improved standard of living in the continent, (Arnold, 2009: 54-56).

State Council, (2011) depicts that by 2009, the government of China had eliminated tariffs on more than 440 lines of African exports. The elimination of most tariffs on African products to Chinese market has boost African exports to Chinese markets and opened up unprecedented access of African companies’ (Yao, 2006). Furthermore, another positive aspect of the Sino-African trade agreement is zero tariffs to African agricultural products. Huge Chinese population has created opportunities for African countries to supply agricultural product to China and has increased the volume of trade between African and China, (Fan, 2007).

Agricultural growth is imperative in the wellbeing of farmers since it is a mechanism of alleviating poverty in Africa since agriculture is the backbone of African economies (Sammis, 2011).Increased African agricultural export to China has improved living standard in African since farmers have the financial ability to spend more on basic goods and services which subsequently have improved the quality of life in the continent (Ibid). A worthy example is the government of China financing a training programmed, to train farmers in Guinea Bissau to produce hybrid rice, (Fan, 2010). Therefore, the production of hybrid rice has helped reduced hunger in Guinea- Bissau.

Guy Arnold, (2009) states that infrastructural development is fundamental in improving the living conditions in Sub-Saharan African. African states are profiting from huge Chinese investments in the infrastructural sectors: the agreement between Chinese Export-Import Bank (Exim Bank) with the Democratic Republic of Congo to finance infrastructural projects worth 6.5 billion dollar, in a bid to improve infrastructures in the Democratic Republic of Congo (Arnold, 2009: 60-70) is fundamental in the economic development of the DRC. Likewise, Angola is benefiting from huge Chinese investments in the infrastructural sector to the amount of 300-500 million US$ to improve Angolan railway network (Ibid). One of the most significant Chinese infrastructural investments in Africa is the TAZARA railway. It was constructed during the peak of the Cold War to demonstrate its loyalty to fellow socialist states. The railway linked Dar es Salaam to the copper belt completed in 1975 Brautigam, (2009: 40) and facilitated movement between Zambia and Tanzania. The improvement in transport network due to huge Chinese investment in Tanzanian helped the Chinese government to transport raw materials out of East Africa. TAZARA railway was used as an opening to transport raw materials from landlord countries like Uganda, Zimbabwe and Zambia (Ibid). Improvement in transport network facilitated the shipping of agricultural and raw materials out of the country which increased the volume of trade and boost GPD of African countries. With a positive balance of payment, African government have more flexibility in terms of budget choice and can spend more on social services such as schools, hospitals, electricity and pipe borne water and has improved living conditions.

Nevertheless, the impact of Sino-African trade in improving the standard of living based on individual countries. Countries which exports agricultural products and raw materials to China will benefit from high commodities prices due to China huge demand for natural resources. Nonetheless, manufacturing countries with vibrant home industries like South Africa have much to lose trading with China since it is detrimental to the growth of home industries, (Eichengreen and HUI, 2006: 227). According to the IMF forecast as cited by, (Arnold, 2009: 63) Sino-African trade will surpass the US$ 50 in 2007 and will eventually reach US$ 100 in 2010. Such a forecast indicates Sino-Africa trade is increasing at an alarming rate and has lifted many people out of poverty. China is importing different commodities from all over African; such commodities include timber from Cameroon, Liberia, Gabon and Equatorial Guinea. The Chinese government also imports diamonds from Zimbabwe, Congo, copper from Zambia, oil from Sudan and Nigeria. Even countries which do not have natural resources have witnessed a dramatic increase of trade with China like Ethiopia which has double its trade with China from US$ 150 in 2003 to US$ 300 in 2005, (Arnold, and 2009:56).

4.3 Social Development

According to Ademola et al, (2009) cheap consumer products from China have improved living standards in Africa since individuals are able to afford made in China goods as compared to goods from Europe. Cheap motorcycles, vehicles, mobile phones, textiles products, household appliances such as fridges, gas cooker have improved the quality of life of most Africans, (Ademola et al, and 2009:469). Furthermore, the availability of cheaper transport equipment’s to African business has lowered the cost of doing business in Africa, (White Africa, 2009). The availability of cheap motorcycles from China is significantly supplementing the production of taxi services in all municipalities in Africa, generating employment opportunities for the youths. Motorcycles are very useful in conducting petite business activities in cities and villages since most roads are inaccessible.

Improved communication due to the availability of cheap mobile phones from China has made it much easier for farmers to get in contact with prospective buyers. Similarly, the availability of cheap mobile phones from China has improved the efficiency of African business since businessmen can contact prospective trading partners much faster than before which has improved trading in Africa, (Parr, 2013). Equally the availability of cheap mobile phone from China has transformed millions of lives in Africa through mobile money transfer, the effects of mobile money transfer in the lives of ordinary Africans is amazing because people can received and send money without the complication of bank transaction and has improved the circulation of money, hence improving living standards of most Africans.

Haughton and Haughton, (2011) states that African has benefited from cheap consumer goods from China such as fridge’s, gas cooker, household furniture’s, and kitchen utensils have improved the quality of life of most Africans. These cheaper goods from China has improved living standard among African since they are more affordable as compared to Africans buying such goods from other trading partners like Europe, Japan and the USA,( Haughton and Haughton, 2011 :113-114).

The government of China is financing various training schemes to assist African countries meet the challenges of the 21st century, (Besada et al, 2008). This various technology centers which primary focus is innovative research have helped African countries to produce improved quality products. A good example of Sino-African collaboration in knowledge such as the training schemes in Guinea Bissau to train farmers how to grow and produce hybrid rice has improved the quality of rice in Guinea- Bissau, (Fan, 2010). The effect of the Chinese training program is a knowledge transfer which has helped African countries to gain necessary skills needed for the 21st century. Furthermore, the rice training scheme in Guinea- Bissau has increased rice productivity which has help reduced hunger in Guinea-Bissau.

4.4 Critique of the Theory

Helleiner, (2003) states advocates of economic liberalism fails to understand for an efficient capitalist system in which the poor in the society are protected the state must play an important role in regulating certain activities such as currency exchange rate, bank regulations, labor regulation. He explains without the government regulating commercial and financial transactions there are bound to be disastrous economic consequences and in such a scenario it is the underprivileged members of the society that are bound to suffer. Therefore, the state must intervene and regulate financial activities to protect the underprivileged in society.

Ghosh, (2001) states that a society based on economic liberalism exploits the working class. He explains such a society which the capitalist elite exploits the working class is unjust since economic gains of the system are in the hands of a few capitalist landowners.

Ghosh, (2001) argues economic liberalism market principles based on Bretton Wood institutions desires structural adjustment for developing nations to reap the benefits of free trade and without such structural adjustments from these Bretton Wood institutions developing nations will not profit from free trade.

According to Helleiner, (2003:691) members of the green party revolution argue advocates of economic liberalism do not pay much attention to environmental issues and are much more interested

in how much profit is to be made. Similarly, they argued that Bretton Wood institutions do not place much emphasis on environmental issues.

Similarly, feminist argues the theory fails to take into account men and women participate differently in economic production. Women are engaged in low- paying jobs like housekeeping and export processing jobs while men are involved in high paying service jobs Helleiner, (2003:692). They argued capitalist system of production does little to protect rights of women in the job market.

Summary

Sino-African trade is beneficial to African countries because of cheaper products from China which has improved living conditions of most Africans. Increased Sino-African trade through investments has contributed to African countries meeting developmental goals. The affordability of made in China goods has improved living conditions in the continent since Africans are able to purchase goods they could not buy from Europe, (Hanson, Kararach, Shaw, 2012). Increase size of trade concerning Africa and China has boost GDP of African nations which has contributed to economic growth which has led to a positive balance of payment. A positive balance of payment enables African governments to provide basic services to the population due to the availability of cash to spend on such services like the provision of pipe borne water, electricity, hospitals, and schools. Nonetheless, there are some negative effects of Sino-African trade, African economies are becoming too dependent on trade with China which focuses more on natural resources and it is not good for the future industrialization of Africa.

4.5 Dependency Theory

Dependency theory seeks to enlighten the circumstances contributing to the underdevelopment of less developed countries (LD C). It is deep-rooted in the Marxism doctrine of exploitation of less developed countries by developed countries. Nonetheless, to have a better analysis of dependency theory the works of authors who have written extensively on the topic will be useful.

B.N. Ghosh, (2001) in his book Dependency Theory Revisited defines dependency as an unequal trading relations between the developed economies the core nations dominate the less developed economies periphery nations, all trading activities are determined by the developed economies at the expense of the less developed economies,(Ghosh, 2001: 1). Similarly, Dos Santos, (1970) in his book Structure of Dependency defines dependency as when the expansion of the periphery less developed economies is determined by developed economies Dos Santos, (1970:231).

4.6 Economic Development

According to Ademola, (2009) cheaply imported made in China goods is detrimental to the growth of African home industries since the goods are more affordable than locally made goods. This has contributed in workers losing their jobs since African home industries do not have the necessary skills and knowledge to compete with Chinese manufacturing firms. A good example is the South African textile industry which has been affected by cheap imported Chinese textile products. The South African textile industry has lost from 23.000 to 85.000 jobs due to competition from cheaper textile products from China and has resulted in workers being laid off which has aggravated the unemployment situation.

Giovannetti and Sanfilippo, (2009: 522) illustrates there is a correlation between increasing Chinese exports and decreasing African export when both countries produce the same products. They argued in areas where Africa and China are competing for the same targeted customer. African companies are in a disadvantageous position. The textile industry in South Africa, the influx of cheaper textile products from China has reduced the demand for local textile products. Such a scenario is not good for the employment situation in South Africa. South African home industries are bound to lay off workers due to low sales. This situation has led to severe criticism by high ranking government officials in South Africa, President Mbeki, as cited by Arnold, (2009) states that the nature of Sino-African trade whereby China exports manufactured products to Africa and imports raw materials is not good for the industrialization of Africa, Arnold,( 2009: 71-72). This is a true picture of effects of Sino-African trade.

According to Munemo, (2013:303-304) Sino-African trade relationship, has been disastrous to the African continent. He explains Sino-Africa trade relationship is not good for industrialization prospects of Africa, since Africa is exports raw material and imports finished products from China makes it challenging for African economies to diversify.

According to Kofi and Desta, (2008: 36-37) African countries have failed to adapt their economies to the challenges of the 21st century and have structured their economies to depend on exporting raw materials and agricultural products. Bretton Wood institutions like W.T.O is putting African economies on an unfair advantage when they advocate for free trade ,whereas, develop countries are protecting their home industries from outside competition by providing subsidies Moyo, (2009:115). For example US agricultural sector which benefits from government subsidies making it difficult for the African agricultural sector to compete.

According to Ghosh ,(2001) industrialized nations like China are exploiting economic situations in less developed countries by providing aid to have influence and complete dominance of African economies which has contributed to African countries continuous reliant on aid.

4.7 Social development

Chinese increase presence in Africa has had disastrous consequences as far as the promotion of human right is concerned. Marks, (2007) argues that Chinese support of dictatorial regimes with a poor human right record has derailed international efforts to promote good governance and not a good sign for African democracy. A striking case is in Zambia where protestors of Chinese -owned mines protested against poor working conditions, low wages and demanded accountability from Chinese top management when a mining explosion killed 46 Zambians miners. Miners demanded an answer from top Chinese management instead 6 protesters were shot by Chinese security forces leading to the massive discontent of Chinese presence in Zambia, (Arnold, and 2009: 70).

Similarly, Chinese trade with Zambia has resulted to dumping of cheap Chinese goods at the detriment of infant industries which has led to discontent of local businessmen and women in Zambia who question Chinese involvement in petite business activities. This situation prompted the former Zambia minister of trade to question Chinese true intentions in Zambia by stating ingenious businessmen cannot compete with Chinese businessmen in petite trading activities such as selling of eggs, clothes and chicken in the market and it presents a great challenge to local businessmen, (Arnold, 2009:70). This model of Chinese trade in Africa has contributed in African economies being too dependent on trade with China.

Another contentious aspect of Chinese involvement in Africa is Chinese support of dictatorial regimes and conducting business with such regimes like selling arms to Zimbabwe and Sudan which both presidents are known human right offenders, (Brautigam, 2009: 287). The sale of arms to dictatorial regimes that cling to power by all means has led to massive human right abuses in the continent and such arms are used in conflict regions like Sudan. Likewise, president Mugabe of Zimbabwe is using arms from China to torture and silence any opposition voice in the country (Arnold, 2009:57-74). The supply of arms to dictatorial regimes has derailed international efforts to promote good governance and it is not good for consolidation of democracy in Africa (Marks, 2007). Nonetheless, Chinese officials insist Chinese government principle of non-intervening in the internal policymaking of foreign regimes must be respected by the international community, (Arnold, 2009:57). Such statements do not help anti-China sentiments in the continent since it demonstrates that China does not care about good governance and democracy.

Nevertheless, African civil societies are exacting pressures on their governments to protect their citizens when dealing with Chinese companies and business. For example, the humiliating encounter China had in 2008 where a Chinese bound cargo ship with ammunition comprises of assault rifle, rocket –propelled grenades intended for Zimbabwe was refuse to be uploaded by South Africa dockworkers because of the intended purpose of the arms and cargo ship was recall back to China and China suffered international the humiliation (Arnold, 2009:71).

Another aspect of Chinese trade with Africa countries which contributes to dependency is the fact that Chinese trade in Africa focuses solely on raw material which is not good for the industrialization of infant industries due to limited transfer of knowledge by Chinese Firms since they prefer Chinese workers (Marks, 2007). Such a trajectory of Sino-African trade makes Africa economies too reliant on trade with China. Furthermore, Chinese trading with Africa countries focuses more on raw materials locks African economies in the primary industry and susceptible to prices fluctuation (Ibid). Similarly, Chinese investment in oil and gas sectors in Africa which has not encourage African oil exporting nations to diversify their economies and have made oil exporting nations too reliant on Chinese investment in the oil sector which has a negative effect on the employment situation, (Adenikingjin and Bamou, 2006:18-19). The figure below describes the organizational framework of dependency theory.

Diagram 3: Organizational Framework of Dependency Theory

CORE STATES;

CAPITALIST IN ORIENTATION

PRODUCER AND EXPORTER OF FINISHED MANUFACTURED PRODUTCS, IMPORTER OF RAW MATERIAL

VALUE ADDED

REPOSITORY OF SURPLUS CAPITAL

VALUE ADDED

CAMEROON/AFRICA

SUPPLY NATURAL RESOURCES AND AGRICULTURAL PRODUCTS

BUYS FINISHED MANUFACTURED PRODUCTS. ZERO SUM GAIN

ZERO SUM GAIN

ZERO SUM GAIN

CONTACT CENTRE

THE CASE OF CHINA

IMPORTS NATURAL RESOURCES AND AGRICULTURAL PRODUCTS

EXPORTS MANUFACTURED FINISHED PRODUCTS

The overhead diagram displays the dynamic of Sino-African trade relations. China imports raw materials and agricultural products from Africa and exports manufactured products to Africa, valued added to the Chinese economy. Whereas, Africa export raw materials and agricultural to China and imports manufactured products which leads to a zero- sum gain, which led to the dependency of African economies on trading with China.

4.8 Critique of the Theory

According to Ghosh, (2001) dependency theory fails to provide any practical alternative to overcome the economic dependency of less developed economies from developed economies. The theory is too subjective and does not provide better alternatives or solution to overcome the challenges of underdevelopment in less developed countries, (Ghost, 2001:12).Dependency theory lacks concrete details on how developing countries can become less dependent on developed economies.

Furthermore, the theory has failed to illustrate how poverty and wealth are the outcomes of capitalism (Ghosh, 2001: 11). Dependency theory has failed to give a proper explanation of how capitalism generates enormous wealth and while also creating the conditions of economic hardship and poverty at the same time

Finally, the theory fails to take into account class and cultural aspect which plays a factor in the underdevelopment and generating poverty of the less developed countries, (Ghosh, 2001:13). Dependency theory fails to acknowledge some of the issue of poverty and underdevelopment of less developed countries have a cultural aspect which has hindered any real economic progress. He further argues that dependency theory is constrained by a naïve interpretation which makes the theory fail to provide better alternatives on how less developed countries can break away from poverty.

4.9 Interdependence Theory

According to Brenner, (2000) interdependence theory gained popularity in the 1970s once advocates of political realist philosophy could not offer a better description of the recent happenings in international relations and failed to recognize several new features of interstate relations. Though, this theory has witnessed some changes over the years the core principles of interdependence theory have remained the same over the years. Researchers such as Robert Keohane and Joseph Nye, (1977) are of the opinion that interdependence theory encompasses nations avoiding conflict because of the benefit of commercial activities. They explained it is hard for trading nations to go to war because of the cost of war and the benefit of trading outweighs wars. Although, scholars such as Robert Keohane and Joseph Nye, (1977) portrays interdependence theory as a situations in which actors of international relations, that is states are engaged in a reciprocal relationship with other states because of the benefits of trade and opportunities to be derived from trading activities as opposed to conflict which leads to financial cost.

In reality, Sino-African relationship both partners are reliant on one another. China offers financial incentives in the form of aid, whereas, African countries provide raw materials, natural resources and a market for manufactured Chinese goods.

Such a scenario of the relationship as describes above is better illustrated by Enuka, (2011, 44-53) when he explain that Africa is a poor continent which is in need of aid and financial money to meet developmental targets and it is willing to partner with any nation that can offer much needed financial assistance.

It is worthy of mentioning that state relations are not always equally balance as illustrated by Robert Keohane and Joseph Nye (1977) they presented a logical example where country A is dependent on trade with Country B with respect to oil and country B is dependent on trade with country A with respect to food. Both nations are dependent on each other, but it would be wrong and incorrect to assume that the trading relationship between country A and B is a balance trading relationship. The picture of this relationship explain overhead is not balance since country B that sells oil has more money than country A that sell food.

That is the nature of Sino-Africa relationship is not a balanced relationship. China buys raw material and sells finished products to Africa value is added to the Chinese economy .Whereas, Africa countries sells raw material to China leading to zero sum-gain. Nevertheless, both partners are dependent on each other for trade. The Chinese government is in need of African natural resources to sustain its fast- growing economy. While, Africa nations are in need of Chinese aid to meet millennium development targets. The figure beneath will illustrate the application of the interdependence theory.

Diagram 4: Application of interdependence theory

The diagram overhead displays the dependent nature of the Sino-African relationship. The Chinese government is dependent on African raw materials to sustain its fast growing economy. Africa nations are dependent on Chinese aid and investment to meet developmental targets. It is worthy of pointing out that Sino-African trade relationship is unbalanced since Africa’s exports raw materials and imports finished products from China.

4.9 Criticism of the Theory

Firstly, less developed economies are in a disadvantageous position when bargain with developed countries since they are too reliant on financial and economic grants from developed economies putting African countries in a weak bargaining position[footnoteRef:6]. Nations with robust economy such as China are in strong bargaining position when negotiating and are able to direct and determined the outcomes of trading negotiations because of financial incentives they offer. [6: Omojarabi Femi (2015): The relevance of interdependency theory in a Globalization Age. Available online at: http://www.academia.edu/4327944/. Accessed on 5/26/2015.]

Secondly, another critique is that international organizations like W.T.O. World Bank, UN are not democratic enough and do not protect the interest of smaller nations but promote the agendas of powerful nations. For instance, UN Security Council with veto powers allocated to permanent members supersedes the decision of the National Assembly which is undemocratic. Likewise, W.T.O and I.M.F decisions are conducted behind closed doors and in secrecy which is not good for democratic processes of such organizations (Ibid). There is a need for structural reformation of Bretton Wood institutions in order for African nations to profit from free trade.

Finally another critique of the theory is that the theory fails to explain states will always put the interest of their nations before any other nations and will resist any common profits if it is not profitable, (Ibid).

Sub-Conclusion

It is clear from the overhead description Sino-African relationship is complex but gutted with opportunities. From an African perspective, the relationship offers opportunities in terms of investment and financial incentives. Equally, from the Chinese perspective, it offers China a ready market to sell Chinese manufactured products and a constant supply of raw materials.

The theories explained overhead illustrate how Sino-African relationship works and offers different perspectives of this relationship. Economic liberalism portrays the benefit of free trade. Whereas, dependency theory demonstrates that Sino-African trade relations has contributed in African economies becoming too dependent on trade with China which has disastrous consequences. Lastly, interdependence theory describes Sino-African relations as both nations dependent on each other; Chinese government needs African raw materials and a market to sell its manufactured products whereas Africa needs Chinese aid to meet developmental targets.

5.0 Findings and Analytical Discussion

This chapter data will be analyzed in conjunction with relevant theories to generate meaning of Sino-Cameroon relations, whether this relationship has created opportunities or challenges for Cameroon to meets its developmental goals. This chapter will be grouped into themes for easy readability.

5.1 Sino-Cameroon Trade: Opportunities and Challenges.

Trade is an essential element in the economic development of a nation. Chinese increased status as a key actor in international political economy has increased its trading with the outside world. Sino-Cameroon trade over the past two decades has witnessed dramatic increase as represented below.

Figure 1: Sino-Cameroon Exports and Imports from 1995 to 2008

Source: World Trade Atlas Complied by CCS (2008)[footnoteRef:7] [7: Centre for Chinese Studies]

It is clear from figure 1 overhead that the size of trade concerning Cameroon and China is on an upward trend. Cameroon exports to China was US$ 30 million in 1995 which improved to US$ 475 million in 2008, while at the same time Cameroon importations from China improved from 10 million US$ in 1995 to 380 US$ million in 2008.It is clear from figure 1 Cameroon imports from China is in a continuous upward trend which means Cameroon is importing more products from China from 10 million US$ in 1995 to 380 million US$ which indicates China is an important import destination for Cameroon business. Likewise, figure 1 also shows Cameroon’s exports to China constantly fluctuate which are not good for the overall trading relations with China.

Nonetheless, it is important to determine the degree to which Cameroon is benefiting from trading relations with China. The increased importation of cheaply manufactured products from China is advantageous to the lower stratum of the Cameroonian society because of the affordability of made in China products. The importation of cheap consumer products from China has created employment opportunities for youths in the service sector in Cameroon. For instance, the importation of cheap motorcycles from China has supplemented the availability of taxi services which has generated employment opportunities for youth who are employed in taxi services transporting passengers. Similarly, the low-cost importation of motorcycles from China has generated revenues for city councils through the issuing of licenses and the collection of taxes from owners of these motorcycles operating taxi services. Furthermore, the importation of cheap mobile phones from China has also created employment opportunities for youths who work in phone booth services. Khan and Baye, (2008) explain the availability of cheap mobile phones from China has eased money transfer in Cameroon through mobile transfer which has contributed to stress-free financial transactions as people can received and send money via mobile phones .Another, findings of this study is phone booth services generates revenue for city council through the collection of taxes for operating a phone booth service. Due to the increase job opportunities created from cheap motorcycles and mobile phones from China has contributed to the reduction of crime rate in the major cities in Cameroon. Figure 2 beneath shows employment situ