Accidently shaping African politics? : China’s economic pursuit of mutual benefits in Zambia

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Accidently shaping African politics?

China’s economic pursuit of mutual benefits in Zambia

June 22, 2018

Research Project: The African Renaissance and the Politics of Development Msc Thesis Political Science: International Relations

Word count: 23.007

Author: Oscar Donck (10380183) Supervisor: dr. M.O. (Michael) Eze. Second reader: dr. R. (Rocco) Bellanova

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Abstract

Research on China’s economic activities in Africa is widespread. Scholarly debate on the Sino-African relation clashes on the economic benefits or losses China presents. This thesis moves beyond this economic scope and examines whether China’s economic policy imposes effects on Zambian politics. A multi-level analysis with a focus and theorization on agency and structure is implemented. Using multiple primary sources and building on scholarly debates, this research

argues that China’s capital presents increasingly political emancipating and developmental opportunities to Zambia. The specific effects of China’s capital, however, are highly dependent

on Zambia’s willingness and ability to exert agency into the relationship.

Keywords: China, Africa, Zambia, Beijing Consensus, economic relationship, political effects, aid, FDI, agency-structure

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List of abbreviations

ACCZ Association of Chinese Corporations in Zambia

AEI American Enterprise Institute

AERC African Economic Research Consortium

BjC Beijing Consensus

BOC Bank of China

CCM Column Coal Mine

CCS The Centre for Chinese Studies

CGIT China Global Investment Tracker

CNMC China Non-Ferrous Metals Mining Group

DAC Development Assistance Committee

ExIm Chinese Export-Import Bank

FDI Foreign Direct Investment

FOCAC Forum on China-Africa Cooperation

IMF International Monetary Fund

IPRC International Poverty Reduction Center

ODA Official Development Assistance

OECD Organization for Economic Cooperation and Development

OFDI Outward Foreign Direct Investment

OOF Other Official Flows

PF Patriotic Front

MFEZ Multi-Facility Economic Zone

MMD Movement for Multiparty Democracy

MOFCOM Ministry of Commerce

NFCA Non-Ferrous China-Africa Mining Corporation

POE Privately-Owned Enterprise

SEZ Special Economic Zones

SSA Sub-Saharan Africa

SOE State-Owned Enterprise

TUFF Tracking Underreported Financial Flows

WaC Washington Consensus

ZDA Zambia Development Agency

ZEIT Zambia Extractive Industries Transparency Initiative

ZIC Zambia Investment Centre

List of figures

Figure 1: Overview literature review & indicators p. 13 Figure 2: Roots and channels of Chinese finance in Africa p. 17

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“The great force of history comes from the fact that we carry it within us, are unconsciously

controlled by it in many ways, and history is literally present in all that we do

” – James Baldwin

(1985).

Although James Baldwin’s quote is applicable on anything that basically has a history, it seems strikingly fitting for the history of Africa: the vast continent was, after the Western conquest around the globe, quickly exploited in order to benefit the West as a stepping stone for imperial adventures. Particularly the English, the Dutch and the Portuguese were quick on their feet to extract revenues and use African lands as establishments territories for further travels towards Asia. These activities culminated in the Berlin Conference of 1884, where the European powers divided up the entire continent – which was three times the surface of the European continent – between themselves and engaged in heavy competition for African lands (Bayly, 2004, p 228 – 231). Now, that is commonly known as ‘the Scramble for Africa’.

The implications of the Western activities in Africa are widespread. The damages of (neo)colonialism on African lands, resources and minds are described by numerous scholars and remain part of historic and political debate. Despite African nations having achieved

independence in the 21st_{century and Africa’s current development which is commonly referred} to as the ‘African Renaissance’, denoting a revival and renewal of the African continent

(Kathleen & Winston, 2017), many African countries are still underdeveloped when compared to the rest of the world. According to data of the World Bank(WB), for example, twenty-one of the twenty-five countries in 2016 with the lowest GDP per capita were African (WB, 2018a; Tasch, 2016 April 3). But the wreckages of colonialism also supersede the economic aspects, for the colonialist rücksichtslos division and pooling of tribes and countries into plasticized states did not

create stable conditions for Africans to thrive (Eze, 2010, p. 159).

Goaded by different motives, Western countries engaged in interventionist politics by helping African countries transcend their state of underdevelopment, hence implementing liberal ideas as democracy, the protection of human rights and the reduction of poverty. During the uprising of neoliberalism in the late 1980s to early 1990s, the International Monetary Fund (IMF), the WB and the United States actively promoted the ‘Washington Consensus’ (WaC), an economic reform policy intended to privatize state companies, liberalize markets and make demands of strict budgetary policies in order to develop African countries. The contentions around the effectiveness of this policy, aiming at African development, however, still continues.

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However, these policies of development and financial aid were and are often intertwined with ‘politics of conditionality’, meaning that only by complying with Western political and economic demands, African countries will receive financial help for development (Alesina & Dollar, 2000; Tull, 2006). Nonetheless, many African countries are incapable or unwilling of complying with such policies, thus resulting in a situation in which neither Western nor African countries come anywhere near their set ambitions of development. Moreover, the effectiveness of Western aid policies in general is still debated. Dambisa Moyo (2006), for example, argues that giving aid only makes recipient countries dependent on that aid, thereby reducing the possibilities of increasing state capacities, and Alberto Alesina & David Dollar (2000) argue that aid only increases unproductive public consumption. Politics of development thus remain a debated issue. In the meanwhile, however, a ‘sleeping dragon’ seems to arise, providing Africa with a different set of instruments that could possibly spur African development: China.

1.2 China and its ‘Beijing Consensus’

With its rise on the global stage, China has established itself as an alternative to Africa for the WaC (Van Dijk, 2009, p. 207). At the end of the 20th_{century, in accordance with their growth} into a global economic power, China’s foreign policy changed and intensified in weight. As a growing power, China has entered the global stage and started to engage with many countries across the globe. Subsequently, China has extended its activities deep into the African continent, where it engages in trade, investment and what one could call ‘politics of development’. In 2013, China became the largest importer of Sub-Saharan Africa (SSA) (Pigato & Tang, 2015). Also, to strengthen economic and political ties and institutionalize African-Chinese relations, the Forum on China-Africa Cooperation (FOCAC) was founded in 2000. In an effort to comprehend the weight of China’s activities on the African continent, Pádraig Carmody & Ian Taylor (2010) state that China’s involvement in Africa is ‘the most momentous development on the [African] continent since the end of the Cold War’.

With regard to the WaC, Chinese foreign economic policies are often placed within a notion of their own economic development model, labelled the ‘Beijing Consensus’(BjC). Coined by Joshua Ramo (2004), the unofficial BjC conceptualizes China’s policies in which China ‘marks a path for other nations around the world who are trying to figure out not simply how to

develop their countries, but also how to fit into the national order in a way that allows them to be truly independent’ (Ramo, 2004, p. 3). Ramo portrays the BjC as a non-Western alternative for the WaC, which Ramo describes as being famous for its ‘prescriptive, Washington-knows-best approaches to telling other nations how to run themselves’ (Ramo, 2004, p.4).

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Consequently, African governments are solely the executors of Western stipulated politics, restricting their own agency. Abstaining of such strategies, the BjC offers more opportunities for recipient governments to define their own developmental politics (van Dijk, 2009, p. 211). As Ramo aptly notes: ‘It [the BjC] is about using economics and governance to improve society, an original goal of development economics that somehow got list in the Washington-consensus driven 1990s’.

In practice, the BjC is predicated on the Chinese tradition of non-interference in political, domestic affairs, while looking for ‘mutual benefits’ with ‘no political strings attached’ (Alden, 2007, p. 8). This ambition is a continuation of China’s foreign policy that is founded upon the ‘Five Principles of Peaceful Coexistence’, which were signed in the Bandung agreement of 1955 with India to settle their border disputes. These ‘Five Principles’ entailed ‘respect for territorial integrity; nonaggression; non-interference in each other’s internal affairs; equality and mutual benefit in relations; and peaceful coexistence’ (Power et al. 2012, p. 41). Subsequently, this is all to be achieved through the enactment of ‘soft power’1_{, meaning the absence of military}

intervention and putting an emphasis on economics, aid, investment and diplomacy2_(Carmody & Taylor, 2010; Power et al., 2012). This model serves as the backbone of China’s foreign policy, and this so-called ‘Peaceful Rise’ of China has quickly gained support in Africa, culminating in close and friendly relationships with various African countries (Alden, 2005, p. 8, Carmody & Taylor, 2010; Power et al. 2012, p 58).

Through barely politicizing its economic policy and its political policy of non-interference, China’s Africa politics mainly consists of the economic dimension. In essence, contemporary Chinese politics are rather focused on a liberal, pragmatic and market-driven approach in their relationship, focusing on establishing mutual benefits through an economic relationship (Power et al., 2012, p. 48; Eisenman, 2015; Tull, 2006). Despite showing similarities with Western development tactics, the one-sided focus on the economic aspect makes it a new, interesting model that could provide very different outcomes and could tackle what is perceived to be a determining factor for “Africa’s” state of underdevelopment: the failure to attract investments and capital (Ferguson, 2006, p. 196).

1.3 Research Question

In light of China’s economic focus in international politics, much of today’s academic literature China policy bears focus solely on this economic aspect (Large, 2008, p. 55). But Marcus Power

1_{‘Soft power’ is a concept famously coined by Josephy Nye. It means that a country can get other countries to do}

what it wants through positive persuasion and abstaining of hard power such as military usage and sanctions.

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et al. (2012, p. 11) argue that the forthcoming increasing global economic entanglement and international capitalization of states also developed a deepening of socio-economic relations of

states. Despite the vast literature on the economic aspects of China’s African policies and political impacts of Western activities in Africa, studies on this deepening through political

implications of Chinese economic interaction with the African continent, however, seem to lack comprehensiveness, specificity and in-depth study. With regard to China’s non-interference policy, Codon (2012) therefore states that scholarly debate ‘pays very little attention to the negative externalities that arise from its investment spending’. Daniel Large (2008) thus observed a ‘marked gap between the perceptions and exaggerated projections of an inexorable Chinese rise in Africa and knowledge of how this is actually playing out.’ The literature hence lacks a broad perspective on the political effects of the predominantly economic Sino-African relationship. While, after all, a surge of capital on the African continent irrefutably has consequences for domestic politics (Alamgir, 2008).

Thus, a lacuna on this issue becomes apparent. This thesis will dig deeper into this hiatus with a case study and will thus focus on the (unintended) political effects of Chinese capital, such as aid and Foreign Direct Investment (FDI) flows in the case of Zambia. The following research question thus has been established:

What effects does China's 'politically non-interfering' capital impose on Zambian politics in the 21st century?

This question focuses on the political impact of China’s economic developmental, ostensibly ‘non-interfering’ model, which is in line with the principles of the BjC. This focus will make a relevant contribution to the understanding of the political side-effects of China’s

‘non-interfering’ and economy-centered politics, its effects on African politics and its potential to serve a successful developmental model. So, in an effort to move beyond the traditional, Western perspective on development in Africa, this thesis tries to create new knowledge through

combining the classical Western idea of development with the relatively new politics of China’s in Africa. As a component of state-development, focusing on the effects on Zambian politics can add to the debate on development. Such a scrutiny hence provides fundamental knowledge about (effective) African policies in interaction with external powers. Because a comprehensive research on China’s effects on African would outreach the scope of this thesis, a case-study is more constructive. More on this will be outlined in the section on the research design, chapter 6. 1.4 Structure

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This introduction briefly examined the political-economic backgrounds of the developmental policies of the West and China in Africa. The political economic perspective on the matter of Chinese policies in Africa is of vital importance in order to define the political (unintended) political output of these policies in Africa for it is, indeed, China’s economic arm that composes its foreign policy. So although the main subject of this thesis is Zambia, understanding China’s policies is crucial in understanding to define its effects on Zambia. The main objective of this thesis is thus embedded in the ambition to comprehend the political effects of the so numerously discussed activities of China on the Africa continent.

This thesis consists of 11 chapters. The second chapter will approach Chinese African policy more comprehensively, giving historical and economic context to the Sino-African relation. In chapter 3, a literature review will be outlined, through which the indicators of ‘political consequences’ that serve as the foundation for the analysis will arise. Afterwards, the necessary information on Zambia, China and their sub-state actors will be provided. In chapter 5, a theoretical framework will be provided to understand the researched phenomenon. Chapter 6 will focus on the research design, methods of data collection and methodological deficiencies, where after the hypothesis will be outlined in chapter 7. The remaining part of the thesis includes the analysis and a conclusion.

In this thesis, I will argue that although there is some validity to the accusations on China’s extractive policies in Africa and Zambia, this will over time move towards a balance of ‘mutual benefits’ for both actors, due to increasing Zambian agency in combination with China’s political culture of guanxi and China’s ‘infancy diseases’ in foreign politics.

2. History & economics

To fully comprehend the effects of a phenomenon, one has to understand the historical grounds of the phenomenon. For what makes the relationship between China and Zambia of importance for both actors? What does the economic and political relationship entail? On what economic fields do Zambia and China relate? Simply: Where do we have to look to find the political implications of Chinese politics? To answer these questions, a conceptualization of the Sino-African relationship is necessitated to probe the meaning of Chinese engagement and tactics. This conceptualization will proceed as follows: first, the economic component of the Sino-African relationship will be historicized. Second, the relational economic foundations will be portrayed; its complementary character, its geo-political focuses on economic classes and sectors. 2.1 Sino-African historical foundations

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Historically, Africa and China shared and to some extent still share the same underdeveloped position in the international constellation when set against the West. In China’s ‘Second White Paper on African politics’ (2015), the official governmental outline of its policy goals, this perspective is concisely emphasized:

“China-Africa relations have now reached a new historical starting point. Given their shared development tasks, highly compatible strategic interests, and broad prospects for mutually beneficial cooperation, the Chinese and African people will advance side by side with an

ever-growing sense of purpose.”

A shared sense is developed through their historical experiences of colonization. Accusations of Western countries of China imposing ‘neocolonial’ policies in Africa are often refuted by China by referring to their own history of being colonized. Former Chinese Premier Jiabao thus stated that China itself ‘was the victim of colonial aggression’ for over 110 years, and that ‘the Chinese nation knows too well the suffering caused by colonial rule and the need to fight colonialism’ (Mohan & Power, 2008, p. 24). Therefore, during the 1950s and 1960s, when African countries were trying to achieve independence from the European colonists, China perceived the efforts of the Europeans to retain their territories as a replay of their own history, when it tried to shed European presence on their own territory (Power et al., 2012, p. 37).

Becoming an important actor on the global political stage, these values are reflected in China’s own (outspoken) foreign policy in Africa of non-interference and respecting sovereignty (Juma, 2015, p. 173). Marcus Power et al. (2012, p. 59) thus argue that

“China has been an ‘all-weather’ friend to Africa and therefore by implication that its contemporary interactions with Africa are also legitimate and build sensitively but directly on historical precedents. Thus, this history has come to serve as a kind of discursive field through

which China’s contemporary forays into Africa are constructed as a legitimate form of ‘cooperation’ rooted in the past.”

Their shared history arguably resulted in a mutual sense of victimized empathy, which is wielded and perceived as a foundation for future relations (Juma, 2015; Alden, 2005).

Congruently, Xi Jingping for that reason spoke at the FOCAC in 2015 the following: “China and Africa share a common future. We Chinese and Africans have forged a profound friendship through our common historical experience and our common struggles.” (Quartz Africa, 2015 December). Although lacking a historically intense relationship like the Europeans had with

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Africa or China, it is arguably exactly that absence which makes the historical foundations of China and Africa so fruitful for a future partnership: no historical resent, but a vision of opportunities.

2.2 Sino-African economic complementariness

Sino-African relations gained steam in the late 1990s by the intensification of their economic relationship, also as a consequence of their economic complementary characteristics. The most striking complementariness clarifies when looking at the specific economic needs of both actors: while China was ‘racing for resources’ to facilitate their high rates of economic growth, Africa was seeking new consumers for their abundant ones (Juma, 2015, p. 174; Adem, 2010; Tull, 2006). For China, as a country with a large population and a rapidly growing economy, the necessity of import is hard to underestimate. Consequently, Sub-Saharan Africa’s (SSA) natural resource exports to China have boomed from $3 billion in 2001 to $84 billion in 2014 (Foster et al, 2009, p. 37; World Bank, 2016). Exemplary, China has overtaken the EU as the SSA’s largest export partner and China provided $52,8 billion in aid to African countries between 2003 and 2011 (Pigato & Tang, 2015). Additionally, China has given all sorts of (financial) privileges to African countries. At the fourth meeting of the FOCAC in 2009, China announced the

cancellation of 168 debts belonging to 33 countries, a lesser emphasis on loans in favor of grants, the intention to support the African Union (AU) and to put more emphasis on capacity building of African states (Power, et al., 2012, p. 62).

Besides rising incomes due to increasing exports to China, Africa benefits because of such capacity building, entailing the construction of the infrastructure Africa lacks for the extraction of resources; hence coining the formula of “resources for infrastructure”, or as it is commonly referred to: “the Angola Model”3_{(Adem, 2010; Foster, et al., 2009; Pigato & Tang,} 2015, p. 16). This infrastructure consists not only of transportation but also of the establishment of public buildings such as dams, schools and hospitals. Chinese overseas FDI in Sub-Saharan Africa since 2005 adds up to $283,87 billion, according to data retrieved from the American Enterprise Institute (AEI). To provide some context to this number: That number equalizes fourteen times the GDP of Zambia4_{. One can thus confidently assume that Chinese economic} efforts in Africa will, could and probably would have a big impact on the development of the continent.

3_{The Angola Model entails a policy where the sate ‘collateralizes resources in return for credit’ (Power et al, p. 157).} 4_{According to the World Bank, Zambia’s GDP in 2016 equaled $19,51 billion.}

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Moreover, external political-economic factors also contribute to the rising economic relationship between Africa and China. Frustrated with Western conditional developmental policies, African governments willingly turned to an alternative external agent for economic, developmental help. For example, after the refusal by Angola of the adoption of the IMF program after the Angolan Civil war in 2002, China quickly offered an agreement that would develop their infrastructure for ‘new economic and commercial cooperation’, entailing a $2-billion package provided by the state-owned Chinese ExIm bank for public investment projects in 2003 (Power et al. 2012, p. 142). China thus eagerly filled the hole of dissatisfaction of African countries created by Western financial conditionality. This ‘fiscal triangulation’ (Power et al. 2012, p. 158) - the Chinese economic alternative - presented a tangible option for African countries, thereby presenting a possibility to diversify their foreign relations and relieving them from dependence on Western countries (Juma, 2015, p. 175; Taylor, 2004).

3 Literature review

To fully comprehend the impact of Chinese capital on Africa, it is important to dissect its strategic policy and understand its core and aims. In order to do so, it is important to gain a deeper understanding of China’s incentives and its strategic positions; which countries they engage with, with whom inside those countries, and above all: why. These questions will be central to this paragraph. Whether or not the opportunities presented by China truly lead to mutual benefits is, however, contested in scholarly literature. Although many of the scholars in the issue of China in Africa agree upon the existence of some of China’s general objectives, ranging from economic incentives to emphasizing China’s status as a ‘superpower’(Eisenman, 2015) and ‘buying’ votes for the UN (Tull, 2006), there is still scholarly debate on whether these policies are truly beneficial for the African continent.

Within these debates, a couple of scholarly ‘clashes’ on the political incentives and outcomes of its economic policies appear. These clashes are broadly speaking dividable in two schools of thought on the effects of China in Africa: ‘Sino-optimists’ and ‘Sino-pessimists’ (Adem, 2010). These schools will be discussed alongside the indicators of the possible political outcomes of Chinese politics. By focusing on these indicators in this literature review, instead of the ‘optimists’ and ‘pessimists’, more nuance and depth on the political outcomes of China’s activities can be attained, which gives us a clear image on the lacunas in the literature and can provide a foundation for the development of the main argument of this thesis. These indicators will therefore also serve as the framework for the analysis and it is for this reason my main argument will abstain from this paragraph.

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3.1 Towards a self-sustaining economy?

When embracing a macro-focus approach of China’s capital, Sino-optimists point to the vast amounts of trade, investments, aid and higher prices for African resources as evidence of the positive economic impacts on African countries that could ‘propel them towards self-sustaining economic development’ (Brautigam, 2009; van Dijk, 2009; Adem, 2010; Juma, 2015). Starting off from the perspective that the Chinese economic model resulted in an astonishingly rise of China’s economy, the model entails promises to achieve the same effects in Africa. The

exemplary potential of the Chinese economic model is also acknowledged by African politicians and contributes to the credibility of China (Brautigam, 2009, p. 11). Meles Zanawi for example, the former Prime Minister of Ethiopia, stated that “it has now been proved the development paradigm in China has its own specific advantage (…) Chinese transformation disproved the pessimistic attitude that was, if you are poor once, you are likely to be poor forever” (Adem, 2010).

Entangled with China’s economic model and its foreign policy, China’s focus on

infrastructure is perceived as its prime awarding feature since it deploys a substantial lowering of production costs (Brautigam, 2009, p. 11). The Chinese even have a proverb regarding the necessity of infrastructure as a means for development: “To end poverty, build a road” (idem, p. 308).5_{The infrastructure provides African countries with, for example, good transport}

possibilities and easier access to (cheap) goods, which spurs development in different sectors, such as agriculture, telecommunication and manufacturing activities (Van Dijk, 2009, p. 17In the meantime, Western suppliers of aid have lowered the share of aid supplied to infrastructural projects (Brautigam, p. 11). Therefore, the argument is made that China’s ‘new way’ of aid might have stronger positive impacts than the more traditional ways of providing aid (Dreher et al., 2017).

Secondly, in an empirical, economic analysis of Sino-African trade and a rebuttal of claims that China exerts a ‘neocolonial’ and extractive policy, Eisenman concludes that the balance of trade between China and African countries rather favors the latter, giving Africa the higher ground:

“In general, China’s manufacturing capacity and economies of scale supply a steady stream of affordable Chinese consumer goods for the domestic market and for export to African

5_{A rather high-profile and characterizing project of China, for example, is its ‘One Belt, One Road’ initiative.}

Officially enrolled in 2013, it aims at reviving and expanding the historical Silk Road that created a trade route from China to Europa. Such policies are foundational to Chinese foreign policy. This is supposed to create a web of roads and seaports, all the way from Eastern China to West Europe and into Eastern-Africa, mainly Kenya.

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markets. Together, China’s high demand for raw materials and its ability to produce affordable consumer and capital goods have become the dual engines for the growth of Sino-African trade”

(Eisenman, 2015, p. 18).

Given that Africa serves as a market for Chinese goods and that China urgently necessitates the natural resources Africa has an abundance of, optimists also stress the possibility that it is not Africa that specifically needs China, but China that needs Africa (Power et al. 2012, p. 244).

The Sino-pessimists, however, seems to stand out in the academic literature.6_They generally portray China’s intentions as being neocolonialist, solely aimed at serving Chinese interests through the extraction of the vast amount of African resources. Indeed, there is no political conditionality attached to Chinese investments, but it is argued China engages in a form of ‘commercial conditionality’, meaning that African countries have to abide by Chinese

economic preconditions by signing contracts with the Chinese in order to get Chinese investments (Power et al. 2012, p. 137). It is thus stated that China only extracts the African lands without giving benefits (Tull, 2006; Power et al., p. 15). This perspective culminated in the usage of concepts such as the ‘Second Scramble for Africa’ (Lee, 2006; Taylor, 2015; Dreher et al., 2017), China’s ‘resource grab’ (Moyo, 2012) and China’s ‘march into Africa’ (Carmody & Taylor, 2010).

3.2 The geopolitics of Chinese engagement

Despite the disputed presence or absence of mutual economic-benefits, there is also scholarly discussion regarding the geopolitical decision-making of China focusing on which countries it chooses to establish economic relations with. Clearly, the intensity of China’s contact with individual African nations differs. Much of the Chinese political and economic relations with Africa are enacted through bilateral plans, differing in intensities and focus due to differences varying to ‘geographies, energy endowments, make-up of the economy and political regimes of the countries’ (Power et al., 2012, p. 77). The political regime in a recipient country is hence perceived as the principal variable that defines the incoming amount of China’s capital (Tull 2008, p. 112).

Positioned on neutral grounds regarding this issue, Carmody and Taylor (2010)

emphasize that China does not use a single strategy on the different African countries, but rather

6_{Most of the academic publications on this issue are in fact Western, which is a competitor of China in the region}

(Carmody, 2009). Much of the popular articles and mass media reports regarding the Chinese and African

relationship are hence focused on China ‘grabbing resources’ in Africa. The popular Dutch television show, Zondag met Lubach (25-03-2018), for example, recently attributed an item on this issue, stating that “China sucks Africa dry”.

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engages in different modes of governance, varying in their relationships which they call

‘flexigemony’, pertaining the idea that Chinese actors ‘adapt their strategies to suit the particular histories and geographies of the African state with which they engage’ (idem, p. 497). This aligns with China’s preference for acting bilaterally, offering possibilities to differentiate in policies towards individual countries, contrasting with Western actors that impose one political-economic system upon all sorts of countries. In a similar vein, the argument is made that Chinese capital is beneficial for incumbent governments of any kind because it enables them to consolidate state power (Juma, 2015, p. 175).

Detached from political motives as a foundation of China’s politics but still pertaining on ‘neutral grounds’, some scholars argue that China’s cherry-picks on the availableness of market dynamics and is on that premise useful for all sorts of African regimes (Eisenman, 2015; van Dijk, 2013). Kragelund (2009a) argues, in his analysis of Chinese investment in Zambia, that China was attracted to Zambia due to its liberal investment climate. Sautman hence argues that China, in contradiction with Western powers, recognizes African agency and does not only perceive Africa as an “economic basket case” (Sautman, 2015, p. 139). On a more Sino-optimist note, some scholars suggest that China’s investments in non-extractive sectors, such as

infrastructure and telecommunications not only indicate Chinese political win-win based

incentives but could also strengthen civil society and alter the authoritarian nature of the state by emancipating lower-political levels groups (Adem, 2010; Juma, 2012, p. 177).

Contrary to the suggestion that China geopolitical focus is not tied to the regime type of the African state, it is stressed that China focusses on autocratic regimes while it also strengthens these in the process of engagement (Eisenman, 2015; Alden, 2005; Tull, 2008). Within such autocracies, the economic opportunities posed by the Chinese are easily wielded by Africa’s governing and business elites to reap economic benefits that could be deployed to strengthen their authority (Tull, 2006; Tull, 2008). James Ferguson (2006, p. 196) thus argues that “failed” states of Africa attract the most foreign capital investment. These propositions are also concisely noted in Chris Alden’s (2007) statement that: “From the Chinese perspective, these [autocratic] economies are generally closely tied to African elites’ interests, and there are fewer obstacles to rapid investment in the resource sector than they might experience in a state with stronger institutions and commitment to constitutional law” (Alden, 2007, p. 70).

On top of that, the ‘so-called non-commercial’ infrastructural projects of China are argued to be aimed at gathering sympathies of autocratic African leaders to achieve political influence to engage in business sectors (Tull, 2006, p. 468). For such autocratic leaders, the construction of prestigious buildings such as football stadiums and palaces are used for political

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reasons (Tull, 2006). Moreover, it is argued that China’s focus on infrastructure is insufficient to generate economic growth because it lacks complementary strategies that could benefit different sectors of the economy (Juma, 2015). In addition to the argument that China’s focus on elites rather than society as a whole, Denis Tull (2006) thus argues that the political implications of Chinese politics thus remain limited, hence not contributing to political shifts within nations. 3.3 Micro-political effects of China’s capital

Descending on the political ladder towards a focus on national political issues, different

perspectives on the effects of China’s capital on lower levels of African governance appear in the literature. These perspectives are split into two subdivisions: focusing on 1) economic and 2) cultural consequences. Sino-pessimists perceive the negligence by China of conditions of the WaC as an open invitation to undermine perceptions of ‘good governance’ that are perceived to be foundational of development, such as the absence of corruption and a strong rule of law (Van Dijk, 2009, p. 16; Eisenman, 2015, p. 9). As such, China’s business culture that entails a

willingness to pay bribes would yield such neglect (Isaksson & Kotsadam, 2018). For this reason, Power et al. (2012, p. 63) claim that Chinese enterprises may spur the lack of transparency and deepen corruptive activities

In addition, China’s policy, consisting of also bringing cheap labour to the African continent to work at their SOEs would be disruptive for the African economies, that generally already suffer from a high rate of unemployment (Gadzala, 2010; Ferguson, 2010). It would not only be an issue of displacing job opportunities, but the jobs presented in China’s production are often blue-collared ( Power et al. 2012, p.80). Similarly, it is argued that the economic benefits for the African countries are much lower than anticipated, or not beneficial at all. Despite the Sino-optimists contention that the provision of cheap goods is said to improve African purchasing power (Gadzala, 2010), China’s provision of cheap Chinese products for African markets would undermine local businesses by cheap competition, instead of bringing wealth to the population (Tull, 2006; Kaplinsky, 2013).

Power et al. (2012, p. 165) also, however, provide some nuance on the effects of employment, pointing to the concept of the ‘complementary – competitive axis’. This axis pertains a division regarding the exact engagement of China in Africa’s economic sectors: the extent to which China’s capital displaced local economies in the dependent on the location of its employment in the value chain: in some cases, it might replace or compete with local industries – hence ‘competitive’ -, while in different ones it would fulfill a complementary function.

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Moreover, within these local communities, the Chinese labourers are argued to be negligent of the values of the local community and its labours laws (Van Dijk 2009, p. 212), leading up to tensions and urban protests (Eisenman, 2015). Aleksandra Gadzala (2010) explores the culture of these enclaves, emphasizing the importance of guanxi in Chinese business culture

as an important determinant of trust and collaboration. This would prompt more isolated

Chinese communities in Zambia attributed with tensions with local communities. China, aiming for solely economic relations, would therefore have not any interests in adding to social justice movements or trade unions (Palat, 2009). Such isolation is furthermore endorsed by the language gap between the Zambians and the Chinese, for they are generally unable to communicate in the same language (Power et al. 2012, p. 177).

However broadly outlined, the economic benefits of the African – Chinese relationship remain contested. Despite China’s proposed abstinence from interfering with domestic issues and quest for finding mutual benefits, the above-given analyses share the idea that the influx of Chinese capital changes economic dynamics within African nations; varying from the possibility of emancipation through enhancing or decreasing economic capabilities, to undermining or strengthening local economies and creating new markets. Although economic in nature, such developments could develop into political action of African/Zambian population. It is also for this reason that a case-study could provide more nuance and conclusion with regard to the domestic sensitivities and political outcomes.

School

Indicator Optimist Pessimist

Propelling towards a

self-sustaining economy? - China’s trade and FDI benefits Africa’s economic development -China’s focus on non-extractive sectors benefits economic growth

- ‘Resource grab’: ‘neocolonial’ China reaps of the African continent

- Chinese investments in infrastructure are incoherent

Enhancing autocracy? - Bilateral relations are unconditional of regime time; focus on the availableness of market dynamics

- Investment in non-extractive sectors can alter authoritarian nature of state and strengthen civil society

- China focusses on authoritarian regimes and countries where human-rights violations occur because of tied interests

- “Failed states” attract the most capital - Many investments focus on prestigious buildings

Effects on political blocs

on sub-state level? - China provides services and opportunities. - Chinese economic activities are complementary to African economics

- Neglect WaC indicates disinterest in good governance

- Chinese enterprise deepen corruptive activities and dislocate local workers - Chinese guanxi neglect local culture

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3.4 Lacuna

What seems to be missing in the analyses of the existing literature on the political effects of Chinese capital into Africa is twofold. First, much of the literature still uses statist or even continental approaches to the effects of Chinese capital. Despite the high amount of literature, focusing on African – Chinese diplomatic relations (Juma, 2015), its economic interaction (Eisenman, 2015; Taylor, 2004) and analyses on political implications of China’s turn to Africa (Alden, 2005; Tull, 2006; Tull, 2008), much of it focusses on ‘China’ and ‘Africa’ or lacks more recent analyses.

Indeed, there has been paid scholarly attention to Chinese – Zambian relations. For example, Carmody & Taylor (2010) compare China’s geo-economic strategy in Zambia with that of Sudan, Anders Bastholm & Peter Kragelund (2009) focus on Chinese strategies with Zambian local communities to create a fruitful investment climate, Kragelund (2009a) analyses Chinese investment in the Zambian mining and constructing sectors and Deborah Brautigam (2009) also includes Zambia in her broad analysis of China in Africa. But unfortunately, these analyses focus on China and its interests: explaining the manifestation of the binary division of ‘Sino-optimists’ and ‘Sino-pessimists’ within scholarly debate. Accordingly, much of the literature discussed in this chapter and portrayed in figure 1 is also Chinese-centered.

Secondly, the literature regarding Chinese capital in ‘Africa’ is also widespread, focusing on Chinese aid and the determinants of Chinese capital flows (Alesina & Dollar, 2000; Van Dijk, 2009; Dreher et al. 2017; Foster et al. 2009; Kragelund, 2014) or of SOEs and POEs (Gu, 2009; Isaksson & Kotsadam, 2018). But once again: these analyses entail a Chinese-centered approach and a focus on ‘where’ it’s going, ‘why’ it’s is going there, but not what its effects are and how it works and how it coalesces with Zambian communities. What, in short, seems to be missing is a synthesis between the role of Chinese capital, a case-study and the inclusion of agency of an African actor, whilst this can make a substantial contribution to the much-researched

phenomenon of on one hand China’s rise in Africa, and African development on the other.

4 Actor and ‘aid’ conceptualization

“Action without a name, a who attached to it, is meaningless” – Hannah Arendt

4.1 China

Before progressing towards the analysis of this thesis, it is essential to not only define what we are

looking at but also to whom. When looking at ‘China’, its economic rise of the last decades is

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and present economic and political opportunities that would lead to ‘mutual benefits’ (Gu et al. 2008). Its quick rise on the global stage, however, also poses some dangers because China might be rising too fast for its own good: Their rocketing ambitions might surpass their governing

capabilities (Power et al. 2012, p. 243), leading to what could be seen as an analogy of an ‘imperial overstretch’7_{in which China is unable to oversee and control everything and everyone} under its wing. Because of this, ‘infancy diseases’ might be attributed to China, leading to discrepancies between China’s ‘mutual benefits’-policies and its actual activities (Gu et al. 2008; Lee, 2014). A scrutiny on the actor itself is thence of importance to unveil such discrepancies.

But taking a closer look at China will necessitate some nuance in the concept of ‘China’. This immediately poses questions regarding what to call ‘China’. Despite China’s communist, one-party rule, it is too blunt and short-sighted to use a single frame to comprehend ‘China’ and its foreign activities under one denominator (Grimm, 2015, p. 35). This view is endorsed in the empirical analysis on Ghana and Nigeria, where Lambert & Mohan (2015, p. 109) emphasize there is not something as a unitary ‘China’ that engages with Africa, nor is there an African state which entails full agency. As such, and with regard to the research question of this thesis, ‘China’s’ effects in Zambia are not only the direct result of inter-state politics with Zambia but also of intra-state politics within Zambia and local communities. Originating from this

conception, a more nuanced outline on what ‘China in Africa’ really comprehends is vital in understanding the effects of its capital.

On state level, Power et al. (2012) broadly distinguish two components of China’s state Africa policy: the ‘White Paper on Africa’ as the goal-setting brief of its foreign policy, and the FOCAC, founded in 2000, as the overarching institution to achieve the goals (Power et al., 2012, p. 64).8_{It is important to note, however, that FOCAC is not a decision-making entity, but rather} a collective, Sino-African recognition of interests and the commitment to intensify their

cooperation. Throughout the summits of FOCAC, multiple general economic plans have been announced, which mainly entail financial premises for partnerships such as the financing of the entrance of Chinese enterprises in African countries (Power et al. 2012). The FOCAC does not publish an official report or establishes commissions to that monitor progress, thus presenting itself merely as an indicator of Sino-African relationships. In this capacity, Grimm (2015) justly calls FOCAC ‘much rather a festive framework, than a working framework’ (Grimm, 2015, p. 37). Calestous Juma (2015) extends this perspective on FOCAC by arguing that one of FOCACs

7_{This concept was coined by historian Paul Kennedy, who did research on and in}_{The Rise and Fall of Great Powers}

(1987).

8_{So far, five FOCAC summits have been held: 2000 Bejiing, China; 2003 Addis Ababa, Ethiopia; 2006, Beijing;}

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‘largest impacts’ was that it has given African leaders confidence and recognition on the global stage. The use of FOCAC as the primary scope to define the effects of Chinese capital would thus lack the accuracy and precision needed, because China pursues the promises outlined by FOCAC on a bilateral basis (Alden, 2007, p. 23).

Therefore, the gravitational point of China’s Africa politics lies on this more dominant level, where China, amongst other things, develops trade deals, makes investments and shapes financial transactions. These financial flows are mainly channeled through the state-owned Chinese ExIm bank, which lies at the heart of China’s ‘going global’ strategy (Brautigam, 2009, p. 12; Power et al., 2012, p 77). Consistently, contracts and projects such as infrastructural projects are financed through this Chinese development bank, which are thereon enacted by state-owned enterprises (SOEs). And although Chinese engagement in Zambia is mediated through a variety of channels (figure 2), SOEs account for the greater part of China’s capital activities on the African continent (Power et al. 2012, p. 85; Kaplinsky & Morris, 2009). Characteristic of China’s statist politics, only two of the thirty companies with the highest amount of Outward Foreign Direct Investment (OFDI) from China are not state-owned. Although the autonomy of the Chinese enterprises in Africa has risen relatively, the grip of the Chinese state on these enterprises and China’s FDI remains very strong (Power et al. 2012, p. 17; Kamwanga, November 2009).

Likewise, Meine Pieter van Dijk (2009, p. 122) stresses the impact of China’s economic tradition of central planning, resulting in Chinese foreign economic activities still being enacted through SOEs. The proliferation of SOEs in Africa rose when China enrolled its ‘go out’, or ‘going global’, strategy, that stimulated Chinese enterprises to go abroad to find new markets and investment opportunities.9_{This plan was officially presented in China’s 5-year plan in 2006, but} the internationalization of Chinese enterprises was already unofficially national economic policy in 1992 (Van Dijk, 2009, p. 122). These SOEs define the main assets of China in Africa and are generally big, multinational corporations. But importantly, what this strong entanglement between the Chinese state and the SOEs in Africa and Zambia indicate is that these SOEs are extra vulnerable for political decisions from China itself and from African/Zambian politics towards China (Lee, 2014). This stems from the conception that the ‘trade follows the flag’, meaning that an uprising of, for example, ‘anti-Chinese’ politics or sentiments would also result in similar sentiments towards Chinese SOEs, whilst politically independent enterprises are more likely to be left alone by anti-Chinese sentiments.

9_{In 2004, the Chinese ExIm bank and the National Development and Reform Commission officially decided to}

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On economic terms, the entanglement of SOEs in Africa and state policy is exemplified by a deal with Angola after 2002. Ironically, after signing a financial deal with Angola in 2002 to support Angola after they denied Western politically-conditioned capital that were to be gained by regulative financial reforms, China’s imposed their own commercial conditions: the

commitment of Angola to outsource 70% of the construction and civil engineering projects after the Angolan war to Chinese enterprises (Power et. Al. 2012, p. 144). This, as Power et al. (2012) conclude, gave ‘as a result that almost everything down to the cement and nails for these works are imported from China ensuring a large portion of the loan money returns to China’s domestic economy and addresses China s domestic challenge of structural unemployment by restricting competition from local and other foreign firms’ (idem, p. 144). Even though the amount of SOEs in Zambia remains unclear, much of China’s greater investments and OFDI’s in Zambia are tracked through different institutions (outlined in chapter 7) and publicly announced through the FOCAC.10_{Thus, although the exact amount remains unclear, the greater share of} SOE-activity can be monitored in the analysis.

Figure 2: Roots and channels of Chinese finance in Africa - Adapted from Strange et al. 2013.

A second component through which China establishes activity in Africa is through Privately Owned Enterprises (POEs). These POEs, in contrary to SOEs, fulfil a much smaller part of China’s activities and generally focus on petty manufacturing and services (Power & Mohan, 2009; Gu, 2009; Amighini et al. 2012). Once again, there is no hard data on the number of Chinese enterprises on the continent. In 2006, the Chinese ExIm bank estimated there were 600 Chinese companies in Africa. Data from Chinese Embassies and the Chinese Businesses communities during 2007 and 2008, however, indicated there were around 2000 (Gu, 2009).

10_{According to data from the AEI, the main Chinese SOEs that are involved with investments in Zambia are China}

Nonferrous Metal Mining Group (CNMC), China Railway Construction, China Railway Engineering, Sinomach (machinery industry) and Sinohydra.

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Regardless of its numbers and its political autonomy, POEs are still incorporated in the analysis, for the presence of many POEs in Africa is subjected to the mandate of China’s go-out policy, which is the ‘very foundation for Chinese investments in Africa’ (Bastholm & Kragelund, p. 134). This is, moreover, also a methodological necessity, because Africans generally do not distinguish POEs from SOE. It is for this reason POEs and SOEs are bundled into the denominator of ‘China’ in the main question of this thesis.

4.2 Zambia

Much of the literature regarding Sino-African and African-Zambian relations as well as this thesis so far focussed on China, and not for no reason. The intensification of the relationship has been mainly caused by a combination of China’s economic growth, its ‘going global’-strategy, and by Africa’s welcoming of ‘the Chinese alternative’ that presented China political and economic opportunities.11_{One can thus confidently assume it was China’s economic expansion that}

spurred African-Chinese relations (Alden, 2007, p. 37). This conception is also epitomized by the statement in a Kenyan report on its foreign policy in 2006 that ‘Chinas has an Africa policy. Africa does not have a China policy’ (Taylor, 2015) and Gadzala’s (2010, p. 56) assertion that Zambia only reacts to China’s activities ad hoc. This view is reinforced by the suggestion that leadership in African nations have the tendency to focus on short-term policies (Juma, 2015). In addition, African nations would lack state capacities to deal strategically with China. As Juma (2015) states: ‘South Africa is the only African country with think thanks devoted to analysing Chinese trends’.

These statements and arguments invoke an image of a passive Zambia that is subdued to China’s actions. Such interpretations of Zambia when conducting research to its relationship with China are deficient and perhaps derive from a Western bias towards Africa as well as China, as appeared in the literature review. But ignoring Zambian agency would be too short-sighted. Progressing beyond the image of Zambia reacting ‘ad hoc’, Zambia did, for example, provide pull-factors for capital investments by establishing an interesting investment climate. Although not entirely as a consequence of their decision-making, but as an outcome of the WaC, Zambia established an interesting investment climate from the 1990s on (Gadzala, 2010, p. 43).

Synchronised with the neoliberal fashion in that period, Zambia privatized its mining industries, making way for foreign investors by establishing assisting institutions.

11_{It is also supposed to meet the challenges of over-production within the Chinese economy and to strengthen}

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Consequently, Zambia established the 1995 Investment act, which established the Zambia Investment Centre (ZIC). As typical of liberal policy, the ZIC served to facilitate and present special incentives for foreign investors in certain sectors, such as mining. It offered fiscal opportunities for foreign investors to withdraw capital and dividends without the necessity of having to pay taxes or fees. The ZIC evolved into the Zambia Development Agency (ZDA) in 2006, which introduced standards for minimum investments and employment creation, hence perpetuating offering fiscal prerogatives to foreign investors. Indicating Zambian and Chinese economic complementariness, the Zambian government planned to create a ‘multi-facility economic zone’12_{(MFEZ) within its borders to attract investors while China was looking for} such foreign economic zones that could spur their go-out policy at the same time (Brautigam, 2009, p. 98 – 101; Kragelund, 2009b). In 2007, the Zambian government created such a zone for Chinese investors in Chambishi, which is located town within the Zambian Copperbelt,

Zambia’s mineral-rich province, making investors excused from paying import duties for capital and raw material while introducing generous tax incentives13_{(Carmody et al. 2012; Gadzala,} 2010).

Simultaneously with the rise of China’s aid flows to Africa, Zambia has become less dependent on aid, although still suffering from a lot of poverty. In 2015 65% lived below the poverty line (CIA, 2018) and is ranked 7th_{on the list of countries with the highest income}

inequality. Furthermore, the combination of a one-sided economy that is highly dependent on its copper industry and recent lowering copper prices has resulted in a stark decrease GDP ever since 2013: $28 billion in 2013, to $21 billion in 2016. Nevertheless, Zambia’s ‘aid dependency’ – the percentage of the national budget that consists of aid - decreased from 53% in 2001 to 30% in 2009 (Rakner, 2012). Accordingly, ‘traditional’ suppliers of aid, such as the Netherlands and Canada, retracted their flows of aid. Convergent of these two phenomena, Lisa Rakner (2012), a researcher on aid in Zambia, hence noted: ‘perhaps the most significant change to the

[effectiveness of] development aid debate in Zambia...is…the enhanced importance of non-traditional donors, most notably China’ (Rakner, 2012).

12_{The Zambian Development Agency defines the purpose of MFEZs as follows: “to create a platform for Zambia}

to achieve economic development by attracting significant domestic and foreign direct investment (FDI) through a strengthened policy and legislative environment. The initiative emphasizes on political will and integrity, private sector dynamism and integrity and civil service efficiency and integrity as key forces that enable the economy to attain accelerated economic development.”

13_{Settling companies do not have to pay taxes for the first five years, only pay a portion of the amount of taxes}

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As exemplary for the stability and power of a people within a country, a brief scrutiny on Zambia’s civil society can provide insights. Zambia’s civil society is to Western standards

underdeveloped. According to data of CIVICUS, a ‘global alliance of civil society organizations dedicated to strengthening citizen action and civil society throughout the world’, the state of Zambia’s civil society is ‘Obstructed’, ranking 76th in the world (Civicus, 2013). This index indicates levels of governance, cultural and, most importantly for this thesis, socio-economic environments. Despite globally partaking in the lower-middle sections, Zambia ranks relatively high among other countries in SSA, with neighbors such as Angola (101), Zimbabwe (103), Congo (109) placed in lower ranks (Civicus, 2013).

4.3 Chinese capital

However, two actors do not clarify where and how they meet. The purpose of this paragraph is therefore to provide that wavelength of contact that is central to this thesis: Chinese ‘state capital’. Chinese ‘state capital’ flows in Zambia can be broadly be divided into two components as provided in figure 2: ‘Governmental financial assistance’ which resembles aid, and ‘Financing Investment’ as a bundling of governmental FDI and private FDI, or SOEs and POEs.

It must first be noted, however, that the distinction between FDI and aid is more of a traditional conception of Western and traditional discourse. Due to China’s unconventional manner of conducting foreign policy, such distinctions are not there to make since FDI and aid flows are almost never granted but follow the road of the mentioned “Angola Model”, indicating a tradeoff between funds and resources or contracts (Kaplinsky, 2009). Chinese aid and

investment also differ from traditional, Western aid and FDI in the sense of its destination. The geographic locality of FDI is usually captured within the ‘OLI’-model, meaning that the place of FDI is determined on the basis of ‘Ownership’, ‘Location’ and ‘Internalization’, which are three

sources that define the decision of an enterprise to invest somewhere (Dunning, 2000). But an

extra component that seems determinant of the decision of Chinese investors to invest abroad and seems to align with the aforementioned concept of an ‘imperial overstretch’ leading to ‘infancy diseases’, is the aspect of ‘learning’: Chinese investors engage in investments simply to gain experience (Kaplinsky, 2009). On top of that, Africa is thought to be a fruitful place for such practices due to the limited amount of competition there (WB, 2010 March).

Regardless of the non-traditional conception of Chinese ‘aid’, ‘aid’ is still valuable as a concept, as it can serve as an umbrella for all resembling flows of capital. Congruently and tellingly of China, the conceptualization of ‘Chinese aid’ shows methodological issues (Dreher et. al, 2018; Kragelund, 2014). In their analytical study of Chinese financial flows, Dreher et al.

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(2018) conclude that Chinese aid is less comparable to our Western ideas of ‘aid’. Aid, in Western perspective, is usually a conditional-free flow of money to assist in policies of development, although often being applied tactically (Morgenthau, 1962; de Mesquita & Smith, 2007). According to official standards by the Development Assistance Committee (DAC) and the Organization for Economic Cooperation and Development (OECD), there exist two kinds of flows of aid: Official Development Assistance (ODA) and Other Official Flows (OOF).

The more ‘traditional’ forms of aid are the ODA, which consists of grants, interest-free loans, concessional loans14_{, debt relief and military aid, all conducted by the Chinese state itself,} through China’s Ministry of Commerce(MOFCOM), or through the China ExIm bank.

Differently, OOF flows ‘include loans and export credits that have little or not grant element or that are not primarily intended to improve economic development or welfare in the recipient country, such as China’s grants to celebrate a diplomatic anniversary’. Where ‘Western’ aid is usually skewed to ODA, much of China’s aid is accounted for as OOFs (Foster, et al. 2009, p. 73). This aligns with with China’s policy of finding ‘mutual benefits’, rather than Western notions of aid and help.

Chinese aid also differs in its institutional form. Whereas other countries have

independent aid agencies and are pooled within the DAC and the OECD, China’s main channel of aid is its MOFCOM, which outsources its aid activities to state-owned banks, such as the China ExIm Bank. In this capacity, Naim (2007) suggests that Chinese ‘aid’ is more focussed on generating income, for after all: banks desire financial returns. Brautigam (2009, p. 111),

however, responds to this issue and scrutinized the Chinese ExIm Bank, which does not seek profit and primarily serves as a governmental instrument to unroll its going-global strategy. The traditional, Western concept of ‘aid’ is thus not applicable in the strictest sense of the word.

5. Theoretical framework

5.1 A look at ‘social reality’

When looking at the written literature on Sino-African or Sino-Zambian relations with an eye on a theoretical conceptualization of actors and agency, the absence of such theorization becomes rather apparent. By generally focussing on Chinese interests (hence the ‘Sino-optimists’ and ‘Sino-pessimists’) and its possible outcomes, the literature lacks a focus on structure-agency dynamics between the various political agents involved in the Sino-African relationship.

14_{Concessional loans are loans that are more generous than market loans: they entail low interest rates, interest-free}

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In their analysis on the agency of Ghanaian and Nigerian elites shaping Chinese

enterprises, Ben Lampert & Giles Mohan (2015) do pay theoretical attention to African agency. This analysis, however, focusses on elites, rather than making an effort to fully comprehend both interstate and inner state actors as agents and structures. Taylor (2015) and Lucy Corkin (2015), albeit paying tribute to agency in Africa, presume agency as given without contextualizing it within a broader debate on structure and agency. Providing theoretical scrutiny on the dynamic synthesis of structural and agential factors can thus add new perspectives on this field of research by its capability of generating concepts – agents, focus points, interactions – that ‘underpin the design of empirical study’ (Sibeon, 2004, p. 13; Bryman, p. 710).

The theoretical component of this thesis thus opens with providing theoretical depth on first defining a perspective on agency and structure within this field of research. Such an outline articulates the dynamics that constitute and create the Sino-Zambian relation and its outcomes. Examining these dynamics of structure and agency premises the ability to explain a social phenomenon (Lewis, 2002, p. 18). The key focus here is dividing the object from subject – or, the dependent and the independent variables - within the Sino-Zambian relationship. Thus, outlining the role of structure and agency within the relation can clarify causal mechanisms within the nature of social order and action (Falleti & Lynch, 2009).

5.2 Structure vs agency

Therefore, to describe the relationship amongst the units of analysis, we have to distinguish the independent on the dependent variable. The debate regarding the nature of social order and agency of its actors knows many names: ‘existentialism vs structuralism’, ‘actor vs system’, ‘voluntarism vs determinism‘ or ‘agency vs structure’ (Carlsnaes, 1992), of which the last one appears to be the most dominant in social and IR theory. At the core of this issue stands the question to which extent an actor is limited in his agency by the social structures around him (Carlsnaes, 1992). A well-known aphorism that implies one extreme within this debate, propagating the lack of any structure and thus premises on the idea of full agency of an agent, was shaped by the existentialist Jean-Paul Sartre when he stated that “man is condemned to freedom” (Sartre, 1943), indicating full agency of an actor. Although applied to “man” in this example, the broader term of ‘agent’, used in the debate regarding agency and structure denotes agents of any kind; enterprises, political groups and states are just some examples. Structure, on the other hand, ‘refers to the conditions within which agents operate, encompassing social norms, rules and so on’ (Lewis, 2002). These structures thus constrain and enable certain choices

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of actors, thereby influencing decision-making mechanisms of agents. Or roughly and simplistic: structures are determinant in causalities within the social world and shape action of an agent.

Emanuel Adler (1997) advocates a middle-ground within these two ends. He propagates this view in his analysis on this ‘constructivism’ within the domain of ‘World Politics theory’, providing a striking metaphor to explaining this middle ground, where both agency and structure define causality in social reality:

‘Take a group of people, a nation, or various nations and metaphorically toss them in the air. Where they go, how, when and why, is not entirely determined by physical forces and constraints [i.e. structures]; but neither does it depend solely on individual preferences and rational choices [i.e. agency]. It is also a matter of their shared knowledge, the collective meaning

they attach to their situation, their authority and legitimacy, the rules, institutions and material resources they use to find their way, and their practices, or even, sometimes, their joint creativity’

(Adler, 1997, p. 320).

The acknowledgement of historical and social processes as a structure provides a structural basis for making causal claims, because ‘determining the meaning of actions provides some knowledge of causes’ (Adler, 1997, p. 330; Falletti & Lynch, 2009). Karl Marx (1852, p. 1) equally shared this view when he argued that: “Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past”. In these words, the middle-road between structure and agency becomes apparent, where structures are present but not preclude the existence of agency: it provides a synthesis between the idea that one can create history but is also limited to its own.

Accordingly, Bob Jessop (2009) and Paul Lewis (2002), standing within the philosophical school of ‘critical realists’, contribute to the constructivist middle-ground, but extend it by emphasizing the existence of a multiplicity of phenomena and agents that define such structures. In an effort to extract causality, critical realists argue that the mechanisms of structure are

possibly understood through contextualizing its historical and social processes (Bryman, 2012, p. 29). The necessitated historical contextualization, propagated by this school of thought as fundamental for finding causality, has been outlined by the provision of the historical and economic groundworks of the Zambian and Chinese relation in previous chapters. The essence of such contextualization and distilling object from subject is concisely noted by Colin Wight’s (2004, p. 270), calling this middle-ground theory ‘a structurally aware, although non-structural

Accidently shaping African politics? : China’s economic pursuit of mutual benefits in Zambia