Master-Thesis
Taming the dragon? Uncovering cooperation and
exploitation in Sino-African relations
How can we explain the diverging consequences of RFI
deals between China and developing countries?
Arnon Greve - s4608402
Political Science 2017-2018
Specialization: Conflict, Power, Politics
Supervisor: Dr. Thomas Eimer
Nijmegen School of Management
Radboud University Nijmegen
Word count: 22.868
Table of Content
1 Introduction...1
2 Theoretical framework...6
2.1 Developmental State...7
2.1.1 Core assumptions...7
2.1.2 Overview and historical background of the theory...8
2.1.3 Core features of the Developmental State Theory and their impact on the research...10
2.1.3.1 Meritocratic bureaucracy...11
2.1.3.2 Embedded autonomy...12
2.1.3.3 The Developmental State and globalization...13
2.1.4 Expectations for the case study...14
2.2 Obsolescing Bargaining...14
2.2.1 Core assumptions...14
2.2.2 Overview and historical background of the theory...15
2.2.3 Core features of the OB theory and their impact on the research...16
2.2.3.1 Opportunity costs...17
2.2.3.2 Sunk-costs...19
2.2.3.3 Obsolescing Bargaining and globalization...20
2.2.4 Expectations for the case study...21
3 Methodology...22
3.1 Abductive research design...22
3.2 Method of inquiry and sources...23
3.3 Rationale for case selection...25
3.4 Hypotheses and operationalization...26
3.4.1 Dependent variable (explanandum)...27
3.4.2 Independent variables (explanans)...27
4 Empirical Chapter...32
4.1 The Sino-Angolan cooperation...32
4.1.1 Starting situation...32
4.1.1.1 Strategic interests in Oil...32
4.1.1.2 Strategic interests in infrastructure...36
4.1.2 The negotiators...37
4.1.3 Negotiation dynamics and outcome...39
4.1.3.1 First tranche...40
4.1.3.2 Second tranche...44
4.1.4 Implementation of the agreement...46
4.1.5 Analysis...48
4.2 Sino-Congolese cooperation...51
4.2.1 Starting situation...51
4.2.1.1 Strategic interests in cobalt and copper...51
4.2.1.2 Strategic interests in infrastructure...53
4.2.2 The Negotiators...55
4.2.3 Negotiation dynamics and outcome...56
4.2.4 Implementation of the agreement...65
4.2.5 Analysis...67
5 Conclusion...70
1 Introduction
Since the turn of the century, China has strengthened its ties with the African continent to an unprecedented scale. According to Alden et al. (2008) this is leading to the conclusion that “China’s expanding relations with Africa are the most important dynamic in the foreign relations and politics of the continent since the end of the Cold War”. Despite the broad spectrum of Chinese activities in Africa, China’s economic engagement is predominantly considered to be a representation for the Sino-Africa relation at large. This is not a surprise as the headline stating that China has become Africa’s largest trading partner resonated, not only in the academic world but also within the broader public. It is against this background that the discourse about the new “age of the Dragon” in Africa became polarized and politicized.
Put briefly, the advocates of intensified China-Africa ties are holding that the relations are based on a cooperative nature while the critics are considering the modus operandi as exploitative. The first group stood under the influence of China’s initial steps on the continent in Algeria and South Africa. For those countries the positive effects of China’s engagement were emphasized (Volodzko, 2016) stressing the multifaceted nature of Beijing’s acting. Moreover, it was argued that China’s engagement is different to the West's, as the colonialist/imperialist interaction is going to be substituted by a more equal China-Africa relationship. An expression of the different approaches could be found in the diverging forms of cooperation; while “Western agencies have selective engagement with Africa, e.g. with Francophone, Anglophone, or specific ‘programme countries’, China embraces partnership with all African countries, except for the handful which maintain diplomatic relations with Taiwan” (King, 2006). It is argued that China’s unconditional cooperation (no-strings-attached policy) enables high-in-debt, isolated or African countries suffering sanctions to develop economically, a first step to break the vicious circle of poverty. Supporting this claim, several studies found a positive correlation between China’s activities and the economic growth of the African country (Koumou et al, 2016), with Nigeria being the most cited example (Oyeranti et al, 2010). It is held that the development of
African countries is facilitated by China’s approach to support infrastructure projects, a policy field left open by Western-donors. In this regard, the World Bank estimated “that the African continent required US$ 93 billion annually in infrastructure spending to catch up to the West” (Foster et al. 2010). Finally, the positive image of China’s actions in Africa, described in the literature as the “Honeymoon period” (Basu, 2013), was promoted by the Chinese government. The former President of China, Jiang Zemin, praised the relationship stating that: “The flower of Sino-African friendship is blooming with the care and nurturing of the Chinese and African peoples. We will greet a flourishing tomorrow…China, the biggest developing country in the world, is ready to join hands with Africa, the biggest developing continent in the world, to march into the 21st century full of confidence” (Alden et al., 2008).
On the other hand, the more critically minded group of scholars, journalists and politicians are questioning the credibility of the so-called “win-win” cooperation. In this regard, China’s engagement thwarts Western-donors policies of good-governance, transparency and debt-sustainability. Moreover there is a general criticism towards Beijing to support authoritarian regimes (rogue-states) by prioritizing short-term business opportunities over long-term developmental goals. This perception is supported by the long-term economic relationship between China and Zimbabwe which persists in the face of Mugabe’s brutal rule (Vines, 2017). The underlying assumption is that the cooperation is first and foremost based on Chinese commercial interests, an opinion supported by the theory that China’s activities are mainly geared towards resource-rich countries (exploitative mode of cooperation). In those countries, it seems that the president and its entourage are profiting the most from the cooperation. Being only interested in personal gains, the Chinese activities are pre-disposed to continue the status-quo. Under such conditions and bearing in mind the economic weakness of African states, it is very likely that China is the main beneficiary of the “marriage of convenience”. Keeping this assessment in mind, the relationship is assumed to be exploitative instead of the so called “win-win” cooperation. The relationship between China and (South) Sudan is an example of this.
China is exploiting the oil reserves while the African country is negatively impacted (Askouri, 2006).
Overall, it has been shown above that the criticisms of China’s relations to Africa are related to a complex and multi-faceted explanatory mechanism. This entails economical, power-relational, societal and cultural factors. With that being said the contemporary image of China’s role in Africa is overwhelmingly negative; yet is this – very much black-and-white assessment- a realistic representation of the impact of the “rising dragon” on the continent?
For that purpose, this study takes one element of the board portfolio usually labelled as “Chinese activities” as focus point, namely the resource-for-infrastructure (RFI) deals. Similarly to the different perceptions and findings related to the Sino-African relationship at large, the impact of RFI deals are debatable. While Alves (2013a) argues analytically and with reference to empirical data for a negative impact of RFI deals, a study by Jones (2013) emphasizes the advantages of this financial mechanism. With regard to this analytical and empirical puzzle, the following research question is guiding this study:
How can we explain the diverging consequences of RFI deals between China and developing countries?
In order to narrow the focus, the effect-assessment is going to be conducted for the countries Angola and the Democratic Republic of Congo (DRC). In light of the comparable starting conditions for both countries, the most similar-case design had been used. In this regard, Angola and the DRC are both post-conflict countries with comparable economic and political conditions. In addition, both countries had difficulties accessing finance from more traditional donors in order to fund their reconstruction programs. Under those circumstances, Angola and the DRC negotiated RFI agreements with China, yet the consequences of those contracts are different for both countries. Abstractly speaking, the main research goal is to explain how it is possible that the RFI deals – the same independent variable – had arguably a different impact on the development (dependent variable) of the cases.
With the aim to investigate the reasons for those differences, the effect-analysis is twofold. First the negotiation dynamics and the outcome are being investigated, then the agreement’s implementation is going to be assessed. In both stages, the nature of the relationship (dependent variable) - rather exploitative versus rather cooperative – will be stated. The results are going to be discussed mainly through the lenses of the Developmental State literature and the Obsolescing Bargain Model, a specific form of mercantilistism theory. While the former allows investigating within-state causal mechanisms in the form of a specific relationship between state institutions (bureaucracy) and private market agents, the latter provides the theoretical tools to predominantly study external factors expressed in the negotiation dynamics.
Applied to this study, the Developmental State theory assumes that the state structure of the host country is responsible for the diverging consequences of the RFI deals. The Obsolescing Bargaining perspective accounts for the different impact of the RFI deals by taking external factors into account which couldn’t be influenced by the host country.
Derived from the Developmental State literature, the following main hypothesis could be drawn; Sino-Congolese relations are expected to be rather exploitative. This is due to the weakness of the state to fulfil the core features of a Developmental State. In contrast, Chinese-Angolan relations are rather of a cooperative nature. The reason for this assumption lays in the country’s capacity to manifest important parts of the Developmental State (embedded autonomy and meritocratic bureaucracy). With this hypothesis, the study contributes to the broad debate about the Developmental State and its receptiveness to foreign engagements.
Making use of the Obsolescing Bargaining theory, the core assumption would be that the DRC’s weak power position at the beginning of the negotiations has been used by the Chinese counterpart to steer the process towards its interests. Under those scope conditions it is reasonable to expect a rather exploitative nature of relationship during all the stages. The Sino-Angolan relationship is assumed to be rather cooperative during all the stages because of different external factors - being described in the empirical chapter – impacting negotiation position positively.
As well as these main focus points, this study contributes to a deeper and better informed assessment of Chinese activities in Africa. While in the literature Chinese activities are seen as holistic bloc, this study considers that Chinese private businesses, cooperatives and diverse joint-ventures have their own interests and are mostly acting independently from the state.
Being part of a larger trend, China is out-sourcing big infrastructure contractors into foreign countries (going-out strategy), in order for them to acquire larger contracts. This is a phenomenon widely underrepresented in the literature, especially when it comes to impact-assessment for the host country. Studying the terms-and-conditions of the recent RFI deals, this going-out strategy is incorporated into the agreements, meaning that the findings of this investigation are closing a gap in the literature and are allowing a better understanding of Sino-Africa cooperation at large.
The role of African agency/ownership has been an important topic in the recent literature in the field of development studies (Shaw, 2015; Corkin, 2013). It is against this background that RFI deals are a suitable test field for African agency/ownership. This is due to the relatively large room to manoeuvre for the African government when it comes to the desired infrastructure project and the possible changing power-relations during the negotiation process. Despite the broad debate about agency, connecting the latter to the RFI deals is largely understudied. As a result, this research enriches the existing literature.
More importantly, the main added value of this research is to investigate comprehensively external and internal explanatory approaches with the aim to establish possible scope conditions for a successful economic cooperation with China. The results of the study could be of value for other African countries, as well as for developing countries at large. Furthermore, the research design allows assessing the impact of the state-structure and the negotiation dynamics in a comparable manner. Following this approach makes it possible to investigate the degree to which the internal or external explanatory mechanism could account for the result. This underlying theoretical puzzle fits into a long-debated standoff in the field of development studies between adherents of an internally based explanatory mechanism
and those supporting an external perspective. To put it more bluntly, are the country specific state-structures responsible for the underdevelopment of states or are the policies of the industrial countries (external factors) responsible? This research aims to find an answer to this question and to provide possible policy recommendations for future RFI deals.
With that being said, the following theoretical framework provides an insight into the core assumptions, a historical background and the impact of the theory on the cooperation. The third chapter describes the methodology of the research explaining the method of inquiry, the rationale of the case selection, the hypotheses and operationalization as well as the strengths and weaknesses of the research design. Subsequently, the empirical chapter presents the findings for the Sino-Angolan and Sino-Congolese relationship separately. The last chapter outlines the findings of the research, connects them with the hypotheses and discusses them in relation to the broader debate.
2 Theoretical framework
The research aims to identify key components affecting China’s cooperation with Angola and the DRC. To investigate comprehensively the reasons for an exploitative or cooperative mode of relationship, it is argued that country specific internal processes and external factors need to be taken into account. For that purpose, the Developmental State Theory provides the theoretical lens to analyze the internal processes, while the Obsolescing Bargaining approach is used to study external factors. In the following, the core assumptions of the theoretical perspectives are being briefly described, then a historical background of the theory will be presented and lastly the main elements and their impact on the cooperation are sketched.
2.1
Developmental State
2.1.1 Core assumptions
Scholars of the Developmental State literature are investigating “the interplay of states, markets and societies in the making and implementation of development strategies” (Underhill et al, 2006). Furthermore, the approach aims at identifying the scope conditions responsible for “cross-national variations in industrialization trajectories“ (Underhill et al). Developmental States are defined as states “whose politics have concentrated sufficient power, autonomy and capacity at the centre to shape, pursue and encourage the achievement of explicit developmental objectives, whether by establishing and promoting the conditions and direction of economic growth, or by organizing it directly, or a varying combination of both”(Leftwich, 1995, p. 401).The principle assumption of the Developmental State literature is that the power position of a state, namely its capacity to steer ties with a foreign actor in a cooperative manner, are impacted by the state structure. The Developmental State literature provides the tools to investigate – from a state-internal view - the mechanisms behind the hypothesized diverging nature of the relationship.
According to Evans (1995), the very existence and survival of a Developmental State depends on the “state’s capacity to behave as a coherent corporate actor” (p.230), thus only an embedded autonomy and a meritocratic bureaucracy could provide those scope conditions. Furthermore the theory assumes that “Developmental States needed a meritocratic and professional bureaucracy that was insulated from both the pressure of special interests and the whims of ruling politicians” (Kyle, 2017, p. 8). In the ideal type of an embedded autonomy “politicians reign while bureaucrats rule” (Kyle). However, the establishment and the preservation of an embedded autonomy are based on a very precarious balance: there is a permanent risk of either too much embeddedness or a too strong autonomy. In more concrete terms, bureaucratic agents are being pressured by market actors stating their interests, while at the same time bureaucrats need to keep a “sufficient distance for the renegotiation of goals and policies when capital interests are inconsistent with national development” (Preston,
2008).On the other hand, when bureaucrats act independently, but without taking the long-term developmental goals of the state into account, it leads to a too strong autonomy.
2.1.2 Overview and historical background of the theory
Only indirectly mentioned in the works of Karl Marx and Friedrich List, the Developmental State was linked in the early stages to the “completely autonomous position of the state” (Marx, 1852). An example of this is Louis Bonaparte’s France, where the state had a central role for the economic development. Moreover, List (1841) claimed that “a perfectly developed manufacturing industry, an important mercantile marine, and foreign trade on a really large scale, can only be attained by means of the interposition of the power of the State” (p. 178).
Those – up to that point in time - loosely conceptualized ideas were picked up by some economic planners and developmental economists during colonial times. The group advocated that only a “bureaucratic policy” planned and executed by technocrats could lift the colonialist countries out of their late development phase (Leftwich, 1995). In the paradigm of this time the role of the bureaucrats had been crucial, a fact advocated by authors stating that a Developmental State is a “political system in which power and participation in national decisions are limited almost entirely to the employees of the state, particularly the officer corps and the highest levels of the bureaucracy, including especially the highly trained specialists known as the technocrats” (Jackson, 1978, p. 3). When this developing theory was used to find explanatory mechanisms for the economic growth of large parts of Asia, other scholars argued that those assumptions would fall short in identifying “the political and institutional conditions for its (state) discharge” (Green, 1974).
This scientific debate had been taken up by Chalmers Johnson in the 1980’s who contributed significantly to the establishment of a political theory of the Developmental State (Leftwich, 1995, p. 403). In his conceptualization he emphasized the peculiar “plan-oriented market economy“ (Leftwich) of Japan. It is held that the Japanese Developmental State was “setting substantive social and economic goals for
the private sector to meet, whereas the regulatory state merely established the framework for components of this sector to set their own goals” (Johnson, 1982 , p. 19).
Building on those foundations, Leftwich (1995) conceived the most comprehensible and context-independent approach of the Developmental State. Following his conceptualization, the state-structure needs to feature the following components:
1. a determined developmental elite; 2. a relative autonomy,
3. a powerful, competent and insulated economic bureaucracy, 4. a weak and subordinated civil society,
5. the effective management of non-state economic interest; and 6. repression, legitimacy and performance (Leftwich, p. 405).
In recent years the traditional Developmental State model faced criticism, because it is failing to establish a variable alternative to the liberal thinking of the Washington Consensus (Ban, 2012). Prominent Brazilian and international scholars argued that the liberal model was failing to promote growth in Latin America. In this regard, they combined structuralist and Keynesian theories to develop the Neo-Developmentalism approach. Moreover, the scholars of the Sao Paolo manifesto hold that the Global Financial Crisis of 2008 “showed the limits and dangers involved in financial globalization and financial deregulation” (Revista de Economia Política, 2011, p. 488), thus those events were a sign for the decline of the liberal model. While the traditional Developmental State model stresses more protectionist measures, the new approach emphasizes the fact that “middle-income countries have overcome the infant industry stage” and the states are consequently suitable for the open economy (Ban, p. 3). The traditional Developmental State scholars were also challenged by a group of authors stressing the context dependent nature of their model. It was argued to extend the model “beyond the private sector to a wider group of social actors” (Green, 2011,
p. 41). Moreover, the democratic Developmental States approach places the importance on “the state’s ability to use its autonomy to consult, negotiate and elicit consensus and cooperation from its social partners in the task of national economic reforms and adjustment. Cooperation is therefore a central element of the Developmental State” (Edigheji, 2005). Besides the cooperation component, the democratic control of the Developmental State is important, considering that this feature contains “rent-seeking”. Under those conditions, the state has an increased autonomy towards market actors (White, 1995). Moreover, White investigated the reasons for the democratization of Developmental States. The findings indicate that international and domestic pressures, as well as communication technology and “universal norms of human rights and citizenship” (Green, p. 41) are factors contributing to democratization. This view is challenging the perception of the traditional scholars, which highlighted the repressive and authoritarian nature of the Developmental State.
Overall, the traditional developmental approach was geared towards the nation-state whereas the democratic Developmental State theory discussed the topic in the context of globalization.
2.1.3 Core features of the Developmental State Theory and their impact on
the research
While theoretical discussions about the features of any form of a Developmental State are complex, with the only shared assumption that “robust, competent public institutions” (Evans, 2012) are key, any policy recommendation for its existence are extremely difficult to provide. The interplay between the state bureaucracy and market actors is a highly complex mechanism, thus “a cookie cutter approach to the construction of Developmental States – assuming that one size fits all – will fail in the same way that neoliberal, one size-fits all, cookie-cutter approaches to building effective markets have failed” (Evans). It is therefore useful to consider the building of a universal model of the Developmental State as a continuous developing process.
In light of those considerations, it is argued that a meritocratic bureaucracy and an embedded autonomy are the central elements for the establishment of a Developmental State. For this reason, only these two elements are used in the further study.
2.1.3.1 Meritocratic bureaucracy
A meritocratic system might be defined as a state in which “everyone has an equal chance to advance and obtain rewards based on their individual merits and efforts, regardless of their gender, race, class, or other non-merit factors” (Castilla, et al, 2010).
In the ideal type of the Weberian meritocratic state, the state is strong “in the sense that its internal modus operandi is insulated from both the market and the logic of individual utility maximization” (Vartiainen, 1999, p. 219). To put it another way, “the state apparatus must be bureaucratic and meritocratic enough to impose its collective objectives onto its individual civil servants” (Vartiainen). In a meritocratic bureaucracy civil servants have job security with a long term career path within the bureaucracy, an element which distinguishes the Weberian bureaucracy from an appointive one. Empirical data about the performance of bureaucratic institutions suggest that “merit-based recruitment and promotion through predictable, rewarding career ladders improve civil servants’ capability and performance and are valued by citizens as an accountability mechanism” (Baimenov et al, 2015, p. 7). As such, an ideal type of a meritocratic bureaucracy displays a high degree of “prowess and perspicacity of technocrats within the state apparatus” (Evans, 1995, p. 141).
Another aspect of a meritocratic system is a general acceptance of the “legislation, regulations, procedures, specifications, and organizational structures” (De Sardan, 2013, p. 70). It is therefore crucial that “officials have to operate in accordance with rules and established norms” (United Nations, 2018). This is leading to expected patterns of behaviour and making infringements less likely. It is argued that in the ideal type of Weberian meritocratic state the bureaucracy is “more effective at facilitating capitalist growth than other forms of state organization” (Evans et al, 1999, p. 749). However, the state features – in a significant part of the developing countries –
a weak centralized economic bureaucracy. According to Johnson (1982, p. 26), in such an environment the establishment of “pilot agencies” is an important facilitator to efficiently structure state/economy relations, as they are responsible for economic planning, implementation and monitoring. Nevertheless, the sole existence of those agencies and an apparently meritocratic bureaucracy is just a small, yet crucial, element in the puzzle explaining economic development.
The features of stable bureaucratic institutions are a meritocratic recruitment, corporate coherence, professionalism and an esprit de corps (Evans, 1995). If a state lacks these features, the political elites and bureaucrats have not enough “autonomy to resist corruption and capture by actors whose rent-seeking behaviour would otherwise derail the state's efforts to promote development and formulate policy in the national interest” (Campbell, 1998, p. 103). In a degrading meritocratic bureaucracy, patronage networks are quickly taking over the administration and the civil servant is becoming dependent, either on the private interests of politicians or on private actors. According to Fritzen (2007, p. 7), in such an environment, close ties between civil servants and market actors prevent the bureaucrat to “discipline capital by, for instance, stopping subsidies where this was necessary”. Besides that, several scholars found that there is a “significant divergence between the official norms that govern these institutions (bureaucracies) and the actual behaviour of their employees” (De Sardan, 2013, p. 1). One reason for this divergence could be the often low salaries in the public sector, which incentivize the civil servants to search for a second source of income in the private sector.
2.1.3.2 Embedded autonomy
The second crucial element of the Developmental State theory is the “embedded autonomy” feature. Developmental State scholars have defined embedded autonomy as a state which “has been able to achieve relative independence (or insulation) from the demanding clamor of special interests (whether class, regional or sectoral) and that it both can override these interest in the putative national interest” (Nordlinger, 1987, p. 361).
To establish this, the state is confronted with a balancing act. Finding an equilibrium between an appropriate degree of embeddedness and the right proportion of autonomy is very difficult to find, yet crucial in order to “move beyond simply regulating production at arm’s length or becoming producers themselves” (Campbell, 1998, p. 104). While theoretically market actors and kin relations are pressuring state agents towards more embeddeness, a meritocratic legal-based bureaucratic apparatus requires autonomy. The main challenge in finding a balance is “connecting bureaucrats and corporations” (Evans, 2008) in a developmental manner “by devising long-term economic policies unencumbered by the claims of myopic private interests” (Mkandawire, 2001, p. 290). Moreover, the embedded autonomy can be shaped in several ways, depending on specific contextual circumstances and the modus operandi between market actors, bureaucratic agents and their specific incentive structures. Taking all these findings into account, a meritocratic bureaucracy seems to be a prerequisite for an effective embedded autonomy.
2.1.3.3 The Developmental State and globalization
Originating in the context of intra-state ties between local market actors and bureaucrats, scholars of the Developmental State theory have shifted their attention to a higher level of interaction, namely the ties between transnational actors and higher levels of the state bureaucracy (often government representatives). This tendency had been recognized by Khondker (2008) stressing the need “to embed the autonomous state in local institutions and norms as much as in the nexus of globalized institutional and normative structures” (p. 37). In a globalized world, “states must enjoy embedded autonomy to provide the appropriate incentives for entrepreneurial firms to flourish and become strong enough to compete effectively in the global market place” (Evans, 1995, p. 104).
To achieve a strong position in the global market, a Developmental State should consolidate power and autonomy before national or foreign capital became influential (Leftwich, 1995, p. 416). In this context, bureaucrats are increasingly confronted with the demands of transnational actors, mainly multi-national corporations. Consequently,
small domestic economical actors can, in the best case scenario, only profit on a very small scale from the developmental potential as they have difficulties to compete with the large multi-national corporations. To prevent this, an embedded autonomous state might persist on a conditionality policy. Based on this policy tool, the state could pressure the international actor to establish joint enterprises and/or to apply to local content requirements. Given the case that those measures are often being denied by the foreign actors, the state bureaucracies could screen and monitor the foreign contractors/capital (Leftwich), thus increasing the benefits for the host country. As a consequence, the state bureaucracy is now acting as a broker “helping capital as a whole to reach solutions that would be hard to attain otherwise” (Evans, 1987, p. 574).
2.1.4 Expectations for the case study
With the role of globalization in mind, a state needs a meritocratic bureaucracy and an embedded autonomy to steer bi-lateral relations in a cooperative manner. In contrast, if a country does not feature those two main principles, it is assumed to have an exploitative kind of relation.
2.2
Obsolescing Bargaining
2.2.1 Core assumptions
In contrast to the Developmental State approach, the Obsolescing Bargaining (OB) theory provides an alternative, external perspective which is based on the foreign actor’s view and power position. Scholars from the OB school might be placed within the field of the international political economy. With the aim of finding an explanatory mechanism for the hypothesized cooperative/exploitative dichotomy, the OB theory gives the tools to study the relations between multinational corporations and host governments of developing countries.
The authors assume that the MNC has an unconstrained choice to place its investment internationally. In this process the specific power relations are influenced by the anticipated exit costs of the foreign actor. The specific anticipated exit costs depends,
in turn, on the nature of the assets the foreign investor would like to extract from the host country (opportunity costs) and the degree of already made investments (sunk-costs). Investigating the power-relations through the lenses of the MNC, the Obsolescing Bargaining theory conceptualizes the process in a long term manner, accounting for changes and continuity in bargaining processes. The dynamic and iterative nature is methodologically investigated with the assumption that “MNCs and governments compete for input-, process-, and outcome-based resources” (Luo, 2002, p. 72).
Traditionally, the approach had been applied in the context of MNCs, yet more recently several scholars have been using the model to investigate internationally operating State-Owned Enterprise (SOE) host government relations (Vivoda, 2009; Wellhausen, 2013; Ramamurti, 2004). It is argued that SOE host government power relations are following the logic of the traditional approach. This is because strategies and behaviour of internationally operating SOE’s and MNCs have aligned, especially in recent years. Both business entities are following the paradigm of “market seeking, resource seeking, efficiency seeking or strategic asset seeking (Dunning, 1993) and are acting in the global economy. Following those considerations, the foreign investor’s opportunity costs and sunk-cost could be used as core elements in the context of SOEs.
2.2.2 Overview and historical background of the theory
The Obsolescing Bargaining theory had been established by Raymond Vernon (1971) who studied the growing role of American multinational enterprises in the 1970s. In this research Vernon investigated “business strategies which interact with major government economic and political policies” (Vernon, p. 1). The aim was to assess the effects of those factors on host and home countries. In a second study conducted a few years later, Vernon searched for an explanatory mechanism accounting for the “widespread expropriation and nationalization in the 1970s of Multinational enterprises natural-resource subsidiaries located in developing countries” (Eden et al, 2004, p. 2).
Taking those findings as a starting point several authors (Kobrin, 1987; Abe, 2006) developed related approaches and/or applied Vernon’s perspective to other countries. A few years later, Theodore Moran extended the field applying the theory to “vertically integrated resource-intensive industries” (Eden et al, 2004, p. 3). She found out that the “MNEs have been able to protect their bargains” (Eden et al). Furthermore, the model had been used to study relations between MNE from the manufacturing industry and host governments. It is argued that “bargains are expected to be less prone to obsolescence because MNE investments tend to be smaller and more mobile, and the MNE’s knowledge-based firm specific advantages (FSAs) are more difficult to copy” (Kobrin, 1987). Eventually, the foundation of the theory was applied to nationalizations of foreign MNE investments; in this context it had been suggested to break the bargaining outcome into two components. Vachani (1995) argued to differentiate “between static bargaining success (the outcome of any one particular negotiation) and dynamic bargaining success (the long-run trend in outcomes over several negotiations), on the grounds that factors important for one might not be important for the other”. Despite the wide range of applications and contexts, all the scholars argue that the bargaining relations are characterized by the capacities and assets of the actors involved.
2.2.3 Core features of the OB theory and their impact on the research
In accordance with the considerations sketched above, the relative power position of the foreign actor is impacted by its anticipated exit costs. The factors determining the anticipated exit costs are two-fold: nature of the asset the foreign actor is willing to extract from the host country (opportunity costs) and its previous investments (sunk-cost). Being a phenomenon of the global economy, a multinational corporation/internationally operating SOE is defined as “a firm that controls and manages production establishments- plants- in at least two countries” (Caves, 1996, p.1). In addition, the enterprises are defined as being “engaged simultaneously in economic production, international trade, and cross-border investment” (Oatley, 2016, p. 159). The MNC’s are “prompted to invest abroad to acquire particular and specific resources of a higher quality at a lower real cost than could be obtained in their home
country (if, indeed, they are obtainable at all)” (Dunning et al, 2008, p. 68). Several scholars have identified resource availability as the determining factor, as “outstanding geology can overcome all sorts of investment disincentives – the presence of oil companies in some of the most inhospitable countries illustrates the point” (Wälde, 1993, p. 344).
In the OB and international political economy literature the MNC/internationally operating SOE are aiming to profit from locational advantages by placing a foreign direct investment (Wälde, p. 167).
2.2.3.1 Opportunity costs
Those locational advantages are expressed by the specific opportunity cost structure of the internationally operating SOE. The factor accounts for the degree of exit power the foreign actor could employ on the host government. The concept of exit-power was coined by Hirschman and became prominent in the context of organization theory/sociology. It implies that “that every form of human enterprise that offers a product or service can be punished and compelled to change by the ability of consumers to exit. Individual consumers have the option to exit, or to act by not buying a product or service as well as by abandoning the provider completely” (Hirschman, 1970). Considering the MNC/SOE as the individual consumer, the possible degree choosing the exit option lays in the nature of the asset the investor is willing to extract from the host country.
Having an unspecific asset to extract from the host country, the MNC/SOE is able to threaten the host country by choosing the exit-option, thus investing in another country. An example for the scenario could be that an investor is willing to extract oil; considering that the oil reserves are relatively spread between countries the investor could choose between different locations. Under those scope conditions the foreign actor’s power is higher than that of the host country. In contrast, if the asset the MNC/SOE is willing to extract is very specific and rare, the host country can steer the bargaining process. Under those scope conditions, the MNC/SOE is confronted with a monopolistic situation in which the country has the exclusive control over a resources
valued by the MNC/SOE (Oatley, 2016, p. 189). Empirical evidence shows that in countries “with high asset specificity there is a risk that the MNE's partner may use its political connections to redirect potential rents to themselves away from the MNE” (Rugman, 2003, p. 224), thus favouring the host country.
Hirschman explains this phenomenon with the reference to an environment of monopoly in which “the consumer or voter is captive with nowhere else to go” (Rugman, 2003, p. 70). As a consequence, the anticipated power position is more on the side of the host government and the MNC/SOE is compelled to voice its complaint, grievances or proposal for change. Taken into account that an anticipated exit option increases the foreign actor’s weight voicing its proposals, the foreign actors chances are impacted by its anticipated blackmail potential. As shown above, the credibility of the foreign actor’s threat to relocate is the key component for the agent’s power position.
Closely connected to the voice and exit theory are the foreign actor’s cost-benefit calculations based on the principle of opportunity costs. Coming from microeconomic theory, the concept of opportunity cost is defined as “given by the benefits that could have been obtained by choosing the best alternative opportunity” (Oxford Dictionary). In the context of the foreign actor’s relation to a host country, the opportunity cost refers to the benefits that the foreign actor could have earned by choosing to invest in an alternative country. Considering that opportunity cost calculations are based on the estimated return for an investment contrasted to an alternative option, a bigger sample of countries having the resources needed by the MNC/SOE would decrease the MNC/SOE’s opportunity.
In contrast, having a small sample of countries would increase the opportunity costs of the MNC/SOE. The relative gain in power position of the host country might be expressed in diverse ways, yet the most tangible expressions are ”non-equity contractual arrangements (such as management and marketing contracts and production sharing) and the extraction of favourable terms and conditions for the host country like detailed time-table for exploration, sanctions against delays in completion
of projects, minimum production requirements, and increased local processing by means of export quotas on unprocessed raw materials” (Ozawa, 1993, p. 112).
2.2.3.2 Sunk-costs
According to the OB theory, the second feature determining the nature of the relationship is the degree to which the MNC/SOE has already economic ties with the host country (sunk-costs). In the literature sunk costs are defined as “those investments that, once undertaken, cannot be fully recovered through their transfer or sale” (Barham et al, 2005, p. 162). In the extractive industry field the most obvious costs are “outlays necessary to secure rights to the resource and to construct (or purchase) the physical infrastructure for the extraction, processing, storage, and transportation of raw materials and their by-products” (Barham et al). In addition, expenditures are high “to recruit, screen, hire, and train worker, to comply with government regulations and registration requirements for initiating extractive activity, and to form contracts and business relations with input suppliers and buyers” (Barham et al). Overall, it means that “once the investment has been made, it is relatively location bound” (Dunning et al., 2008, p. 68)
In this context, it is argued that the outcome of the initial bargaining in terms of power relations becomes obsolete in the investment process, thus in the degree to which sunk-costs are accumulated (Ramamurti, 2001). In the OB literature it is held that “as soon as an MNE entered a country, its bargaining position began to obsolesce as a result of inter alia of its investment in immobile plant and equipment” (Vernon, 1971). This process has been comprehensively described by Moran (1993, p. 275) stating that “before the investment for new production capacity, a new smelter, or a new refinery, the relative weight of bargaining strength tilts in favour of the foreign investor; after the operation is successful, it begins to tilt back toward the host country”. The relative weak power position of the MNC in the investment-process is due to the specific feature of the resource-extraction. According to Bunker (1994) “minerals and non-mineral energy resource developments, often tend to be lumpy – that is, investments
are only economical at a relatively large scale requiring tightly coordinated and integrated stages”.
Moreover, increasing sunk-costs are reducing the uncertainty about the production costs and the existence of the resource for subsequent investors. Eventually, “the government can drive a tougher bargain with later entrants, and this in turn increases the leverage in demanding revision of the original concession to put them in line with later agreements” (Moran, p. 274).Under those conditions, the foreign actor’s opportunity costs are too high making a threat to relocate the investment not credible. Despite those considerations, sunk-costs could differ based on the extracted resource, making the concept crucial in finding explanatory mechanisms for the different form of cooperation.
2.2.3.3 Obsolescing Bargaining and globalization
In recent years the increasing integration of internationally operating economic actors challenged the traditional Obsolescing Bargaining model in different aspects. Generally speaking, the number of MNC rose. In this context, Haslam (2004) argues that the increased competition between the MNC leads the investor to consider the long term perspective as a determinant factor. This is because the MNC is confronted with a volatile market and a substantial investment is risky. Considering that the cost-benefit calculations of the MNC are based on anticipated costs, the knowledge about the host country is important. This might be a factor assessing actors the power position during the bargaining process. Due to MNC’s increased budget for research, the MNC power position is assumed to be stronger than in the traditional bargaining model. More importantly, the gains for the MNC might be substantial enough preventing the bargains to obsolesce.
From the perspective of the host country, the multitude of MNC brings the country in a more favourable position. The country can choose between several MNC. However, more and more developing countries in Africa are attracting foreign investors with a privilege access to the domestic market. To account for this increased complexity, Eden et al. established the political bargaining model. In this approach the resources
and policy goals of the host country are determining the power relations during the bargaining process.
2.2.4 Expectations for the case study
Following these considerations, Obsolescing Bargaining scholars would argue that high opportunity and sunk-costs would lead to a cooperative form of relationship, whereas low opportunity and sunk-costs might lead to an exploitative relationship.
3 Methodology
As it has been made clear in the previous chapters, the research aims at finding explanatory mechanisms for the diverging nature of the Angolan and Sino-Congolese cooperation, based on the Developmental State and Obsolescing Bargaining literature. To put it another way, how can we explain the different effect of the RFI deal on the cases? Which theoretical perspective is best suited to explain the power relations in the different phases? For that purpose, the negotiation and outcome phase as well as the implementation period of the RFI deals will be analyzed. Eventually, this research aims at giving policy recommendations for similar cases about the interaction of China’s RFI deals.
In the following, the underlying conceptual thinking in terms of an abductive research design will be discussed. Secondly, an explanation for the case selection is going to be presented and its implications for the general application, liability and reliability of the findings are given. This part is going to be succeeded by a description of the expectations formulated in terms of hypotheses. Finally, the abstractly formulated assumptions will be operationalized with respect to the theoretical framework and the limitations of the methodology (literature review) are sketched.
3.1
Abductive research design
Derived from the research question the research design is a y-centered approach. Furthermore, it is assumed that different factors (independent variables) have an impact on the type of relationship between China and the cases. Assuming that the different consequences of the RFI deals are caused by the elements of the Developmental State and the Obsolescing Bargaining literature makes it possible to investigate the scope conditions and mechanisms at play.
With that in mind, the conceptual thinking of this study is based on an abductive research model. According to Kratochwil et al. (2009) an abductive approach represents an “alternative to standard scientific methods” (p. 702) escaping “from the
epistemological deadlock” (701). As such, the abductive methodology positions itself between the ontological realism of “a deductive theory testing (“trial and error”) approach and “the inductive derivation of theoretical propositions from empirical observations” (Kratochwil et al, p. 702). The abductive approach is suitable for this research because of its relative flexibility in its logic of interference. This makes it possible to account for the nature of the thesis which is identifying “functional rather than causal explanations, such that behaviour is accounted for rather than predicted” (Svennevig, 2001, p.13)
In the first place, an abductive methodology requires a screening of the empirical data of both cases having in mind an approximate theoretical framework.
Eventually, the empirical data leads to tentative hypothesis. The most-similar case design enables the identification of the mechanisms and scope conditions under which certain outcomes occur. The exploitative nature of the research design ensures that two different theories are chosen without presupposing which might supplement or eliminate each other.
3.2
Method of inquiry and sources
In light of the case study research design, the logic of interference and the sources used, the study makes use of a process-tracing method. Connected to case study analysis in social science, the approach “is a research method for tracing causal mechanisms using detailed, within-case empirical analysis of how a causal process plays out in an actual case” (Beach, 2017). Extending the concept slightly, it is a suitable method to investigate cases within a most-similar case design due to its ability to “shed light on generalizable causal mechanisms linking causes and outcomes within a population of causally similar cases” (Beach). The results within one case analysis could be compared to another case assuming that the latter is “causally similar to the studied one, we should expect similar mechanisms to also be operative in these cases” (Beach). Considering that the study follows an abductive logic of interference, the process-tracing give an insight into “descriptive narratives of the events between the occurrence of a purported cause and an outcome” (Beach).
The process-tracing has been conducted studying academic, journalistic documents and online sources connected to the RFI deals of China in Angola and the DRC. With the purpose of identifying the mechanisms behind the diverging outcomes of the RFI deals, the determinant actors involved had been filtered out and their course of action has been analyzed comprehensively.
A general overview by Alves (2013) has been used as a starting point. At this stage, the detailed account of Corkin (2013) provides detailed information about China and Angola in all phases of the RFI deal. Based on those insights the determinant actors had been organized. Subsequently, those empirical findings have been used in the search for a theoretical framework. Studying a few articles by Ovadia (2012, 2013, 2016) about the relationship between the Angolan elite/bureaucracy in the oil sector, the embedded autonomy and meritocratic bureaucracy criteria of the Developmental State literature seemed to provide the theoretical tools to investigate the mechanisms. At the same time, the literature (Roth, 2007) covering the effect of RFI deals involving China and Africa indicated that the outcome of the RFI deals are impacted by China’s own position. In light of this finding, the opportunity structure and sunk-cost elements of the Obsolescing Bargaining theory had been chosen. Moreover, the work of Lo et al. (2014) stressing the diversity of the internationally operating Chinese actors confirmed the choice of the approach. The Obsolescing Bargaining theory is able to conceptualizes the multitude of Chinese actors. In addition, a World Bank report from Halland et al. (2014) highlights the diverging outcomes of the RFI deals over time; the Obsolescing Bargaining theory provides also insights into this mechanism.
Based on the research of Konijn (2014) investigating the effects of Chinese RFI on African countries, the Sino-Congolese RFI deal seemed to be a case in which the scope conditions were similar, yet the outcomes of the RFI deals were different. This impression was confirmed after consulting the extensive contributions of Jansson (2011, 2012, 2014) who describes in detail the RFI deal between the Congo and China (SICOMINES-agreement), its different phases, the actors involved and the mechanisms at play. Additionally, a case study by Landry (2017) points out the
shortcomings of the SICOMINES agreement. Such as impeding the Congolese state to fully benefit from the developmental potential of the cooperation.
Those articles provided the breeding ground to investigate the specific relationship between the Congolese bureaucrats/negotiation actors and their Chinese partners, a topic covered by an extensive Global Witness (2011) report. In this regard, a World Bank (2008) report covers the bureaucratic structure of Congo and its capacity to monitor the RFI process.
With that, the remaining part concerning the Chinese opportunity structure still needed to be investigated. As a first approximation in this field, a booklet of Kaiser (2013) was used. In more detail a contribution by Chen et al. (2015) studies the incentive structure of Chinese actors to invest into the Congolese resource sector. The same topic had been covered by Foster et al. (2009), a report also specifying the sunk-costs of China in Angola and the DRC. In this regard, the Chinese investments made in the copper sector within the DRC are detailed. Moreover, an interview with an expert issued on Forbes (2018) provides further insides in China’s resource investments. Eventually, a journalistic article by Kushner (2013) was used to quantify the impact of the investment on the Sino-Congolese relationship as a whole.
3.3
Rationale for case selection
In the light of the research question, the most similar case design (comparable scope conditions but different dependent variables) had been chosen. It allows identifying the reasons (independent variable) for the different dependent variable. Against this background, the cases of Angola and the DRC are fulfilling the essential prerequisites of a most similar case system design.
Both countries have suffered recently from a long-lasting civil war which destroyed large parts of the country’s infrastructure and bureaucratic capacity. In addition, Angola’s and the DRC’s economic output is heavily dependent on their natural resources and both countries are financially dependent on external help in order to develop in a wide array of sectors. Besides those similarities, Angola and the DRC are
still affected by the state structure imposed by its colonial powers, respectively. Due to the high rate of ineptness – mainly accumulated after the independence – the countries have extreme difficulty accessing credit-lines from the IMF and the World Bank. In this situation, the cases turned towards China in the search to find an alternative partner able to finance the countries large-scale reconstruction schemes. With regard to the cases and China’s interests, this cooperation took the specific form of a RFI deal. Having concluded the agreement with China, the outcomes of the RFI deals (dependent variable) varied; expressed in a cooperative mode for the Sino-Angolan relationship and an exploitative form for the Sino-Congolese relations. It is assumed that cooperation takes place if a country features important aspects of a Developmental State and China’s Obsolescing Bargaining power is low. An exploitative mode of relationship develops if the state structure is not comparable to a Developmental State and the Obsolescing Bargaining power of China is high. Bearing that in mind, the following section specifies the key assumptions and describes the operationalization of the study.
3.4
Hypotheses and operationalization
With the aim to explain the different nature of the Sino-Angolan and Sino-Congolese cooperation, this research has presented two theoretical perspectives. It is assumed that the elements of those approaches are accounting for the diverging outcomes of the RFI deals. In this regard, the underlying interference and structure of the study is explained just below.
explanans
explanandum
Embedded autonomyCooperation or Exploitation
Meritocratic bureaucracy Opportunity costs Sunk-costs3.4.1 Dependent variable (explanandum)
In line with the above described considerations, the dependent variable (explanandum) will be defined as either cooperation or exploitation. In the literature, a cooperative behaviour is loosely defined as “the act of working together with someone or doing what they ask you” (Cambridge Dictionary). Referring to a bi-lateral relationship, a cooperative mode of interaction would imply that two or more entities engage in a mutually beneficial exchange. In addition, cooperation means that the distributions of gains can be proportionally equal in the same field or in a cross-sectional manner. Conversely, an exploitative mode of relationship is defined as the proportionally un-equal distribution of gains in a cross-sectional manner. Following the same approach as for cooperation, losses can be balanced with gains in other fields.
3.4.2 Independent variables (explanans)
In line with the considerations above, the Developmental State structure is assumed to positively impact the relationship with China. Under those scope conditions, the state has the capacity to steer the negotiations and monitor the implementation. Consequently, the following hypothesis will be formulated:
H1a: The RFI deal with China leads to a cooperative outcome, if the target country is featuring a strong, yet responsive bureaucracy.
This is the case, if the state is equipped with a meritocratic bureaucracy and an embedded autonomy. In this regard, a public administration following the meritocratic principle makes corruption less likely because the recruitment and career perspective is based on performance. In such an environment, the African bureaucrat is more likely to act in an impartial and development-oriented manner. Connected to this is the responsiveness of the bureaucracy. This notion can be operationalized by the embedded autonomy feature. If a country is equipped with a responsive bureaucracy, the negotiating agents are able to establish the precarious embedded autonomy balance. This entails that there is a communication between the Chinese and the African negotiators, yet the procedures of the negotiations are mostly determined by
the side of the developing state. Moreover, the African negotiators are able to deny or exit negotiations if the offered terms and conditions are not in their interests. Furthermore, the bureaucracy is able to monitor the implementation and maintains the projects financed through the RFI deal. Finding evidence that the RFI deal takes place in a larger institutional framework or the existence of legal advisors in the negotiation-teams could indicate a strategic responsiveness towards the Chinese actors.
If the country does not feature those Developmental State elements, the state’s relationship to China is assumed to be exploitative. Consequently, the state has not enough capacity to steer the negotiations or to supervise the monitoring. Resulting from those considerations, it might be hypothesized the following:
H1b: The RFI deal with China leads to an exploitative outcome, if the target country is equipped with a weak and un-responsive bureaucracy.
In this regard, a weak bureaucracy is characterized by the absence of a meritocratic system. Moreover, an un-responsive administration is operationalized by a failure to establish an embedded autonomy. Coming back to the first element, in a un-meritocratic administration the bureaucracy is politicized and patronage networks, as well as bureaucratic inefficiency, are widespread. The bureaucratic agents are assumed to be easily captured by the Chinese interest leading to embezzlement. In such an environment, the country is not able to establish an embedded autonomy. This might occur if the there is an indication for a strong embeddedness – a sign might be corruptive behaviour - between the Chinese and their counterparts or if the autonomy is too strong. Another indication would be the target country’s unilateral withdrawal from the negotiations due to the intransigent position of the country’s negotiators. The agreement might be either skewed towards the Chinese interests or there is no agreement at all. Both outcomes are detrimental for the target country.
Overall, the more evidence found from actors involved or third parties indicating a certain meritocratic bureaucracy and embedded autonomy, the stronger the causal relationship.
Concerning the alternative theory to explain the outcome, the Obsolescing Bargaining approach assumes that China’s anticipated exit costs are the determining factor. In this regard, high exit costs are assumed to have a positive impact on the target country as China cannot credibly threaten the target country with the exit-option. From this, the following hypothesis can be derived:
H2a: The RFI deal with China leads to a cooperative outcome, if China anticipates high exit costs.
In order to operationalize the anticipated exit costs, China’s opportunity and sunk-costs are the determinant elements. It is expected that China’s opportunity sunk-costs are high if the asset specificity of the resource needed by China is high, thus the degree of China’s dependency for the specific resource is also strong. Under those conditions, the target country has a bigger potential to pressure China to make concessions, thus leading to a cooperative outcome. As China’s investments made (sunk-costs) within the target country increase, the countries blackmail-potential in terms of a possible delocalization decreases. With increasing sunk-costs the target country’s agency is strengthened leading to a cooperative relationship.
Conversely, the impact of the RFI deal for the target country is expected to be negative if China’s anticipated exit costs are low. Under those scope conditions, China can convincingly threaten the target country with withdrawal or even place its investment in another country. Consequently, it might be assumed that:
H2b: The RFI deal with China leads to an exploitative outcome, if China anticipates low exit costs.
In such a scenario, China’s opportunity costs are low because the country is not depending on the extraction of the resource. This means that the resource has low asset specificity as it could be extracted in different countries. Moreover, the investments made by China are not so substantial, making the exit-option a credible threat.
To sum up, the more evidence from actors involved or third parties indicating a certain asset specificity and dependency, the stronger the causal relationship.
3.5
Strengths and weakness of the research design
The theoretical framework allows investigating China’s specific perspective (Obsolescing Bargaining theory) and the host country’s internal structure (Developmental State theory) in a single research design. Thus this study represents an alternative theoretical framework as those perspectives are most commonly studied separately. In this research design, the results can be compared. More importantly, this study might be better able to give a multi-faceted response to the issue of whether the way of external interaction with developing countries is responsible for the underdevelopment or the internal structure of the country is the determining factor. This question is central in many academic, public and political debates in the last few years and this research might bridge the separated camps. Moreover, the theoretical framework is based within the field of international political economy, yet the complexity assessing the RFI deals includes elements of international relations and developing studies disciplines. Against this background, the way of China’s engagement in Africa could be a predictor for other country’s approach, most probably BRICs countries. This means that the study might be useful for developing countries to get an insight into the mechanisms at play and to benefit from an engagement. At the same time, the research can inform western countries about China’s (BRICs) approach. Consequently, the findings can indicate a way making cooperation between the two groups more fruitful for the developing country.
With regard to the internal structure perspective, the Developmental State theory has been increasingly used in recent years in relation to African states (Ovadia, 2016; Kanyenze, 2016). This research contributes to the field by applying the theory to Angola and the DRC. Moreover, the established literature about the Developmental State are mainly focused on relatively diversified economies (South Africa, Namibia and Malawi), this study provides an insight into the relation between resource-rich countries and Developmental States.
Regardless of the strengths of the research, there are some issues. The literature concerning the RFI deals in the DRC and Angola is relatively scarce and the academic/journalistic debate is dominated by a Westernized view. In this context, the
results of the study might be biased and the comparability to other, more diversified, researches within the field of China Africa relations might be reduced. In addition, the studied outcomes of the RFI deals are time-variant, a fact which might limit the general usability of the findings. To put it another way, the nature of the relationship with China is impacted by the timing of the RFI deal. In this context, China’s experience with similar deals in the past might has an effect on the country’s perception and approach towards future engagements. Overall, the results of this research might only be applicable to other cases, if temporal elements are taken into account.
Furthermore, the conclusion made in this study, based on the empirical findings, is to a certain degree subjective given that a direct contact with the persons involved in the process was not possible. This is due to the political instability in the DRC and Angola as well as the discretion of the RFI deals. Against this background, different sources have been analyzed comparatively aiming at identifying a pattern in the literature increasing the probability for one of the hypotheses. Moreover, the logic of deduction follows the laws of plausibility which might reduce the reliability of the findings.
