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The clash of two tigers: Understanding Sino-Indian competition in Africa

india_china_africa_flag_mapThe rapid economic growth experienced by China and India has resulted in an increase in competition for global resources and investment opportunities.(2) Unsurprisingly, the abundance of natural resources in Africa has made the continent a hotspot for Chinese and Indian economic activity. This growing Sino-Indian involvement has been economically beneficial and has resulted in widespread investment and development, with African leaders welcoming the competition. This was reinforced when Katureebee Tayebwa, a member of the Ugandan High Commission in New Delhi, declared that, “We [Africa] are happy that there is intense competition between India and China to gain African markets.”(3) Political commentators are divided over the relationship between China and India, with some downplaying the scale of competition between the two powers.(4) Their argument has been reinforced by recent evidence of cooperation between China and India in South Sudan, where joint oil ventures have been established.(5) Opponents of this view assert that the current economic rivalry will give rise to political tension as India continues to threaten China’s regional dominance. It is also possible that the two powers will become more aggressive when pursuing Africa’s increasingly limited resources. It is therefore important for African leaders to consider the implications of changing Sino-Indian relations in the future. This paper discusses the nature of China and India’s involvement in Africa and whether there has been evidence of increasing competition in recent years. This paper begins with an overview of China and India’s involvement in Africa and the impacts of their governments’ different economic strategies, followed by an outlook on the future Sino-Indian relationship and the role that Africa can play to ensure that its own strategic interests are enhanced.

Looking East

China and India’s histories of involvement in Africa are very different, with China only recently developing into a major trading partner for Africa. Since the 1990’s, China and Africa have established one of the fastest growing economic partnerships in the world.(6) This exponential trade growth has been caused by the Chinese lack of natural resources, which has caused the government to search abroad for trade opportunities with resource rich continents like Africa.(7) While India’s economic involvement in Africa has been more moderate, the country has enjoyed a longer trading history with Africa.(8) This has allowed India to forge deep cultural links throughout the continent, and it is currently estimated that there are more than one million Indian people living in the region.(9) The historical affiliation between India and Africa has also been caused by the close proximity of India to Africa and the shared colonial experiences of both regions.(10) The historical similarity between India and countries like Uganda, which was also a former British colony, has encouraged close political and economic cooperation.(11) In addition, the establishment of regional institutions like the India-Africa Forum Summit in 2008, has also allowed the Indian government to reinforce its mutual ties with Africa and enhance its strategic objectives in the region.(12)

China and India’s economic strategies have varied considerably, with China placing a stronger emphasis on resource extraction and infrastructure development.(13) China’s strategy has focussed on maintaining close contact with resource-rich African countries by providing multi-billion dollar loans in exchange for their resources.(14) India’s economic presence has been characterised by the predominance of small private enterprises which specialise in areas like education, health services, information technology and telecommunications.(15) A key issue that has prompted the contemporary Sino-Indian rivalry has been India’s rapid development, which has caused it to compete with China for access to similar resources and materials. While China is far more industrialised than India, its government has continued to be aggressive when pursuing global economic opportunities. The Chinese Governments’ assertiveness has been caused by the pressure applied by the country’s rising middle-class population, who are becoming more expectant of their government to improve domestic living standards and national economic growth.(16) It is possible that as India continues to industrialise and experience the same internal pressures as China, the current economic rivalry will escalate into political tension. This tension could be heightened as China and India become more aggressive in their search for Africa’s increasingly limited resources. It is therefore vital for African governments to consider the implications of India’s industrialisation and whether they will be adversely affected by the possible increase in Sino-Indian rivalry.

Impacts of Sino-Indian engagement

The economic importance of India and China to Africa can be seen by the rising value of trade between the regions. In 2009 China surpassed the United States to become Africa’s most important trading ally, and in recent years the value of Indian trade has soared as the country has begun to industrialise.(17) The different economic strategies used by India and China have contributed to the development of a broad array of African industries ranging from telecommunications to the resources sector. Both countries have focused on improving the technical capabilities of African industries by providing thousands of scholarships to African students to attend Chinese and Indian universities.(18) Growing cultural exchange has resulted in China and India being firmly entrenched in African society, and the ability of both countries to develop successful enterprises within impoverished African markets has challenged the historical commercial dominance of Western countries like the United States and Britain.(19)

There have, however, also been some negative impacts on China and India’s growing involvement on the African continent. The “no strings attached”(20) approach of both governments has been criticised for allowing authoritarian governments in countries like Sudan, Zimbabwe and Angola to ignore basic human rights standards and governance norms.(21) This has been most evident in Zimbabwe, where economic competition between India and China has resulted in both governments signing multibillion-dollar deals with the Mugabe government to gain access to Zimbabwe’s energy, construction and mining sectors.(22) According to some, China and India’s economic activity has helped justify President Mugabe’s ‘look east’ policy, which was formulated after his fall-out with the West in the early 2000’s.(23) The negative impact of trade imbalance and counterfeit goods on local African industries has furthered concerns about Africa’s increasing reliance on India and China, particularly in the context of their mounting economic and political rivalry.(24)

Evidence of increasing competition

While China’s aggressive economic approach has caused it to achieve more influence in Africa than any other country, its dominance is slowly being impeded by India’s growing involvement in the region.  India has focussed on emphasising its cultural and historical ties to enhance the development of its trade relations with resource-rich countries like Zimbabwe, Ethiopia and Sudan.(25) According to Brahma Chellaney, professor at the New Delhi-based Centre for Policy Research, India has tried to “position itself as different to China, which has acquired the image of being a new imperial power.”(26) The success of India’s soft power strategy has been evident in countries like Sudan, where Indian corporations have attained near complete control of the local oil and natural gas industry.(27) The same trend is occurring in Zimbabwe where China’s dominance in the energy and resource sectors is being challenged by private and state-owned Indian enterprises.(28) The US$ 4 billion takeover of Zimbabwean steelmaker Zicosteel, by India’s Essar Group, was hailed by the Zimbabwean Government as the largest foreign direct investment deal in Zimbabwe in recent decades.(29) Competition for the takeover was intense, as various Chinese corporations challenged the Essar Group’s bid.(30) The incident has been viewed by some as a reflection of the intense rivalry developing between China and India, and while China continues to dominate African markets, the success of India’s economic strategies has raised uncertainty towards China’s future economic dominance in the region.(31)

Historical animosity between India and China is another factor enhancing the likeliness of future political tension and conflict. The ongoing border disputes between India and China, which peaked during the short border conflict in 1962, have illustrated the potential for military tension between the two powers.(32) The nuclear tests undertaken by the Indian military in recent years have furthered the discomfort of the Chinese Government, which has publicly denounced India’s actions.(33) Indian officials have also criticised China’s assistance to the development of Pakistan’s nuclear programme; allegations which have repeatedly been denied by the Chinese Government.(34) It is possible that these complex political issues will become more prominent as India and China compete for economic and political influence in Africa. The occurrence of a Sino-Indian conflict would be detrimental for Africa’s future economic development. It is likely that Africa would become polarised, as countries would be forced to ‘choose sides’ between India and China. The African region could also become destabilised by the political and military tension emanating from a future Sino-Indian conflict. The reliance of African countries on China and India for humanitarian and economic support means that it is vital for Africa to balance the interests of both countries.

Despite recent evidence of increasing competition between China and India, leaders from both countries have downplayed the rivalry. African leaders, one of which is Ethiopian Prime Minister Meles Zenawi, have also focussed on quelling global concern by asserting that Africa is large enough to accommodate the economic interests of both India and China.(35) While Zenawi declared that it is common for rising superpowers to experience some direct competition, he denied that India and China would experience the same ‘zero sum competition’ as the United States and Soviet Union during the Cold War.(36) While Zenawi predicted that a “sibling rivalry”(37) would develop between China and India, it is likely that heightened political tension will be contained by the growing economic interdependence of the two regions.(38) Regional forums like the East Asia Summit, which were much rarer during the Cold War period, will also help diminish future political disagreement between the Chinese and Indian Governments.(39) In recent years there has been some evidence of Sino-Indian economic cooperation, particularly in vast African regions where it has been mutually beneficial for the countries to combine their resources. In 2004, China and India made history when they became partners in the Greater Nile Oil Project in South Sudan; which was the first sign of significant economic cooperation between the two powers in Africa.(40) By cooperating, it has been possible for both nations to reduce their intense competition for resources, which has contributed to lower infrastructure costs and lower oil prices.

Conclusion

Historical events like the Cold War have shown that political conflict is likely to come about when two rising powers are competing for regional influence. While China is far more industrialised than India, the potential for India to threaten China’s regional economic dominance is already being displayed in Africa. Africa’s reliance on both countries for economic and humanitarian assistance is crucial for its own future development, and it is likely that the escalation of political tension will negatively affect the region. Africa is in a good position to increase its own regional influence by balancing the relationship and encouraging diplomatic cooperation. Recent evidence of cooperation between China and India in regions like Sudan has reinforced the economic benefits that can be obtained from mutual cooperation. It is vital for African leaders to be assertive when dealing with China and India, so that both countries are held accountable to ensure that Africa’s long term interests are maintained and enhanced.

– Doing business in Africa

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