INTRODUCTION

China has expanded its relationship with many African countries in recent years. However,
Chinas increased presence and aid to most African country has been a hot topic, it has been a
topic of great interest to many. Its presence in Africa has seen a combination of optimism,
concern and intense debates that have been generated due to its presence. The impacts of Chinese
economic activities are being felt in many parts of Africa. The areas of impact include foreign
direct investment (FDI), funding and introduction of Low price electronic and
telecommunication hardware products. It is behind this background that this essay will chronicle
and discus Chinese development assistance to Africa (Zambia). Furthermore, it will show how
different Chinese assistance is from the western convectional donors. In addition, it will provide
alternative development financing options for Africa. Thereafter a conclusion will be drawn to
sum up the whole piece of writing.

BACKGROUND OF CHINAS DEVELOPMENT ASSISTANCE TO AFRICA

Chinas first encounter with Africa was back in the 20 th century during the Bandung conference
of the non aligned nations in 1955. There has been a couple of stages or phases in which China
has engaged itself with African nations. There was a substantial improvement in the relationship
towards the end of 1950s between china and Africa, as a result of its worsening ties with the
Soviet Union. China was in search of allies in Africa to establish a counter balance weight to
Soviet hegemony and western imperialism (Chang, 2002).

In addition, Chinese engagement in Zambia dates back to the colonial days when China
supported the liberation movement. Chinese investment in Zambia, albeit one sided, began as
early as the first republic. Chinese loans are concessional, and they are consequently competing
highly with the World Bank. This is in effect of being cheap, effective and free of heavy
conditionalities. They are linked to commodity production, mostly raw materials, which are
important for Africa since the continent is largely a producer of raw materials. However, Chinas
aid to Africa features differently stages along with changes of times and international
environment of the time on the one hand, and on the other are closely associated with chinas
development itself (Brautigam, 2004).
STAGES OF CHINESE DEVELOPMENT ASSISTANCE IN AFRICA

Early Stage

The first form of aid China rendered to African countries was as early as 30 th may, 1956 when
china realized gratuities aid to African countries with concerns as top priority, newly independent
African countries as main aid objects. The Chinese helped in improving infrastructure
construction in African countries which it aided by then. China attaches great importance to
equality and mutual respect of each others sovereignty when giving out aid to Africa, and there
no strings which are purely attached when providing aid to Africa. The first stage ranged from
1956 until the late 1970s (Chang, 2002) .

The Exploring and Adjustment Stage

The 1990s marked an important phase in Chinas re-emergence in Africa. The period was
characterized by unprecedented involvement in the continent. The relationship was broadened in
various areas to include: trade, investment, development assistance, technology transfer and
training. This stage stretched from 1978-1990 following policies created in 1978 the Chinese
governments foreign policies, around this period the ways of development assistace to Africa
and the types of projects they came in with were diversified (Hansen, 2001). For example, this
time around there was an introduction of free interest loans, expertise guidance in different
projects and programmers in Africa, labor service and provision of personnel, training and
transfer of different technologies. Both China and the needs of African Countries development
and experiences are taken into account, reflecting flexibility and campability in chinas African
Aid.

Comprehensive Reform Stage

In the period between 1970 to 2000, china carried out comprehensive reforms In foreign strategy
chinas aid to Africa hit new level of reform policy adjusting, focusing on diversifying the source
and means of funding. For example in 1993 the Chinese government set up the foreign aid fund
for joint ventures and cooperation projects with part of interest free loans being repaid to china
by developing countries with medium and long term law interest preferential loan via import and
export bank of china (Brautigam, 2004).

Institutional Stage

In the early years of the 21st century, chinas aid to Africa reached yet another new height, which
is the stage of institutionalized development with the establishment of form of China-Africa
cooperation china in the years 2006 and April 2011 respectively decided to release Chinas
African policy and Chinas Foreign Aid were released. Chinas aid to African countries entered a
new stage of institutionalization and system construction since the year 2000. China has issued a
series of policies, measures and documents concerning chinas aid to Africa (Brautigam, 2004).

CHINESE DEVELOPMENT ASSISTANCE TO AFRICA (ZAMBIA)

As clarified by the white paper on Chinas foreign Aid, Chinas foreign Aid is guided by the
following principles: first enabling recipient countries build up their capacity to self
development; second Imposing no political conditions; third adhering to equity, mutual benefit
and common development remaining realistic while striving for the best, keeping pace with
times `paying attention to reform and innovation (Pilling, 2009). For example, China is bringing
in self development to Zambia to enable Zambia be able to develop herself minus relying on aid
largely.

Ajayi (2000) points out, Chinese development assistance or aid is said to be tied which
simply means that aid is provided on conditions, such as project works will be undertaken by
Chinese companies, this is of advantage to the recipient country because aid funds are unlikely to
be wasted by corrupt individuals. Most African leaders tend to misuse the funds left to them by
donors hence tied aid ensures that there is no misuse or misappropriation of donor funds. For
example China sends its skilled workers out to foreign countries to undertake construction works
and also help in training the Zambian workers on how to tackle future projects.
China has great interest in Zambias manufacturing sector. In addition, china has invested in the
manufacturing sector in Zambia which is a very big need for most African countries. Chinese
factories do offer jobs for the locals apart from this they also use production technologies which
Zambian entrepreneurs can easily adopt and use. For example the use of simple solar energy
systems has improved business of majority of small businesses like barbershops to do business
during this period when Zambia is facing an electricity crisis.

China adopted a mutual benefit and common development principle as a basic principle for
delivering aid to Africa. China as a developing country provides aid to a developing country is
more like helping its friend, when china helps out a developing country it expects to them to help
it too. This brings in the principle of, equality and mutual assistance as a principle core of its
relationship with recipient countries (Bhagwati, 2010). China has great interest in Zambias
manufacturing sector. Furthermore, china has invested in the manufacturing sector in Zambia
which is a very big need for most African countries. Chinese factories do offer jobs for the locals
apart from this they also use production technologies which Zambian entrepreneurs can easily
adopt and use (Moyo, 2009). For example the use of simple solar energy systems has improved
business of majority of small businesses like barbershops to do business during this period when
Zambia is facing an electricity crisis.

Major infrastructure projects across Zambia and Africa are financed by the Chinese government.
For example the railway linking Zambia to the Tanzanian port. China financed and constructed
the Tazara railway which has been of great importance due to its link to the sea port enabling
Zambia to receive goods from overseas, and also find it easy to export her products too. With
such assistance Zambia has a fair chance of developing herself.

Furthermore, Chinas great need for natural resources or rather minerals and other extractives has
increased the world prices for commodity such as copper, aluminium and others. Its urgent need
for such minerals has helped in reversing the age-long decline in prices (Easterly, 2002). For
example Zambias economy largely depends on copper sells, hence when there is less demand of
the commodity on the global market the Zambian economy suffer drastic decline. But due to the
Chinese government which has great need of such resources Zambia is able to trade her
commodity at slightly fair prices. This in turn gives Zambian government much needed revenue
and economic boost.

In addition, Chinese investment brings about additional source of investment capital at a time
when aid alone is unable to address unemployment, poverty alleviation and generate a significant
multiplier effect through the local economy by the way of sourcing and provision of local
management expertise and technology transfer. To make this happen, China has taken up some
measures. Cheap consumer goods still account for high proportion of Chinese export to Africa. It
has indicated its readiness to support Africas product value chain (Glaeser, 2004).

WESTERN CONVERCTIONAL DONORS VERSUS CHINESE AID

There is a distinction between Chinese development assistance and the aid received from the
western convectional donors. There are currently two strands or rather contrasting approaches
towards aid policy in Africa, those that are followed by the West are well known for their
conditionality and selectivity and focus on direct financial support, while the approach adopted
by China avoids conditionality and concentrates on infrastructure building support (Hansen,
2001). History clearly points out that China did not foist itself on African governments like the
western colonialist who took up the administrative governance and resources of each country the
colonialized. Furthermore, investment data shows clearly shows the emergence of china is highly
beneficial. There is generally significant investment coming from Chinese state owned
enterprises; however investment from the private sector is growing in an unprecedented manner
(Bbc, 2010).

Majority of the Chinese firms are willing to give development assistance whether the western
convectional donors are willing to invest or not (Pilling, 2009). For example majority of the
western convectional donors are not willing to invest in countries such as Zimbabwe due to the
sanctions imposed on it, but it is unlike of the Chinese companies. Many of the deals closed by
Chinese firms in Africa are ones that western companies would not stake their investment. For
example, in 2005 China and Nigeria signed an $800 million crude oil sale agreement. This in
turn would lead to Chinas buying of 30,000 barrels a day for five years. It also won a license to
operate four oil blocks and take-over of the Nigerian refinery. These are risky and money losing
ventures that no western oil company would ever think of staking its investment 38 because
these investments are located in a politically volatile and hot spots zones (Bhagwati, 2010).

Western convectional donors aid is usually attached with some conditionalitys and restrictions.
However, Chinese development assistance in Africa is not a threat there is much of gains than
loses because Chinese government does not impose political conditions on African countries
(Chang, 2002). For examples The Bush Administration created the millennium challenge account
in 2002, as a means of driving democratic reforms to the recipient countries. This meant that
African countries were given a test which they had to pass in order to receive aid. The fact
majorities of African countries no longer receive aid from the former socialists bloc; they were
forced to abide by the millennium account in 2002 minus option . Furthermore, there is a big
disparity between the western convectional donors and the Chinese form of aid due to Concerns
led to adoption of conditionality and selectivity by Western donors in 1980/90s Washington
Consensus (Moyo, 2009). For example during the period of the cold war western countries could
only give aid to countries which were following their political policies while neglecting those
who followed other forms of political ideologies hence the aid is selective.

In addition, the Western Convectional form of aid is selective which roughly recognizes the
importance of good governance for the effectiveness of aid. However, it fails to recognize that
good governance is itself internally determined by the backwardness of the economy; for
example corrupt government are part of the development problems, unlike focusing on the cause
of it and thereby aid is needed partly to solve the problem in government. In addition, the
internal governance problem mean that the west approach to aid faces dilemma on one hand,
conditionality is supposed to prevent the misuses of monetary aid while on the other hand
African countries need aid to foster the development that will help tackle corruption and improve
guidance (Chang, 2002).

The problem with western aid which has conditionality and selectivity is that efforts to tackle
down poverty should take into account the problem of the government, not make a pre-condition
of recipient aid. Hence, Chinese development assistance emphasizes on the infrastructure which
many African countries need and want, but often find traditional western aid donors reluctant to
fund. The Chinese have expanded their scholarships lately to developing countries, they further
have offered medical assistance to a number of poor countries. However the unconditionality
does not mean that Chinese aid comes with no strings attached to it, self interest is an undoubted
feature but does not set the type of conditions typical of the western program because china does
not explicitly require a good human rights supporting state, strong economic management,
environmental responsible policies or political operation on the part of the recipient countries.
One major principle is non interference which differs with the western approach. China has been
criticized for the human right record hence it makes it difficult for it to impose political features
or ideologies on others (Pilling, 2009).

Meanwhile Chinese approach avoids the above dilemma and internal problems by directly
targeting constraints to development (Chang, 2002). For example in Zambia the Chinese have
direct infrastructure provisions which means the Zambian government does not act as a middle
man hence this reduces the opportunities for corruption in recipient countries, therefore this does
not require conditions on aid to be imposed because government involvement is misused. Even
though the approach creates limited direct employment the end result is tremendous due to
improvements in infrastructure, telecommunication and transportation. These reduce the cost of
trade thereby increase the opportunities for economic players to realize their potentials.

Increased Chinese development assistance to Africa pales in companies inside the continent
unlike what the west had offered Africa as development assistance (Chang, 2002). For example
throwing money at the problem is not an answer to African development challenges. If it were,
several billions of dollars offered for the past five years would have changed the face of African
countries. In addition, flooding the African nations with money does not guarantee economic
growth due to many factors which fight Africa such as corruption and the lack of
industrialization.

Trade data analysis shows Africas trade with China being highly concentrated in only a few
countries, about 60 percent of Chinese exports are destined for just six African countries
including Zambia. Beyond this there is imbalance in trade as the distribution of the trade
produces net deficit. However, the balance of trade deficit is not due to trade in oil as only nine
percent of chinas oil is imported from Africa, unlike the United States which has 32 percent and
Europe 33 percent of African oil imports (Brautigam, 2004).

Furthermore, ever since the late 1970s the United State Agency for International development
(USAID) has not funded heavy infrastructure projects in Africa. In addition the World Bank and
the United State agency for International development has reduced support for agriculture as
high as 90 percent in the nineties. However Chinese firms have committed huge investment in
upgrading African infrastructure (Bhagwati, 2010). For example in the past few years in Zambia,
Chinese companies have directly built bridges, upgraded railroads, and other needed
infrastructure. Regardless of such investment there are no conditions attached to them unlike the
western form of aid.

The other difference between Chinese development assistance and the western donors is due to
the fact that Chinese aid is Tied meanwhile the Western one is Untied. This in simple terms
means for a country being rendered help by China, Chinese engineers or simply the Chinese
work force has to carry out the operations of projects (Easterly, 2003). For example a
construction company will fly all the way from china to Africa to do some construction work
hence bringing with them new technologies and better ways to carry out projects faster and
efficiently. This is the opposite of the Western convectional donors.

China insists that aid should be used to help recipient countries achieve self-development, and
that aid should not be imposed with any political conditions or used to interfere with the internal
affairs of the recipient countries. It is well known that Chinas foreign policy is guided by the
Five Principles of Peaceful Coexistence, whose core is mutual respect for sovereignty. The aid
policy, as an integral part of the foreign policy, naturally follows these principles. To respect the
sovereignty of recipient countries implies the principle of non-intervention, and non-intervention
means that China does not impose any political conditions on its aid and has no intention of
dictating others development path (Chang, 2002).

According to Brautigam (2010), this stands in sharp contrast with the West. In the West,
development assistance operates on a modernization theory, which assumes that all societies
need to modernize and grow economically in a series of historically verified stages similar to that
undergone by Western nations during the past 300 years. This process of modernization and
growth can be accelerated in poor countries through resource and technology transfers from
developed industrialized countries. The Western donors assume that they know what factors
contribute to development, and they naturally attach those as conditions to the aid they render
( Ajayi, 2000).

It is clear that the western aid policy not only collides with china principle of non intervention
but also contrasts fundamental differences from Chinese foreign aid philosophy, with its stress on
economic development. Unlike china, which cherishes the principle of equality and mutual
assistance as the core of its relationship with recipient countries the west places itself as superior
position when naming its assistance as development aid. Meanwhile china defines its aid as
Development assistance (Gleaser, 2004).

CRITIQUE ON CHINESE AID TO AFRICA

Unconditionality supports unsavoury regimes and fuels corruption. The issue of unconditionality
keeps corrupt regimes in office (Bhagwati, 2010). For example, it supports leadership of
dictators who have been sanctioned for maybe their ruthless behavior towards innocent citizens
but China despite of this still renders development assistance. Chinas only interest is to plunder
Africas natural resources. Chinas main aim which is unclear at some point of view leaves much
to be desired, many scholars have come with different view points on what really is the backbone
behind the aid being received from china (Hansen, 2001).

Little direct employment is created. China carries with itself man power or experts to carry out
projects which leave the local experts trained from different universities jobless (Gleaser, 2004).
For example, University of Zambia graduates from the school of engineering hence fails to get a
job due to the fact that Chinese companies which are giving out development assistance come
with their own professionals. Chinese aid increases indebtedness for African countries, which is
dangerous phenomenon for African countries which are so desperate to develop.
ALTERNATIVE DEVELOPMENT FINANCE

Africa at large has to use other means or alternatives to fund its growing economy unlike relying
on economic support which is full of conditions and unknown tendencies. Methods such as
Sukuk financial instrument can be of great help.

Sukuk is a form of financial certificate which allows the investor to share in profits deriving
from the asset or activity that has been financed. Rather than functioning as bonds which provide
a fixed and pre-agreed return to the investor, sukuk are financial certificates that allow an
investor to share in the profits deriving from the asset or activity that has been financed (Easterly,
2003).

The method of finance was dominantly pushed by Islamic states such as Malaysia and those that
make up the Gulf cooperation council. The combination of a large Muslim population and a well
structured Sharia banking system which based on the principle which are generally agreed upon
within the Muslim community which has enabled countries to issue almost all of the Sukuk to
date in a global market that is now in excess of 100 billion a year (Easterly, 2003). If African
countries were to device such a system among themselves, African states can have a more
authentic source of finance, unlike sources full of strings attached to them.

CONCLUSION

In conclusion Chinese development assistance to Africa emerged in four different stages which

are; early stage, exploring and adjustment stage, comprehensive reform stage and the

institutionalized stage. Furthermore, the western convectional aid is selective, contains

conditionalities, it offers direct financial support and is Untied. Meanwhile Chinese

development assistance is unconditional, concentrates on infrastructure building and is Tied.

Finally, the alternative forms of finance Africa should come up with is forming Local community

funding systems such as Sukuk, which can lead to the emergence of local funding system.

Therefore, Africa and Zambia in particular should desist from focusing largely on aid from

overseas.