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Tough rivalry

Much has been said lately about the China-Japan rivalry spreading to the continent of Africa. Perhaps, this is logically so.

Japan’s growing interest in Africa as a lucrative market for economic ties and energy security, at a time when China’s ever-increasing economic and political clout is engulfing Africa; is proving to be an extension of already existing competitive rivalry between both the nations. An adding to this tension is their war of words over each others intentions in Africa.

The ongoing rivalry between the two Asian giants over potentially resource rich Senkaku islands in the East China Sea and Japan’s unresolved wartime past has maintained a continued face-off between the two. Subsequently, they have both used ways like regional diplomacy through political and economic persuasion; media sponsored propaganda, use of geopolitical strategies like the ADIZ and sustained presence in the East China Sea to maintain pressure over each other.

However, their engagements in Africa go beyond that. Their proxy psychological war will continue to try and contain each others interests in Africa. But, as Africa is fast becoming an economic frontier, the rivaling Asian giants will increasingly depend on the continent for their economic gains. Africa is fast proving to be a lucrative market for Chinese goods, which is accelerating trade between the two countries. Resource rich Africa is also proving to be crucial for Japan’s vital automobile industry and energy security needs.

As a result, these two economies will continue to pump in billions of dollars worth of investment and help development projects, which will surely benefit the continent. In addition, African countries are also turning out to be good political investments for China and Japan alike.

Attractive destination

Attraction to Africa is easy to understand. Libya ranks ninth in the world for oil reserves, Nigeria 10th and Angola 16th. In natural Gas, Nigeria ranks eighth, Algeria ninth and Egypt 15th. Africa holds 95.5% of the world’s platinum reserves, 58.3% of all diamonds, 49.2% of all cobalt, 45.8% of chromium supply and 27.1% of the world’s manganese. In this sense, some significant trends seem to emerge.

Firstly, as China and Japan eye Africa as a strategic market and a politically strategic option, Africa’s importance on the world economic map will increase. Africa is attracting investment attention anyway, but their importance will catapult, keeping in mind that the biggest Asian economies are investing in Africa’s growth in the middle of the Asian century.  

For example, a high level Japanese minister admitted that since Japan has only one operating gold mine and totally relies on imports of the basic and minor metals it needs for its vital car manufacturing industry, without security of supply of these metals; it would lose a large part of its global market share in the automobile industry. Thus, if the supply of material deposits from African countries would stop, it would have to suspend most of its production.

China has control of over 90% of the current global market in rare-earth metals, which directly threatens Japan’s economic and strategic interests. This makes finding new sources, in places like Malawi, important for Japan.

China’s growing interests in African hydrocarbon resources is increasingly pitting it against nations like USA, India and Japan. The Japan-China rivalry in Africa is visible in Zimbabwe, where Tokyo and Beijing are fighting to secure contracts to mine the country’s coal deposits.

Although Japan has signed a deal with Zimbabwe for fifteen million tons of coal annually, China is still fighting. Meanwhile, in East Africa additional discoveries of oil and natural gas fields in recent years have seen Tokyo and Beijing announce new aid projects for countries in the region.

Last year, Japan said it would provide a $340.6 million loan to Kenya in order to build a highway bypass in Mombasa, the country’s second-largest city. Just a day after that announcement, China said it would extend a $100 million grant to Kenya to install CCTV cameras in urban areas, as a way to monitor “terrorist” activities.

China and Japan have stretched their competing interests to the continent. They are scrambling for resources in the new arena of Africa now. Japan has entered the continent amidst stiff competition for the continent’s mineral resources from China.

While Japan has long used the Tokyo International Conference on African Development, which was established in 1993, China goes through the forum on China-Africa Cooperation, which was established in 2000.

Challenges for Japan

It is rather interesting to observe the trajectory of policies that are being followed by Beijing and Tokyo. Immediately after Japan’s announcement of aid to Africa, China also announced that it would increase its aid to Africa by US $20 billion over the next two years. Japan already finds itself lagging behind its rival China, which has been investing heavily in Africa for over a decade.

Japan will find it difficult to catch up to China’s political influence as well. China’s leaders are frequent visitors to the continent. China’s President Xi Jinping visited Africa last year on his first overseas trip as President. Beijing has also cultivated close relationships with ruling governments of African countries by inviting their top leaders frequently to China.

It will be hard for Japan to compete with China’s consolidated relationships primarily on a business level. China on the other hand, emphasizes the ‘friendship’ between its government and African nations and when joint projects are in question, they are always mentioned as a sign of China’s friendship towards Africa.

With China’s policies of non-intervention in domestic affairs, China’s ‘business is business and politics is politics’ approach to African diplomacy allows it to secure deals in countries with troublesome governments and dictators in ways that will perhaps be considered illegal in Japan and Western countries.

Not only that, China will easily qualify as one of the, if not the top exporter of arms to Africa. Most Chinese embassies in Africa have Defense attaches, which qualifies to prove that China has military interests in the continent as well.

This means that China is not only looking for economic engagement with African nations. Instead, it wants a strategic foothold on the continent with significant political clout. It doesn’t only seek to secure its economic interests; it has strategic factors that account for its expansionist policies.

Because Japan cannot even equally compete with China in this regard, China will perhaps, very easily outsmart Japan. After the slightest threat from Japan is mitigated, China will then compete with USA on the continent, which then, might fuel a possible US-Japan alliance in the region, just like one already exists in the East Asia region.

New approach

Further, with an eye on China, Japan’s artistry in diplomacy seems to be headed in a new direction as it now seeks to carve a significant place for itself in the world order, under the leadership of PM Shinzo Abe.

He has openly spoken about expanding Japan’s presence in Africa to create a new market for Japanese goods and a source of minerals and energy like rare-earth metals for Japan’s industrial economy that it currently imports from China. By making Africa his diplomatic centerpiece he is pushing his so called ‘Abenomics’ with the aim to end Japan’s economic decline by pitting itself against countries like China, USA and other European countries in the scramble for Africa.

Japan’s arrival of sorts was cemented with PM Shinzo Abe’s visit to three African countries in January this year, a first in eight years. Interestingly, his visit to the Ivory Coast, Mozambique and Ethiopia perfectly coincided with Chinese Foreign Minister Wang Yi’s visits to Ethiopia, Djibouti, Senegal and Ghana. This marked the beginning of Africa as their new economic and diplomatic battleground.

Even though Japan’s investment in Africa doesn’t come near that of China’s, it is nevertheless a handsome one. As Abe moved through Sub-Saharan Africa, he offered aid and development projects worth billions of dollars to help Japan catch up with China’s enormous footprint on the continent. He pledged more than US $14 billion in aid and trade for Africa. In Abidjan, Ivory Coast, Japan pledged US $84.4 million for security in the SAHEL region. Japan also renewed its pledge of providing US $32 billion for private and public support to African economies for the next five years.

Especially in Maputo, Mozambique, Shinzo Abe opened new avenues for Japan’s quest for energy security. Securing access of Liquified Natural Gas is now a diplomatic priority for Japan. Since the Fukushima Nuclear Plant disaster, Japan has become the world’s biggest importer of Liquified Natural Gas.

Now a Japanese company, Nippon Steel is developing a coal mine in Mozambique in addition to the US $672 million loan which is aimed at building a construction and transportation network for Mozambique’s Liquified Natural Gas. The Japanese Chiyoda Corp is also bidding for the US $20 billion contract for the construction of the plants.

In some African countries with rich mineral resources like South Africa, Japan is especially influential. South Africa’s third-largest trading partner is Japan. Over 100 Japanese companies have a presence there. And the government is not just interested in importing South Africa’s resources but also in exporting Japan’s famous bullet trains.

Last year Japan held its fifth Tokyo International Conference on African Development conference to promote high-level policy dialogue with African nations. It was during this conference that the Japanese government expressed its intention to support African development by using the country’s public and private funding sources. By shifting boldly from the image of an international aid donor to an investor and trade partner, Japan signaled a diversion in its African policy.

However, Japanese officials admit that they cannot match the billion of dollars that the Chinese have poured into Africa since 2000. The International Monetary Fund statistics shows that China’s trade with Africa was worth US $138.6 billion in 2011, while Japanese trade was worth just about US $27.8 billion. While China’s trade was reported to be seven times more than that of Japan’s in 2011, its exports to Africa were about five times more.

The Chinese are a major investor in Africa’s oil and gas sector, as over half a dozen nations in Eastern and Western Africa enjoy Chinese projects. It is also the biggest buyer of oil and minerals from many African countries. Its construction companies are building roads, highways, railway lines, sports stadiums, government buildings, transit systems and hospitals across Africa. China’s state-owned mining companies were given the go ahead to secure precious commodities as far as Zambia’s copper, Gabon’s iron ore, Angola and Sudan’s oil are concerned.

In fact, China’s aggressive expansion and Japan’s struggle to fill the gap found them in a war of words, targeting each other policies. Japan hopes to close the huge gap by training Africa’s human capital of engineers, technicians, etc, in order to differentiate its efforts from Chinese projects that have been criticized for employing mainly Chinese workers while offering few jobs to the Africans.

Japan also criticizes Beijing for its tendency to build lavish headquarters as donations for African politicians, including the most famous US $ 200 million headquarters of the African Union in Addis Ababa, Ethiopia. However, most of its engagement with Africa is as an aid donor rather than a business partner; and, while the two countries take verbal shots at each other, the reality is that China has adopted a far more aggressive strategy in Africa, and has been enormously successful so far.

Beijing seems worried that the image of China as a giant vacuum cleaner that is good only for sucking Africa’s resources may hamper its long term plans in Africa; therefore it may instead of importing their own laborers from China would like to engage the African youths and thereby create more jobs for African countries.

Japan on the other hand, with their vast knowledge in science and technology, if the said human capital development is fully implemented in Africa, will in no time bring about a technology transfer in the continent.

As global power shifts from the US and the European Union (Africa’s traditional developmental partners) to Asia, led by China and Japan, both countries are poised to fill the vacuum. It is in Africa’s interest to cajole and nudge these Asian economic giants to peacefully resolve their disputes without engulfing Asia in a war between China and Japan that would retard its own economic growth and development.