How Africa is Becoming China’s China


This video was made possible by Brilliant. Start learning with Brilliant for 20% off
by being one of the first 200 to sign up at http://brilliant.org/wendover. Political alliances manifest themselves here—on
the voting floor of the United Nations General Assembly in New York, New York. In this room countries impose legislation
that carries weight worldwide and so what happens in this room is the physical materialization
of the world’s politics. 47 years ago, exactly that happened when one
of the General Assembly’s most consequential votes occurred. China, you see, essentially has two governments. There’s the Republic of China which used
to control the mainland and Taiwan but today only administers Taiwan and there’s the
People’s Republic of China which controls the mainland. Both claim to be the rightful governments
of all of the Chinese territory—both Taiwan and the mainland—and so back in 1971 the
United Nations had to decide which government would represent China. Essent ially, the question was which government
was the rightful leader of the territory as there could only be one in the United Nations. The US was the main superpower opposing the
People’s Republic representing China as it had a strong political and military alliance
with the Republic of China government and so the vote was essentially the US’ sphere
of influence versus the world. Among the 35 countries that voted against
the People’s Republic were much of Africa—the Central African Republic, Chad, Gabon, Liberia,
Niger, South Africa, and plenty of others that sided with the US. Despite the US’s efforts, the resolution
ended up passing and the representative government for China in the UN was switched to the People’s
Republic of China but what’s interesting about this is not the result, it’s who voted
against the People’s Republic. Since that 1971 vote, you see, something has
changed. In 2007, the UN general assembly met once
again to vote on whether to adopt a resolution condemning the human rights situation in North
Korea. As one of North Korea’s strongest allies,
this vote was China and its sphere of influence versus the world. In this vote, though, only Burundi, Equatorial
Guinea, Eritrea, Ghana, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mauritania, and Tanzania
voted against China. All the 43 other African countries either
abstained or voted no along with China because in the forty years between those votes, political
ties changed. Africa no longer bows to the US. Much of the continent is now economically
and politically aligned with the world’s fastest emerging superpower—China. The simple answer for why this is is because
China has pumped huge amounts of money into the continent of Africa. They’re buying allies. For example, China built a $3.2 billion railway
in Kenya trekking the 300 miles from Nairobi, the capitol, to Mombassa, the second largest
city and primary port, in 4 hours and 30 minutes. That’s faster than what the fastest train
in the US, the Acela Express, takes to travel the equivalent distance from Philadelphia
to Boston. China also built a $526 million dam in Guinea
which helped push the country from having constant power shortages to making more energy
than it needs and selling the extra capacity to its neighbors. China also built a $475 million light rail
system in Addis Ababa, Ethiopia, the first of its kind in sub-Saharan Africa, designed
as a way to combat the capital’s crippling traffic. These are only a sampling. There are literally hundreds of others of
Chinese infrastructure projects in Africa each year. All across the continent, China is playing
a part in projects both big and small that are transforming African economies. It’s important to note that these projects
are not, though, free. Each of these three were financed by loans
granted by China’s state-owned and controlled Export-Import bank and these loans do, of
course, need to be paid back by the countries granted them. Large African infrastructure projects, though,
would be viewed as risky by any traditional bank and would therefore struggle to get financed
but China’s export-import bank doesn’t care. Assuming cooperation between the Chinese and
African countries’ governments, this bank will give low-interest or no-interest loans
to African countries so they can build these trains or dams or other projects. These loans are therefore considered a form
of foreign aid since China doesn’t expect to get all their money back, at least adjusted
for inflation, since they’re not charging much interest and there’s a high risk of
default. Of course China isn’t just financing these
projects out of kindness. For each of them there’s a political goal
behind it. You see, the country of China is running out
of growth potential. Its era of double digit year over year GDP
growth is over as it makes the shift from industrializing to industrialized. Africa, meanwhile, is one of the least developed
areas of the world and a lack of development actually makes fast growth easy. The first step of economic development for
many countries is natural resource exploitation. Nearly every country has some level of natural
resources that they can use to kickstart growth but first they need to have enough money to
build the infrastructure and take the steps needed to gather these natural resources. As everyone knows, it takes money to make
money and China has money. By investing in African mining and farming,
China can profit off of Africa’s growth and fuel the business back in China that require
minerals and food, but in addition to it serving as a source of natural resources, Africa has
another resource—labor. It might seem strange that China, the country
that the world uses for low-cost manufacturing, is looking for a labor source elsewhere but
that is exactly what it’s doing. China is a victim of its own success. The economic development that its manufacturing
industry brought pushed a large segment of its population into the middle class which
raised labor costs country-wide. It’s not bad news, China as a country has
shifted from having a low-skilled to a medium-skilled workforce as their education level has improved,
but for the lowest cost, lowest skilled manufacturing work, the country of China is no longer competitive. Therefore, Chinese manufacturing firms are
setting up their own operations in Africa—one of the cheapest and lowest skilled labor markets
in the world. Today, China is now the largest trading partner
with Africa as a whole. Despite China being a vastly larger country
than the US in population, the US and China both trade a similar value of goods worldwide
each year. In this case, though, whereas $48 billion
worth off goods were exchanged between the US and Africa in 2016, China traded $128 billion
worth of goods—nearly three times as much. Now, the whole idea of setting up a structure
of power over other less developed states in order to gather resources and use their
labor force might sound familiar because that’s largely what colonialism was. The motives behind European powers expanding
their territory to less developed nations in the 15th through 20th centuries were remarkably
similar to the motivations behind China’s growing economic influence in the developing
world today. Despite what some may say, there is empirical
evidence that China has been using these infrastructure investments to affect worldwide politics. It’s been found that if an African country
recognizes Taiwan as a country they receive, on average, 2.7 fewer Chinese infrastructure
projects within their borders each year. Conversely, if an African country votes overwhelmingly
along with China in the United Nations General Assembly, they receive 1.8 more infrastructure
projects per year. Considering that the General Assembly is an
equal representative body where each country gets one vote no matter if they have a million
residents or a billion, China’s getting a lot of influence for, in the grand scheme
of things, not a lot of money. China touts the fact that their foreign investment
and aid is “no strings attached.” Unlike other institutions that give low or
no-interest loans to developing countries like the International Monetary Fund or World
Bank, China give loans with no requirements on factors like respect of human rights or
democratic elections. Of course, this data linking infrastructure
investment with political leanings shows that there are indeed hidden strings that require
benefit for China rather than benefit for the receiving country. Western powers are understandably concerned
about this shift in power dynamics towards a country with vastly different ideals. In 2017, China entered a select club as it
opened a military base in Djibouti. While four other countries have bases in Djibouti—France,
Italy, Japan, and the US—this base was unique as it was China’s first base abroad and
those by themselves, military bases abroad, are unique. Only 15 of the world’s most developed and
militarily powerful countries worldwide have them and now China is one of them. Although, western powers might be worried
for the wrong reasons. The government of China is clearly putting
a lot of focus and money into Africa but not as much as you’d think based off the result
they’re getting—vast amounts of influence over a whole continent. There are two key numbers to look at. In 2015, China loaned just $12 billion to
African countries. In the same year, the country invested a mere
$3 billion in the continent. That’s just not much but the reason China
is gaining this enormous influence over the continent is because the Chinese government
no longer has to force this phenomenon. Private Chinese industry is taking hold of
Africa. Of the estimated 10,000 Chinese businesses
in Africa, 90% of them are privately owned rather than one of the numerous Chinese state-run
companies. The Chinese companies in Africa are actually
making money—some substantially so. The Chinese government certainly has provided
a considerable push to the industrialization of Africa but now that that’s done, economic
forces are moving the initiative further forward. Chinese small business is gripping the continent. Much of the western world is ignoring the
prospects of the continent—ignoring that business in Africa can now be as profitable
as business in China was when its period of tremendous growth began. Right now, Africa is establishing itself as
the source of labor and resources for China and so, until the west pays attention, Africa
will continue inching forward on its path towards becoming China’s China. One of the techniques used to predict the
GDP or GDP growth of a country, which is of course used to decide which country to invest
in, is machine learning. For example, here’s what a machine learning
model predicted a country’s GDP would be over three months and here’s what it actually
was. It forecasted the country’s GDP far better
than humans did. The science behind predictions like this is
complex but fascinating. If you want to learn how it works, though,
the best place to do so is brilliant.org. Their machine learning course makes this advanced
concept simple because their simple explanations, illuminating graphics, and thought-provoking
questions break a concept down into small packages and then builds it back up to the
final result. They truly are experts in successfully teaching
complex topics. They also have plenty of other fascinating
courses on topics like computational biology, number theory, artificial neural networks,
and more. You can start learning for free at brilliant.org/Wendover
but then, if you want to access the full range of classes with their premium subscription,
the first 200 to use that link will also get 20% off their annual premium subscription. Thanks for watching and we’ll see you again
in three weeks for another Wendover Productions video.

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