[Senate Hearing 110-649]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-649
 
             CHINA IN AFRICA: IMPLICATIONS FOR U.S. POLICY

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON AFRICAN AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 4, 2008

                               __________

       Printed for the use of the Committee on Foreign Relations


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                COMMITTEE ON FOREIGN RELATIONS          

           JOSEPH R. BIDEN, Jr., Delaware, Chairman          
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
JOHN F. KERRY, Massachusetts         CHUCK HAGEL, Nebraska
RUSSELL D. FEINGOLD, Wisconsin       NORM COLEMAN, Minnesota
BARBARA BOXER, California            BOB CORKER, Tennessee
BILL NELSON, Florida                 GEORGE V. VOINOVICH, Ohio
BARACK OBAMA, Illinois               LISA MURKOWSKI, Alaska
ROBERT MENENDEZ, New Jersey          JIM DeMINT, South Carolina
BENJAMIN L. CARDIN, Maryland         JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, Jr., Pennsylvania   DAVID VITTER, Louisiana
JIM WEBB, Virginia                   JOHN BARRASSO, Wyoming
              Antony J. Blinken, Staff Director          
       Kenneth A. Myers, Jr., Republican Staff Director          






               SUBCOMMITTEE ON AFRICAN AFFAIRS          

           RUSSELL D. FEINGOLD, Wisconsin, Chairman          

BILL NELSON, Florida                 JOHNNY ISAKSON, Georgia
BARACK OBAMA, Illinois               NORM COLEMAN, Minnesota
BENJAMIN L. CARDIN, Maryland         DAVID VITTER, Louisiana
JIM WEBB, Virginia                   CHUCK HAGEL, Nebraska

                             (ii)          

  


                            C O N T E N T S

                              ----------                              
                                                                   Page

Christensen, Thomas J., Deputy Assistant Secretary of State for 
  East Asian and Pacific Affairs, Department of State, 
  Washington, DC.................................................     4

      Prepared statement.........................................     8


Economy, Elizabeth C., Director of Asia Studies, Council on 
  Foreign Relations, New York, NY................................    25

      Prepared statement.........................................    27


Feingold, Hon. Russell D., U.S. Senator From Wisconsin...........     1


Isakson, Hon. Johnny, U.S. Senator From Georgia..................     3


Morrison, J. Stephen, Executive Director, Africa Program, Center 
  for Strategic and International Studies, Washington, DC........    30

      Prepared statement.........................................    32


Swan, James, Deputy Assistant Secretary of State for African 
  Affairs, Department of State, Washington, DC...................     6

      Prepared statement.........................................     8


         Appendix--Additional Material Submitted for the Record

Responding to China in Africa, by David Shinn and Joshua Eisenman    49

                                 (iii)

  


                           CHINA IN AFRICA: 
                      IMPLICATIONS FOR U.S. POLICY

                              ----------                              


                        WEDNESDAY, JUNE 4, 2008

                               U.S. Senate,
                   Subcommittee on African Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:33 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Russ 
Feingold, chairman of the subcommittee, presiding.
    Present: Senators Feingold, Nelson, Casey, Webb, Lugar, and 
Isakson.

        OPENING STATEMENT OF HON. RUSSELL D. FEINGOLD, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Feingold. We'll call the committee to order. Thank 
you all for being here. The hearing will come to order.
    I have had the privilege of traveling to Africa many times 
over the 16 years that I've served in this subcommittee, and 
I've often noted the tangible, prominent signs of China's 
activities on the continent--new roads, sometimes ornate 
government buildings, crowd-pleasing soccer stadiums, and the 
growing numbers of Chinese-run factories and retailers.
    Through its no-strings-attached approach and ability to 
deploy state-owned assets, China has rapidly increased its 
trade, investment, and influence in many sub-Saharan African 
countries in recent years. I'm pleased to hold this hearing to 
further examine this issue as China makes its interest in 
Africa abundantly clear and as other emerging economies follow 
its lead.
    Two years ago, China held the Beijing Summit of the Forum 
on China-Africa Cooperation, which served as a clear indication 
of China's commitment to this part of the world. With leaders 
of 48 African countries--including Sudan's Omar al-Bashir and 
Zimbabwe's Robert Mugabe--in attendance, Chinese President Hu 
Jintao noted that China wants to be Africa's partner and 
pledged to double his country's assistance to the continent by 
2009 through a raft of new loans, development projects in 
health, education, and agriculture, and debt cancellations.
    The 2006 Sino-African Summit sparked concern in some 
Western countries, where donors feared their efforts to improve 
economic and political governance would be undermined by 
China's unconditioned support.
    Now, in theory, there should be no problem with this type 
of increased cooperation and engagement. It is no secret that 
many African nations are in great need of assistance when it 
comes to building infrastructure and strengthening their 
economies. However, this engagement does become more 
problematic when it appears, and often is, devoid of the 
critical underpinnings that help build robust, open societies.
    To this end, it has not gone unnoticed that as the Chinese 
identify and seize development and investment opportunities 
across Africa, they are doing so to help secure their own 
economic objectives, but often without concern for national 
political dynamics and the consequences their engagement may 
have on local populations.
    Nonetheless, the United States must not fall into the trap 
of believing that, simply because China is willing to provide a 
package of assistance, enter into some partnership, or make 
some investment, we need to try to beat the Chinese to the 
punch. In some cases, it may not be economically feasible or 
prudent for American companies to compete with Chinese state-
subsidized firms. In many other instances, loosening or 
abandoning historic U.S. standards for democracy, governance, 
and human rights to seize an opportunity would weaken our most 
potent and unique leverage: Our fundamental values. 
Compromising these principles will leave us with less 
influence, over the long term, and limit our ability to build 
lasting, productive partnerships for the pursuit of shared 
objectives on the continent.
    Where the Chinese are providing critical infrastructure 
development, we should not attempt to compete with or obstruct 
these efforts, but rather, we should seek to empower African 
governments and communities to demand internationally 
recognized standards with respect to the environment, human 
rights, and product quality.
    There are times, however, when China's actions need to be 
condemned--for example, when they sell weapons to Sudan that 
could be used to prolong the conflict in Darfur, or build new 
power plants that support Robert Mugabe's repressive regime in 
Zimbabwe. We, as an international community, should not 
tolerate such reckless behavior, as it undermines global 
efforts to bring peace and security to these countries. We 
should be clear about the need to uphold international norms 
and responsibilities and not provide soft loans as a 
substitute.
    So, in sum, I believe that the appropriate response to 
China's rising role in Africa is more United States engagement 
with both Africans and Chinese to show that we acknowledge the 
growing strategic importance of this continent and are 
committed, over the long term, to its stability, development, 
and prosperity.
    This morning's hearing will explore these issues in great 
depth--what China is doing in African countries, why, and how, 
as well as what implications this has for African and Western 
countries, particularly the United States.
    On our first panel, we will hear from the Deputy Assistant 
Secretaries of State responsible for East Asia and Africa, 
respectively. Tom Christensen will offer historical context for 
China's economic, commercial, and political engagement on the 
African Continent and insights from ongoing United States-China 
senior dialogue. James Swan will follow with an Africa-focused 
analysis of how Chinese activities on the continent affect 
countries and United States interests there.
    Our second panel will offer expert analysis, again from 
both the Chinese and African viewpoints. Dr. Elizabeth Economy, 
the senior fellow and director for Asia studies at the Council 
on Foreign Relations, has written widely on Chinese domestic 
and foreign policy and United States-China relations. She will 
offer insights on the motivations behind China's growing 
involvement in Africa and the challenges this presents for 
China, African countries, and the United States. Next, Steve 
Morrison, the executive director of the Africa Program at the 
Center for Strategic and International Studies, who has 
recently returned from one of many trips to China to discuss 
that country's Africa policy, will assess where Chinese and 
United States interests converge in Africa, where they clash, 
and what this means for United States foreign policy.
    Thank you all for being here today. I am looking forward to 
your testimony and engaging with you in a discussion of this 
timely and complex issue.
    At this time, I will invite my esteemed colleague and the 
ranking member of the subcommittee, Senator Isakson, to make 
his opening remarks.

               STATEMENT OF HON. JOHNNY ISAKSON, 
                   U.S. SENATOR FROM GEORGIA

    Senator Isakson. Well, thank you, Senator Feingold. And at 
the risk--so I won't be redundant, I would just like to echo, 
verbatim, the comments that you made with regard to Africa and 
China and the very importance of the United States 
relationship.
    I just returned, in January, from a trip to Africa, and saw 
firsthand both increased Chinese investment in its embassies 
and engagement in Africa, as well as great efforts on behalf of 
the United States of America in many countries in Africa, as 
well. Africa is of critical interest to the United States, not 
just strategically, not just because of its assets, because of 
its great future. The promise of Africa is obviously ahead of 
it. The American people have made a tremendous investment in 
the AIDS initiative, the Millennium Challenge account and other 
investments in Africa to improve the quality of life.
    And I echo again what Chairman Feingold said with regard to 
my disappointment with some of the engagements of the Chinese 
in places like the Sudan and Darfur, where they've had some 
engagement, without any strings attached. That's not in the 
best interest either of those countries or of humanity.
    So, I welcome our esteemed guests for being here today. I 
look forward to the information we learn from them, and I thank 
the chairman for calling this hearing.
    Senator Feingold. Thank you, Senator Isakson.
    We'll begin with the first panel.
    Mr. Christensen. Thank you.

STATEMENT OF THOMAS J. CHRISTENSEN, DEPUTY ASSISTANT SECRETARY 
  OF STATE FOR EAST ASIAN AND PACIFIC AFFAIRS, DEPARTMENT OF 
                     STATE, WASHINGTON, DC

    Mr. Christensen. Thank you. The Department welcomes the 
opportunity to address the implications of China's engagement 
in Africa and the implications of that engagement for U.S. 
foreign policy.
    My colleague, Jim Swan and I, have submitted lengthy 
written testimony, and we'll make some brief comments this 
morning.
    We believe China has multiple goals in its Africa policy, 
much like many nations who trade and invest in Africa, but we 
believe that three major objectives stand out over the last 
several years in China's policy toward Africa. First, to secure 
supplies of natural resources and markets for Chinese exports 
in Africa. Second, to increase China's power and prestige on 
the international stage as a leader of the developing world. 
And third, to compete with Taiwan for diplomatic recognition by 
African states.
    I'd say, at the outset, that China's role has been, for the 
most part, in our perspective, a positive one. On an abstract 
level, China's own domestic economic reforms and opening up to 
the outside world provide a good example for some of the more 
insulated economies on the continent. And on a more concrete 
level, we believe that China's investment in infrastructure and 
in building businesses in Africa provide positive results for 
the African people.
    We neither perceive nor seek a zero-sum competition with 
the Chinese in Africa. In fact, as elsewhere in the world, 
we're encouraging China to do more in Africa, albeit in 
coordination with the United States, major donors, and 
international institutions, like the IMF and World Bank.
    To date, we believe that Chinese aid and investment 
policies are not transparent, and generally lack the 
conditionality that's been attached by leading donors and 
international institutions. Conditionality is designed to 
encourage good governance, and we believe that good governance 
in Africa is the foundation of sustained economic development. 
We believe we share the views of most economic development 
experts in pushing that approach.
    We engage the Chinese on their Africa policy in all our 
major dialogues, including the Strategic Economic Dialogue led 
by Secretary Paulson, at Treasury, and the Senior Dialogue on 
security and political affairs, led by Deputy Secretary of 
State John Negroponte. At the State Department, we also have a 
regional subdialogue on African affairs, led by Assistant 
Secretary Jendayi Frazer and her Chinese counterpart, Assistant 
Foreign Minister Zhai Jun. We also have dialogues on Sudan with 
our special envoy, Ambassador Williamson, and his Chinese 
counterpart, Ambassador Liu Guijin.
    We plan to start a very important dialogue, this fall, on 
assistance policy in general, of which Africa policy will be an 
important part. And that will be led by Director of U.S. 
Foreign Assistance Henrietta Fore and her counterparts in the 
Chinese Ministry of Commerce.
    I would like to say something about China's own efforts in 
Africa to date, where they have pushed their agenda through 
various channels. Senator Feingold mentioned the most prominent 
one, the Forum on China-Africa Cooperation, a large summit held 
every 3 years, most recently in November 2006.
    China's engagement in Africa has grown very quickly, and 
there's no doubt that this is an impressive rate of increase, 
but we should keep things in perspective. First of all, China's 
aid to Africa is somewhere between $1-$2 billion a year. It's 
not very transparent, but that's the best estimate we can come 
up with. This is significantly lower than figures for United 
States aid of $5 to $6 billion a year, and European aid, which 
is upwards of $18 billion a year.
    In terms of investment, China's total investment stock to 
date in Africa amounts to about 1 percent of the total stock, 
according to our latest figures, which come from 2006. This is 
several times less than the U.S. stock.
    And to put things in perspective in the energy sector, 
which has drawn a lot of attention in the scholarly community 
and among pundits, we believe that China's overall production 
in Africa is about one-third of the total production of one 
U.S. firm--ExxonMobil. So, I think we need to keep those 
figures in perspective, even as we appreciate the growth rates 
in China's activities.
    So, what's our task, moving forward, from a U.S. Government 
policy perspective? We're trying to encourage better aid and 
investment practices that will not only better assist African 
development, but will actually help China's own reputation on 
the continent. So, we don't believe we're asking China to do 
anything for our benefit; we believe we're asking China to do 
something that will actually assist China, as well, over the 
long term if they put the proper conditionality on their 
assistance programs and on their investments, if they're more 
transparent, and if they encourage good governance.
    We first need to better understand China's own policies. 
There's a tendency in the United States to ascribe to China a 
great deal of grand strategizing and integration within the 
Chinese Government on Africa policy, yet we are under the 
impression that this view is not accurate. We believe that 
there are multiple Chinese Government agencies involved in aid 
and investment to Africa; and that these agencies are not 
particularly well coordinated at this time. Relevant agencies 
include the Ministry of Commerce, the Ministry of Finance, the 
National Development and Reform Commission, as well as state-
owned enterprises involved in investment and assistance 
programs. And we would like to get a better handle on exactly 
what China is doing there, so that we can try to assist the 
Chinese Government in making better choices and in coordinating 
its own policies toward Africa in a positive direction.
    So, we hope to learn more in our dialogues about the nature 
of China's activity, and to steer them, again, in a direction 
that makes China's policies more compatible with the leading 
donors, with the United States, and with international 
institutions.
    While many are concerned about competition between the 
United States and China in Africa, I'd like to point out that 
our own economic activity and aid programs to Africa have grown 
very quickly this decade, just as China's have. I think this 
underscores the point that there is no zero-sum competition 
between the United States and China in Africa. We will continue 
to work with the Chinese to try and help make their policies, 
investments, and assistance programs in Africa more effective 
for the long-term. The best way to do that is to have the 
Chinese and others encourage African governments to adopt good-
governance practices and create the foundations for long-term 
stability.
    The ultimate goal of U.S. foreign policy in Africa is to 
create a better environment and better prospects for the future 
for Africans, not to compete with the Chinese for influence.
    Thank you very much.
    Senator Feingold. Thank you very much, Mr. Christensen.
    Mr. Swan.

 STATEMENT OF JAMES SWAN, DEPUTY ASSISTANT SECRETARY OF STATE 
    FOR AFRICAN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Swan. Mr. Chairman, Senator Isakson, thank you very 
much for the opportunity to testify this morning.
    My colleague obviously has presented much of the background 
with respect to China's motivations in Africa and the nature of 
the United States dialogue with the Chinese on African issues.
    I want to stress that China's engagement with Africa is not 
new. Beijing initiated bilateral assistance to Africa in 1956, 
and, as you mentioned in your opening remarks, Senator, on the 
continent there is no place where there is not a gleaming 
showplace that has been built by the Chinese.
    Estimates of Chinese development assistance this decade, 
again, are in the range of $1 to $2 billion a year, which is 
significantly overshadowed by the over $30 billion in 
assistance from the European Union, the United States, and 
multilateral institutions.
    But, there's no question that China's economic and 
commercial engagement in Africa has increased dramatically and 
been diversified in the last several years. Bilateral trade 
rose from about $10 billion in 2000 to some $70 billion in 
2007, and China is now Africa's second largest trading partner, 
after the United States.
    As my colleague mentioned, China's direct investment stock, 
albeit starting from quite a low base of less than half a 
billion dollars, has ballooned to some $2.5 billion over the 
last 3 years, and it continues to grow. And Africa is becoming 
a more important export market for Chinese consumer goods.
    China's increased economic and commercial activity in 
Africa raises a variety of issues that Chinese and American and 
outside experts, but also Africans themselves, are examining. 
Among the primary concerns--and some of these have already been 
touched upon, Mr. Chairman--are that the influx of low-cost 
goods from China will undercut local industries as they develop 
in Africa; that Chinese infrastructure projects and other 
investments underutilize indigenous labor, finance, and 
resources, and oftentimes ignore labor and environmental 
standards; and, finally and perhaps most importantly, that 
China's assistance efforts in Africa, which emphasize no 
strings and eschew conditionality that is typical of Western 
donor programs, is going to endanger progress that has been 
achieved in promoting good governance and market reform in 
Africa.
    In our view, Africans themselves ultimately will largely 
shape the terms of their relations with China, and it is 
apparent that, while welcoming increased Chinese engagement, 
Africans are also increasingly signaling the importance to them 
of business practices and investments that reinforce African 
Union and New Partnership for African Development principles on 
good governance and transparency.
    My colleague spoke about the methods that we have for 
senior-level dialogue with the Chinese, both on global issues 
and on African issues, and I have spoken about some of the 
concerns that we have with respect to China's engagement in 
Africa, but I also want to speak briefly about a number of 
areas that we believe could benefit from additional cooperation 
and burden-sharing between us and the Chinese.
    For example, with some 1,500 Chinese peacekeepers and 
military and police and other observers serving on peacekeeping 
missions throughout the continent, we think that China could 
play a growing role in partnering on post-conflict security-
sector reform on the continent. And we've seen some initial 
efforts at collaboration with the Chinese. One example is 
Liberia, where we've collaborated in trying to improve bases 
for the newly created Liberian military. And this is an 
example, frankly, where very close collaboration between our 
embassies in the field has been critical to moving forward on 
this project.
    Let me, in my brief time remaining, say a word about our 
engagement with China on Sudan. It's been mentioned by the 
chairman and others.
    Our dialogue with the Chinese on Darfur continues and is 
producing results. After years of acting primarily to protect 
Khartoum from international pressure, since late 2006 China is 
showing an increased willingness to engage with the 
international community on Darfur and to apply diplomatic 
pressure on the Government of Sudan to change its behavior. 
China voted for the Security Council resolution that created 
the hybrid United Nations-African Union mission in Darfur. It 
has contributed engineering corps to this mission, 
interestingly, making China the first non-African troop-
contributing country to deploy in Darfur. And China has become 
somewhat more involved in responding to the humanitarian crisis 
in Darfur.
    We've welcomed these positive trends in Chinese policy on 
Sudan, but we've also told the Chinese, frankly, that we think 
they could do a lot more. The Sudanese Government continues to 
use violence against civilians and rebels in Darfur, and to 
renege on key elements of the UNAMID deployment.
    China, as we've discussed, has significant influence with 
the Government of Sudan, and we've asked China to exercise that 
leverage to pressure Khartoum to work toward a negotiated 
settlement in Darfur.
    Elsewhere on the continent, we've pushed the Chinese 
Government to reconsider its close military relations with 
repressive regimes. Perceptions of Chinese support for African 
leaders, such as Zimbabwe's Robert Mugabe, harm China's public 
profile and detract from its ability to play the role of a 
responsible stakeholder in Africa.
    The recent case of an allegedly routine arms shipment set 
to arrive 2 weeks after the March elections in Zimbabwe was 
recalled due to international and, importantly, regional 
pressure on the Chinese.
    Finally, as we look for opportunities in our relationship 
with China in Africa, we note that there may be some 
possibilities in nonsecurity sectors such as health and 
agriculture. For example, China and the United States are 
pursuing potentially complementary programs to eradicate 
malaria, polio, and other endemic diseases, and we have 
encouraged our embassy teams across the continent to identify 
potential areas of cooperation with the Chinese and to engage 
with them to try to promote the benefit of the African 
population.
    We'll continue to pursue these opportunities with the 
Chinese while also seeking to influence their actions on 
African issues to encourage good governance, democracy, human 
rights, and transparency, issues that we would like to see play 
a yet more prominent role in Chinese policy toward Africa.
    Thank you, Senator.
    [The joint prepared statement of Mr. Christensen and Mr. 
Swan follows:]

  Prepared Joint Statement of James Swan, Deputy Assistant Secretary, 
 Bureau of African Affairs and Thomas J. Christensen, Deputy Assistant 
  Secretary, Bureau of East Asian and Pacific Affairs, Department of 
                         State, Washington, DC

    Mr. Chairman, Senator Isakson, and members of the committee, thank 
you for the opportunity to address the subject of China's growing 
engagement with Africa and its ramifications for U.S. foreign policy.
    China's growing presence in Africa has generated significant 
discussion during the last several years. This attention reflects the 
reality that China has important and growing interests in Africa, 
including access to resources and markets, development of diplomatic 
ties, and Chinese claims of leadership in developing world. These 
objectives are not inherently incompatible with U.S. priorities and, in 
fact, may offer important opportunities for the continent. In general, 
we see China's growing activity on the continent as a potentially 
positive force for economic development there, which is a goal we share 
with China and many others. As President Bush has said, we do not see a 
``zero-sum'' competition with China for influence in Africa. Nor do we 
see evidence that China's commercial or diplomatic activities in Africa 
are aimed at diminishing U.S. influence on the continent.
    As Deputy Secretary Negroponte recently noted in testimony before 
the full Senate Foreign Relations Committee, policy differences in some 
areas should come as no surprise given the two countries' very 
different demographic and economic conditions, histories, and political 
systems. Our goal, as with other areas of the world, is to engage 
Chinese officials to try to define and expand a common agenda for 
Africa that ultimately will serve both our national interests and 
maximize the benefit Africa derives from U.S. and Chinese economic 
investment in the continent. We are actively looking for areas of 
complementarity and cooperation with the Chinese, while engaging at 
multiple levels on differences in approach to specific issues.
    Our regular high-level dialogues with China include the ``Senior 
Dialogue'' led by Deputy Secretary of State Negroponte, which focuses 
on political and security issues and the Treasury-led ``Strategic 
Economic Dialogue,'' which addresses bilateral and global economic 
issues. We also plan to begin this autumn a bilateral dialogue on 
development assistance led by the Director of U.S. Foreign Assistance 
Henrietta Fore and her counterpart in China's Ministry of Commerce.
    The State Department holds a regional subdialogue on Africa as part 
of the United States-China Senior Dialogue on security and political 
affairs. The subdialogue is led on our side by Assistant Secretary 
Jendayi Frazer. In addition to these formal dialogues, Assistant 
Secretary Frazer talks with her Chinese counterparts on an ongoing 
basis on a variety of issues, most recently hosting China's Special 
Representative Liu Guijin in May. Special Envoy to Sudan Richard 
Williamson also regularly communicates with Ambassador Liu on Sudan. In 
September 2007, Ambassador Ruth Davis, Chief of Staff of the Bureau of 
African Affairs, traveled to China for a series of high-level meetings 
and public appearances aimed at explaining United States-Africa 
relations. And, of course, our diplomats in Africa are in regular 
contact with their Chinese counterparts on the full range of issues on 
the continent.

                            CHINA IN AFRICA

    China's engagement with Africa is not new. Beijing initiated 
bilateral assistance to Africa in 1956 and, by its own account, has 
funded over 800 projects between 1957 and 2008. There are few capitals 
in Africa where China has not built a showpiece building, from a 
national sports stadium to a gleaming new ministry headquarters. 
Estimates of Chinese development assistance to Africa in this decade 
vary, but tend to fall around $1-$2 billion per year. This amount is 
still relatively modest in comparison to the annual contributions of 
$18 billion (including debt relief) provided by the European Union (EU) 
and member countries, $9 billion from multilateral institutions, and 
about $5 billion from the United States Government.
    China's economic and commercial engagement in Africa has 
dramatically increased and diversified during the last several years. 
Bilateral trade rose from $10 billion in 2000 to $70 billion in 2007, 
and China is now Africa's second largest trading partner after the 
United States. Africa ran an overall trade surplus with China between 
2004 and 2006, as it did with the United States, and it is clear that 
China, like the United States, has become an important source of both 
export revenue and investment for the continent. China's direct 
investment in Africa increased from $491 million in 2003 to over $2.5 
billion 3 years later and continues to grow. Africa is also becoming an 
important export market for Chinese consumer goods. Small, private 
Chinese investors have invested millions of dollars into opening 
enterprises in Africa that operate in textiles, light manufacturing, 
construction and agriculture. Recent media attention has focused on 
high-profile Chinese investments in Africa, such as the Industrial and 
Commercial Bank of China's October 2007 purchase of a 20-percent stake 
in South Africa's Standard Bank, or a $9 billion loan and investment 
package for Congo that will be repaid in cobalt and copper from 
Congolese mines.
    China's economic and commercial engagement in Africa should be 
understood in a broad context. Its activity has increased dramatically 
in recent years, but started from a relatively low base. As of 2006, 
the value of China's trade with Africa was lower than with the Middle 
East or Latin America and was a minute percentage of its trade with the 
rest of Asia. On the investment side, China's investment flow into 
Africa constituted only 2.9 percent of its global outward direct 
investment. China's total direct investment stock in Africa accounted 
for only 1 percent of global foreign direct investment in Africa.
    The composition of China's involvement in Africa has changed 
greatly over the past decade. Whereas the foundation for China's early 
interaction with Africa was the promotion of a shared leftist, 
anticolonial ideology, the common ground now is mostly a convergence of 
economic interests in a global trading system. In many ways, China's 
successful embrace of market-based economics and openness to most 
aspects of globalization can be a positive example for African nations. 
There also have been significant increases in two-way tourism, academic 
and nongovernmental exchanges, and diplomatic initiatives. China has 
even modeled many of its engagement programs after very successful U.S. 
exchanges on the continent. For example, historically, the United 
States has identified young emerging political and economic African 
leaders for exchange programs in the United States under something 
known as the ``international visitors program.'' China is now doing the 
same thing--identifying Members of Parliament, local entrepreneurs, and 
well-placed government officials in such key ministries as Foreign 
Affairs, Internal Affairs, and Trade and Commerce for training and 
exchange programs in Beijing. China also funds trips by local traders 
and businesspeople to Africa to source Chinese consumer products. It 
funds sports teams and provides equipment for aspiring African 
Olympians. Since the year 2000, China's primary public relations 
vehicle for promoting its African presence is the Forum on China-Africa 
Cooperation (FOCAC), which is held every 3 years.
    China's increased economic and commercial activity in Africa raises 
a variety of issues that African, Chinese, and other international 
experts are examining. Some Africans worry that the influx of low-cost 
goods from China undercuts local industry. We also hear concerns that 
Chinese infrastructure projects underutilize indigenous labor, finance, 
and resources. Chinese projects often employ imported Chinese workers 
and utilize imported raw materials. Observers have warned that China's 
assistance efforts in Africa, which emphasize ``no strings'' and are 
not predicated on the same kinds of conditionality as other countries' 
aid programs, could endanger progress in promoting good governance and 
market reform in Africa. As Chinese companies' presence on the 
continent expands, they will increasingly be expected to bolster 
indigenous capacity and contribute to long-term development. The U.S. 
Government would like to engage the Chinese on how their economic 
policies in Africa can help produce better results for sustainable 
economic development if they conform to the international community's 
broader initiatives for Africa. We remain steadfast in our belief that 
strong democratic institutions and protection of fundamental human 
rights are the foundations for sustainable economic growth.
    We remain concerned with a general lack of transparency regarding 
China's foreign assistance practices in Africa, and are encouraging 
Beijing to more fully engage with other major bilateral and 
multilateral actors to ensure that aid supports the efforts of 
responsible African governments to be responsive to their people's 
needs. As the U.S. and other creditor countries implement the enhanced 
Heavily-Indebted Poor Countries (HIPC) initiative and provide debt 
relief to qualifying countries, transparency is key to understanding 
how creditors' assistance packages fit with a borrowing country's debt 
sustainability framework developed with the International Monetary Fund 
(IMF) and World Bank. By its reluctance to coordinate with groups like 
the IMF and World Bank, we believe China misses an opportunity to make 
the most of its aid, loans, and investment in Africa. On occasion, it 
appears that China's policies serve to undercut the efforts of others 
to use investment and development assistance to produce improved 
governance, which almost all credible research about development point 
to as essential to long-term, stable economic growth.
    The international community has expressed similar concerns about 
the Chinese use of foreign assistance as a trade tool, as when African 
governments grant favorable treatment to Chinese project bids because 
such bids are tied directly to Chinese Government development 
assistance packages. It is in China's interest to demonstrate to the 
international community that its policies in Africa are not driven 
solely by the desire to secure natural resources and access to markets 
and access to major infrastructure projects, and that the Chinese 
Government is committed to improving the long-term welfare of people 
across the continent.
    When discussing China's presence in Africa, it is important to 
highlight that China's economy has become increasingly diversified and 
has numerous public and private economic actors that influence the 
African market. Chinese companies are active in financial markets, 
telecommunications, manufacturing, textiles, agro-business, and a 
variety of extractive industries. For example, we must distinguish 
between Chinese energy companies' pursuit of exploration agreements and 
the Chinese Government's Africa policy. Certainly the Chinese 
Ministries of Commerce and Foreign Affairs promote access to natural 
resources and export markets for Chinese firms as part of their 
policies. But observers sometimes ascribe too much coordination and 
grand strategizing to the Chinese leadership's policies toward the 
developing world. There are often exaggerated charges that Chinese 
firms' activities or investment decisions are coordinated by the 
Chinese Government as some sort of strategic gambit in the high-stakes 
game of global energy security. In reality, Chinese firms compete for 
profitable projects not only with more technologically and politically 
savvy international firms, but also with each other.
    Contrary to what many assume, China's large oil companies are not 
dominant players in Africa's energy industry. With the important 
exception of Sudan, where the China National Petroleum Company (CNPC) 
is the major operator, Chinese oil companies are relatively minor 
players in Africa. In 2006, total output by all Chinese producers was 
approximately one-third of a single U.S. firm's (ExxonMobil) African 
production. Some energy assets now held by Chinese companies were in 
the past run by international oil companies that found more profitable 
opportunities elsewhere in Africa.
    Africans themselves will, of course, largely shape the terms of 
their relations with China. While welcoming increased Chinese 
engagement, Africans have also signaled the importance of business 
practices that reinforce African Union and New Partnership for African 
Development principles on good governance. Chinese labor, environmental 
and quality-control standards have drawn extra scrutiny from many 
Africans. In Zambia, for example, anti-Chinese sentiment became an 
important election issue in 2005 when the opposition mobilized voters 
from the country's copper belt following a deadly explosion at a 
Chinese-owned copper mine.

                     UNITED STATES-CHINA ENGAGEMENT

    Within the context of our senior- and policy-level discussions with 
the Chinese, we have identified a number of areas that would benefit 
from additional cooperation and burden-sharing. For example, with 1,452 
Chinese military, police, and observers serving on peacekeeping 
missions throughout Africa, China could play a greater role in 
coordinating with us on post-conflict security sector reform activities 
and in equipping and supporting African peacekeepers. In Liberia, for 
example, China has contributed to the U.S.-led rebuilding of that 
nation's army. The U.S. Government trained staff and refurbished the 
Ministry of Defense headquarters while China provided vehicles and 
computer equipment. The United States is in the process of recruiting, 
vetting, training, and equipping a 2,000-man army and has rebuilt three 
military bases around Monrovia. China is providing some specialty 
training and is rebuilding at least one base up-country. Good 
communication between the U.S. and Chinese Embassies on the ground has 
helped each party identify areas for inputs. We want to build on that 
success elsewhere in Africa.
    Our dialogue on Darfur is ongoing and is producing important 
results. After years of acting primarily to protect Khartoum from 
international pressure, since late 2006 China has shown an increased 
willingness to engage with the international community on Darfur, and 
has applied diplomatic pressure on the Government of Sudan to change 
its behavior, as well as to engage in a political process for a 
peaceful negotiation to the Darfur conflict. China voted for UNSC 
Resolution 1769 that created the hybrid United Nations African Mission 
in Darfur, but has at times acquiesced in the Government of Sudan's 
opposition to its full implementation. China has pledged up to 300 
military engineers, of whom 140 have been dispatched, making China the 
first non-African Troop Contributing Country to deploy in Darfur. China 
has also become more involved in responding to the humanitarian crisis, 
providing some direct assistance and donating $1.8 million U.S. dollars 
to the Darfur region and the African Union Special Mission.
    We have welcomed this positive change in Chinese policy, but have 
also told China frankly that it could do a lot more. The Sudanese 
Government continues to use violence against civilians and rebels in 
Darfur, and renege on key elements of the UNAMID deployment. China 
enjoys significant influence with the Government of Sudan due to its 
investments in the country's energy sector, and we have asked China to 
exercise its leverage to pressure Khartoum to work toward a negotiated 
solution in Darfur.
    We have also asked the Chinese Government to halt its companies' 
substantial arms trade with Sudan because of the likelihood that some 
Chinese-origin armaments are being used by the Sudanese Government in 
Darfur, in contravention of UNSCR 1591. The proliferation of lethal 
conventional weapons in Africa contributes to instability and endangers 
China's long-term interests on the continent. In the same spirit we 
have pushed the Chinese Government to reconsider the wisdom of 
retaining close military relations with repressive regimes on the 
continent. Perceptions of Chinese support of African leaders such as 
Zimbabwe's Robert Mugabe, who rule through guns and intimidation, harms 
China's image and undermines it ability to play the role of responsible 
stakeholder in Africa's affairs.
    In nonsecurity areas such as health, China and the United States 
are pursuing potentially complementary programs to eradicate malaria, 
polio, and other endemic diseases. In agriculture, the U.S. and Chinese 
Ambassadors in Ethiopia arranged exchanges to observe demonstration 
farms each country had built to increase agricultural capacity. The 
U.S. and Chinese Ambassadors in Angola have also agreed to identify a 
joint development project in the agriculture sector. We have encouraged 
our Embassy country teams all over Africa to identify potential areas 
of cooperation in the multiple sectors and engage with Chinese 
counterparts to the benefit of African populations.
    The State Department has also attempted to bring Chinese, United 
States, and African civil society together by supporting conferences 
and symposiums. For example, the NGO Vital Voices held a summit for 
African Women in Cape Town, South Africa, in January 2007, in which a 
small contingent of Chinese women participated. A followup symposium 
for Chinese and African women entrepreneurs in Shanghai was held in 
September 2007 to further cooperation.

                               CONCLUSION

    International concerns about China's increasing commercial and 
diplomatic presence in Africa must be considered within the wider 
context of questions about the ramifications of China's rise as a 
global economic and political actor. These questions are particularly 
acute because of our bilateral trade deficit with China and the 
perception that China's growing demand for natural resources is 
contributing upward pressure on global commodity prices during a 
potential global economic slowdown.
    But the big questions for the United States in discussions of 
China-in-Africa are not based in concerns about the United States-China 
bilateral economic relationship but rather in our foreign policy 
priorities for Africa, which are promoting democracy, human rights, 
political stability, good governance, and sustainable economic 
development to improve the health, education, and living standards of 
the continent's population. China already is making a substantial 
contribution to the continent's economic development, and we believe 
that it can play an even more important role in the future. In that 
spirit, we engage at multiple levels to influence Chinese actions on 
issues such as good governance, human rights, and transparency--issues 
that we believe should play as prominent a role in Chinese Africa 
policy as in ours.

    Senator Feingold. Thanks, Mr. Swan, and to the panel.
    We've been joined by the ranking member of the committee, 
Senator Lugar, who, of course, has a very long career and is 
very devoted to all the issues that come up with regard to 
Africa, and Senator Bob Casey, Pennsylvania, who, of course, is 
a new colleague, but this time last week Senator Casey and I 
were in India, holding meetings with top Indian officials. And 
I would just note that India has significant involvement in 
Africa, as well, and that is the subject of some interest, as 
well, even though the focus today is on China and Africa.
    Let me begin with 7-minute rounds.
    Thank you for your remarks. I'm glad to hear that the State 
Department appreciates both the potential for cooperation with 
the Chinese in some areas, as well as the need for more 
concerted efforts to change current Chinese policy in others.
    I agree that China's commercial and diplomatic activities 
in Africa are not aimed at diminishing U.S. influence on the 
continent, but, of course, as you've both suggested, if 
repressive rulers or abusive militaries know they can rely on 
Chinese support, that will undermine efforts of the 
international community to bring about reform through isolation 
or conditional assistance.
    Now, Mr. Swan, as you pointed out, China's arms sales to 
Sudan are an excellent example of the Chinese Government 
directly defying the will of the international community, as 
expressed in U.N. Security Council Resolution 1591. I 
appreciate that you have asked the Chinese to halt such sales. 
What more can the United States do to hold China accountable 
for its violation of international law and norms?
    Mr. Swan. Thank you, Senator.
    The Security Council resolution prohibits arms shipments 
into Darfur, and the concern that we have raised with the 
Chinese is that their sales to Sudan, in general, pose the risk 
that those armaments could be transferred to Darfur and add to 
the instability in that region. This is an issue that obviously 
we continue to raise with the Chinese. We have a very active 
dialogue with them on Sudan issues. The special envoy for 
Sudan, Richard Williamson, is in frequent contact with his 
counterpart. His predecessor as special envoy also met 
frequently with his Chinese counterpart, and, indeed, traveled 
to Beijing on, I believe, twice for consultations on these 
issues. So, on the whole range of subjects related to how to 
influence Sudanese behavior with respect to Darfur, we are 
working very closely with the Chinese.
    Obviously, there are other vehicles for us to continue to 
engage the Chinese on this subject. We are in frequent contact 
with them through the Security Council, which, of course, is 
active not only on Sudan issues, but on other peace and 
security issues throughout the continent. So, this issue is 
going to remain very much at the top of our agenda with the 
Chinese.
    I would like to point out that, at the last Assistant 
Secretary level meeting with her counterpart in the PRC 
Government last March, Sudan was very much on the agenda, and, 
indeed, as part of those discussions, our Assistant Secretary 
emphasized the importance of a Chinese contribution to 
proceeding with the heavy support package as a bridge to 
deployment of UNAMID. And partly as a result of those 
conversations, we did see the Chinese commit to a deployment of 
400 engineers to Darfur, of which I believe about 140 are 
currently in place in Darfur. We also pressed, during those 
conversations, for the Chinese to take a greater interest in 
the humanitarian situation in Darfur, and, as a consequence 
partly of those conversations, Assistant Secretary Frazer's 
counterpart, Zhai Jun, personally traveled to Darfur as part of 
a multilateral humanitarian mission, and we've subsequently 
seen some modest contributions from the Chinese in the 
humanitarian sector in Darfur. So, our engagement is showing 
results, in terms of influencing Chinese behavior, and, on the 
full range of issues related to Sudan, we will continue to try 
to exercise that pressure.
    Senator Feingold. Thank you.
    Let me get Mr. Christensen's view. Why aren't we doing more 
to hold the Chinese Government accountable for its 
irresponsible policies in Sudan, Zimbabwe, and elsewhere, where 
its economic ties seem to trump wider governance and security 
objectives? And what, in your view, are our points of leverage 
here?
    Mr. Christensen. Thank you very much.
    I think it's an excellent question, and, as Jim Swan just 
pointed out, we have been engaging the Chinese on these issues 
for some time. I started this job in July 2006, and at that 
time China's policy on Sudan, in particular, was about as bad 
as one could imagine, where they were basically telling the 
international community, ``If you want to put pressure on 
Sudan, you have to come through China; China will stand in the 
way and protect Khartoum.'' And it really has evolved quite a 
bit in that period, from July 2006 to the present, to include 
deployment of engineering troops, et cetera. And we believe 
that our dialogue system and basically holding China to account 
for its reputation around the world for its policies has been 
effective in getting China to move in a positive direction.
    On the issue of arms sales, we're not at all satisfied, 
obviously, with the policy. And one of the things we're trying 
to drive home to the Chinese is that there's more to being a 
responsible stakeholder in the world than following the letter 
of the law in U.N. Security Council resolutions. So, if you 
look at 1591, China can come back and say, ``Well, we're 
selling weapons to Khartoum, we're not selling weapons to the 
Darfur region.'' But, China needs to recognize that selling 
weapons to Khartoum at this time, while Khartoum is involved in 
the activities in the Darfur region that it's involved in, is a 
negative outcome for the international community, for 
humanitarianism, and also for China's own reputation on the 
international stage.
    In the case of Zimbabwe, you saw China get a lot of 
pushback, again, not just from the United States and the EU, 
but also from regional actors, about its arms sales to 
Zimbabwe, particularly just after just after the election 
debacle there. I think that sends a message to China, that they 
need to learn, over time and through these types of dialogues, 
that it's really their own interests that are on the line when 
they adopt these policies because their reputation is harmed. 
And they do seem to care quite a bit about their reputation.
    Senator Feingold. As you both know, today is the 19th 
anniversary of the infamous Tiananmen Square massacre. On that 
note, one issue that was glaringly absent from your testimonies 
is China's poor human rights record, which we see reflected in 
its activities in Africa.
    Mr. Christensen, I understand that after being stalled for 
a number of years, the United States-China Human Rights 
Dialogue was restarted last week in Beijing, and that you were 
a participant in these discussions. I'm curious why this 
dialogue was reopened now, despite no observable progress with 
respect to human rights. In fact, China has recently violated 
its own promises to improve its record in advance of the 
summer's Beijing Olympics. So, what was the impetus for this 
meeting? And what were the intended deliverables from the 
meeting?
    Mr. Christensen. The meeting was agreed upon this February 
by Secretary Rice and Chinese Foreign Minister Jang Jiechi. 
They talked at great length about the importance of human 
rights and why restarting the dialogue was a good way to try to 
push the ball forward on this issue.
    In terms of the types of topics that we dealt with in the 
dialogue, it was precisely the types of topics that you raised, 
Senator: freedom-of-the-press issues that are supposed to be 
linked to the Olympics--China's implementation of its own 
commitments in January 2007 to open up China to the foreign 
press corps. We're urging China to abide by those commitments, 
to implement them around the country, and also to apply those 
commitments, after the Olympics, to foreign and Chinese 
journalists.
    Senator Feingold. Just a quick followup. Were any of these 
deliverables achieved?
    Mr. Christensen. We'll have to see whether they're 
achieved. The nature of these dialogues is that we present our 
concerns and our analysis of trends in China, and then we wait 
to see how the Chinese Government responds. We deal with 
programmatic issues, like freedom of the press, rule of law, 
the court system, and various laws that have been passed. We 
also deal with specific lists of dissidents and prisoners, and 
issues like the Tiananmen prisoners. Then we have to wait and 
see.
    The way we present this to the Chinese, to get at the 
question of what might move the Chinese, is, to say that we are 
committed to the idea that China should have a successful 
Olympics. That's something the United States would like to see. 
The President has committed to go to the Olympics. For the 
Olympics to be successful, however, China has to show progress, 
not just on the economic front, but on the social and human 
rights fronts as well. That's the approach that we've taken. I 
think it's an approach that leads the Chinese to listen to our 
concerns in a more attentive fashion because they know that 
when we raise these human rights concerns that we wish China 
well. We want China to adopt these reforms, because we think 
it'll make China stronger and more stable.
    I think that's the spirit of the dialogue. We hope that the 
dialogue will produce results. We think this type of dialogue 
is the way to go. And we're glad that it's been restarted after 
a 6-year hiatus.
    Senator Feingold. Thank you, sir.
    Senator Isakson.
    Senator Isakson. Thank you, Mr. Chairman.
    I have not traveled to Africa nearly as extensively as the 
chairman has, but I've traveled there a little bit, and I know 
the issue of the no-strings-attached approach of China, versus 
the United States approach; we focus on human rights, we focus 
on democracy, we focus on infrastructure.
    I was in Equatorial Guinea in January. They have a newfound 
wealth, in terms of natural gas in abundance. And I noted with 
interest that they were building hospitals. They brought the 
Israeli Government in to build and staff hospitals. They were 
building facilities. They were really investing not only in 
their infrastructure, but their people, which is, of course, 
what we would like to see every countrydo. Is there a move--as 
Africa is beginning to prosper in certain areas, is there a 
movement--a positive movement toward what we seek, which is 
helping the people, reinvesting in the people in the country, 
and human rights? Do you see a trend going that way and away 
from the old Africa?
    Mr. Swan. Thanks very much for the question, Senator.
    Yes; overall, I think our Government is Afro-optimistic. I 
think that we believe that there is a very strong and positive 
future for the continent, and that we've seen tremendous 
progress in Africa in recent years, with some unfortunate 
exceptions----
    Senator Isakson. Right.
    Mr. Swan Overall, certainly we've seen high levels of 
economic growth, averaging more than 5 percent for the 
continent in recent years. We have seen a wave of democratic 
reform on the continent, from fewer than five countries that 
were classified by Freedom House as free in the late 1980s, to 
a majority, at this point. So, we're seeing steady progress on 
the continent in a whole variety of areas.
    Equatorial Guinea is a unique example, in many ways, 
because of the very rapid increase in its wealth as a 
consequence of the oil discoveries, oil discoveries that were 
primarily undertaken by U.S. private-sector firms when a number 
of other governments, parastatals, and private foreign 
companies were not interested in Equatorial Guinea. So, I think 
this is an example of a strong and successful private-sector-
led investment in Africa.
    And as I hope you noted, Senator, while you were there, 
although we are starting from quite a small base, in terms of 
our own presence, our post in Malabo was closed for a number of 
years, but we have a very dynamic Ambassador there now who is 
building up a staff. We have identified a new property, and 
look forward to construction of a new embassy in the coming 
years, and are very actively engaged with the Equatoguineans.
    There is also an innovative program there, the Social 
Development Fund, in which the United States is actually 
helping the Equatoguineans and the Equatoguinean government in 
determining how best to manage its own social investment 
programs within Equatorial Guinea to ensure maximum benefit to 
its people.
    Senator Isakson. Well, on that subject, Ambassador Johnson 
is doing a great job. And I had enjoyed meeting with him. The 
Chinese are building a huge embassy compound there. And the 
Equatoguineans gave the United States a good site. I want to 
commend you--if you had anything to do with it--moving forward, 
by a year, the funding for both the residence, as well as the 
embassy, which I think is going to be critically important. 
This is not to compete with China or anybody else, but because 
a lot of the European countries are doing the same thing, as 
well, and we have a tremendous American investment--private 
investment in Equatorial Guinea.
    One comment you made, I was interested in. You said, ``Some 
Africans worry that the influx of low-cost goods from China 
undercuts local industry.'' Did you say that, Mr. Swan?
    Mr. Swan. I did.
    Senator Isakson. OK. What took me was that I would have 
thought that, as China being at the level of development they 
are, and Africa the level they are, that the reverse would be 
true. But, are the Chinese able to produce and sell in Africa, 
products cheaper than Africans could do it themselves?
    Mr. Swan. In some sectors and for some commodities, yes. I 
mean, one sees throughout Africa small, inexpensive mass-
produced Chinese plastic goods. And because of the scale of 
production in China--I'd defer to others who know more about 
the Chinese economy, certainly than I do--but, because the 
Chinese scale of production is so massive, their ability to tap 
into worldwide distribution chains so good, while many African 
countries are still at a nascent stage, in terms of 
industrialization and manufacturing production, this has been 
an issue.
    In South Africa, for example, which does have an active 
manufacturing sector, the threat from very inexpensive Chinese 
imports has been an issue in the labor sector there.
    Senator Isakson. Well, I guess one great target for 
investment would be in business and manufacturing expertise. 
The United States has to get them competitive, in and of 
themselves, in Africa.
    Last question. Mr. Christensen, you made an interesting 
comment also. You said they had three goals--China had three 
main goals in Africa. One was the natural resources, which the 
majority of their imports from Africa are natural resources; 
enhanced power and prestige; and then you said ``to compete 
with the image of Taiwan and China.'' Did you say that?
    Mr. Christensen. To compete for diplomatic recognition from 
Africa----
    Senator Isakson. What is Taiwan's presence in Africa?
    Mr. Christensen. Currently, four African nations that 
recognize the Republic of China--Taiwan's official name--
instead of the PRC.
    Senator Isakson. OK. That was very interesting.
    Thank you, Mr. Chairman.
    Senator Feingold. Senator Casey.
    Senator Casey. Mr. Chairman, thank you very much. And I 
appreciate you calling this hearing, and enjoyed our time in 
India the last couple of days, and it's good to be home. Thank 
you so much.
    I wanted to return to the discussion about Darfur--and also 
want to say, to Mr. Swan and Mr. Christensen, thank you for 
your testimony today, and your public service--I wanted to 
return to some of the questions that Senator Feingold raised 
with regard to Darfur. In particular, let me also just quickly 
review what was in the testimony, as it pertains to Darfur and 
China.
    All is good news. I don't mean to downplay or undercount 
what we reviewed here. But, five or six things were mentioned. 
Engage with the international community--that's good news. 
Diplomatic pressure--good news. Resolution 1716--that's good. 
Three hundred military engineers--good news; 1.8 million 
bucks--not a lot of money, frankly, but some good news.
    But also, I think it's important to make sure we're on the 
same page, in terms of what the reality is. Let me ask--Mr. 
Swan might be the one to answer this. Does China continue to 
sell aircraft, weapons, and police equipment to the Khartoum 
regime?
    Mr. Swan. I don't know when the last sale would have taken 
place, but my understanding is there has been no commitment by 
the Chinese not to continue arms sales to Sudan. But, I don't 
know exactly when the last sale might have taken place.
    Senator Casey. But, you have no evidence that there's been 
any diminution in that, or the cessation of that kind of 
commercial activity, we'll call it.
    Mr. Swan. No; I don't think we have any indication of a 
cessation of that activity, that's correct.
    Senator Casey. And that's obviously very troubling. And, 
Mr. Christensen, you raised this issue, and it's an important 
one to remember, that despite all of the progress--and I know 
that progress doesn't come by accident--it didn't happen 
because they woke up one morning and decided to do it; I 
realize our Government and people like you have been working on 
this. So, we appreciate that. And I think that has to continue. 
And I think people are going to be watching carefully--or 
watching closely, I should say, the progress of that effort to 
ask the Chinese Government to do what it can do, because of the 
influence that they have on the Sudanese Government.
    Let me also--in terms of what they're not doing--let me go 
back to a discussion about their noninterference policy. It 
seems that their noninterference policy is in place, but 
there's a--there's a big neon sign--asterisk when it comes to 
Taiwan. It's, ``Noninterference, except you've got to do this, 
that, and the other thing with regard to Taiwan.'' And just in 
terms of their credibility in the international community, do 
you think that exception, or that asterisk on the policy, don't 
you think that compromises their ability to--or compromises 
their credibility, I should say, in the international 
community?
    Mr. Christensen. I think I can answer that. People say that 
there are no strings attached to Chinese aid and Chinese 
investment. Actually, there is clearly one string attached, 
which is whether the country in question recognizes the 
Mainland or recognizes Taiwan. That does affect their policies.
    I think that, in general, there are optimistic trends in 
cross-Strait relations that may, we hope, lead to a more 
expansive and open policy on the Mainland toward Taiwan and 
cross-Strait relations, and also toward Taiwan and the 
international community, to provide Taiwan more international 
space. We have pushed for that consistently as part of our 
policy. In cases where statehood is a requirement, the United 
States doesn't seek Taiwan's membership in international 
organizations, but we do support observer status and meaningful 
participation. In other cases, where statehood is not a 
requirement, we support Taiwan's full membership and active 
membership.
    We're hopeful that the warming trends in cross-Strait 
relations will lead the government in Beijing to realize that 
it's in the long-term interest of stability across the Strait 
and in the long-term interests of the international community 
for Taiwan to play the full role that it can play on the 
international stage.
    Senator Casey. Mr. Christensen, before, in response to--I'm 
not sure what question it was--you mentioned the awareness or 
the sensitivity that the Chinese have to their reputation, or 
how they're viewed. Tell us more about that. In terms of--in a 
general sense, but specifically in terms of, for example, the 
Darfur policy. I'm thinking about psychology here as much as 
anything, but tell us more about that, in terms of how we can 
foster that.
    Mr. Christensen. Yes, I think psychology is important here. 
China clearly, as part of its overall policy toward the 
international community, wants to improve it's prestige and 
reputation abroad. That's been a consistent goal for decades. 
What we need to do is to convince the PRC that the best way to 
improve that reputation and to improve its prestige is to 
coordinate its activities with the international community. 
That's the whole foundation of our approach of saying, ``China, 
we want you to do more on the international stage, we want you 
to have a higher profile, we want you to have more influence, 
but we want you to do that by becoming a responsible 
stakeholder.''
    We think that this approach has produced results, not just 
in Sudan, but in other countries, as well, and it's a process 
of debate within China. There's not a monolithic view within 
the Chinese Government on how China should pursue its foreign 
policy. We want the right people to win those debates.
    One of the things we try to do is point out when China 
takes actions that we think are irresponsible, such as the arms 
sales to Sudan, but we also try to point out, in a positive and 
very public way, when China does the right thing, like 
committing to send 300 engineering troops to the UNAMID 
peacekeeping force, 140 of whom are deployed. And they're under 
threat, to be frank. There are groups in Sudan that don't want 
those Chinese forces there. And they've kept them in place, and 
they are building infrastructure.
    Ultimately, we won't be satisfied in Darfur until that 
large peacekeeping force is in there and the people are safe, 
so we urge China to do more than it has in the past. But, when 
it does the right thing, we're very quick and very public in 
our congratulations of China for doing the right thing.
    We think that's the way to go, in general, with China. A 
lot of people in China think that we're trying to contain China 
and keep it down, but, in fact in many ways, we're doing the 
opposite by encouraging China to do more on the international 
stage, albeit in coordination with the international community, 
the United States, and the European Union, in order to achieve 
stability and long-term economic development.
    Thank you.
    Senator Casey. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Feingold. Thank you, Senator Casey.
    Senator Lugar.
    Senator Lugar. Well, thank you, Mr. Chairman. I join 
Senator Casey in congratulating you and Senator Isakson for 
this timely meeting, and, likewise, the energy you give to 
issues of Africa.
    A group in Washington, called the Africa Society, held its 
fourth annual meeting honoring a specific ambassador from an 
African country this year. The ambassador nominated and heard 
was the distinguished Ambassador from Angola. And I mention her 
because, during her remarks to a large group of Americans and 
Africans, she mentioned Angola is now the seventh largest 
supplier of oil to the United States. This came as a revelation 
to many, that, first of all, there was that much oil being 
produced in Angola, and that we were as dependent upon Angola 
as we are, as a matter of fact. It also brought to the fore 
that a civil war occurred in Angola for well over two decades, 
terminating somewhere around 2002-2003, and, in some respects, 
the United States was perceived on the wrong side of how that 
turned out.
    Now, this is not all bad, from our idealism; we were on the 
side, we felt, of human rights and of trying to diminish what 
we felt were Communist influences from other countries. But, at 
the same time, the Angolans are pointing out, this has required 
very special emphasis on our part, not as a rectifying our 
position, but of more engaged diplomacy with Angola to bridge 
gaps that are important, with an important country.
    Now, I mention all of this because two of our staff members 
from the committee, Michael Phelan and Neil Brown, went to five 
African countries during the recent recess, and their 
observations jibe with what I learned during this Africa 
Society dinner, which also included about 20 other ambassadors 
from African countries. I had a very rich dialogue both before 
and after the speech by the Angolan.
    And, essentially, what they are pointing out is, as you 
have, that the Chinese presence has been highly visible for a 
long time, for decades now, a very high visibility, and not by 
chance. The Chinese have attempted to enhance that visibility.
    Now, I suppose, second, they observed, at least in the 
embassies that they visited, that there was little systematic 
policy engagement between the United States diplomats there and 
the Chinese. Now, this is differentiated from the occasional 
partnership or place in which we find a cooperative element. 
But, in terms of persons in the embassy and resources in the 
embassy assigned to an alliance or a--more of a coming together 
with the Chinese, this suffers, perhaps, as both of you know 
better than most, from the lack of resources in some of these 
embassies. And I compliment both of you for your advocacy 
within the Department. It's not easy.
    Or, to state it another way, there is also a feeling on the 
part of these African ambassadors that I talked to, quite apart 
from observation of our staff, that high-level visitations by 
United States officials in Africa clearly are well behind those 
of the Chinese, for example. Maybe other countries. But, the 
Chinese frequently devote pretty high-level folks to have high-
level dialogue.
    Now, we do the best we can with resourceful ambassadors in 
the field, and with yourselves, as you move through there. And 
I don't diminish your importance. But, at the same time, I 
would just suggest that this, you might say, is a subject 
that's beyond my paygrade. You know, the Secretary has to 
decide who goes and who doesn't, and so forth. I just observe 
that, as we're discussing, today, the role of China there, 
pretty high profile for a long time, and sort of embedded in a 
good number of these situations, and with some pretty stringent 
objectives, as they look at it, that are useful for them, as 
well as for the African countries--been mutually helpful--and, 
I would say, even in the oil business. The observation of the 
ambassadors, as well as our staff, is that the Chinese have not 
been invidious to our interests. If anything, the Chinese 
investment in the oil business has made available more oil in 
the world markets than would have been the case without their 
investment. So that it's a sophisticated process as to who is 
doing what.
    My only question--and I raise it in this way--is, How can 
we elevate the interest, in our own government, in the African 
nations to a point where resources are available, that the 
requests come initially from the Department for these 
situations? And, second, organizationally, how can the 
embassies be configured in ways in which we are more likely to 
have systemic cooperation with the Chinese--sort of, week in, 
month out--so that--because I think that's doable--in part, 
because of some breakthroughs, maybe, elsewhere in the Six- 
Power Talks with North Korea, which have nothing to do with the 
Chinese specifically, but, as all of you know, brought together 
our diplomats at various levels with Chinese diplomats in ways 
that have led to cooperation elsewhere in the world, including 
Africa.
    Do you have any general comments as to how the situation 
can be enhanced?
    Mr. Swan. Certainly. Thank you very much, Senator.
    With respect to the level of engagement that we have with 
the Chinese in Africa, first of all, I think we are seeing that 
increase. My own observation, personally from the field, is 
that in recent years we've seen a new breed of Chinese 
diplomat, if I may put it that way, on the continent, often 
with a lot of regional area expertise, often with very good 
local language skills, and seemingly much more interested in 
exchange and dialogue with us. And I know that our posts in the 
field, our embassies, are acutely aware of the heightened 
interest in China in Africa. We frequently ask them to take the 
pulse of what's happening in those relationships.
    I know that when I am out in the field personally, I try to 
see my Chinese colleagues. I was in Chad not too long ago, and 
made a point of seeing the Chinese Ambassador there for his 
perspective on developments in Chad. And so, I think there is a 
serious effort to move in that direction.
    But, I take your point, absolutely, sir, that this is an 
important issue, and we need to continue to look to ways to 
step up our engagement on it.
    If I might just say a word with respect to a more general 
premise of the question, I think, it's that United States 
engagement in Africa, of course, has increased and is quite 
robust, at this point. As someone from the Africa Bureau, of 
course, I would be enthusiastic about seeing it increased yet 
further. But, obviously, there are questions of global 
priorities that have to be addressed by others. But, certainly 
we've seen United States assistance bilaterally increase to 
$5\1/2\ billion; we've got the Millennium Challenge Corporation 
program--8 of the 16 countries that have signed a Millennium 
Challenge Compacts are in Africa; it's about 3 billion dollars' 
worth of Millennium Challenge programs; very dynamic and 
expansive PEPFAR, President's Emergency Program for AIDS 
Relief, on the continent at the $30 billion commitment level; a 
$1.2 billion multiyear President's Malaria Initiative and other 
programs. So, I think that there is a very active engagement 
there.
    We also have been very involved in certain areas in which 
perhaps others are less willing to be--the patient and 
painstaking diplomatic work to help resolve conflicts. I think 
the United States has been very actively promoting peace on the 
continent, from Liberia to Democratic Republic of the Congo to 
the North-South Sudan Peace Agreement. So, I think there is 
very active U.S. engagement on that front as well.
    In terms of high-level visits, President Bush was there in 
February and was, I think, extraordinarily well received in 
Tanzania, in Rwanda, in Benin, in Ghana, and in Liberia. And, I 
think, as you look at African responses, African attitudes 
toward the United States, remain very, very favorable. And I 
think that that is a testimony to the level of engagement that 
we've had.
    That said, I support, absolutely, contining on a trajectory 
that leads to deeper engagement.
    Senator Lugar. Thank you.
    Mr. Christensen. If I could just add a couple of things, 
Senator. I think your question is an excellent one, and I would 
just point out that, in the case of Angola, it is a major 
energy supplier for China--in fact, it's the largest energy 
supplier in sub-Saharan Africa for China, much bigger than 
Sudan. China has big interests in Angola. China has invested a 
lot in Angola and has given assistance to Angola.
    One of the things we have tried to do through our 
Ambassador in Angola is reach out to the Chinese in Angola to 
see if we can do joint projects on agricultural development. 
This is right along the lines of the thrust of your question.
    We don't know where this is going to head. It's a new 
proposal. But, we think it's the right kind of proposal.
    And I'll just say, as a China specialist--so I can make my 
own special advocacy for China specialists--I'm an academic; 
I'm in the government temporarily--I think it's very important 
for the Nation to have lots of China specialists, to have 
people who speak Chinese. I think it's good for the U.S. 
Government to have China specialists deployed not just in 
China, but deployed increasingly in other places, so that they 
can engage their Chinese counterparts in places like Southeast 
Asia, Africa, Latin America, and elsewhere. If more resources 
were put in that direction, I think it would be welcome and it 
would be a good idea.
    Thank you.
    Senator Lugar. Thank you.
    Thank you both.
    Senator Feingold. I'm pleased to see such good attendance 
for this hearing.
    I'd turn now to Senator Nelson.
    Senator Bill Nelson. Thank you, Mr. Chairman.
    And thank you, gentlemen, for your public service.
    I want to follow up more on the cooperation of the Chinese 
with us. And, Mr. Christensen, you state in your testimony, 
``We also plan to begin, this autumn, a bilateral dialogue on 
development assistance, led by Director of U.S. Foreign 
Assistance Henrietta Fore and her counterpart in China's 
Ministry of Commerce.'' And the last time that Secretary 
Negroponte was here, I asked him what the United States was 
doing to get China to cooperate--specifically, that question 
was to the Sudan. And he said the State Department had proposed 
dialogues on assistance with China. Have the Chinese agreed to 
discuss their assistance programs in Africa with us?
    Mr. Christensen. Yes, sir. We had a very good visit. I 
traveled with the Deputy Secretary in May, and we met with the 
Ministry of Commerce during that trip, and we discussed the 
assistance dialogue. The Chinese were very receptive to the 
idea, the only problem being that they have this small event, 
the Olympics, coming up in a hurry, and they're also tied down 
in relief work in Burma and their own earthquake problems, 
which are quite severe, as you know. So, they decided that it 
was probably best to have these meetings sometime after the 
Olympics.
    They were quite positive in their discussions with us about 
this idea. They seemed to want to engage. And we had a very 
good meeting with one of their vice ministers in the Ministry 
of Commerce, and we look forward to that dialogue. It will be 
about more than just Africa, but obviously Africa will feature 
prominently in that dialogue.
    Senator Bill Nelson. And in that dialogue will it be the 
position, the policy of the United States Government that, in 
the dialogue, that the Chinese position of no-strings-attached 
approach is not going to be good, because it helps prop up some 
of these brutal regimes?
    Mr. Christensen. Yes, sir. When we approach the Chinese on 
these issues, we try to drive home why these good-governance 
programs, at the heart of which is this conditionality, are 
important for long-term development in Africa. For either 
intentional or unintentional reasons, some Chinese assistance 
programs which have no strings attached pull in the opposite 
direction, and a big part of our dialogue system is simply 
convincing them that it's in their interest to have good 
governance in Africa, to have transparency, to have 
accountability in Africa. We believe, as they invest more and 
more in Africa, they're going to increasingly come to this 
conclusion, that they have a stake in stability and good 
governance there. They've run into some real problems in Africa 
with their investments. They've had kidnappings of Chinese 
workers; they've had some contractual problems. I think, over 
time, partially through our dialogue and partially through 
their own experience, they will come to different conclusions 
about the nature of no-strings-attached investment. That will 
be very much at the front and center of our approach when we 
address them, as it has been in the past, in the Senior 
Dialogue and in the Strategic Economic Dialogue.
    Thank you very much.
    Senator Bill Nelson. Have you seen any evidence that 
they're changing their attitude about their no-strings-attached 
policy?
    Mr. Christensen. I wouldn't say that we have evidence that 
they've changed, on a principled level, the no-strings-attached 
policy. However, we do see some evidence that they have run 
into problems in Africa that have forced them to adjust their 
behavior toward certain countries, that they've pulled back 
some business deals, they've had some problems recently in 
Zimbabwe, like everybody else, because of the nature of the 
regime there. We're hopeful that the Chinese Government will 
draw the proper conclusions from those lessons that the best 
way forward over the long term is to have good governance in 
those countries.
    Senator Bill Nelson. Well, speaking of Zimbabwe, they want 
to sell weapons to Zimbabwe. What's their lesson in Zimbabwe?
    Mr. Christensen. Well, here's a good example. They do sell 
weapons to Zimbabwe, and we have real concerns over that. 
Recently, there was a shipment to Zimbabwe, just following the 
election debacle there, and the international community and, I 
think, even more important still, local governments and local 
actors in Africa resisted that arms transfer at that time, and 
it's our understanding that the shipment of arms, which was 
worth over a million dollars, we believe, in arms, was sent 
back to China. They had trouble unloading the shipments in 
South Africa. Other countries said the shipments were 
unwelcome. The international community, including the United 
States, expressed concerns about the transfer of weapons at 
this time, given the civil strife in Zimbabwe, and the Chinese 
recalled that shipment. Whether that will become a pattern or 
not, we will see, but we think that the recall of that shipment 
was a good decision.
    Senator Bill Nelson. This kind of approach to aid 
assistance in Africa by China, is this buying them long-term 
political support among the African nations?
    Mr. Christensen. I think, as with many countries' 
experience in the past, China's record on this is mixed. I 
think that governments in Africa are obviously more comfortable 
with unconditional aid than conditional aid, but I think that 
China has run into some reputational problems in Africa as a 
result of its economic engagement. There have been, as I said, 
some attacks on Chinese projects in countries like Nigeria. 
There have also been problems for China in electoral politics 
in countries like Zambia. And we think that China is running 
into some of the problems that former investors and outside 
economic actors have run into in Africa. I think they've run 
into some that are particular to China at this time, which is 
that many people in Africa seem to appreciate the fact that the 
international community, the United States, the major donors, 
the international institutions, support good governance as part 
of these assistance programs. Our own reputation in sub-Saharan 
Africa, I understand--Mr. Swan can speak more authoritatively--
is quite high, and we have kept a very strict conditionality on 
our assistance.
    So, hopefully----
    Senator Bill Nelson. Well, what----
    Mr. Christensen. I am hopeful that China will study that 
lesson, will care about its own reputation, as it does around 
the world, and will draw the right conclusions from that 
experience.
    Senator Bill Nelson. What about debt forgiveness? Are they 
going to work with other nations in the forgiveness of debt 
among African countries?
    Mr. Christensen. That's one of the areas where we want to 
see coordination. It's very important, because we have debt-
forgiveness programs, and we don't want Chinese money to pour 
in just after that and to undercut some of the efforts at, 
again, producing good governance and better institutional 
decisions on the parts of these governments.
    But, again, I think I should turn to Mr. Swan, here. I'm 
getting a little bit in over my head, in terms of the African 
reality.
    Mr. Swan. With your permission, Mr. Chairman.
    I would just like to pick up on a couple of points that my 
colleague mentioned, to stress again, it's not just those 
outside Africa who are concerned about the Chinese actions in 
Africa. It's fundamentally and primarily Africans themselves 
who have concerns about the direction of some of these no-
strings-attached policies and nontransparent-assistance 
practices. And we've certainly seen concerns raised in a number 
of countries over the fact that a no-strings-attached policy, a 
lack of attention to good governance, is, indeed, contrary to 
principles that have now been agreed by the African Union 
itself as an institution, is contrary to the overall direction 
of the New Partnership for African Development, which includes 
governance and other criteria as a key element in economic 
development in Africa.
    So, I think what we're seeing is a growing level of African 
concern, as well, to ensure that the Chinese behave and perform 
responsibly in Africa.
    Similarly, on the issue of debts and nontransparency, we've 
seen an example recently in the Congo, where a significant 
Chinese offer of a loan has attracted attention within the 
Congolese Parliament. It's obviously attracted attention more 
broadly within the Congo. And so, I think we're going to see 
more of that with it not only being other donors concerned 
about how China's loan practices may influence debt relief, but 
the populations and the political leadership within these 
countries also have those same questions and will insist on a 
greater level of transparency.
    Senator Feingold. I thank the first panel very much, and 
we'll now turn to the second panel.
    [Pause.]
    Senator Feingold. Dr. Economy, would you please begin with 
your testimony?

 STATEMENT OF ELIZABETH C. ECONOMY, DIRECTOR OF ASIA STUDIES, 
           COUNCIL ON FOREIGN RELATIONS, NEW YORK, NY

    Dr. Economy. Thank you. Three brief points, focusing my 
remarks on the China component of the equation, and then I'll 
certainly welcome questions.
    The first point I want to make is really just that China's 
Africa strategy is part of a much broader global strategy that 
we find in Southeast Asia, as well as in Latin America, to 
secure resources, as Tom earlier mentioned, to limit Taiwan's 
international space, and, I think, really, as a hedge against 
any potential U.S. political or military challenge. This makes 
the job of addressing China in Africa more difficult in some 
ways, because what we're really talking about are the 
fundamentals of Chinese foreign policy, not simply China's 
engagement with several individual countries in Africa. But, I 
also think it offers the United States a wider range of 
political partners so that when we're talking about something 
like illegal logging, for example, we're not simply talking 
about Mozambique or Gabon, but also Indonesia and Brazil. This 
offers the United States broader opportunities, in terms of the 
forums for discussion and negotiation with the Chinese.
    In the past few years, I've attended a couple of 
conferences in South Africa that have focused all of their 
attention, really, on this issue of China in Africa. The 
picture that has emerged, at least in my mind, is clearly a 
very mixed one, and some of what I've seen and heard has been 
mentioned already. But, Chinese investment, its infrastructure 
development in Africa, its educational assistance, its 
technical assistance, are very much welcomed, and often, at 
least in these conferences, they're discussed in the context of 
filling a gap that the United States and the European Union are 
not, in fact, addressing. At the same time, there is a lot of 
concern voiced among many of these academics who are at these 
conferences over the lack of transparency, over the 
environmental and labor conditions and practices of Chinese 
multinationals, over the competition from Chinese 
manufacturers, the loss of potential jobs with African labor, 
the export of Chinese labor to Africa, and China's reluctance 
to engage in broader good governance and regional security 
issues.
    I think the good news is that over the past few years the 
Chinese have become highly sensitive, highly attuned to these 
complaints, and some officials and scholars are beginning to 
rethink part of their approach to Africa, and that means that 
there is an opportunity for the United States to assist.
    But, I do think it's important to recognize that 
cooperation with China is hard, and that, no matter the number 
of dialogues, the Chinese are often very content to have 
dialogues or 10-year frameworks for dialogue that don't 
actually require change in behavior, so that sometimes it's 
necessary to hold Chinese feet to the fire. Dialogue can only 
take us so far.
    But, I do think there are a few things that we can do to 
maximize our chances of success in working with China.
    The first is to address those issues which the Chinese 
themselves have recognized as necessary to reform. For example, 
corporate social responsibility. I think this is key for the 
Chinese at this point. It addresses several issues of 
governance on the ground, where there have been many protests 
in Africa concerning Chinese behavior. You now have officials 
in the Ministry of Foreign Affairs in China, in the Ministry of 
Environment, certainly you have NGOs in China--to a lesser 
extent, people in the State Forestry Administration--who are 
quite interested in seeing Chinese companies adopt better 
environmental and labor practices.
    Unfortunately, for the most part, these institutions have 
less power, because corporate social responsibility is overseen 
by the Ministry of Commerce, which has no experience in this 
area, and not so much interest.
    Nonetheless, we've seen the Chinese taking up to 200 
companies to the Global Compact, to the United Nations, to talk 
about corporate social responsibility. I think there's 
opportunity in the strategy economic dialogue to address this 
issue. So, looking forward, it's an area where the kinds of 
reputational issues that Deputy Assistant Secretary Christensen 
raised earlier, come to the fore for the Chinese. They're very 
concerned, for example, in the Ministry of Foreign Affairs, 
about this kind of backlash on the Chinese reputation due to 
the poor practices of Chinese companies.
    I think, too, one of the things that perhaps was missing in 
the earlier discussion is an opportunity to work with China in 
a multilateral context. We have a lot of bilateral dialogues 
going, but it seems to me that we have to consider China in a 
broader context, because, in many respects, that's where you 
get the most bang for the buck, when it comes to China.
    So, first, I think that means engaging India--and this was 
raised by Mr. Chairman because India is following on the heels 
of China, and is going to pose many, if not all, of the same 
challenges to the region. It's far behind, still, in terms of 
level of its trade, et cetera, but has similar issues on 
sovereignty that the Chinese have. So, we're going to have to 
engage India. China's not going to trade off its short-term 
economic gain if it thinks that India is somehow going to be 
advantaged by this.
    The EU already has a trilateral dialogue with Africa. Japan 
is becoming much more engaged in Africa. It has, now, what it's 
calling ``rare metals diplomacy.'' So, I think that bringing 
all of these forces together to talk to China will be 
important.
    And then, I think one of the things that was coming through 
earlier in the discussion, too, is that Africa itself, in many 
respects, has the greatest leverage, both because it holds what 
China wants--namely, the commodities and the reputation. To a 
large extent, China feels free to disregard the United States. 
They will call it containment, or they'll say we, ourselves, 
are not having best practices. So, I think that it's important 
to remember that Africa probably holds greater leverage on many 
of these issues than the United States does.
    In my last 34 seconds, I'll just say that one thing that 
struck me, again, at these meetings in which I've participated 
in Africa, is that, while they will complain about China, they 
certainly complain as much about the United States. And, while 
I don't focus on U.S. policy in Africa, I'll just note that 
some of the complaints, such as an overwhelming focus by 
theUnited States on antiterrorism issues, not listening to the 
needs of Africa, a lack of, high-level diplomatic attention, et 
cetera--are very much the same kinds of complaints that I hear 
when I travel in Southeast Asia, as well. So, it seems to me 
there's the possibility that, on a few issues, we might want to 
be taking a page out of China's playbook in thinking about the 
way that they engage more broadly strategically and deeply.
    I'll stop there.
    [The prepared statement of Dr. Economy follows:]

 Dr. Elizabeth C. Economy, C.V. Starr Senior Fellow and Director, Asia 
          Studies, Council on Foreign Relations, New York, NY

                    THE LANDSCAPE OF CHINA IN AFRICA

    China's active diplomatic, economic and military engagement in 
Africa dates back more than a half century. Yet over the past decade, 
the relationship between China and much of Africa has expanded so 
rapidly that both sides--not to mention the rest of the world--have 
been left struggling to understand the new rules of engagement.
    Why Africa matters to China is no mystery. China's top priority is 
acquiring access to the natural resources--copper, timber and oil, 
among them--that are plentiful in Africa and critical to China's future 
economic development. China currently accounts for approximately one-
fourth of world demand for zinc, iron and steel, lead, copper, and 
aluminum. Africa also offers a growing market for inexpensive Chinese 
consumer goods, such as textiles and electronics. Politically, African 
countries often play a pivotal role in support of China's broader 
interests: Supporting its case against greater international 
recognition for Taiwan (although this may become less important given 
the recent warming in Taiwan-PRC ties) and protecting it from censure 
in various human rights fora.
    On all fronts, the relationship between China and Africa is 
exploding with activity. During 2001-2007, trade between China and 
Africa jumped from $8.92 billion to a reported $73 billion; China 
anticipates that bilateral trade will reach $100 billion by 2010. More 
than 800 Chinese companies are formally registered to do business in 
Africa and have officially invested $12 billion. Much of this 
investment is tied into larger investment, aid and loan packages 
structured by the Chinese Government, such as a recently inked $9 
billion deal with Congo exchanging resource rights to copper, cobalt, 
and nickel mines for extensive assistance in infrastructure 
development. The Congo deal also typifies China's strategic thinking 
about the region: It will develop a special economic zone in Congo that 
will be the hub of an industrial distribution system linking Congo by 
rail and highway to Zambia and Angola, all of which will benefit 
China's export capacity.
    China's economic activity is matched and supported by an 
extraordinary level of diplomatic initiative. There is an endless 
stream of highly polished diplomatic forays by China's top leaders to 
Africa, the establishment of an Africa+China institution, the Forum on 
China Africa Cooperation, and China maintains the largest number of 
embassies, consulates, and diplomats in Africa of any country. China is 
also expending significant energy in its cultural and educational 
diplomacy, establishing 11 Confucius institutes to promote Chinese 
language and culture throughout Africa and promoting a wide range of 
student, medical, and technical exchanges.
    In contrast to its expansive economic and political efforts, China 
is only gradually expanding its military role and influence in Africa. 
As of 2006, there were only 15 permanent military attaches and 26 
bilateral mil-to-mil exchanges. China's only permanent military 
dialogue is with South Africa.
    For the United States, China's engagement in Africa poses a clear 
challenge to America's stated commitment to promoting good governance 
in the region and, according to some U.S. businesses, to American 
competitiveness. Importantly, China's ``go out'' strategy is a global 
not merely a regional one. China in Africa looks very much like China 
in Southeast Asia and Latin America, suggesting that any U.S. response 
to China's growing role in Africa will have broader applicability 
throughout much of the developing world. Second, while China is clearly 
at the forefront of redefining how outside powers engage in other 
regions of the world, India, and in some cases, Russia are close 
behind. Thus, a U.S. strategy designed to meet the challenges or take 
advantage of the opportunities posed by China's Africa initiatives 
should account for the future challenges and opportunities posed by 
other rising global powers.

                EMERGING CHALLENGES FOR CHINA IN AFRICA

    China's initiatives in Africa have generally been heralded by 
senior African officials and businesspeople for their focus on 
providing Africa with what it needs--namely no-strings investment and 
infrastructure. At the same time, there is a growing sense of disquiet 
among some African governments and sectors of civil society concerning 
how China does business, including rampant corruption, poor 
environmental and labor standards, the influx of hundreds of thousands 
of Chinese workers, and, perhaps most importantly in some instances, a 
perceived mismatch between China's oft-stated principles of 
noninterference and not mixing business with politics and African 
interests in better governance and regional security.

   Inequitable Trade and Investment Deals.--African officials 
        raise several concerns on the trade and investment front: (1) 
        China imports primarily raw commodities from Africa, but 
        exports finished textiles and electronics. Ghanaian Trade 
        Minister Alan Kyerematen has argued that Africa needs to be far 
        more aggressive in identifying market opportunities for 
        finished products in China. (2) China's extraction of resources 
        to benefit its continued industrial development will prevent 
        African industry from developing. (3) China is undermining 
        domestic industries in textiles and wood processing (e.g. while 
        timber-rich countries export finished wood products to Europe 
        and the United States, Chinese imports are 85 percent logs).
   The Export of Chinese Labor to Africa.--An estimated 
        750,000-1,000,000 Chinese now reside in Africa; Chinese 
        infrastructure deals often mandate up to 70 percent Chinese 
        labor. As a result, Africans complain that they receive little 
        benefit from these large deals. In addition, within African 
        cities and towns, Chinese often establish their own 
        restaurants, small hotels/dormitories, and stores to serve the 
        needs of the Chinese workers, thereby limiting the value of the 
        new labor to the local economy.
   Corruption.--Complaints about Chinese corruption arise from 
        both government and nongovernmental actors. Both raise the 
        issue of the significant role Chinese companies play in illegal 
        logging and mining, depriving both locals and the government of 
        legal revenues. As Richard Behar reported in a series of 
        articles in Fast Company, the Government of Congo, for example, 
        revealed that as much as 75 percent of the minerals such as 
        copper and cobalt are illegally exported via black market 
        miners, many of whom are indentured to Chinese middlemen and 
        financiers, who then smuggle the minerals to China on cargo 
        ships via South Africa or Tanzania. Nongovernmental actors are 
        also concerned about the lack of transparency in China's back-
        room, large-scale aid/trade and investment projects, believing 
        that much of the potential economic windfall is siphoned off by 
        senior government leaders in their own countries.
   Poor Labor and Safety Standards.--Chinese extractive 
        resource industries in Africa have earned a reputation for weak 
        labor and safety standards, as well as low levels of pay; a 
        situation reflected within China itself. (More than 300 people 
        die every day in China because of unsafe working conditions.) 
        Cheng Siwei, vice chairman of the Standing Committee of China's 
        National People's Congress, has warned that the lack of CSR by 
        Chinese companies operating abroad is harming China's 
        reputation. (In at least one case, in Zambia, the issue of 
        Chinese business practices became an issue in the national 
        election.)
   Environmental Degradation.--Chinese companies' CSR deficit 
        extends to their environmental practices. Mining companies have 
        come under fire in Zambia for groundwater contamination and 
        failure to undertake mandated environmental impact assessments. 
        The Chinese oil company, Sinopec, lost its drilling rights in 
        Gabon for its environmentally unsound practices in a national 
        park. Chinese timber exporters are funding extensive illegal 
        logging in Mozambique and Gabon. (Between 70-90 percent of all 
        exports are illegal.) International and domestic environmental 
        nongovernmental organizations have also condemned poor 
        environmental practices surrounding Chinese dam construction in 
        Sudan and now Mozambique.
   Regional Governance Concerns.--China has generally trumpeted 
        its principles of sovereignty, noninterference, and not mixing 
        business with politics as a strong selling point in its 
        relations with Africa. Increasingly, however, African leaders 
        have begun to pressure China to play a more responsible role in 
        regional security affairs. They have called on China to cease 
        arms sales to Zimbabwe, for example, arguing that they are 
        fueling an already highly explosive situation. The African 
        Union has also argued for intervention in the case of 
        humanitarian disasters, as well as supporting democracy, and 
        has called on China to be supportive of its efforts.

                          CHINA'S NEW THINKING

    Chinese officials in Africa and scholars who work on relations 
between China and Africa are highly attuned to these emerging problems. 
In speeches, writings and private discussions, these diplomats and 
scholars suggest that while overall they feel their Africa strategy is 
quite successful and should stay the course, some aspects will require 
adjustment. Some of the lines of continuity and potential change 
include the following:

   Continue and Expand Economic, Technical and Educational 
        Ties.--In 2006, Chinese President Hu Jintao set forth an eight-
        point proposal to support future African development, including 
        $5 billion to support Chinese business investment in Africa, $5 
        billion in preferential loans and credits to establish Sino-
        African trade and economic zones, the doubling of 2006 levels 
        of assistance by 2009, expanding the range of tariff-free items 
        Beijing will import from Africa from 190-440 before the end of 
        2009, and the provision of technical assistance. China will 
        also increase the number of government scholarships for African 
        students from 2000 to 4000. (Some scholars argue that much of 
        African elites' commitment to multiparty democratic values, 
        etc., comes from studying in the West and that China should 
        similarly stress its political and economic comparative 
        advantages through educational opportunities.)
   Overseas Development Assistance.--There has been some debate 
        within China over the lack of untied aid to Africa between 
        those who believe Beijing needs to increase its efforts in this 
        area while others argue that Western-style aid projects are not 
        effective. One scholar has suggested that Chinese aid projects 
        allow Africans their dignity and are more stable and equal than 
        those offered by the West.
   Gradual Reform of Sovereignty Principles.--As the African 
        Union has begun to push China to do more to ensure regional 
        security, China is very gradually assuming a more responsible 
        role (largely through its support of U.N. peacekeeping 
        missions). China's official position remains that it is limited 
        in what it can and should do as an outsider, that sovereignty 
        must be respected and that with regard to human rights, China, 
        as is true of other countries, has its own human rights 
        problems and shouldn't criticize others. Still, there is now 
        discussion within Beijing about how to adjust to the AU's 
        belief in conditional intervention.
   Develop a System of Corporate Social Responsibility.--
        Raising the labor, safety, and environmental standards of 
        Chinese companies in Africa has become a top priority for 
        Ministry of Foreign Affairs officials, who believe that these 
        corporations are seriously damaging China's reputation. (In 
        some cases, MOFA officials must establish a temporary residence 
        in areas where Chinese companies are based in order to help 
        with community relations.) This will be a challenging task: 
        Chinese companies have no tradition of CSR and introducing it 
        in Africa will come only after they address the problem 
        domestically; responsibility for CSR rests with the Ministry of 
        Commerce, which has no experience in these issues; 
        increasingly, the Chinese companies going to Africa are not 
        simply the large state-owned enterprises with financial and 
        political ties to Beijing but rather smaller enterprises from 
        the provinces or private entrepreneurs over whom Beijing has 
        virtually no leverage.
   Rethink Security Interests.--China has only low-level and 
        limited military engagement with most of Africa. Several 
        factors are prompting a growing interest in a broader security 
        engagement: The safety of Chinese workers, who have been 
        abducted and killed in Southern Sudan, Nigeria, Zambia, 
        Ethiopia, and Chad; the increasing presence of India, which has 
        a strong and growing naval presence in maritime shipping lanes; 
        concern over the security of China's supply lines; and the 
        U.S.'s AFRICOM initiative, which some Chinese military experts 
        argue is directed at China's growing role in the region.

               POLICY IMPLICATIONS FOR THE UNITED STATES

    China's successes and its emerging challenges offer the United 
States the opportunity to increase its own engagement in the political 
and economic development of Africa. There are several avenues the 
United States could pursue in conjunction with China and/or Africa to 
enhance the U.S. role:

   Cooperate with China on issues of corporate social 
        responsibility. China's new-found desire to improve the 
        reputation of its businesses operating in Africa provides both 
        the United States and African countries the opportunity to 
        press Chinese state-owned enterprises to join the Extractive 
        Industries Resource Initiative and/or other global corporate 
        governance efforts such as the Global Compact. The United 
        States could also use its Strategic Economic and Political 
        Dialogues with China to advance cooperation on areas of joint 
        concern, such as illegal logging and mining safety.
   Take advantage of growing Chinese Government concern over 
        the security and stability of African states and the Chinese 
        citizens who reside there to engage in broad security 
        cooperation. This might include in some instances joint support 
        for police and military; most certainly it should include the 
        advancement of international standards on transparency and good 
        governance.
   Assist Africa in taking a page from China's own economic 
        development playbook. Throughout China's economic takeoff, the 
        country's leaders have ensured that Western assistance and 
        investment benefited Chinese companies and Chinese workers, 
        with domestic labor and sourcing requirements. In addition, 
        they insisted on broad corporate social responsibility, with 
        multinationals required to fund infrastructure such as roads, 
        schools and hotels, as part of the price of doing business.
   Recognize that Africa's leverage with China is often greater 
        than that of the United States. China can often dismiss U.S. 
        pressure by pointing to shortcomings in America's own 
        governance and human rights practices or by claiming that the 
        United States is simply trying to contain China. Africa, 
        however, provides China with both resources and international 
        legitimacy. There are significant costs to China's reputation 
        when it ignores Africa's requests for good corporate governance 
        or support for regional security.
   Ensure that America's Africa strategy is meeting Africa's 
        perceived needs as well as those of the United States. China 
        gets high marks across the developing world for listening to 
        the interests of its prospective partners. Moreover, its broad 
        and deep diplomatic and economic engagement ensures that even 
        as it falls short in meeting African expectations and needs, it 
        is constantly reassessing and adapting its policies. The United 
        States could likely benefit from the type of broader and deeper 
        political/economic and strategic integration that China's 
        political and business leaders have brought to their Africa 
        strategy.

    Senator Feingold. Thank you for your testimony, Doctor.
    Dr. Morrison.

 STATEMENT OF J. STEPHEN MORRISON, EXECUTIVE DIRECTOR, AFRICA 
   PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES, 
                         WASHINGTON, DC

    Dr. Morrison. Thank you very much, Senator Feingold, for 
the opportunity to be here today.
    I'm going to offer a few focused remarks that look beyond 
my prepared testimony.
    First has to do with China's evolving approach on Africa. 
There's been some discussion earlier about the scope and scale 
of its assistance. I think we need to acknowledge, out front, 
that this is not just another donor. China will surpass the 
United States as the lead premier trading partner with Africa 
no earlier--no later than 2010. When concessionary financing is 
being put on the table on the order of $50 billion for Nigeria, 
this is a different reality and a different order of 
engagement.
    There is a reassessment, an internal reassessment ongoing 
within China right now with respect to its approaches to 
Africa, and that is a multisectoral and long-term approach 
that's going on. We don't understand it very well. They're 
reexamining their approaches on health, the way that they deal 
with human rights advocates and media within Africa. Corporate 
social responsibility is a source of active internal debate. We 
need to know more about that.
    I think that you can look at the Darfur instance and make 
the case that China's foreign policy engagement did respond, in 
terms of appointing an envoy, dispatching the envoy into Darfur 
repeatedly, and engaging a much broader spectrum of players 
than would have been the habit before that. That's positive.
    There are very serious interagency difficulties within the 
Chinese approach, and embarrassing episodes like the arms sale 
to Zimbabwe. The Foreign Affairs Ministry struggles, I believe, 
to get its arms, in the case of Sudan, around the policy with 
respect to Sudan, as against the interests of oil and the 
security alliance with Sudan.
    The Olympics are a huge factor right now, heightened 
sensitivities on Darfur, quite a bit of outrage internally 
within the government over some of the actions; for instance, 
the decision by Steven Spielberg to step down as the director. 
These are issues that became very emotional and incendiary 
issues, and there's a--the debate, I sense, with respect to 
Darfur, has crept into an area of, sort of, backlash of Chinese 
nationalism that we saw also around Tibet and we've seen in 
some other issues, and in which a sort of sovereign interest 
and sovereign pride has crept into the discussions, that 
earlier, around Darfur, could be much more confined. I think 
we're going to have to wait until the other side of the 
Olympics to be able to really begin to seriously reengage 
around some of these, although many of these pressing matters 
on Darfur require immediate attention, obviously.
    The Africa policy that the Chinese pursue, I believe, will 
enter a period of accelerated reassessment, this fall, in the 
lead-up to the next FOCAC Summit, in Cairo, which will be at 
the end of 2009. That's not that far off. So, you can expect, I 
believe, to see some interesting developments that will be 
rolled out in that November--October-November-December 
timeframe, whenever they actually hold that Cairo meeting.
    On United States-Chinese collaboration, I think there is a 
general consensus around no-zero-sum competition, points of 
tension that need to be managed, shared interests. However--and 
the subdialogue that was created, I think you could be very 
helpful in trying to ensure that that subdialogue is carried 
forward into the next administration.
    Very little has been achieved, in concrete terms, but a 
consensus is being formed that this is valuable. We should 
preserve that and move that forward.
    I also think that the consensus that exists, and what we--
and the cooperation that we've seen on Darfur recently between 
the United States and China, in getting to the U.N. Security 
Council resolution, this is very fragile, and could be easily 
reversed, and I'll explain in a moment what I mean by that.
    The Chinese changed, in 2006 and 2007, with respect to 
Darfur, partly because they wanted--they were concerned about 
their--how their behavior within the Security Council itself 
was being seen; and Kofi Annan's argument that, ``If you're 
going to be a member of this group and be influential, you 
have--you cannot be isolated, you need to move forward,'' was a 
convincing one. I think there were lots of reputational damages 
being inflicted internally within their own elite, within every 
Western embassy, protests of all sorts, of all forms, and 
within the African political community. I think we've seen a 
slowdown lately in that cooperation. I see a hardening of 
position with respect to Darfur, less interest in helping move 
forward a deployment of non-African troops into Darfur, less 
interest in helping overcome some of the slowing tactics that 
we see Khartoum enacting. There seems to be a position that 
there needs to be some--on the Chinese part--a need for some 
kind of longer term new thinking on this. I'm not sure where 
that goes.
    There hasn't been any discussion around the JEM attack upon 
Khartoum and Omdurman. This, in my mind, was a dramatic moment. 
It revealed the degree to which the conflict in Darfur has 
become regionalized between N'Djamena and Khartoum. It shook 
this regime. There has been debate within the Security Council 
about the possibility of a Security Council-led initiative to 
try to broker an end to proxy border warfare between Khartoum 
and N'Djamena. It hasn't gone very far. However, that's another 
opening where you could see greater cooperation.
    Within the CPA, the North-South Peace Accord, there is 
dramatic tension today, and, I think, as we look forward, in 
the next 2 years, towards the election in 2009 and the 
possibility of the referendum that's called for in 2011, we can 
expect continued tension and conflict between the North and the 
South. We have a terrible problem in Abia today that's 
unresolved. And, I think, when you look at the Chinese and the 
United States position, we're allied on opposite sides of the 
table on that. When you look at the interests that the Chinese 
have with respect to oil, arms, political alliance with 
Khartoum, opposition to a cessation within the South; you look 
at the United States position, which is sanctions, which 
alignment with the South, which is coding Khartoum as a 
genocide regime, on the list of State Sponsors of Terror--the 
potential for a polarization and divergence of approaches as 
the CPA moves forward in the next 2 years is very, very high, 
and we need to keep that in our minds and be thinking about 
that.
    There are some other cases in which there could be greater 
collaboration or thinking. Nigeria being one, Angola being 
another.
    On AFRICOM--just one closing comment on AFRICOM--the 
Chinese seem to be taking a quiet wait-and-see approach on 
AFRICOM. They are resistant to cooperating directly with us on 
peacekeeping. This issue was raised by Jim Swan. I support that 
idea. They do not see AFRICOM, I do not believe, as a threat to 
their interests or as motivated by Chinese entry and--they see 
this as a--an important United States initiative that's been 
beset by some difficulties around mandate, partnerships, and 
building legitimacy, and winning support within Africa. 
However, I would argue that there are openings in which the 
Chinese and the Americans could begin dialogue and exchanges on 
creating peacekeeping support within Africa.
    Senator Feingold. Thank you----
    Dr. Morrison. Thank----
    Senator Feingold [continuing]. Doctor.
    Dr. Morrison. Thank you.
    [The prepared statement of Dr. Morrison follows:]

    Prepared Statement of Dr. J. Stephen Morrison, Director, Africa 
Program, Center for Strategic and International Studies, Washington, DC

                              INTRODUCTION

    Senators Feingold and Isakson, I am very grateful for the 
opportunity to speak today at this timely hearing.
    In late 2006, CSIS and the China Institute for International 
Studies (CIIS) hosted a conference in Beijing that examined the scope, 
characteristics, and drivers of China's engagement in Africa. The 
results were detailed in the CSIS conference report, ``China's 
Expanding Role in Africa: Implications for the United States.'' In your 
invitation letter, Senator Feingold, you cited the conclusions of that 
report and asked that I comment on new, emerging evidence and thinking 
on China's role in Africa, based on CSIS's ongoing work, and the 
implications these developments may have for U.S. policy.
    To answer Senator Feingold's question, I will base my remarks 
largely on a subsequent major CSIS conference, held in Washington, 
December 5-6, 2007, in collaboration with the Stockholm International 
Peace Research Institute (SIPRI) and CIIS. It featured senior leaders 
and expert analysts from China, the United States, Kenya, Nigeria, 
Angola, Swaziland, and Uganda. It solicited a range of African views on 
the impacts of Chinese engagement in Africa, and sought to identify 
concrete areas for future United States-Chinese-African collaboration. 
The full conference report will be available on the CSIS Web site at 
the end of this week.

       CHINA'S EXPANSIVE ENGAGEMENT IN KENYA, ANGOLA, AND NIGERIA

    At the December 2007 conference, commissioned papers were tabled 
that examined in depth China's engagement in Kenya, Angola, and 
Nigeria. The authors, experts from the three focal countries, each drew 
on extensive in-country interviews. It was our view that this type of 
informed, ground-level analysis has been largely absent from most 
discussions of China's expanding role in Africa. Interestingly, while 
the authors varied considerably in their approach and focus, all three 
described a largely positive and pragmatic relationship with China, and 
emphasized that engagement is maturing as country capacities and 
priorities evolve. The three country studies are contained in the full 
conference report.
    Michael Chege, UNDP advisor to Kenya's Ministry of Planning and 
National Development, argues that China's resounding economic entry 
into Africa has been poorly served by most literature on the subject, 
which often depicts African economies under threat of malevolent 
Chinese investment strategies and a flood of cheap manufactured goods. 
In the Kenyan instance, the Chinese-Kenyan relationship has by-and-
large been mutually beneficial.
    Chege challenges the assertions that increased imports from China 
have harmed the Kenyan economy, arguing that Kenya's manufacturing 
output has risen and become more diversified while imports from China 
have been rising to record levels. Chinese construction firms are not 
inherently detrimental to Kenyan interests; they are a leading source 
of employment, and create infrastructure at lower costs, making Kenya's 
economy more competitive overall. The study finds that most Kenyans are 
pleased with the transportation networks Chinese firms have provided, 
despite widespread criticism of inferior Chinese construction.
    China's share of Kenya's external development assistance has 
increased dramatically, from .08 percent of total assistance in 2002 to 
13 percent in 2005. In Kenya, there is no single predominant oil or 
other natural resource base. Accordingly, China's investments are 
spread across multiple other sectors.
    Kenya will need to carefully manage its bilateral relationship if 
it is to be successful in the long term. Kenya continues to struggle to 
boost the volume of its exports to China in the face of a large surplus 
in China's favor, and it will continue to be tested when Chinese 
businesses engage in poor environmental practices or illegal activity. 
Protectionism or limiting its cooperation with China will only harm 
Kenya in the long run. Chege argues that Kenya's competent technocratic 
cadre and business sector have thus far been able to manage the 
relationship to Kenya's benefit. The larger enduring challenge, in his 
view, is for Kenya to come to terms with evolving global competition.
    Indira Campos and Alex Vines, research assistant and head of the 
Africa Program at Chatham House, respectively, describe in their 
analysis a largely pragmatic relationship between Angola and China, 
which the Angolan Government has leveraged to meet the country's urgent 
reconstruction priorities. Angola has benefited from large quantities 
of Chinese financing when concessional funding from international 
institutions, like the IMF, was not available. Chinese financial and 
technical assistance has kick-started over 100 projects in the areas of 
energy, water, health, education, telecommunications, fisheries, and 
public works enabling Angola to become one of the most fast-growing 
economies in sub-Saharan Africa in a span of 5 years. The China-Angola 
relationship is unique in the China-Africa context in that Angola 
inconsistently runs a large trade surplus with China, owing to the 
rapid rise of Chinese oil importation.
    In Angola there is a clear quid pro quo: China's desire for natural 
resources as against Angola's stark development needs. Crude oil 
represents over 95 percent of all Angolan exports, and it is also 
China's main Angolan import. Over the last 6 years, China has been the 
second-largest importer of oil from Angola behind the United States, 
consuming roughly 9.3 to 30 percent of Angola's total oil exports. 
Despite the U.S. lead in the imports of Angolan oil, since 2002 Angola 
oil exports to China have increased seven-fold, compared to only 3.5 
times to the United States. However, Angolan oil production is still 
dominated by Western companies such as ChevronTexaco, Total, BP, and 
ExxonMobil.
    Despite rising Chinese investment, Angolan officials insist that 
China is only one of several major external partners, and they remain 
wary of becoming beholden to any single external partner or resource. 
This pattern is visible when looking at the origins of Angola's imports 
over the years: China's share has increased significantly, but so have 
the shares of India, South Africa, and Brazil. Similarly, Angola 
exports over the years have significantly diversified.
    Angola is acutely aware of many of the challenges it faces in its 
relationship with China. It acknowledges that it is often unable to 
utilize local capacity to fill the mandated 30-percent Angolan 
workforce quota for infrastructure projects under Chinese credit lines. 
It has established a mechanism whereby it reinvests 5 percent of its 
oil proceeds into the nonoil sector. It seeks to improve its relations 
with Western institutions by agreeing to pay, on an accelerated basis, 
the bulk of its debt of $2.5 billion owed to Paris Club creditors and 
seeks greater foreign direct investment by claiming to have eased its 
investment laws. It has also responded to Western criticisms of 
opaqueness in its Chinese credit lines by issuing a statement in Luanda 
in October 2007 clarifying the Angolan terms for use of those funds. 
Although this is a welcome development, Vines and Campos argue that 
more disclosure on the part of the Angolans is needed.
    As Angola continues developing its relationship with China, 
controversial issues such as local content and employment may intensify 
over time, and tensions may rise over the slow pace of implementation 
and relative decision-power in the relationship. However, Angolan 
officials appear confident that their efforts to diversify donors and 
diversify investment into nonoil sectors will succeed in the long term.
    Professor Pat Utomi, a political economist and senior faculty 
member at the Lagos Business School-Pan African University, details in 
his analysis an increasingly complex, rapidly evolving relationship 
between Nigeria and China. He makes the case that Nigerian perspectives 
on that engagement, even within the government itself, are far from 
uniform. Utomi's study explains that many career foreign affairs 
officers and politicians feel that a China-Nigeria partnership could 
offer greater benefits than collaboration with the West, but that there 
were many areas of the relationship that needed increased attention and 
improvement: The risk of heightened dependence on China and often weak 
official Nigerian leverage in the relationship; quality of project 
implementation, and uncertainty over technology transfer. Nigeria's 
private business community also exhibited mixed feelings about Chinese 
business incursions into Nigeria. Businessmen welcomed trading with a 
lower cost economy, securing financing from Chinese partners, and 
learning from Chinese manufacturers and business models, but worried 
that Chinese firms might be benefiting in greater proportions than 
Nigerian businessmen.
    In order to combat some of these challenges, Utomi calls for 
expanded debate within the Nigerian Government and across the business, 
academic, and civil society communities on how best to optimize Western 
and Chinese engagement. He argues that Nigerian policymakers, including 
national and local officials, are not setting policies that will have 
the strongest possible impact on Nigeria's long-term economic growth 
for the widest array of its citizens. To overcome this challenge, 
strong pressure must be placed on Nigerian leaders to effectively 
balance U.S. and Chinese engagement to maximize African growth and 
opportunity.

                            EMERGING THEMES

    Several important cross-cutting themes emerged from the discussions 
held at CSIS on December 5-6, 2007.
    Correct for exaggerations: First, there was a widely held view that 
much of the rhetoric surrounding China's engagement in Africa has been 
overblown, particularly the emphasis on negative impacts in terms of 
internal governance, business and donor practices, and environment, and 
the potential for a major clash with U.S. strategic interests. This is 
fueled by generalized uncertainty as China's engagement rapidly 
expands, and in part by concern about African capacities to manage and 
shape this engagement to their countries' ultimate benefit. While 
serious tensions and challenges were acknowledged, on balance there was 
a shared sentiment that there are several areas in which United States, 
African, and Chinese interests intersect and where greater 
collaborative efforts can yield positive results.
    Need for African leadership: Second, there was a strong consensus 
that both African state and nongovernmental interests need to play a 
more proactive role in shaping and directing United States-Chinese 
cooperation. African states are too often discussed as the scene in 
which United States-Chinese strategic competition playouts, and African 
interests are frequently cast also as passive recipients of potential 
cooperative development or security assistance. If African governments 
assert themselves strategically, they will leverage competition to 
their countries' long-term benefit and set priorities for cooperative 
efforts.
    African diversity: Third, there is no single ``African'' 
perspective on China's engagement in Africa. Africa features a wide 
diversity of actors and interests, across countries, across sectors, 
between governmental and nongovernmental actors, and within African 
governments themselves. In many countries that have enlarged the 
political space for civil society, these various interests and 
perspectives have become increasingly influential, and the demands on 
African governments for competent and accountable management will 
likely continue to increase. A priority for the international community 
should be to build the capacity of nongovernmental entities--the 
business sector, civil society, and the media--to engage their 
governments on a strategy to manage increasing external competition and 
opportunities for cooperation.
    Multiplicity of Chinese interests: Fourth, China itself is not a 
monolithic entity, and Chinese engagement, contrary to popular 
rhetoric, is often not directed from Beijing. The number and types of 
Chinese actors engaged in Africa are rapidly diversifying, including 
diplomatic representatives, state-owned enterprises, private 
enterprises and individual families, each driven by different 
interests, and different modus operandi. There are instances where 
Chinese national interests and those of state-owned enterprises appear 
increasingly independent of one another. To maximize opportunities for 
cooperation at multiple levels, both U.S. and African actors will need 
a more comprehensive and nuanced understanding of these realities.
    Early United States-China dialogue: Fifth, there have been 
tentative steps toward United States-Chinese dialogue and cooperation 
in Africa, conducted at the Assistant Secretary level; in the case of 
Sudan, between special envoys and in actions taken in the U.N. Security 
Council; and in the case of Liberia, generated through innovative 
cooperation on the ground. These have yielded concrete gains on Darfur 
and Liberia security sector reform. Especially important has been 
Chinese diplomatic leadership in the U.N. Security Council and its 
pressures upon Khartoum. These were essential to the U.N. Security 
Council authorization in July 2007 of the deployment of the 26,000-
person joint UN/AU peace operation to Darfur. Much more effort, backed 
by high-level commitments on both sides, will however be needed to 
sustain the peace efforts in Darfur and address the worsening crisis 
within the Comprehensive Peace Agreement that ended the North-South war 
in Sudan in January 2005.
    There is opportunity for United States-Chinese project cooperation 
in less politically sensitive areas like agriculture and health. There 
is a case for active United States-Chinese cooperation on peacekeeping 
in Africa, but resistance from both sides remains strong, and U.S. 
statutory limits (for instance, a provision contained in the National 
Defense Authorization Act of FY 2000 barring cooperation with the 
People's Liberation Army except for humanitarian purposes).
    There is need for continued dialogue on areas of disagreement and 
tension: Most importantly, human rights, governance, donor lending and 
debt terms, business practices, and environmental standards, for 
example. In each of these areas, African regional organizations and 
nongovernmental players could facilitate debate and create a greater 
African voice. Across the board, stronger leadership from African 
interests is needed to drive these efforts forward on a sustained 
basis.
    Transnational expert networks: The final cross-cutting conclusion 
is that much analysis concentrates too narrowly on government-to-
government engagement in discussion of United States-China-Africa 
relations. Greater priority is needed to strengthen nongovernmental, 
policy-focused, transnational networks. Universities, research 
institutes, and advocacy groups, environmental and health policy 
organizations, could play a powerful role in promoting corporate social 
responsibility, environmental stewardship, and community development.

                            ENERGY SECURITY

    China is sensitive to being lectured on ``gobbling up'' Africa's 
oil supplies. There is often exaggeration of the scope of Chinese 
energy engagement in Africa, frequently portrayed as a zero-sum 
``scramble'' for African energy resources. China's demand for oil 
resources is indeed rising steeply, but in absolute terms China remains 
a relatively small player in African oil exploration. Today Africa 
accounts for 30 percent of China's overall oil imports (oil imports 
constitute 30 percent of China's total energy consumption) and Africa's 
share of oil imports is certainly set to rise. Given projected Chinese 
energy demands, China, like the United States and the rest of the 
world, has a long-term interest in both oil conservation and the 
development of alternative energy sources. At present however, total 
Chinese oil consumption is one third that of the United States. 
Further, China's share of total African oil production is approximately 
9 percent, versus Europe's share of 33 percent or the U.S. share of 32 
percent.
    The Chinese argue that China's investment in upstream oil 
exploration and production should not be considered threatening, but in 
fact be welcomed since it expands global supplies. It is important to 
recognize that China frequently chooses not to ship African equity oil 
back to China. Logistically, it is easier to ship West African oil to 
markets in Europe and North America, and, commercially, the incentive 
is to choose those markets which fetch the best price. Although 
approximately half of China's equity oil production worldwide come from 
Africa (approximately 300,000 of 600,000 barrels per day, of which 
225,000 barrels derive from Sudan), the majority of that equity 
production is not shipped to China but sold in the global market. 
China, like the United States, will continue to rely overwhelmingly on 
the open market for years to come.
    Chinese state-owned companies operate with increasing independence 
from the Chinese state. It is largely a myth that the Chinese Central 
Government directs state-owned firms where to invest, or that these 
companies rely overwhelmingly on financial support from Beijing. State-
owned companies act largely according to commercial versus geopolitical 
interests. Particularly in places like Sudan, where the reputational 
costs of Chinese investment have been considerable, there is increasing 
divergence between the interests of companies and the interests of the 
state, and uncertainty as to how energy security is achieved for China 
through support for state-owned companies. China's actual imports from 
Sudan are less than 100,000 barrels per day. The lead Chinese company, 
the Chinese National Petroleum Corporation (CNPC), has been doing well 
financially in its Sudan operations, but the Chinese Government has 
been the target of massive international criticism, for what, in a 
global context of 85 million barrels of production per day, is a paltry 
volume of oil imports from Sudan.
    Many African partners look to China for models of energy investment 
different from those of traditional Western companies. The latter have 
tended to operate in enclave-type settings, engaging a narrow elite, 
with weak connection to the rest of society or to other economic 
sectors. There is need in Nigeria, for example, to diversify away from 
the energy sector, and China through its multisectoral package deals 
appears engaged in a broader range of sectors, including critical 
infrastructure, that Western companies and donors shun. The Chinese 
development model is in its early stages in Africa, and positive long-
term impacts on development and equity are not guaranteed. However, 
persistent disillusionment among Africans with Western commercial 
approaches has played to China's advantage.
    There are several energy-related areas where United States, 
Chinese, and African interests intersect.
    Working together on addressing climate change and developing clean 
and sustainable energy sources will be at least as important as 
managing upstream investment. While this will be a long-term challenge, 
cooperative efforts should be given greater priority now.
    Ensuring the security of energy personnel, infrastructure, and 
transportation is a shared interest. Chinese workers are proving 
equally vulnerable to local conflict and violence as Western and often 
African interests, as demonstrated in attacks against oil workers in 
the Ogaden and Sudan and in hostage-taking in the Niger Delta.
    China's principle of noninterference will be increasingly tested in 
unstable, conflicted settings, opening new opportunities for 
cooperation on conflict resolution and collective international 
pressure on governments in energy-producing states to invest in long-
term stability and good governance. Should the Government of Nigeria 
become seriously engaged in addressing long-standing grievances in the 
Niger Delta, both the United States and China would have a shared 
interest in supporting an effective solution and each would bring 
special strengths to a potential resolution and reconstruction 
strategy. The protection of physical infrastructure and sealanes in 
West Africa's Gulf of Guinea is also of increasing common interest, and 
the United States may look to China to play a more active and 
cooperative role in ensuring maritime security, building African coast 
guards and establishing control over rich coastal fisheries that are 
now often plundered through illicit industrial harvesting.
    Finally, transparency and reliable rules of engagement are 
ultimately in the interests of oil investors and energy-producing 
countries. Neither China nor the United States wish to be at the mercy 
of oil states or see market investment opportunities subordinated to 
narrow political calculations and unstable, poorly governed states.

                         AFRICA'S PUBLIC HEALTH

    China and the United States have both rapidly expanded their public 
health initiatives in Africa, at a time when international attention 
more broadly in global public health is also expanding. HIV/AIDS, 
malaria, avian flu, and SARS have generated greater appreciation for 
the internationalization of health and the need for international 
health diplomacy and cooperation. Major government initiatives, along 
with the expansion of efforts by nongovernmental organizations, 
multilateral institutions, foundations, and faith-based organizations, 
offer new opportunities for collaboration to address African public 
health challenges.
    African challenges are many and there are ample areas for 
coordinated work. At least 300 million cases of acute malaria are 
diagnosed annually. Malaria kills over 1 million people each year in 
Africa and is among the leading causes of death for children under 
five. More than 8 million new cases of tuberculosis are detected 
annually, and despite the availability effective treatment, those 
numbers continue to rise. Sub-Saharan Africa is home to 85 percent of 
the world's HIV/AIDS cases, and the disease compounds other diseases 
and other developmental problems. New epidemics such as avian influenza 
could be devastating. And as Africa's urban populations expand, 
alcohol, drug abuse, and chronic diseases like hypertension, heart 
disease, and diabetes are increasing as well.
    Structural challenges persist: The lack of trained health personnel 
and health infrastructure; weak interest internationally in tropical 
disease research; lack of African capacity, for example, in minimizing 
the influx and proliferation of counterfeit drugs.
    U.S. contributions to Africa's health challenges have risen 
dramatically in recent years, enjoying strong bipartisan support that 
is likely to endure. By the end of the first 5-year phase of the 
President's Emergency Plan for AIDS Relief (PEPFAR) in late 2008, the 
United States will have expended over $19 billion on global AIDS 
control, roughly 60 percent in Africa. To date, these efforts have been 
focused primarily on tackling specific infectious diseases--first and 
foremost HIV/AIDS--and targeting select focal countries. In fighting 
HIV, there is increasing recognition that long-term management will 
require greater support to building health systems, and PEPFAR's next 
5-year phase will almost certainly devote greater resources to the 
training of skilled personnel. President Bush has also launched a major 
$1.2 billion, 5-year initiative on malaria: In 2007 the United States 
spent $338 million on malaria efforts in Africa versus $1 million spent 
in 1997. Compared to HIV, control of malaria is more straightforward 
and affordable, with respect to the science of the disease as well as 
prevention and treatment. The challenge is to remain focused over time 
and to collaborate with partners to ensure maximum coverage.
    Chinese contributions to Africa are gradually increasing, and are 
an important component of China's Africa policy overall. China will 
continue to send medical teams to Africa, increase cooperation with 
Africa on prevention and treatment and on research and application of 
traditional medicines. There are approximately 1,000 Chinese medical 
workers in 38 countries in Africa; more than half of the doctors are 
senior physicians and surgeons. Together they have treated an estimated 
170 million patients suffering from various diseases. China has helped 
build numerous hospitals in Africa and has plans in the next 3 years to 
build 10 hospitals and 30 malaria clinics in Africa. On training, the 
Chinese Ministry of Health provides 15 courses each year to African 
participants, in the areas of HIV/AIDS, malaria, hospital management, 
and health reform. Malaria will remain a prominent focus of China's 
health engagement. China's expanding health engagement and efforts to 
link it to an international strategy are somewhat fresh issues. Through 
one promising initiative, the Ministry of Health has turned to global 
health experts at Peking University to help review existing Chinese 
programs, develop a long-term Chinese health strategy for Africa that 
updates the Chinese approach and ties it more effectively to African 
health outcomes, and identify opportunities for collaboration with the 
international community. These experts have recently concluded a 
summary review of all donor activities in the area of health in Africa. 
It is expected that reform of health approaches will take several years 
to formulate and execute.
    There are promising areas for public health cooperation between 
China, the United States and African countries, although currently 
there are bureaucratic obstacles to greater dialogue and joint 
projects. At a minimum, there is need for greater communication to 
avoid duplication of efforts and identify gaps.
    African countries should engage China and the United States on 
bilateral projects but also on multilateral efforts. Moreover, China 
could play a more active role in multilateral initiatives, building on 
its present substantial contributions to the board of the Global Fund 
to Fight AIDS, TB and Malaria, and its leadership of the World Health 
Organization. China and the United States bring complementary strengths 
to the table: China places an emphasis on infrastructure and health 
systems, and the United States on treatment of specific diseases. 
African Government, with robust public health strategies in place, can 
push for cooperation in what they identify as priority areas.
    Collaboration on malaria is a particularly promising area in which 
to build cooperation, given the priority African governments attach to 
this disease and rising commitments by both the United States and 
China. It is also an area that could deliver significant, rapid returns 
and perhaps help encourage future cooperation in more complex health 
efforts. Despite China's interest in malaria, the Chinese and other 
Asian governments were absent at the 2007 Roll Back Malaria Partnership 
Board meeting in Addis Ababa. China should be welcomed and encouraged 
to participate more fully in these and other multilateral global health 
fora.
    Cooperation on health will require greater political will--by the 
United States, China, and African governments--than currently exists. 
This will require senior leadership that supports innovation and 
flexibility in the field, and minimizes political obstacles to 
communication and favors joint initiatives. A future priority should be 
strengthening African capacities to address chronic diseases as well. 
Cooperation should not be limited to government-to-government 
engagement. Linking nongovernmental organizations, research institutes, 
faith-based organizations, and corporate interests in active 
partnerships should also be a priority.

                    CORPORATE SOCIAL RESPONSIBILITY

    While Chinese and United States firms have responded to growing 
pressures to pursue corporate social responsibility initiatives, these 
efforts often have had little meaningful impact on the ground and are 
often seen as exercises in public relations. Much more effort is needed 
to transfer adequate skills or resources to local African communities 
and provide for worker and community safety and environmental 
stewardship.
    It is in the area of environmental stewardship that Chinese 
engagement has been most problematic. The Chinese Government's response 
to concerns over illegal logging has been quite limited. While China 
has signed resource-use agreements, it has not shown strong interest in 
upholding them. As an increasing number of non-state-owned companies 
are engaging in Africa, environmental enforcement will become an even 
more complex and conspicuous challenge.
    Ultimately, the responsibility to set terms for enforcing effective 
CSR falls to African host governments. Collusion between host 
governments and corporations often tilt CSR projects to benefit state, 
not community, interests. Communities often expect corporations to 
deliver services and resources that are more appropriately the 
responsibility of the government. Weak environmental laws and labor 
standards, high levels of corruption, and weak governance structures 
hamper effective CSR. Few African governments have mandated strict 
operational guidelines for foreign companies within their borders. 
Those that have, like Angola, which mandated that at least 30 percent 
of an international company's workforce be Angolan nationals, have 
found these guidelines difficult to sustain. Violations of 
environmental laws or regulations are rarely pursued.
    There have been positive examples of corporate social 
responsibility in the health field, as the threat of HIV/AIDS has 
generated a number of successful public-private and community 
partnerships. There may be lessons upon which both Chinese and U.S. 
companies can build.
    On environmental issues, there has been positive, albeit very slow, 
acknowledgement of the long-term economic, developmental, and security 
costs of illegal logging and other harmful environmental practices. 
Until very recently, the United States and China appeared alike in 
regarding environmental issues as a second-tier priority, and solely 
the responsibility and problem of producing countries. This has begun 
to change, and nongovernmental groups and governments themselves have 
made more information available on the nexus among environmental 
degradation and conflict, food security, and long-term economic costs.
    When pressed, Chinese manufacturers have shown an ability to adjust 
quickly. In recent years, Chinese manufacturers eliminated the use of 
ramin wood very rapidly, following an international agreement to 
control its trade and a precipitous drop in U.S. demand. Similar 
progress was seen in the reduction of illegal trade in rhino horn. The 
United States and China are negotiating bilateral agreements to address 
illegal timber trade.
    Perhaps the most important challenge is for African governments to 
set up effective monitoring and enforcement structures, to establish 
regulations to protect African resources, and to develop African 
capacity for environmental governance. Here, pressure, information, and 
policy advice from nongovernmental actors can play a critical role. 
Strengthening transnational networks of African, Chinese, United 
States, and international advocacy, policy, and research institutes 
should be a priority.

                     BUILDING PEACEKEEPING CAPACITY

    The idea of United States-China cooperation on security engagement 
in Africa is new, and just a few years ago such a discussion--even on 
the less politically sensitive issue of building peacekeeping 
capacity--would have been unlikely. However, both China and the United 
States are becoming increasingly aware of the importance of building 
African security capacity. U.S. and Chinese commitments in this area 
coincide with increased commitments by African states, regional and 
subregional organizations, and by international organizations.
    In recent years, there has been an unprecedented rise in global 
peacekeeping operations: Today, there are 15 U.N. peace operations, 
totaling 90,000 troops and another 26,000 police and other civilian 
personnel. Seventy percent of the U.N.'s operations, which run at $7.5 
billion annually, are in Africa. An increasing number of deployments 
are peace enforcement operations in complex environments. Force 
generation and logistics are an enduring challenge. The United Nations 
has relied extensively on partnerships with African regional 
organizations, in integrated missions in Sierra Leone and Liberia, and 
now a hybrid operation with the African Union in Darfur. The African 
Union has set as a priority the standup of the African Stand-by Force--
five regional brigades with rapid deployment capacity--and sought 
international support.
    Both China and the United States have an interest in protecting 
their citizens and their investments in Africa and in strengthening 
African capacities to manage conflict, including filling key gaps: 
Airlift capacity; communications; command and control capacities and 
surveillance.
    In the United States, higher commitments are seen in the 
establishment of the U.S. Global Peacekeeping Operations Initiative 
(GPOI), launched in 2004, and in 2007 the establishment of the U.S. 
Africa Command (AFRICOM). Having U.S. military engagement in Africa 
coordinated within a single command may make cooperation with other 
donor states (and with African regional bodies) less difficult.
    China has an equal stake in African security and stability. Chinese 
entrepreneurs have been more willing than Western companies to go to 
dangerous and conflicted places, and have suffered economic and human 
losses at the hands of nonstate actors and reputational costs in 
international public opinion. Compared to U.S. and EU engagement, 
Chinese military involvement on the continent is limited, but growing. 
China has only 14 military attaches in Africa, out of the 107 it has 
globally. But China is increasing its U.N. peacekeeping commitments, 
contributing more forces to U.N. operations in Africa than any other 
permanent member of the U.N. Security Council, and often in interesting 
ways. In Liberia, for example, China has deployed 570 military 
engineers as part of UNAMIL, and these engineers are now working to 
rehabilitate the country's roads in a joint effort with the World Bank 
and the Liberian Government. Engineers have been deployed as part of 
U.N. peacekeeping operations in the Democratic Republic of Congo, in 
Southern Sudan, and in Darfur.
    China's growing involvement in peacekeeping is an important turning 
point to encourage enlargement of the base of external actors 
participating in building security capacity in Africa. Direct United 
States-Chinese cooperation in this arena may be some ways off but there 
may be promising opportunities in nontraditional security areas such as 
disaster relief and humanitarian assistance.
    In some instances, informal cooperation and complementary 
approaches of the United States and China are already yielding results. 
In Liberia, the United States-China relationship has been positive and 
mutually reinforcing. The United States has taken the lead in the 
recruitment and training of the Liberian Armed Forces, which was 
entirely disbanded after the Liberian conflict, and in strengthening 
the management capacity of the Liberian Ministry of Defense's civilian 
staff. China has been helpful in complementary ways: Assisting with 
hardware; refurbishing buildings; providing office equipment for the 
Ministry; and constructing facilities in the northern areas of the 
country.
    At present, improved United States-China communication and 
coordination of efforts--if direct cooperation for now is premature--is 
an important first step to strengthen efforts by the AU, sub-regional 
organizations, state forces, and the international community. But given 
the complexity of conflicts and the many challenges and costs ahead in 
building African security capacity, direct United States-China 
cooperation and higher levels of commitment will be needed in the 
future.

                              CONCLUSIONS

    I thank you again for the opportunity to be here today, and look 
forward to our discussion of these topics.

    Senator Feingold. Thank the panel.
    I'd ask unanimous consent that the statement of the 
chairman of the full committee, Senator Biden, be placed in the 
record. Without objection.
    [The prepared statement of Senator Biden follows:]

  Prepared Statement of Hon. Joseph R. Biden, Jr., U.S. Senator From 
                                Delaware

    Today the Subcommittee on African Affairs of the Senate Foreign 
Relations Committee examines China's growing engagement with sub-
Saharan Africa and its implications for U.S. policy. This hearing is a 
part of a series that the Foreign Relations Committee is holding to 
examine China's emergence as a major power not only in Asia, but also 
in Africa and Latin America. Future hearings will examine the United 
States-China bilateral economic relationship, China's internal 
political development, and other issues related to China's growing soft 
and hard power.

                        CHINA INVESTS IN AFRICA

    China's rapid economic growth has spurred a global search for 
markets for Chinese exports and for the raw materials to sustain 
China's economic development. Chinese firms have been especially 
aggressive seeking energy resources to meet the nation's mounting 
demand for oil. Nowhere is this more evident than in Africa.
    According to a recent Congressional Research Service study on 
China's ``soft power'' requested by the Foreign Relations Committee, 
China's imports from Africa are concentrated both in form and 
geographically. China mostly imports raw commodities--oil, iron ore, 
raw timber, cotton, and diamonds. Moreover, China conducts the vast 
majority of its Africa trade (almost 90 percent) with just seven 
countries (most of them rich in oil, ore, and diamonds)--Angola, South 
Africa, Sudan, Republic of Congo, Equatorial Guinea, Gabon, and 
Nigeria.
    As China has scoured Africa for markets and resources, it has used 
soft credit, foreign assistance, investment, and security assistance 
(including both peacekeeping missions and arms sales) as tools to win 
influence. Although precise figures are hard to get, because China does 
not have a transparent foreign aid and security assistance structure, 
Chinese foreign aid to African nations runs somewhere in the 
neighborhood of $500 million/year. But this figure does not include 
various forms of assistance, including soft loans and state-funded 
development projects. The total aid package more likely is in the range 
of $1.5 billion per year, and Chinese President Hu Jin-tao has promised 
to double the 2006 foreign aid level for African nations by 2009.

                  KEEPING CHINA'S STAKE IN PERSPECTIVE

    Still, it is important to put China's overall economic position in 
Africa, including its foreign assistance posture, in perspective. In 
2006, China imported $26 billion in goods and services from sub-Saharan 
Africa, while the United States imported $59 billion. The United States 
imported 45 billion dollars' worth of oil from African states in 2006, 
compared with $19 billion for China. As for exports, in 2006 China 
exported $19 billion in goods and services to sub-Saharan Africa, 
compared with $12 billion in U.S. exports to the region.
    With respect to development assistance, in 2006, the United States 
provided roughly $5 billion in aid to sub-Saharan African states. The 
United Kingdom and the European Union provided $4.7 and $3.5 billion, 
respectively. Japan provided more than $2.5 billion. In sum, the major 
OECD donors provided more than $20 billion in aid to Africa, compared 
with less than $2 billion from China.
    All of this suggests to me that when considering the impact of 
China's growing economic and political ties to Africa, we should not 
overlook our own considerable stake in the continent, and that of our 
close friends and allies.

                      CHALLENGES AND OPPORTUNITIES

    China's growing engagement in Africa presents both opportunities 
and challenges for the United States.
    On the plus side, China's investments and burgeoning trade are 
helping to fuel strong growth in several African states, bringing 
improvements in infrastructure and quality of life to millions and 
bringing more energy resources into the international marketplace. 
China is pursuing a comprehensive engagement strategy under the 
umbrella of the Forum on China-Africa Cooperation, inaugurated in 
October 2000 in Beijing during a summit gathering of 45 African 
leaders. With the urging of African leaders, China is making 
significant investments in health care, human resource development, and 
agriculture. Chinese peacekeepers serve in almost every U.N. mission in 
Africa, including in Darfur, Sudan, where China is the only non-African 
nation to contribute forces.
    On the negative side, China's ``no strings attached'' attitude 
about foreign assistance has sometimes undermined efforts by the United 
States and other members of the international community to tie 
assistance to improvements in governance, protection of human rights, 
anticorruption initiatives, and the adoption of more sustainable 
environmental policies. This is particularly true in nations such as 
Angola, now China's second largest supplier of oil after Saudi Arabia. 
Worse, China's business ties and sales of military equipment to the 
Governments of Sudan and Zimbabwe directly contribute to the ability of 
these states to perpetrate atrocities against their own people. China's 
reluctance to criticize these governments for their human rights abuses 
puts China out of step with much of the international community and at 
odds with U.S. and European Union sanctions.
    Which brings me to one of the core questions that I hope our 
witnesses can address during today's hearing: How can the United States 
convince China to become a more responsible ``stakeholder'' in Africa, 
supporting, rather than undermining, international efforts to advance 
good governance and respect for human rights? Must China learn the hard 
way, as the United States did in Iran with the overthrow of the Shah, 
that there is often a heavy cost to be paid down the road if one 
ignores questions of human rights and good governance in the pursuit of 
oil? Or might we be able to bring China around by sharing our own 
experiences and urging China to join in our efforts?
    I look forward to reviewing the testimony of our witnesses.

    Senator Feingold. And I'll start with a 7-minute round.
    Dr. Morrison, I understand that you recently returned from 
a meeting in Beijing with the Director of China's Sudan Policy. 
Do you agree with the State Department's claim that their 
dialogue with the Chinese on this issue, ``is producing 
important results''? And what concrete changes in policy have 
been achieved, and what concerns remain?
    Dr. Morrison. Senator, your question is what--the United 
States-Chinese dialogue and what has been achieved with respect 
to----
    Senator Feingold. State Department----
    Dr. Morrison [continuing]. Darfur?
    Senator Feingold [continuing]. Claims that, in their 
dialogue with the Chinese, is, ``producing important results.'' 
What concrete changes in policy have been achieved, and what 
concerns remain?
    Dr. Morrison. I think the most important changes occurred 
in the latter part of 2006, up through 2007, and the greatest 
evidence was the U.N. Security Council Resolution 1731, from 
last July, that authorized the deployment of the 26,000-person 
force. That would not have happened if the Chinese had not 
intervened with Bashir and pushed for acceptance of that.
    Right now, the dialogue is centered around getting the 
Chinese to cooperate with respect to non--accelerated 
deployment of non-African contingents, the Nepalese and the 
Thais and others, into Darfur, so that you can get those 
numbers up close to the 20,000 troops needed. There's only 
9,200 on the ground today. And also appealing to them to 
pressure Khartoum on the go-slow bureaucratic delaying tactics 
that have been put forward.
    But, the Chinese, as I understand it, have been less 
responsive in this last phase, dating back to the, sort of, 
February-March period here. And we've had--that's what I meant, 
was--we've had this period of close alignment, convergence, and 
cooperation in the late 2006-through-2007, but I see a--the 
tightening up and a less cooperative relationship, of late.
    Senator Feingold. Thank you, Doctor.
    Dr. Economy, in general, what forms of influence have 
proven most effective in persuading the Chinese Government to 
change a particular policy or position? And what kind of 
leverage can the U.S. employ in this regard?
    Dr. Economy. I think, overall, the greatest leverage that 
we have really, as I mentioned, stems through Africa itself, 
because China has declared itself the brother, the friend, the 
partner of Africa. It sees itself as a leader of the developing 
world. And, to the extent that the claims are made, or that 
requests are made to China to reform its policy--whether we're 
talking about Sudan or Zimbabwe or Chad, or whether we're 
talking about corporate social responsibility-- when it comes 
from Africa, it is more meaningful than when it comes from the 
United States.
    U.S. leverage, I think, is greatest when it's in concert 
with other powers, as Dr. Morrison mentioned, within the U.N. 
Security Council, when you have the full force coming down upon 
China, when China is outed as not being a responsible player.
    I think there is an element where quiet diplomacy can work, 
it's a long process. And so, the kinds of dialogues that the 
State Department uses are very important. It's a type of 
capacity-building, building understanding through dialogue. 
But, if you look at the trend, for example, in human rights 
dialogue with China, notwithstanding the 6-year hiatus, the 
results of that, in the larger scope of things, have been quite 
limited.
    So, again, I think that there has to be an element of 
calling to China to account publicly, in conjunction with this 
dialogue and capacity-building, and it's most effective if it 
comes from those countries who matter most to China in the 
context, which, in this case, is Africa itself.
    Senator Feingold. I'd appreciate if both of you would say a 
word about whether you believe that the current United States-
China bilateral engagement, as described by our first panel, is 
sufficient and effective.
    Dr. Economy.
    Dr. Economy. I think it's an excellent start. In some 
respects, it's very difficult to assess whether the U.S. 
engagement is sufficient and effective. What we're talking 
about, when we're talking about almost all of these issues with 
regard to United States engagement with China in Africa, are 
really fundamental problems within China itself. So, we're 
talking about China's export of its worst practices. Whether 
you're talking about transparency, corporate social 
responsibility, corruption, issues of sovereignty, these are 
all things that are a challenge within China as well. It's not 
simply China's foreign policy, but it's also China's domestic 
policy that we're talking about. What we're trying to do, in 
essence, is have China reform the way it governs itself.
    Again, I think that there is a long-term aspect to this. I 
think, for the U.S. Government, it probably is the most 
constructive way of engaging China, but I think there's an 
important role to be played by Congress, by outside experts, by 
nongovernmental organizations, in ratcheting up the pressure. 
If you want to get China to change it's renminbi strategy, it's 
not all about Hank Paulson and the strategic economic dialogue. 
It might also be about the sets of resolutions emanating from 
Congress that place China under pressure and give it the sense 
that there will be consequences if China doesn't take action.
    Senator Feingold. Dr. Morrison.
    Dr. Morrison. I have a sort of mixed response to that 
question. On the one hand, I think having multiple dialogues 
going, as they were articulated by Tom and by Jim, is very 
favorable, because you've got dialogues going on, on a variety 
of different issues at a variety of different political levels. 
That's good. We've seen the Chinese are receptive to these 
dialogues, they've been responsive to them, they've engaged, 
they've broadened and deepened their engagement in this. That's 
good. We've come around to understand that this is a long-term 
kind of dialogue. So, those are very positive.
    What I do think we've underestimated in looking at the 
opening of these dialogues is the way--is the resistance that 
we see on both sides. And the source--to some degree, the 
resistance have common sources. Both the United States and 
China are very preoccupied with their--with moving forward 
their expansive engagement in Africa, which is historic for 
both of them. So, they're preoccupied. They also are very 
concerned about branding and sovereign identity, and they don't 
want to dilute that. The Chinese are getting into Africa with 
an argument they are different from the West. They're not a--
you know, their motivations are not to dilute that line through 
too close an alignment of--or integration of their efforts with 
ours. We have to get smarter about how we frame this so that we 
can make this--the case that neither of us are going to dilute 
what we're really trying to do here, in terms of promotion of 
comparative national interests.
    The United States has a certainly sensitivity also about 
this being--seeming a bit neocolonial. And I think that 
interest can be ameliorated to the degree that more and more 
African participants are integrating into these discussions.
    To the degree that these are China and Africa's 
policymakers talking--I mean, China and the United States 
policymakers talking about Africa, it does have this odd 
outdated appearance to it, even while there may be important 
business to discuss.
    Senator Feingold. Thank you.
    Dr. Economy, you noted that the Chinese get high marks 
throughout the developing world for addressing the fundamental 
economic investment and infrastructure needs of its prospective 
partner governments, something that the United States is not 
particularly known for. But, in the case of sub-Saharan Africa, 
would you say that meeting the needs of a government translates 
into meeting the needs of the people? What does China--to what 
extent does China really achieve that?
    Dr. Economy. Well, I think that it's probably a mixed bag. 
Earlier it was pointed out that we're seeing a lot of 
Presidential palaces, maybe a cricket stadium, a new foreign 
affairs building in some countries. I think the people of 
Africa don't necessarily recognize those things as contributing 
directly to benefit them, and there have been complaints, for 
example, in Namibia, about the fact that you can't trace 
Chinese development assistance through the budget; you can find 
out how money is spent from every other country, except for 
China. So, I think that lack of transparency is of concern to 
many within civil society in Africa.
    I think, too, the issues of the labor, the export of 
Chinese labor, are raising concern within many countries. This 
was brought up to me, in fact, in South Africa by somebody from 
Sudan. He was, at one point, nominated to be the head of the 
Chinese-Sudanese People's Friendship Association, back in the 
1960s, and he remembered that the Chinese were very good about 
providing real technical assistance, and that they engaged with 
the Sudanese people. Now he doesn't see that kind of transfer, 
real transfer of technical assistance, although it's talked 
about, and that the Chinese tend to live in colonies, almost, 
where they have restaurants and hotels--little hotels and 
dormitories where the people stay, so that there doesn't seem 
to be this kind of----
    Senator Feingold. Yeah, I've heard that----
    Dr. Economy [continuing]. Benefit to the local economy.
    Senator Feingold [continuing]. Same description many times 
in Africa.
    Dr. Economy. Right. So, I think that there's a mixed sense 
for what the infrastructure development brings.
    On the other hand, they're building hospitals, contributing 
to universities, they're training Africans in China, providing 
educational assistance. They have Confucius Centers. So, there 
are things that they are doing that the people perceive to be 
directly beneficial to them.
    Senator Feingold. Senator Isakson.
    Senator Isakson. Thank you, Mr. Chairman.
    Dr. Morrison, at--toward the end of your printed testimony, 
in a paragraph that cites the establishment of the Global 
Peacekeeping Operation Initiative in 2004 and AFRICOM in 2007, 
you have a statement--you said, ``Having U.S. military 
engagement in Africa coordinated within a single command may 
make cooperation with other donor states and with Africa 
regional bodies less difficult.'' And then, in your verbal 
testimony, I heard a reference, ``prospectively to future 
peacekeeping initiatives,'' vis-a-vis the United States and 
China. Would you--I heard you say they were taking a wait-see 
attitude with AFRICOM, and, on the other hand, I almost read 
this to be ``they see that as somewhat positive.''
    Dr. Morrison. Well, my point--my initial point there was 
having a more unified approach, institutionally within our own 
government, will make it potentially much easier for external 
partners to understand and relate to the United States, if it's 
not divided among three different commands.
    So, I hope that clarifies the----
    Senator Isakson. It does.
    Dr. Morrison [continuing]. The point.
    I do think there are barriers to United States-China 
military cooperation in very benign ways in Africa, that would 
help support creating African peacekeeping capacity. We don't 
invite Chinese to come to the Africa Center for Strategic 
Studies and the leadership seminars. We don't invite them to 
the ACOTA peacekeeping training exercises. We don't have a 
dialogue at the United Nations Department of Peacekeeping with 
other Perm-5 members, around relative security strategies for 
supporting. One of the factors is that, in the FY 2000 National 
Defense Authorization Act, there's a bar on China-United States 
military cooperation, with an exception for humanitarian 
operations. And this is a very sensitive issue. We could 
enlarge that--the opportunities and the incentives for 
cooperation if that were--if there were leadership and if there 
were some change, in that way. Chinese have over 2,000 of their 
troops deployed into U.N. peace operations globally; around 
1,500 of those are in Chinese--I mean, in African peace 
operations. We have a very strong shared interest in building 
up African peacekeeping capacities.
    Senator Isakson. Dr. Economy, on the AFRICOM question, 
when--at the outset of your testimony, you said, ``their global 
strategy''--``theirs'' being China's--vis-a-vis Africa, was 
``natural resources, Taiwan, and, third, America's strategic 
interests.'' And you directly refer to AFRICOM. How do you see 
the Chinese viewing AFRICOM?
    Dr. Economy. I think--you know, Dr. Morrison mentioned that 
there's not concern. My sense is--and this is really just from 
readings of Chinese literature, not from direct interviews with 
Chinese on this particular topic--is that, certainly within the 
military academies in China, there is exactly that concern, and 
it's stated quite explicitly, that AFRICOM is, in fact, at 
least in part, directed or designed to assert United States 
influence in the face of rising Chinese engagement and 
development in Africa. So, I think that there is, certainly in 
the military in China, a sense that AFRICOM has a China 
component to it. But, it's also true that the Chinese see that 
everywhere, so that no matter where you are, however the United 
States engages, they tend to see it as, in some way, directed 
at China.
    Senator Isakson. So, sort of a paranoia?
    Dr. Economy. A little bit. But, some of it might, in fact, 
be justified. [Laughter.]
    Senator Isakson. How do you personally view AFRICOM?
    Dr. Economy. You know, I don't really have an opinion of 
AFRICOM, except to the extent that, again, it seems to me, from 
listening to people in Africa, that they would prefer a broader 
engagement by the United States, and that this, in some way, 
reinforces the sense that there's a strong military component 
to it. But, some of what the Chinese do do on infrastructure 
and other things would also be welcome.
    Senator Isakson. Well, the reason I mentioned that point 
is, I think that, perception wise, you're right; but in 
reality, in my visit to Djibouti and just what I have seen, the 
U.S. military initiatives have been primarily in 
infrastructure, well-drilling, bridge-building, roads, and 
infrastructure, and not in military operations, but in 
engineering expertise, which I think Africa needs desperately. 
So, I think it has the potential to be a real positive for the 
country, but I do understand the paranoia and the fear.
    Dr. Morrison, you made reference--you said, ``China is not 
just another donor country, and, by 2010, their investment will 
surpass the United States.''
    Dr. Morrison. Their level of trade----
    Senator Isakson. Their level of trade.
    Dr. Morrison [continuing]. With Africa. Their two-way trade 
with Africa will exceed that of the United States. The United 
States is the largest trade partner with Africa today, and 
China is rapidly approaching the point where it will overtake 
us.
    Senator Isakson. And most of what China buys is petroleum, 
energy, natural resources, is that not correct?
    Dr. Morrison. Well, it's a mixture of energy, timber, 
precious minerals and metals that are--that come from Africa, 
coal, other hard-rock minerals. And there's an--there's a 
sensitivity around the need to diversify that base of imports, 
because of what we heard earlier about the opposition from 
African manufacturing interests, just seeing a flooding of 
markets and the sensitivities around that. And places like 
South Africa, where your manufacturers are quite well 
organized, they're quite vocal, and their unions are quite well 
organized.
    Senator Isakson. I have one last question, if I could find 
where I wrote my note. You talked about interagency, lack of 
coordination within China, and referred definitely to the arms 
shipment. I have always had the impression China was very 
coordinated in their effort, but you seemed to imply, in that, 
that maybe there was some interagency--between military and 
other functions in the Chinese Government, some lack of 
coordination. Did I mishear that, or----
    Dr. Morrison. No; that's my strong impression. This--it's a 
fairly opaque system, so--making categorical statements is a 
little dangerous, but in talking to different parts of the 
government about different sensitive policies, you don't 
necessarily get the same answer. So, it's not quite as much a 
command--a sort of centrist command system as you might expect.
    And I think that one of the dramas--one of the subdramas 
running through the Darfur question has been a reaction 
internally among foreign policy elites and opinion leaders 
within China, saying, ``What are you doing, allowing our 
reputation to be dragged down so badly and damaged so badly in 
a country like Sudan, where, in the big picture, we really 
don't have that much at stake, in terms of national interests, 
but we're taking a hammering, globally, in terms of our 
image?'' And it's going to take--and it's undermining all of 
the other progress that's being made in trying to build the 
reputation that this is an ethical, rising superpower, which is 
the core of their agenda. And so, you had a debate going on. 
And we heard this--we heard this very loud and clear in 2006 
and 2007, in engaging with the Chinese. And that suggested to 
me that there's an internal debate.
    It shouldn't surprise us that there's deep internal debates 
around many of these issues, and that, in the case of Sudan, it 
was the oil interests and the arms interests that got in--were 
the front edge of getting involved, and the policy oversight 
came much later and had to battle against that, I believe. 
That's just one instance.
    In the health sphere, we could talk a bit about the way 
that the health system is trying to coordinate and update its 
approaches, too. It's not always all that centrally directed.
    Senator Isakson. Thank you very much.
    Senator Feingold. Thank you.
    On the AFRICOM point--you know, I've been a supporter of 
the concept of AFRICOM, and Senator Isakson is right, much of 
what our military does, to the extent it does things in Africa, 
has to do with helping developing communities. The problem is, 
when it's done by the military, and that's the only thing 
people see, then we come to Africa with a military face, and 
only a military face. Without broader engagement, as Dr. 
Economy was suggesting, without broader commitment in many 
other areas, including public diplomacy, and more diplomacy per 
se, that allows others--Chinese or others--to characterize our 
intentions in a way that is not accurate. And that's why it's 
so important to get this right.
    But, I do thank the panels. Thank Senator Isakson for his 
commitment throughout the entire hearing and on this 
subcommittee.
    And I have to go to the Judiciary Committee, so that 
concludes the hearing.
    [Whereupon, at 11:14 a.m., the hearing was adjourned.]


                            A P P E N D I X


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              Additional Material Submitted for the Record

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                     Responding to China in Africa

                   by David Shinn and Joshua Eisenman

                               June 2008

                  The American Foreign Policy Council























                                  
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