AFRICA in the crossfire of US-China trade spat (2)

AS THE WORLD becomes ever more interconnected in so many different ways, the consequences have started to emerge, more especially in strange ways. Socially, economically, politically and intellectually, the complexities are evolving – some in ways that task the brightest of minds, or exert pressure on material resources, or yet place precious human lives in the harm’s way – all tipping the balance against humanity one way or another. As the two most powerful nations of the world feud and flex muscles, the grim prognoses for lesser countries that are caught in-between get the more worrisome.

The United States and China have progressed in grades from rifts over tariffs on traded goods to a clampdown on the technology sector that has come to be recognised as a major plank for boosting more of global connectedness. As a result of the brewing disagreements, geopolitics is becoming a new form of risk for firms to manage, putting the hyper-globalisation of the last twenty years under strain. The real geopolitical constraints and disruptions are putting huge question marks on the utopian global village envisaged by the globalisation champions.

As these disruptions unfold, weaker nations need to be wary because of the possible unexpected externalities arising from other countries’ bickering. For Africa, in particular, circumspection is the key word as it needs to avoid becoming a cannon fodder in the East-West trade row. How the continent of Africa is able to shield itself from the burgeoning socio-political and economic standoff will be of great interest to watchers of the unfolding events. Africa therefore needs to be ready, politically, economically and in diplomacy so as not to be dragged into proxy conflicts. Africa should carefully choose its battles, adopt a non-aligned movement’s stance as the clash of superpowers will inevitably hurt smaller and weaker nations.

As the US-China trade war takes a new turn, the zero-sum game approach would do more harm than good for both feuding countries with spill over effects that would mostly be borne by those who contributed nothing to its origin in the first place. Take the case of Huawei, a big tech company from China, now assuming a global ramification, and the concerns being expressed over its operations. With this development, countries in Africa, Asia or elsewhere, having strong security ties to the U.S. and strong economic ones to China will have to make uncomfortable choices. The surprising thing is that there has been very little discussion about Huawei’s ever-expanding role in Africa where this dilemma is real. Some commentators, however, are taking solace in compromise, that Hauwei’s presence is better than not at all.

But here is why Africa needs to be concerned. The direct involvement of the state makes a total denial of Huawei’s link with government very difficult. By Chinese political and economic systems, State Owned Enterprises tower higher than those purely private sector-owned. And Chinese global ambitions can be more easily fuelled by the former rather than the latter. Allegations of Huawei’s link with the government of China have not been debunked categorically. Chinese government has not come out clean to unequivocally deny allegations of security risks and IP theft from the US. The concerns over Huawei are not new. Those concerns have been expressed over a Huawei backed by Beijing, dating back nearly a decade as the Chinese brand has expanded to at least 40 African nations.

From Mauritania to Mauritius, from Cairo to Cape Town, Huawei’s operations have become near ubiquitous. China’s balance of trade has not been that favourable to Africa which exports more of commodities and imports more of finished products. No need to look too far. The antecedents of China would help provide some insights into what to expect in the future from Africa-China relations, politically, socially and economically. Back in China, there are reports that claim the foreign direct investments (FDIs) were forced into joint ventures with local firms, and the corporate governance (including constituted boards) make compulsory the inclusion of certain numbers of Chinese. But outside the shores of China, especially in Africa, those Chinese are not subjected to such arm twisting tactics.

Two decades ago, China erected a Great Firewall between itself and the rest of the world, effectively blocking US online services from Facebook to Google. Banning Google and other ICT companies, and replacing them with their own, was a way of shutting out competition, increasing censorship, reducing transparency. This practice is no longer permissible in a market economy. China first banned Google so as to establish a rival company, but now wants to export its own technology. Simultaneously, as China pursued the slow opening up of its economy, it also set a variety of thresholds for foreign companies wanting to do business in the country, partially to protect domestic incumbents. Africans should be wary, suspicious and endeavour to protect businesses, small or great, exiting or upstarts.

If China’s Africa policies are not explicit enough, African leaders need to ask for more elaboration and to understand the nature of tech value chains and supply chains. But Africa cannot and should not start or run its relationship with China in the same way. Although China’s was effort was primarily aimed at controlling the free flow of outside information to Chinese citizens, it also had the effect of boosting the domestic internet industry massively and creating a separate Chinese ecosystem with its own innovations. Africa is now seen as China’s strategic trading partner, but must watch out against drawing the ire of the West, politically and in trade relations. This is more so as there are possibilities of splitting the world into two incompatible – and hostile – technological blocs, with potentially catastrophic effects for future international relations.

Although Huawei was thought to be an enterprise with a difference, the new stance on it might mean that the most China could achieve by pursuing a stand-off policy would be technological isolation. It is quite unlikely that Africa would like to go the whole hog in such a battle. President Trump, today, might only be amplifying what has been established years before him in previous administrations. As at 2011, U.S. experts had complained of Huawei ties to the Chinese government and military as a security concern, with officials warning of espionage and intellectual property theft. By 2012, a U.S. investigation led to Huawei being shut out of the country’s market for being seen as “basically an intelligence agency masquerading as a tech business” according to a former Foreign Policy writer John Reed.

By 2013, security experts issued a warning on potential surveillance societies in Ethiopia, Zambia, Zimbabwe and beyond, with implications beyond the continent. Those fears have only grown as the hands of viable alternative sources that China may be betting upon are tied. As China unleashes its tech know how, infrastructure and equipment on Africa, leaders must examine the pros and cons, look beneath the surface, challenge populist views and draw plans B, C and possibly D in their respective countries. The continent must be aware of the downsides of “forced technology transfer,” the cost of which may be more than imagined, and work toward its mitigation. Africa must think and act strategically. It must ensure that it is not led by the nose by any interest whatsoever. It is time to decide and to ensure that its decisions stand. Africa should not trade away its birth right on the altar of technological advancement that comes with long string attached.