Africa, Economy & Trade, Global Governance, Headlines

CAMEROON-CHINA: A Wedding with Uncertain Prospects

YAOUNDE, Jan 11 2012 (IPS) - The Cameroon government is increasingly turning to China as a privileged partner in its development efforts. But there are many discordant voices who say the long-term effects of China’s economic relations with Cameroon could be disastrous for domestic industry.

“We are inviting Chinese firms to come in numbers and invest in Cameroon in all sectors, especially hydrocarbons, mineral exploitation, and wood extraction.” That invitation was extended by President Paul Biya in January 2007 when Chinese President Hu Jintao paid the first-ever visit by a Chinese president to Cameroon.

The Chinese president said on that occasion that Chinese relations with Cameroon and Africa were built on “sincere friendship, equality, reciprocal benefit and “win-win cooperation.”

Trade between the two countries leaped to more than 170 million U.S. dollars in 2000, up from only 85 million dollars in 1999. And according to the Chinese leader, by 2006 bilateral trade had climbed to 340 million dollars.

Figures from the National Institute of Statistics indicate that prior to 1999, Cameroon’s exports to China were almost negligible, but jumped by more than 170 percent to 123 million dollars in 2000. This represented seven percent of Cameroon’s total exports, up from barely 2.5 percent in 1999.

By the same token, Cameroon’s total imports from China increased by 110 percent between 1999 and 2005. In 2005, imported goods from China – basically cereals, manufactured goods, machinery, transport and equipment – cost Cameroon 144 million dollars, up from just 39 million dollars in 1999.

The government says China is a good partner for cooperation, not only because of the much vaunted “win-win” approach, but also because China, unlike the West, does not impose conditionalities.

Secondly, the Chinese ask very little for contracts, compared to Western companies. For instance, the China Road and Bridge Corporation won a bid to construct a 13 km road in Cameroon’s economic capital Douala for 18 million dollars, beating out rival bidders who were asking for 30 million dollars. And the project was successfully completed one month ahead of schedule.

Mixed reactions

Meanwhile, many ordinary Cameroonians see cheap Chinese goods as a valid alternative. “With just 2,000 CFA (about four dollars), I can afford a pair of shoes…the Chinese are helping people like us,” says Christian Njah, a security guard in Yaoundé who draws a monthly salary of about 50,000 CFA (100 dollars).

Official figures indicate that 40 percent of Cameroonians live below the poverty line.

But not everyone in this West African nation is happy about the Chinese presence. In Cameroon’s North West region, small-scale traders have expressed anger.

“We are not against the Chinese investing in Cameroon, but when they come to compete with us in roasting and selling simple items like corn, plantains and barbecue on the road-side, then there is a big, big problem,” complains Elizabeth Neh, a roast-corn vendor in Bamenda.

It is a feeling that sweeps across the community of smaller businesspeople in Cameroon, some of whom have wound up selling the same cheap, Chinese products.

Fondo Sikod, a professor of economics at the University of Yaoundé II at Soa, says “Chinese goods provide poorer Cameroonians with cheaper access to more goods and services. This is good for the well-being of the people.

“But this is bad in the long term because it destroys local manufacturing capabilities and competitiveness…Besides, there is little or no technological transfer because the Chinese frequently bring along their own labour, with Cameroonians confined to peripheral positions as drivers and sweepers.

“This is not good at all, and that is why the Chinese are still doing maintenance work at the Yaoundé Conference Centre, constructed way back by the Chinese in 1982,” he said.

The competitive threat is best illustrated in a report submitted to the African Economic Research Consortium in 2008 by Sunday Aninpah Khan and Francis Menjo Baye, both of them lecturers at the University of Yaoundé II.

“A comparison of the prices of made-in-Cameroon and made-in-China batteries can better illustrate this competitive threat. In Cameroon, a pack of four size AA batteries made in Cameroon (Hellesens) costs 67 cents of a dollar, while those imported from China (Royal) sell at just 22 cents – almost 67 percent less, despite incurring additional costs like customs duty, insurance, transport, etc.”

The low cost of Chinese products is having a significant impact on Cameroon’s exports to the Central African sub-region, with sales of industrial products falling by 42 percent between 2003 and 2005, and earnings dropping from four million dollars to just 1.3 million dollars.

“Cameroon firms are not only losing market at home, but also in their backyard,” the report states.

In addition, Cameroon suffers a significant trade imbalance in its relations with China. According to Professor Fondo Sikod at the University of Yaounde II, China was responsible for 23.5 percent of Cameroon’s total trade deficit of 48 million dollars in 2004. And the situation worsened in 2005, with China accounting for 75 million dollars of Cameroon’s 91 million dollar deficit.

President Biya recognised this when he told his Chinese counterpart in February 2007 that “we wish to benefit from export quotas for some of our products like coffee, cotton, cocoa, banana, just to name a few; so as to re-equilibrate as much as possible the trade balance between our two countries.”

So China’s interest in Africa may not be based so much on “sincere friendship, equality, and reciprocal benefit.” China’s economy is growing at a perky 10 percent.

And Sikod says China’s push in Cameroon and Africa is fuelled “by a desperate need to find oil and raw material to fuel its fast-growing industry” – a situation that has created serious trade imbalances, and has had the effect of strangling domestic industries.

Cameroonian political economist Emmanuel Tatah Mentan, now a lecturer at the College of Saint Benedict in the U.S. state of Minnesota, has described Sino-African relations as “a wedding with uncertain prospects.”

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