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EXAMINE THE GROWING IMPORTANCE OF CHINA’S PRESENCE AND INTERESTS IN AFRICA FOR NIGERIA’S ECONOMY

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Abstract

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CHAPTER ONE

1.1 INTRODUCTION/HISTORICAL BACKGROUND

Perhaps because of the misguided Western hermitic claims in historic present, Africa is regarded as the „dark continent‟ from where nothing important, aside from natural resources meant for the consumption of factories of the developed world, could emanate. Beyond this, one realizes that the existing relations between Africans and Europeans has been since about the Thirteen Century, and even at that, they said relations have mostly been asymmetrical and to the advantage of the Europeans. In recent decades however, especially since the Second World War, there has been a serious surge in the relations that African units enter into non-European states; and these comprise of the ones with the United States and Japan to mention a few. These countries and their European counterparts, mostly Britain and France that consider themselves as conventional „overlords‟ in the region are faced with serious contenders in the emerging Asian powers of China and India.

Really China and Africa are quite far apart; the existing relative amity between the country and the varying units of Africa is traceable to about 1000 BC. In 1415 however, Chinese explorers visited the East African coast, taking with them ship-loads of Chinese commodities, such as Ceramic wares in return, domestic articles of trade were given by some African states, for instance Kenya. The modern Sino-African relations started from the Bandung conference held in the 1955, which was widely regarded as a seminal event in Sino-Africa history (China –Africa Friendship and Cooperation, 2000). The conference was expected to enhance economic and cultural cooperation of the two continents and promoted the anti-imperialist and anti-colonial struggle. China presented to Africa what she called “five principles of peaceful coexistence” which covered mutual respect for sovereignty and territorial integrity, mutual non-interference in

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each other‟s internal affairs, equality and mutual benefit and peaceful coexistence. The achievement of great diplomatic success followed after the conference and increased Chinese interests in the continent. In 1963, Premier Zhou embarked on his first ten-nation tour of Africa to promote the second Asia-African conference. Zhou put forward a particular eight – principles that were designed to guide China‟s engagement to African countries. These principles clearly clarified the Chinese intention to assist African countries by the policy of economic and technical aid. On the ideological level, China seemed to support any revolutionary movement against imperialism, including African revolutions. On the political level, the primary motivation was to compete with Taiwan and then get Africa to support the Peoples Republic of China in international recognition as well as to compete with the Soviet Union in the African sphere.

China-Africa cooperation has particularly been put in the spot light. Some international observers accuse Chinese foreign policy towards African countries of undermining international efforts to increase transparency and good governance- (African research bulletin:2006). Others describe it as a policy of an aid for oil strategy or even a neo-colonial policy. On the African side, some blame on Chinese enterprises of underbidding local firms, especially in the textile industry, or of failing to hire Africans. In Beijing, the Chinese government insists on its non-interference policy and refuses to link business with the human right issues. The Beijing summit in 2006 accelerated the interaction between China and Africa even further, as the two sides decided to accelerate cooperation especially in joint resources exploration and exploitation.

The relations between the federal republic of Nigeria and the people republic of China have expanded on growing trade and strategic cooperation. Nigeria and the People‟s Republic of China established formal diplomatic relations on February 10, 1971.

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In this study, China‟s foreign policy toward Africa is narrowed to her economic relationship with Nigeria. An attempt is made therefore to evaluate and critically analyze the extent of this diplomatic relationship. Since February 10, 1971, many Chinese leaders have visited Nigeria just as many leaders of Nigeria have visited China. Relations between the two countries have since enjoyed smooth and steady development. Since May 1999 after Nigeria returned to constitutional democracy, former president of Nigeria, Chief Olusegun Obasanjo visited China twice, in 2001 and 2005 with his Chinese counterpart reciprocating both visits. Many high level visits have taken place between ministers and top officials of both nations. China and Nigeria have signed a number of agreements on trade, economic and technical cooperation as well as an agreement on investment protection. The two countries set up a Joint Economic and Trade Commission. During the first four months of 2004, the volume of trade grew further by 17.6 percent which amounted to $609 million with Nigeria‟s export to China registering a growth of 330 percent. China‟s main exports to Nigeria are industrial, mechanical and electrical products. China‟s main imports from Nigeria are Petroleum, Timber and cotton. Between 1999 till date, China and Nigeria signed agreements to boost their relations including the under mentioned followings;

ï‚· In April 2002, the two governments signed the Agreement for the avoidance of double taxation and the prevention of Fiscal Evasion with respect taxes on income.

ï‚· In July of the same year, they signed the agreement on cooperation on strengthening management of narcotic drugs, psychotropic substances and diversion of precursor chemical and the agreement on Tourism cooperation.

ï‚· Both states agreed to establish a strategic partnership featuring mutual political trust, mutual economic benefit and mutual support.

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 Nigeria and People‟s Republic of China, on 13th October, 2005 signed a contract agreement for the construction of water schemed for 19 states and the Federal Capital Territory (FCT) at the cost of N695 million.

 During President Hu Jintao‟s visit to Nigeria in April 2006, Nigeria and China signed four agreements and three memoranda of Understanding (MOU‟s) on a range of programs to enhance their economic ties including the financial agreement of N8.36 billion (5 million Chinese Yuan) in support of the Roll-back Malaria program, an agreement centered to set up a team of experts for the Nigeria-China friendship cultural project and a memorandum of understanding on the provision of national information communication Technology Infrastructure backbone between the Federal Ministry of Science and Technology and Huwaei Technologies.

Till now, China has set up more than 30 solely funded companies and Joint ventures in Nigeria. The main projects contacted or undertaken in the form of labor service by Chinese companies in Nigeria are the rehabilitation of Nigerian railway, The Games village of Abuja Sports Complex. Major Chinese companies which have undertaken projects in Nigeria are China Geological Engineering Company, China Harbor Engineering Company and China Civil Construction Corporation. China is also involved in construction, oil and gas, Technology, Service and Education sectors of the Nigerian economy. The trade volume between the two countries in 2003 reached $1.86 billion representing a 59 percent growth. According to the Economic and Commercial office of the Chinese embassy in Nigeria, the total volume of trade between China and Nigeria was US$570 million in 1999 and the figure went up to US$860 million in the year 2000 and $1 billion in 2007 (Olugboyega: 2010)

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On the other hand, it is on record that over twenty state governors apart from several corporate bodies have paid official and private visits respectively to the People‟s Republic of China in search of joint venture partners for assorted economic and industrial development projects with varying degrees of success since the assumption of office in May, 1999 (Chibundu:2003). As on previous occasions the Nigeria – China friendship association and several Nigerian Corporate Bodies comprised the unofficial delegation which dialogued with the Chinese private enterprises during the one day business forum in Beijing. (NIIA:2001) it is under considerations that the impact of the foreign Economic Policy or Economic Diplomacy of Nigeria over the past four Decades must be reasonably accessed rather than on occasional spasm engendered by vagaries of international politics totally beyond the control of any developing country.

Chinese activities in Africa are increasing and Nigeria must avail herself the opportunity of this trend to expend her market. According to a 2006 report of the China –Africa business Council, China was Africa‟s third most important trading partner behind United States and France but ahead of the United Kingdom. Five years after in 2011 a report came up that the current emerging African biggest trade partners are India, Brazil and China. Because our focus is on China – Nigeria economic relations it is important to note that this relation goes beyond commercial exchanges, and increasingly beyond raw material extraction. The Chinese offer more flexible financing, more appropriate expertise, technology and training, more affordable and promptly delivered infrastructure, generic drugs, mechanics and consumer goods adapted to Africa thereby putting an end to decades of a near unilateral dependence on western sponsors. Today, Nigeria‟s trade with emerging countries especially China has doubled reaching 40% of its total trade volume. Ten years ago they represented only half of the trade between Nigeria and European Union. The current trend since China overtook the United States as Africa‟s top

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trading partners seem much more promising. One very interesting factor working well for this very partnership is the fact that China has completely removed herself from political interference of African continent as far as internal political issues are concerned. China-Nigeria has gone through different stages starting from the pre-colonial relationship and even after colonialism. China and Nigeria has been in diplomatic relations that has profited the both sides economically, therefore a critical assessment of their diplomatic relations from 2009-2014 will underlined the pros and cons as well as guide for a better relationship.

1.2 STATEMENT OF THE PROBLEM

In view of the need to access some crucial resources, which are relevant to both the sustenance and/or furtherance of its advancement, and in order to secure large market for its mass produced goods, China has deepened its interests and presence in Africa. Granted Nigeria‟s standing as the largest economy in Africa, one cannot but be more concerned about its relations with China. The win-win consequences that Sino-Nigeria trading relations would engender is already well established in literature, especially from Nigeria‟s perspective. However, there is still scanty attention to how such assumed „symbiotic‟ relations could be responsible for complex economic issues and problems in Nigeria.

1.3 AIMS AND OBJECTIVES OF THE STUDY

The specific objectives of the study are to:

1. examine the growing importance of China‟s presence and interests in Africa for Nigeria‟s economy;

2. analyze the implications of the varying economic issues that could be engendered by the convergenceInvestigate how Nigeria is responding to the complexity of economic issues arising from the convergence of Chinese interests in Nigeria.

1.4 SIGNIFICANCE OF THE STUDY

The study will be having the following significances

A. Practical Significance

B. Academic Significance

Practical Significance

1. To assist the Nigerian public to understand China-Nigeria relations.

2. To assist policy makers in formulating diplomatic policies for the Nigeria government.

3. It will help government to review, strengthen and tackle Nigeria‟s challenges in her relations with China.

Academic Significance

1. To add to existing knowledge and works on China-Nigeria economic relations.

2. To accept or reject existing conclusion made on Nigeria-China economic relations.

3. To assist future researchers on related topics that may need the existing knowledge to create or build new knowledge.

4.

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1.5 SCOPE / LIMITATION OF THE STUDY

This study will focus attention on Nigeria-China economic relations. The scope of issues that will be examined is limited to the scope of the overall objectives of the research. However, the time-coverage of this research is 2009-2014. My limitation would be time and money and also access to reliable materials to my research topic, during my field survey I wasn‟t able to gain access to China Embassy and some respondents were not ready to voluntarily cooperate with me.

1.6 RESEARCH QUESTIONS

In an effort to assess Nigeria- china economic relations with particular reference to 2009-2014, attempts will be made to answer through the review of existing literature and questionnaires in the course of this research work. Such questions include the following:

1. What are the growing importance of China‟s presence and interests in Africa for Nigeria‟s economy?

2. Are there implications in the varying economic issues that are arising from the convergence of the growing Chinese interests in Africa for Nigeria?

3. How is Nigeria responding to the complexity of economic issues arising from the convergence of Chinese interests in Nigeria?

1.7 STATEMENT OF HYPOTHESIS

This is a testable proposition about the relationship between two or more events or concept. The hypothesis to be used here will serve as a guide to the investigator in search for data or information for the investigation.

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This hypothesis will be related to the statement of the problem. This will be demonstrated in simple and clear terms under methodology (chapter three) of this project.

The null hypothesis: Ho is the ideal situation.

The alternative hypothesis: H1 is the converse of the null hypothesis.

The hypothesis can be defined as follows:

1. H0- There is a growing importance of China‟s presence and interests in Africa for Nigeria‟s economy.

H1- There is no growing importance of China‟s presence and interest in Africa for Nigeria‟s economy.

2. H0-There are implications in the varying economic issues that are arising from the convergence of the growing Chinese interest in Africa for Nigeria.

H1- There is no implication in the varying economic issues that are arising from the convergence of the growing Chinese interest in Africa for Nigeria.

3. H0-Nigeria is responding to the complexity of economic issues arising from the convergence of Chinese interest in Nigeria.

H1-Nigeria is not responding to the complexity of economic issues arising from the convergence ofof the growing Chinese interest in Africa for Nigeria.

H1- There is no implication in the varying economic issues that are arising from the convergence of the growing Chinese interest in Africa for Nigeria.

3. H0-Nigeria is responding to the complexity of economic issues arising from the convergence of Chinese interest in Nigeria.

H1-Nigeria is not responding to the complexity of economic issues arising from the convergence of Chinese interest in Nigeria