The Political Economy of China’s Belt and Road Initiative in East Africa 3658411600, 9783658411602

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Simon Züfle

The Political Economy of China’s Belt and Road Initiative in East Africa

The Political Economy of China’s Belt and Road Initiative in East Africa

Simon Züfle

The Political Economy of China’s Belt and Road Initiative in East Africa

Simon Züfle ESB Business School, Reutlingen ­University Reutlingen, Germany Eggert_Dissertation pdf to be created. Use “Dissertation Title Page.pdf” for the title page._5 dissertation copies to be delivered to: Simon Züfle, Johannes-Brenz-Weg 8, 70736 Fellbach, Germany.

ISBN 978-3-658-41160-2 ISBN 978-3-658-41161-9  (eBook) https://doi.org/10.1007/978-3-658-41161-9 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 This book is a translation of the original German edition “Die Seidenstraßeninitiative in Ostafrika: Auf dem Weg zu einer Hegemonie Chinas?” by Züfle, Simon, published by Springer Fachmedien Wiesbaden GmbH in 2022. The translation was done with the help of an artificial intelligence machine translation tool. A subsequent human revision was done primarily in terms of content, so that the book will read stylistically differently from a conventional translation. Springer Nature works continuously to further the development of tools for the production of books and on the related technologies to support the authors. This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Fachmedien Wiesbaden GmbH, part of Springer Nature. The registered company address is: Abraham-Lincoln-Str. 46, 65189 Wiesbaden, Germany

Contents

1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 State of the Art—The Rise of China and the BRI. . . . . . . . . . . . . . . . . 13 2.1 Facets of the Debate About the Rise and Role of China. . . . . . . . . . 13 2.2 Investigations on the Chinese Belt and Road Initiative. . . . . . . . . . . 19 2.3 (East) Africa as Part of the BRI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 3 Theory and Analytical Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.1 The Neo-Gramscianism as a Critical Theory Perspective. . . . . . . . . 28 3.2 The Concept of Hegemony in International Relations. . . . . . . . . . . . 31 3.3 The (Neo-)Gramscian Understanding of Hegemony. . . . . . . . . . . . . 33 3.3.1 Hegemony With Gramsci. . . . . . . . . . . . . . . . . . . . . . . . . . . 34 3.3.2 State-Civil Society-Complex, Historical Block and Political Project—The Neo-Gramscian Concept of Hegemony on a Global Level. . . . . . . . . . . . . . . . . . . . . . . . 36 3.3.3 The Hegemonic Elements of a Historical Structure. . . . . . . 39 3.3.4 Passive Revolution and Counter-Hegemony. . . . . . . . . . . . 40 3.4 Operationalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 3.4.1 State-Civil Society Complex Steered by CPC. . . . . . . . . . . 41 3.4.2 Central Elements of the Sino-Capitalist Development Model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 3.4.3 From the Going-out-Policy to BRI—Political Projects of the Emerging Hegemon. . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 3.5 Reconstruction of BRI Infrastructure Projects in East Africa Against the Background of Material, Ideational and Institutional Entanglement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

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Contents

3.5.1

Investigation of the Structural Interlocking as well as the Ideological and Institutional Foundations of the Political Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 3.5.2 Analysis of Three BRI Infrastructure Projects in East Africa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 3.5.3 Content Analysis of Newspaper Articles. . . . . . . . . . . . . . . 57 3.5.4 The Guideline Interview . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 3.6 Reflection of the Operationalization and the Methodological Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 4 China’s State-Civil Society Complex in the Structures of Global Order and Economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 4.1 US Hegemony and Dollar Wall Street Regime . . . . . . . . . . . . . . . . . 65 4.2 China’s Selective Appropriation of Hegemonic Elements. . . . . . . . . 69 4.3 China’s Proactivity in International Affairs Since 2013. . . . . . . . . . 76 4.4 The BRI as a Political Project of the Chinese State-Civil Society Complex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 4.5 China’s State-Civil Society Complex and the BRI . . . . . . . . . . . . . . 83 4.5.1 The CPC’s Central Leadership at the Top of the State-Civil Society Complex. . . . . . . . . . . . . . . . . . . . . . . . 84 4.5.2 Coordination of BRI Implementation by the Party-State Apparatus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 4.5.3 State-Owned Enterprises and State-Owned Banks at the Center of BRI Implementation. . . . . . . . . . . . . . . . . . 91 5 The Material, Ideational and Institutional Externalization of Sino-capitalism in East Africa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 5.1 The Development of Sino-African Relations. . . . . . . . . . . . . . . . . . . 95 5.2 Externalization of Sino-Capitalism within the Framework of FOCAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 5.2.1 The Externalization of Sino-Capitalism in the Context of the FOCAC Summits 2000–2012 . . . . . . . . . . . . . . . . . . 100 5.2.2 The Influence of the Belt and Road Initiative on the FOCAC Summits since 2015. . . . . . . . . . . . . . . . . . . . . . . . 103 5.3 East African States in the BRI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 5.4 Economic Interdependence between China and East Africa. . . . . . . 110 5.4.1 China’s Investments in East Africa . . . . . . . . . . . . . . . . . . . 113 5.4.2 Chinese Credits for East African Countries. . . . . . . . . . . . . 117 5.4.3 Sino-East African Trade Relations. . . . . . . . . . . . . . . . . . . . 123

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5.5 Security Policy Flanking of the BRI . . . . . . . . . . . . . . . . . . . . . . . . . 126 5.6 The Externalization of Sino-Capitalism in the Everyday Experience of the East African Population . . . . . . . . . . . . . . . . . . . . 130 5.6.1 Intensification of Inter-Societal Contacts within the Framework of FOCAC. . . . . . . . . . . . . . . . . . . . . . . . . . 130 5.6.2 Cultural and Media Flanking of the BRI. . . . . . . . . . . . . . . 132 5.6.3 The Everyday Experience of Chinese Engagement through the Afrobarometer. . . . . . . . . . . . . . . . . . . . . . . . . . 134 6 The BRI as a Political Project in East Africa. . . . . . . . . . . . . . . . . . . . . 141 6.1 The Addis Ababa–Djibouti Railway . . . . . . . . . . . . . . . . . . . . . . . . . 141 6.1.1 The Modernization of Railway Infrastructure as the Core of the Growth and Transformation Plan. . . . . . 144 6.1.2 The Involvement of Chinese Actors in the Construction of the Railway Line. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 6.1.3 Rapid Construction Progress and Emergency Operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 6.1.4 The BRI as an Extension of Foreign Policy Options. . . . . . 154 6.1.5 Follow-up Orders for Chinese Companies. . . . . . . . . . . . . . 156 6.1.6 Commissioning of the Railway Line. . . . . . . . . . . . . . . . . . 157 6.1.7 The Sino-Capitalist Development Model as a Point of Reference for the Ethiopian Development Agenda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 6.1.8 End of the Test Phase and Official Opening . . . . . . . . . . . . 163 6.1.9 Increasing Debt Burden and Change of Repayment Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 6.1.10 Interim Conclusion and Theoretical Reference. . . . . . . . . . 167 6.2 The Mombasa–Malaba Railway Line . . . . . . . . . . . . . . . . . . . . . . . . 169 6.2.1 China’s Contribution to Kenya’s Development Vision 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 6.2.2 Criticism of the Opaque Award of the First Section of the Line to the CRBC . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 6.2.3 Contract Clauses on Mandatory Local Content. . . . . . . . . . 180 6.2.4 Irregularities in Compensation Payments . . . . . . . . . . . . . . 182 6.2.5 Ecological Consequences of the Railway Line. . . . . . . . . . 185 6.2.6 Kenya as Part of the Maritime Silk Road. . . . . . . . . . . . . . . 189

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6.2.7

Technology Transfer and Accompanying Measures of the SGR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 6.2.8 Extension of the Railway Line from Nairobi to Naivasha. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 6.2.9 Regional Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 6.2.10 Racism Allegations and Poor Working Standards. . . . . . . . 196 6.2.11 Opening of the Mombasa–Nairobi Section. . . . . . . . . . . . . 198 6.2.12 Operation of the Madaraka Express by the CRBC . . . . . . . 201 6.2.13 SGR as a Gamechanger in the Kenyan Transport Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 6.2.14 Controversies About the Extension from Naivasha to Kisumu and Malaba. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 6.2.15 Growing Debt Burden and Discussion About the Role of the Port of Mombasa. . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 6.2.16 Interim Conclusion and Theoretical Reference. . . . . . . . . . 211 6.3 The Port and Special Economic Zone of Bagamoyo. . . . . . . . . . . . . 213 6.3.1 The Modernization of the Port as Part of the Development Vision 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . 215 6.3.2 Specification of the Construction Plans. . . . . . . . . . . . . . . . 217 6.3.3 Bagamoyo as the Shenzhen of Tanzania . . . . . . . . . . . . . . . 220 6.3.4 Official Groundbreaking at the End of Kikwete’s Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 6.3.5 Flanking the Construction Project. . . . . . . . . . . . . . . . . . . . 225 6.3.6 Stagnation of Construction Work. . . . . . . . . . . . . . . . . . . . . 227 6.3.7 Uncertainty About the Progress of the Construction Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 6.3.8 Preliminary Failure of the BRI Project . . . . . . . . . . . . . . . . 231 6.3.9 Interim Conclusion and Theoretical Reference. . . . . . . . . . 233 7 Key Findings of the Work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 7.1 The Material Externalization of Sino-Capitalism . . . . . . . . . . . . . . . 237 7.2 The Ideational and Institutional Externalization of Sino-Capitalism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240 7.3 The BRI as a Political Project based on the Example of East African Infrastructure Projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241 7.4 Societal Reactions to the Externalization of Sino-Capitalism. . . . . . 249

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8 Conclusion and Discussion of Results. . . . . . . . . . . . . . . . . . . . . . . . . . . 253 8.1 On the Way to a Hegemony of China?. . . . . . . . . . . . . . . . . . . . . . . . 253 8.2 Reflection of the Theoretical-Methodological Approach and the Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 8.3 Outlook and Approaches for the Cross-Regional Investigation of the BRI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265

Abbreviations

ADB ADI AEI AfDB AIIB AU BRF BRI BRICS BRP BWS CADF CCCC CCECC CCM CCTV CDB CMHI CPC CRBC CREG EAC EIA EPC EPRDF EPZ

Asian Development Bank Foreign Direct Investment American Enterprise Institute African Development Bank Asian Infrastructure Investment Bank African Union Belt and Road Forum Belt and Road Initiative Brazil, Russia, India, China, South Africa Belt and Road Portal Bretton Woods System China-Africa Development Fund China Communications Construction Company China Civil Engineering Construction Corporation Chama Cha Mapinduzi (Tanzanian ruling party) China Central Television China Development Bank China Merchants Holding International Communist Party of China China Road and Bridge Corporation China Railway Group Limited East African Community Environment Impact Assessment Engineering, Procurement, Construction Ethiopian Peoples’ Revolutionary Democratic Front Export Processing Zone

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Abbreviations

EPZA Tanzania Export Processing Zones Authority ERC Ethiopia Railway Corporation ETB Ethiopian Birr FOCAC Forum on China-Africa Cooperation FTA Free Trade Agreement GDP Gross domestic product GTP Ethiopian Growth and Transformation Plan ICD Inland Container Depot IMF International Monetary Fund ITC International Trade Centre KES Kenya Shilling KPA Kenya Ports Authority KRC Kenya Railways Corporation KWS Kenya Wildlife Service LDC Least Developed Countries LIBOR London Interbank Offered Rate LSG Leading Small Group MOFA Ministry of Foreign Affairs of the People’s Republic of China MOFCOM Ministry of Commerce of the People’s Republic of China MSRI Maritime Silk Road Initiative NDB [BRICS] New Development Bank NDRC National Development and Reform Commission NEMA Kenya National Environment Management Authority NEPAD New Partnership for Africa’s Development NET Kenya National Environment Tribunal NGO Non-governmental organisation NLC Kenya National Land Commission OECD Organization for Economic Cooperation and Development PB Politburo of the Communist Party of China PLA People’s Liberation Army RMB Renminbi SASAC State Asset Supervision and Administration Commission SCO Shanghai Cooperation Organization SCS Social Credit System SEZ Special Economic Zone SGR Standard Gauge Railway SME Small and medium-sized enterprises SOE State-Owned Enterprise

Abbreviations

SREB SRF TPA TSDI TZS UNCTAD USD WB WTO

XIII

Silk Road Economic Belt Silk Road Fund Tanzania Ports Authority Third Railway and Design Institute Group Corporation Tanzania Shilling United Nations Conference on Trade and Development US Dollar World Bank World Trade Organization

List of Figures

Fig. 3.1 Fig. 4.1

Fig. 4.2

Fig. 4.3 Fig. 4.4 Fig. 5.1 Fig. 5.2 Fig. 5.3 Fig. 5.4

Fig. 5.5

Fig. 5.6

Number of newspaper articles examined. (Source: Own representation). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Share of global GDP, nominal and corrected for purchasing power parity (dotted line). (Source: Own creation based on IMF 2021). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 China's GDP [USD bn] and annual economic growth (right y-axis), 1970–2019. (Source: Own compilation based on World Bank 2021d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Stock (left y axis) and flow of Chinese FDI [USD bn], 1981– 2019. (Source: Own compilation based on UNCTAD 2021b). . . 76 China’s BRI investments by region, October 2013–2019. (Source: Own creation based on AEI 2020). . . . . . . . . . . . . . . . . 83 Chinas Investitionen in Ostafrika. (Source: Eigene Erstellung auf Basis von AEI 2020). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 China’s BRI investments in East Africa by country, October 2013–2019. (Source: Own creation based on AEI 2020). . . . . . . 114 Top investors in Africa by country [USD bn]. (Source: Own creation based on UNCTAD 2020: 28). . . . . . . . . . . . . . . . . . . . . 116 Percentage share of China in ADI holdings of East African countries. (Source: Own creation based on ITC 2021; UNCTAD 2021b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Trade volume of East African countries with selected trading nations and Chinese share of East Africa’s trade volume (right y-axis). (Source: UNCTAD 2021a; UNCTAD 2021c). . . . 124 East Africa’s exports to and imports from China by sector [%]. (Source: UNCTAD 2021a; UNCTAD 2021c) . . . . . . 125

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Fig. 5.7

List of Figures

Assessment of China’s economic and political influence in East Africa. (Source: Own compilation based on Afrobarometer 2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Fig. 5.8 Evaluation of the country with the greatest influence on East Africa’s countries. (Source: Own creation based on Afrobarometer 2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 Fig. 5.9 Assessment of the best development model for one’s own country. (Source: Own creation based on Afrobarometer 2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 Fig. 5.10 Factors contributing to China's positive image in East Africa. (Source: Own compilation based on Afrobarometer 2016) . . . . . 138 Fig. 5.11 Factors contributing to China's negative image in East Africa. (Source: Own compilation based on Afrobarometer 2016) . . . . . 138 Fig. 6.1 Course of the railway line Addis Abeba-Djibouti. (Source: Google Maps 2021). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Fig. 6.2 Media processing of the Addis Ababa–Djibouti railway line, 2010–2019. (Source: Own creation). . . . . . . . . . . . . . . . . . . 144 Fig. 6.3 Course of the Mombasa–Malaba railway line. (Source: Google Maps 2021). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 Fig. 6.4 Media processing of the Mombasa–Malaba railway line, 2008–2019. (Source: Own creation). . . . . . . . . . . . . . . . . . . . . . . 171 Fig. 6.5 Location of the port and the planned special economic zone of Bagamoyo. (Source: Google Maps 2021 (left) and EPZA, cited according to Poverello 2014). . . . . . . . . . . . . . . . . . 214 Fig. 6.6 Media processing of the port and the special economic zone of Bagamoyo, 2007–2019. (Source: Own creation). . . . . . . . . . . 215

List of Tables

Table 4.1 China’s trade agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Table 4.2 The five cooperation priorities of the BRI. . . . . . . . . . . . . . . . . . 81 Table 4.3 Chinese provinces, autonomous territories and government-owned cities in the BRI. . . . . . . . . . . . . . . . . . . . . . 90 Table 5.1 Overview of FOCAC declarations and action plans 2000–2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Table 5.2 Participation of African countries in the BRI . . . . . . . . . . . . . . . 99 Table 5.3 Results of the Belt and Road Forums 2017 and 2019. . . . . . . . . 111 Table 5.4 Chinese companies in East Africa, October 2013–2019. . . . . . . 115 Table 5.5 Investment stock of the largest investors in East Africa [USD mn] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Table 5.6 Bilateral and total debt and repayments of east African countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Table 7.1 Summary and comparison of BRI infrastructure projects in East Africa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

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1

Introduction

A Chinese proverb says ‘yao xiang fu, jiu xiang lu’—‘If you want to become rich, build a road first’. This proverb illustrates the Chinese understanding of economic development. The beginning of progress is an improvement in basic infrastructure, which not only accelerates the transport of goods and the mobility of people, but also enables the circulation of role models, visions and standards. The expansion of infrastructure with roads, railway lines, ports and airports is also at the center of Sino-capitalism since the opening under Paramount Leader Deng Xiaoping at the end of the 1970s (see Démurger 2001; Bai/Qian 2010; Hou/ Li 2011; Bayane/Yanjun 2017). The state acted as the locomotive of the gradual transformation and liberalization of the economy (see McNally 2012). The balance sheet of Chinese transformation is impressive: The gradual-capitalist path went hand in hand with a booming economy and a growing standard of living that freed millions of Chinese1 from poverty. Today the country is the world’s largest exporter, holds the largest share of global foreign exchange reserves with 3.2 trillion USD and contributes 16% to global GDP (see UNCTAD 2021a; World Bank 2021a, b). The rapid transformation process explains the exemplary character of the Chinese development model for numerous countries of the Global South and in particular in Africa (see Alden 2005a). In African countries, the Chinese view that underdevelopment is primarily the result of a lack of infrastructure finds a lot of resonance. As part of the Belt and Road Initiative (BRI) the People’s Republic of China aims to alleviate the infrastructure deficit in countries of the Global

1 For

the sake of better readability, the generic masculine is used in this work. Female and other gender identities are expressly included where necessary for the statement.

© The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 S. Züfle, The Political Economy of China’s Belt and Road Initiative in East Africa, https://doi.org/10.1007/978-3-658-41161-9_1

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1 Introduction

South and thus trigger a development boost. A focus of the BRI is on improving infrastructure connectivity. However, the relationships with the now 143 partner countries are also to be deepened in the areas of policy coordination, financial integration and inter-societal relations (see NDRC/MOFA/MOFCOM 2015; BRP 2019). More than a quarter of BRI partner countries are in Africa. That the continent is in the focus of the BRI does not surprise. So the cooperation with African states has been considered a laboratory for a more proactive foreign, trade and security policy of China since the founding of the Forum on China-Africa Cooperation (FOCAC) in 2000 (see Alden/Large 2015). The close economic interdependence between China and Africa was made clear at the FOCAC summit in Beijing in September 2018. The Chinese government announced investments of up to 60 billion USD for the next three years (see FOCAC 2018b). From the announcement of the BRI in September 2013 to the end of 2019, Chinese investments in BRI partner countries in Sub-Saharan Africa amounted to almost 160 billion USD (see AEI 2020). Almost everywhere on the African continent, Chinese companies are involved in the expansion of infrastructure and are building ports, airports, railway lines, oil pipelines or power lines. Of the ten largest companies on the African Engineering, Procurement and Construction (EPC) market, six are from China (see Sun/Jayaram/Kassiri 2017: 23 f.). In addition, China is by far Africa’s most important trading partner. Bilateral trade volume amounted to 157 billion USD in 2019 (see UNCTAD 2020). The construction and establishment of industrial parks and special economic zones within the framework of the BRI are intended to intensify trade relations. China’s growing engagement in Africa is also manifest in security policy. In 2017, the People’s Liberation Army opened its first foreign naval base after the Korean War in Djibouti. The base is to support, inter alia, anti-piracy operations in the Horn of Africa. In no other continent does China have so many soldiers, policemen and trainers in UN peacekeeping missions. In South Sudan, the PLA took part in its first combat mission under UN leadership in 2013. These projects are accompanied by a variety of diplomatic initiatives to resolve internal conflicts (see Legarda/Hoffmann 2018; Walsh 2019; Munyi 2020). China’s increased foreign and security policy engagement is not only evident in Africa, but also in other world regions and at the global level. In terms of security policy, the territorial disputes over the island groups claimed by China and other East Asian countries in the East and South China Seas stand out (see Zhang 2020). On a global level, the Chinese leadership intends to reform established institutions, inter alia, the World Bank, the International Monetary Fund (IMF) and the UN Security Council, so that they take Chinese interests more into account. In addition, alternative institutions, inter alia, BRICS and AIIB, are to be

1 Introduction

3

set up in order to create a balance to Western supremacy in international organizations (see Ren 2016; Chen/Liu 2018). This engagement of China is a recent development that has intensified since the leadership generation around President Xi Jinping took office. In its international condensation, Xi’s Chinese Dream envisages the return of the People’s Republic to a glorious position on the global stage (see Ferdinand 2016). China’s new proactive foreign policy builds on a scientific debate about China’s rise and role in international politics. There is consensus that China’s rise has far-reaching implications for the global power constellation. However, it is controversial to what extent and when China catches up economically and militarily with the USA and replaces them as global hegemon, and whether this process takes place peacefully (cf. Mearsheimer 2006; Ikenberry 2008a; Johnston 2008; Layne 2008; Nölke 2015; Allison 2017; Beeson 2018a). The tense relationship between the superpowers is reflected in the multidimensional conflict of recent years. In the trade sector, the two powers imposed tariffs in the billions. In technological issues, a trend of decoupling can be seen: While the USA set Chinese technology companies such as Huawei on an “entity list” that prohibits US companies from using or selling technology to listed companies, China is trying to replace US technology in state agencies with national products over a period of three years with the 3-5-2 rule (cf. Bown 2021). However, the struggle for global supremacy diagnosed by some authors does not only concern the immediate relationship between the two powers. The clash of different political systems and development models also creates tensions in the countries of the Global South, which has not been sufficiently taken into account in scientific research to date. With this work, an attempt is made to contribute to the opening up of this field of research, with a focus on China’s engagement in East Africa. At the center is the BRI, China’s central diplomatic project in the era of President Xi Jinping. For the investigation of the BRI, a neo-Gramscian approach is used. NeoGramscian perspectives go back to the Italian politician Antonio Gramsci, who dealt with the capitalist societies of the 1920s and 1930s in his prison writings (cf. Gramsci 1991; Cox 1996: 124). Gramsci attempted to conceptualize an alternative form of state to bourgeois hegemony under the leadership of the working class. In his analyses, he focused on the relationship between civil society and state, and only briefly mentioned international relations (cf. Cox 1996: 124). Robert Cox took up the Gramscian concept of hegemony and made it applicable to studies at the global level (cf. Cox 1981; Cox 1996). In addition to Cox, other authors have advanced the development and operability of the neo-Gramscian

4

1 Introduction

theoretical perspective (cf. Gill 1986, 1993; Bieling/Deppe/Tidow 1998; Bieler/ Morton 2001, 2004; Bieling 2010). In the neo-Gramscian perspective, the starting point for the emergence of a global hegemony lies in the economic and social transformation in a state. There, social forces strengthen and form alliances with other social actors. This is based on an extended concept of the state, according to which not only state executive organs, but also civil society groups can exert a considerable influence on social production relations (cf. Gramsci 1991: 783). The state-civil society complexes support a social and economic development model referred to as the historical block. The historical block integrates different class interests on the basis of a web of material capacities, institutions and ideas, and includes common economic and political objectives. A global hegemony is said to exist when a development model expands beyond national borders and, through political projects, creates a material, ideational and institutional order that other states and societies regard as compatible with their own interests. The hegemonic character of a political project becomes clear when a development model is externalized, for example, through key infrastructure projects, leading to increased economic interdependence and becoming established in the everyday experience of other societies (cf. Cox 1981, 1996; Bieler/Morton 2003; Bieling 2010). With regard to China, it is assumed that there is a state-civil society complex controlled by the Communist Party of China. The Communist Party of China permeates all social, economic and state units, for example through the Social Credit System, and exerts social hegemony. The use of the term “civil society” appears to be contradictory and controversial in the Chinese context, as it crystallized as a “keyword of anti-dictatorial criticism” (Kocka 2000: 18) in late- or post-communist systems. In addition, the term is attributed a comprehensive meaning, for example, in the European context. In this understanding, civil society forms a counterweight to the state in democratic systems and is based on democratic achievements such as universal suffrage or freedom of opinion and the press (cf. Shils 1991: 48/49). By adopting a neo-Gramscian perspective, civil society is not necessarily regarded as a counterweight to the state. The Communist Party of China exerts a considerable degree of control over civil society through technological and nationalist instruments. Nevertheless, the party does not act independently of civil society, but rather steers public opinion and sometimes appropriates the increasingly prevalent nationalism (cf. Zhao 2013; Gries/Steiger/ Wang 2016; Weiss 2019). In this nuanced approach, the term ‘civil society’ can certainly be adapted to the Chinese context as part of the neo-Gramscian terminology. It is understood as a kind of field of forces into which numerous Chinese actors with different

1 Introduction

5

i­nterests, such as State-Owned Enterprises (SOEs), provinces and ministries, are integrated. The state-civil society complex controlled by the CPC is aimed primarily at the externalization of Sino-capitalism, whereby above all companies and banks are to pursue intensified business activities abroad. However, actors involved in the global development of Sino-capitalism have a certain degree of independence in the implementation of state imperatives and sometimes pursue contradictory goals (cf. Schubert/Heberer 2017; Jones/Zeng 2019). Sino-capitalism is based on a high availability of capital, informal and confidential business networks, assigns the state a leading role in promoting capitalist accumulation and sees the expansion of infrastructure at the beginning of economic development (cf. McNally 2012). Chinese companies have been investing abroad since the announcement of the BRI in 2013. However, the BRI builds on the Going-out policy, which was adopted by the Chinese government in the tenth economic and social plan in 2000. With this policy, Chinese companies were encouraged to open up new export markets and invest abroad in order to ensure the sustainable growth of the Chinese development model, energy security and access to other resources such as rare earths (cf. Mumuni/Murphy 2018; Yuan 2018). However, the BRI lifts the Going-out policy to a new qualitative level, because it is not only designed as an economic investment program, but as a multi-dimensional political project. The Chinese leadership links the BRI with further cultural, media and security policy measures that have an impact on the civil society arenas of partner countries. There is agreement in the research debate about the context and motives of the BRI’s emergence (see Clarke 2016; Pantucci/Lain 2016b; Yu 2017; Tekdal 2018; Ye 2019; Clarke 2020; Hayes 2020). However, since the five cooperation priorities of the BRI are kept vague in the official policy document of the Chinese leadership (see NDRC/MOFA/MOFCOM 2015), there is disagreement in the scientific debate about the BRI’s fundamental character (see Ekman et al. 2017; Griffiths 2017; Rolland 2019). So there are authors who see in the BRI a centrally prescribed, geopolitical and geo-economic strategy (see Aoyama 2016; Pantucci/ Lain 2016a; Wang 2016; Beeson 2018b; Mendez/Alden 2021), while others see in it the origins of a fairer world order (see Gong/Ding 2015; Liu/Dunford 2016; Nobis 2018; Wang/Liu 2019). Some authors argue that the internal dimensions should be taken into account first, before attributing hegemonic ambitions to the central leadership prematurely. The BRI is first and foremost a arena of internal political interest conflicts and power struggles (see Yu 2018; Jones/Zeng 2019). In general, various studies point out that the People’s Republic is not a monolithic block. Rather, the foreign policy decision-making process is characterized by a diversity of actors. Therefore, the actor China should be specified more precisely

6

1 Introduction

in the context of the BRI, since different actor groups want to profit from the central leadership’s billion-dollar project (see Li 2016; Summers 2016; Blanchard/ Flint 2017; Mumuni/Murphy 2018; Hu 2019; Jones/Zeng 2019; Rolland 2019; Shi/Hoebink 2020). In previous studies of BRI, hasty conclusions are often drawn by exaggerating individual criticism points of BRI investment projects and attributing them to China’s hegemonic ambitions. At the same time, the numerous flanking measures of investment projects are underestimated. In order to address these weaknesses, the present work examines the concrete logic and the mode of operation of the BRI on the basis of the case study of East Africa. In contrast to world regions such as Central Asia and Southeast Asia, where the BRI was announced and therefore received increased attention in scientific research (cf. e.g. Pantucci/ Lain 2016c; Wilson 2016; Chen 2018; Chung 2018; Garlick 2018; King/Du 2018; Zhou/Esteban 2018; Shariatinia/Azizi 2019), there is still a lack of studies on the BRI in Africa (cf. Fowler 2019). In recent years, individual studies have dealt with infrastructure projects in Africa in an anecdotal way, placing the BRI in the context of FOCAC (cf. Pautasso 2016; Pino 2016; Breuer 2017; Ehizuelen 2017; Cabestan 2019; Wang/Wissenbach 2019; Carrai 2021). In the present work, one step further is to be taken and, based on neo-Gramscian assumptions, the externalization of Sino-capitalism is to be examined on the basis of the structural interlocking between East Africa and China by means of economic indicators as well as accompanying images and visions in a first analysis step. Finally, a close economic connection is essential in the materialistic Gramscian reception of Robert Cox for the emergence of a hegemonic order. In a next step, major infrastructure projects in East Africa are to be considered as a central component of the political project. By analyzing the development, financing and implementation of the projects, it is to be illuminated which actors of the state-civil society complex are involved in the externalization of Sino-capitalism for the securing of Chinese development. The perception of Chinese engagement in BRI partner countries determines the legitimacy of a potentially hegemonic order under Chinese leadership. The fifth priority of cooperation of the BRI is to be considered against this background, as this is intended to deepen inter-societal relations. However, only in isolated cases has this cooperation priority been mentioned (cf. Chen/Fazilov 2018; Benabdallah 2019). This is due to the often made top-down studies. The integration of the BRI into national development plans as well as the disclosure of social reactions to the BRI and individual investment projects have so far only been mentioned rudimentarily (cf. Anthony 2020). This is in line with a research area that opposes the construction of an all-powerful China. Instead, this work

1 Introduction

7

shows that there are numerous reactions to China’s BRI in East Africa. This is in line with neo-Gramscian perspectives, which examine the adaptation of a hegemonic development model to local conditions on the basis of the concept of passive revolution (cf. Cox 1996). This work builds on the sketched research gaps with regard to China’s role in international relations and the BRI. The starting observation of the work is that the state-civil society complex controlled by the CPC is trying to create an external environment that is favorable for the development of Sino-capitalism. This work acknowledges that the BRI has a strategic importance for the Chinese leadership in some aspects, such as securing raw materials that are essential for Chinese development, or gaining market access for Chinese goods and services. The BRI is to be seen as a reaction to the crisis situation of Sino-capitalism perceived by the Chinese state-civil society complex at the beginning of the 2010s. This includes, for example, overcapacities of SOEs, but also a declining economic growth due to stagnating exports, which could erode the legitimacy of the CPC. With the BRI, SOEs should not only reduce their own overcapacities, but also open up new markets with turnkey infrastructure projects that are to favor the export of Chinese technologies, goods and standards. In addition to the partial strategic motives, the BRI is, in the understanding of the present work, however, essentially a gigantic connectivity program with which numerous world regions are primarily developed and integrated by capitalintensive investments in infrastructure and communication projects. The Chinese state-civil society complex is not primarily concerned with imposing the Chinese development model on other states. Rather, the sino-capitalist development model is becoming a reference point for many countries in the Global South to achieve their own development progress. However, in the present work, another contribution is made to the scientific discussion by checking, on the basis of a neo-Gramscian perspective, which effects and side effects the material, ideal and institutional development of Sino-capitalism in East Africa has. The central question of the work is: To what extent is the Belt and Road Initiative a political or hegemonic project of the state-civil society complex controlled by the CPC in East Africa? In order to answer this overarching question, the following guiding thesis of the work is based: The Chinese leadership has formulated the BRI as a political project from a crisis situation of Sino-capitalism in order to secure its own development and to promote the development of numerous world regions, including East Africa. The political project shows, for example, in the trade, credit and investment relations between China and East African BRI partner countries as well as in the implementation of BRI infrastructure projects in East Africa, some effects and trends that make the BRI a hegemonic project that

8

1 Introduction

evokes local approval and resistance. From this guiding thesis, three research questions are developed: 1. To what extent do the investment, credit and trade relations between China and the East African BRI partner countries as well as the implementation of selected infrastructure projects in Ethiopia, Kenya and Tanzania outline a hegemonic project of the Chinese state-civil society complex? 2. To what extent does the Chinese state-civil society complex externalize individual elements of Sino-capitalism within the framework of the Forum on China Africa Cooperation or the Belt and Road Forum as well as in the implementation of key infrastructure projects in East Africa? 3. To what extent do local actors in the BRI partner countries influence the externalization of Sino-capitalism? In order to secure its own development, the Chinese leadership is striving to develop hitherto underdeveloped world regions and, with the BRI, promises to increase intra- and inter-state connectivity, expand basic transport, energy and communication infrastructure, and deepen economic relations. This leads to a densification of structural interlocking, in particular through investments, credits and trade relations (cf. Jacobitz 1991: 15; Cox 1996: 138). However, the implementation of the BRI in East Africa has numerous consequences that represent the BRI as a hegemonic project. In this work, major infrastructure projects in East African countries are considered as the central element of hegemonic tendencies. The thesis to answer the first research question is therefore: The BRI promotes the development of the East African BRI partner countries. At the same time, these countries’ dependencies on China deepen. The infrastructure projects as the central dimension of the political project in East Africa lead to numerous consequences that represent the BRI as a hegemonic project. Since the Chinese weight in established international organizations is only insufficiently recognized, the BRI in particular serves as a security for the relations with the participating countries (cf. Cox 1981: 137). In the present work it is assumed that the Chinese development model within the framework of BRF and FOCAC reinforces the development priorities and discourses of African countries. In addition, the Chinese state-civil society complex externalizes models and visions in these forums. The BRI is also flanked by other measures, such as in the media, security policy and cultural sector, in order to generate a positive image of China in the everyday reality of the societies of the BRI partner countries. In order to answer the second research question, the following thesis is therefore put forward: The Chinese development model is placed as a point of reference and

1 Introduction

9

model for the development of African states within the framework of BRF and FOCAC, supported by the externalization of alternative models and visions. The development agenda is promoted by the radiation of the Sino-capitalist development model, which manifests itself in particular in the implementation of BRI infrastructure projects in Ethiopia, Kenya and Tanzania. In the implementation of these investment projects, numerous local reactions and processing patterns of Chinese engagement are revealed. Finally, the BRI meets state-civil society complexes in the countries of East Africa, which in turn present solutions to national development bottlenecks. Within the scope of this work, the local reactions to the political project and the implementation of the infrastructure projects should therefore be made public. The thesis serving to answer the third research question is therefore: The BRI brings numerous development opportunities for the countries of East Africa and therefore meets with approval in the civil society arenas. However, some of the effects of the implementation of major infrastructure projects also provoke resistance. To answer the research questions, various methods are used in the present work. The work deals with BRI in East Africa. The definition of the African subregion of East Africa is based on the United Nations Geoschema, in which 20 states are subsumed under Eastern Africa (cf. United Nations Department of Economics and Social Affairs Statistics Division 2019). 14 states had signed a Memorandum of Understanding (MoU) with the Chinese leadership on cooperation within the framework of the BRI by the end of 2019 (cf. BRP 2019). In addition, the work relies on statistics and databases of international organizations and think tanks. The structural interdependence between China and East African BRI partner countries is examined on the basis of investment, credit and trade relations. Two rounds of surveys by the Afrobarometer are used to assess the public perception of Chinese engagement in East Africa. The communiqués and final declarations of the Belt and Road Forums as well as the FOCAC summits are used as empirical data basis for the investigation of the ideological and institutional externalization of Sino-capitalism. The analysis should show which priorities and milestones the parties set for plurilateral cooperation and which images and visions the Chinese leadership propagates for the exploration and development of East Africa within the framework of the summit meetings. In addition, the densification of inter-societal relations in the media, security policy and cultural sector is to be outlined. To answer all research questions, three infrastructure projects in the countries of Ethiopia, Kenya and Tanzania are also considered. The presentation of the development phases and the social processing of the BRI infrastructure projects in East Africa is based on a qualitative content analysis (cf. Kuckartz 2016). The empirical basis for the investigation of the infrastructure projects is

10

1 Introduction

completed by guideline interviews, the number of which is limited due to the cancellation of a research stay in East Africa due to the pandemic. The present work is structured in such a way that in Chap. 2 the central research strands of the scientific debate are presented and criticized. In the discussion of the role and rise of China in international politics, the previous studies on the BRI and the role (East) Africa plays in it, gaps and deficits should be identified and the contribution of the present work should be highlighted. In the following chapter, Neo-Gramscianism is to be located as a critical theory before different theoretical approaches to the concept of hegemony in International Relations are explained. Subsequently, a neo-Gramscian theory perspective is taken. Through the operationalization it should be shown to what extent the neo-Gramscian assumptions can be used for the Chinese context. The concepts of ‘statecivil society complex’, ‘historical block’ and ‘political or hegemonic project’ are used. In Chap. 3 the methodological foundation of the work is also explained. In Chap. 4, the Chinese state-civil society complex is located in the structures of the global order and economy. The externalization of Sino-capitalism takes place against the background of US hegemony or the Dollar Wall Street Regime. Some elements of the existing hegemonic model were incorporated into the Chinese development model, such as the limited privatization of SOEs and the accession to the World Trade Organization (WTO) in 2001. At the same time, the Chinese leadership pointed to contradictions in this development model, such as the marginalization of countries of the Global South and the low focus on infrastructure investment and financing in established international financial institutions. This is a central point of reference for the formulation of the political project and the generalization of individual elements of the Chinese development model. In addition, individual actor groups of the state-civil society complex are carried out, which are relevant for the implementation of the BRI and in particular the infrastructure projects in East Africa, including the central leadership of the CPC, the bureaucratic apparatus and provinces, SOEs and state-owned banks. In Chap. 5, the institutional and ideological dimensions of Chinese engagement in Africa should first be illuminated by examining the FOCAC summit documents. The FOCAC reference is relevant because it anticipated central elements of the bi- and multilateral cooperation mechanisms as a precursor to the BRI. In addition, the basic elements of the BRI and the participation of East African countries in the BRI are set out in the communiqués of the Belt and Road Forums in 2017 and 2019 as well as other policy papers of the Chinese leadership. Thereafter, the structural interdependence of the region with China will be illustrated by means of investment, credit and trade relations. In addition, partial projects of the BRI, including on security policy, media and cultural levels, are outlined in

1 Introduction

11

order to make the anchoring of the political project in the everyday experience of East African societies more tangible. In Chap. 6, selected investment projects in Ethiopia, Kenya and Tanzania are examined. Preceding the infrastructure projects is a brief overview of the political and economic conditions in these countries. The analysis of the railway lines Mombasa-Malaba or Addis Ababa-Djibouti as well as the port and special economic zone in Bagamoyo is based on the content-analytical evaluation of press articles in local newspapers. The central processing narratives of the investment projects should be derived from the newspaper articles in order to determine to what extent the Chinese BRI engagement is accepted in civil society arenas. Since the representation is characterized by the large number of processed newspaper articles primarily by an empirical character, the results should be summarized in an interim conclusion and related to the theoretical framework. The final Chap. 7 and 8 summarize the results, reflect the limits of the work, sketch approaches for subsequent studies as well as the transregional research on the Chinese Belt and Road Initiative. With this work, a contribution is made to better understand the character and implementation of the BRI in individual regions and countries. The empirical evaluation makes it evident that the unfolding of Sino-capitalism has far-reaching implications. In the context of the BRI, China has become the most important trading partner, investor and bilateral creditor in East Africa (see AEI 2020; UNCTAD 2021; World Bank 2021). With institutions such as the BRI and the FOCAC, the state-civil society complex steered by the CPC transforms bilateral relations, which is supported by concepts and visions such as the economic community of destiny or the symbiotic Win-Win relationships. The flanking of the BRI in East Africa is carried out by large-scale scholarship and training programs that address both African elites and civil society and address the everyday awareness of societies. By examining the structural interlocking and the three infrastructure projects, some trends and consequences become apparent that represent the BRI as a hegemonic project. Through BRI project contracts, the state-civil society complex ties the granting and processing of loans and investments to the participation of Chinese state-owned enterprises, state banks and workers. The contracts also make the externalization of technical and political standards evident. Through the disruptive character of the infrastructure projects, the everyday experience and the reality of life of the East African societies are addressed and productivity gains are made possible. The East African states adopt individual elements of the Sinocapitalist development model to varying degrees in the sense of the concept of passive revolution. In particular, the strong focus on infrastructure projects and the transport sector in national development agendas was evident. However, the

12

1 Introduction

implementation of the BRI also has limits. Numerous reactions and resistance to the BRI become apparent, in particular with regard to social, ecological and financial issues. This affects both the implementation of BRI projects and the unfolding of Sino-capitalism. In some cases, projects are only partially completed or not implemented at all.

2

State of the Art—The Rise of China and the BRI

The foreign policy of the People’s Republic of China is characterized by greater proactivity in the era of Xi Jinping. The BRI is considered Xi’s central, economic, political and diplomatic project for the development, development and integration of numerous world regions. The scientific debate about China’s rise and global role has gained new momentum. However, the multi-dimensional nature of the BRI is underestimated in the previous discussion. It is not only about a material entanglement of China with countries along the BRI, but also about the securing of cooperation on the basis of ideas and institutions. The BRI is also not only directed at elites in partner countries, but also at social actors in order to anchor the project in everyday experience. In previous studies, the civil society reactions to China’s BRI are neglected. Furthermore, many studies only deal subordinate with Africa, although the continent is particularly since the FOCAC-foundation in the year 2000 as a laboratory for a more proactive Chinese foreign, trade and security policy and priorities of the BRI have their origin in the Chinese engagement with Africa.

2.1 Facets of the Debate About the Rise and Role of China Since the assumption of office of Xi Jinping as General Secretary of the Communist Party of China in 2012 and as President of the People’s Republic of China in 2013, Chinese foreign policy has been characterized by greater proactivity. The foreign policy self-confidence is rooted in an economic increase in importance. China holds the largest share of global foreign exchange reserves, is the world’s leading exporter and, if gross domestic product is adjusted for purchasing power © The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 S. Züfle, The Political Economy of China’s Belt and Road Initiative in East Africa, https://doi.org/10.1007/978-3-658-41161-9_2

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2  State of the Art—The Rise of China and the BRI

parity, the world’s largest economy (see UNCTAD 2021a; World Bank 2021a, b, c). The foreign policy self-confidence is significantly due to the consolidation of Xi’s power. These include the anti-corruption campaign initiated by him, the centralization of the foreign and security policy decision-making process and the deep-seated military modernization and restructuring in order to secure the loyalty of the PLA to the Communist Party of China (see Krupakar 2017; Chase 2018; Cooper 2018). The ambitious development goals of the Chinese leadership are condensed in the Chinese dream. By the 100th anniversary of the Communist Party of China in 2021 or the People’s Republic of China in 2049, the central leadership wants to create a prosperous society (cf. Ferdinand 2016). At the same time, these deadlines are to cement China’s technological, political and economic development. They also serve as a legitimation for the leadership claim of the Communist Party of China and are to be driven forward in particular by industrial and trade policy programmes. With the industrial strategy “Made in China 2025”, the People’s Republic of China aims to achieve technological leadership in ten key sectors, including robotics, artificial intelligence, autonomous driving or cloud computing (cf. Zenglein/Holzmann 2019). With the strategy “China Standards 2025”, the central leadership of the People’s Republic of China intends to significantly shape the international codification and standardization in the digital space (cf. Arcesati 2019). The BRI is more comprehensive and integrates both policies. On the one hand, new markets for the sale of Chinese goods and technologies and the supply of Chinese development with critical raw materials are to be ensured. On the other hand, the harmonization of standards is to contribute to a simplification of trade and to strengthen China’s global weight (ibid.). The Chinese dream has massive effects on the global power constellation. In its international orientation, it provides for China’s return to a glorious position on the global stage. After all, China has long been considered the economic and cultural centre of East Asia before it lost its superiority and sovereignty in the “century of humiliation” and was forcibly integrated into the Westphalian state system by Western and Japanese imperial powers (cf. Zhao 2015a). The Chinese dream also underlines for some authors the desire for great power status and the economic and military catching up to the USA. Rhetorically, for these authors, the revitalization of the Chinese dream is shown in the departure from the principle of “Taoguang Yanghui” coined by Deng Xiaoping, which placed military engagement under the primacy of economic development, to a more proactive “Do something” or “Striving for achievement” (cf. Li 2016). The foreign policy self-confidence of the People’s Republic aims for some authors that their own weight in global affairs is recognized and expanded. The

2.1  Facets of the Debate About the Rise and Role of China

15

economic power, for example in terms of financial reserves, trade, investments and credits, is to be used to change the global power structure (cf. Sieren 2013; Huotari/Heep 2016; Prasad 2017). On the one hand, established institutions, including the World Bank, IMF and UN Security Council, are to be reformed and the growing importance of China in decision-making structures and processes to be recognized. On the other hand, China founds and promotes alternative institutions, in addition to the BRI, for example the Asian Infrastructure Investment Bank (AIIB), the Shanghai Cooperation Organization (SCO) or the BRICS format. This is intended to set other priorities in addition to the balance of power to Western supremacy in international organizations, with the Global South to be more integrated into international decision-making (cf. Ren 2016; Wuthnow 2017; Yuan 2018). Another facet of the increasingly confrontational course in international affairs are territorial disputes in the East and South China Seas. The conflict over the Diaoyu or Senkaku islands claimed by both Japan and China and the establishment of an Air Defense Identification Zone in the East China Sea escalated, while there are continuing territorial disputes between China and the ASEAN states in the South China Sea, for example with Vietnam or the Philippines over the Spratly Islands (cf. Zhang 2020). The new proactive nature of Chinese foreign policy also generated dynamics in scientific discussion. There is consensus that Chinese rise has massive implications for the global order, while it is controversially discussed to what extent China replaces the USA as global hegemon and whether this process is peaceful. Numerous authors predict a hegemonic transition from the USA to China and expect that China will challenge the USA (see Ikenberry 2008a; Levy 2008; Cooney 2009; Goh 2009; White 2010; Jacques 2012; Cardenal/Araújo 2014; Pillsbury 2016; Beeson 2018a). For authors following (neo-)realism1 it is certain that the tense relations between an emerging state and the established hegemon in the history of the modern state system mostly took place violently (see Mearsheimer 2006; Layne 2008; May/Hong 2009; Allison 2017). These authors

1 Realistic

patterns of argumentation have been criticized for reinforcing the China-Threatdiscourse. So China does not have the military and economic resources for a competition with the USA and its high growth rates are not sustainable in the long term. Therefore, Chinese rise does not necessarily lead to instability of the global system (see Roy 1996; Broomfield 2003; Al-Rhodan 2007; Kang 2007). In one of the few empirical studies, the China-Threat-paradigm for the Southeast Asian region is questioned in economic terms (see Pavlićević/Kratz 2018). Other authors point out that the Chinese threat narrative is a question of addressing a specific audience and is used to differentiate and reassure a Western self (see Pan 2012; Song 2015).

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2  State of the Art—The Rise of China and the BRI

see in particular in the Chinese foreign and security policy in the Asia-Pacific region a threat to international stability (see Roy 1996; Mearsheimer 2001; Yee/ Storey 2002; Ross 2005; Pan 2012; Mearsheimer 2010; Yahuda 2013; Shah 2017). Some representatives of the Power Transition Theory assume that Chinese rise will end in a war with the USA in the middle of the 21st century2 (see Tammen/Kugler 2006; Levy 2008; Lai 2011). Realistic arguments include above all military and economic factors, which undoubtedly represent a significant facet to trace Chinese rise. However, in realistic approaches, the importance of the ideal and institutional component is underestimated. China is not only developing economically and militarily, but is also securing its own development through flank measures, such as the establishment of institutions such as BRI or AIIB and the formulation of alternative models and visions. In addition, realistic approaches remain at a systemic level and omit the social reactions in the BRI partner countries. In addition, some studies only represent individual aspects of Chinese power, such as finance (see Walter/Howie 2011; Bowles/Wang 2013; Prasad 2017; Eichengreen/Lombardi 2017), security (see Holslag 2010; Chansoria 2011; Cliff 2015), or reaching for resources (see Jiang/Sinton 2011; Economy/Levi 2014). The multi-dimensional character of BRI almost underscores the need to analyze the often separately considered facets of Chinese rise together. In first studies to close this research gap, the connection between economic transformation and new proactive foreign policy is pointed out (see Shambaugh 2013; Cohen/Chiu 2014; D’Ávila Magalhães 2018; Schmalz 2018). The Belt and Road Initiative exceeds the impact of the financial and economic crisis of 2008/09 on China’s role in the international order. Numerous authors discuss to what extent the transatlantic crisis intensity represented a watershed for the decline of the USA or the West (see Altman 2009; Bergsten 2009; Layne 2009; Brzezinski 2012; Cox 2014; Helleiner/Kirshner 2014). In contrast, the crisis hit less the emerging and developing countries and they were able to maintain high growth rates (see Nesvetailova/Palan 2010; Schmalz/Ebenau 2012). Some countries like Brazil and Russia fell into an economic crisis late, while East Asian countries survived it well overall. Above all, China showed amazing resilience to the financial and currency crisis and became the economic locomotive of the

2 The

assumptions underlying the Power Transition Theory are criticized. So they would be based on historical analogies that would push China into the role of a revisionist state on the one hand and the post-Soviet antagonist of the USA on the other (see Chan 2008; Overholt 2008; Jeffery 2009).

2.1  Facets of the Debate About the Rise and Role of China

17

global economy, which some authors attribute above all to the state-capitalist system with its extensive economic programs and state control of the financial sector (see Breslin 2012; Lardy 2012; McNally 2012; Ten Brink/Nölke 2013; Deppe 2013; Bloom 2016). Despite China’s claim in the economic and financial crisis, various authors diagnose that China’s economic resources have not yet been transferred to a hegemonic position in the international system. They attribute this to the relative weakness vis-à-vis the USA and structural problems of the Chinese economy. China’s accession to the WTO in 2001 underlined the limited influence of China on international institutions. In addition, Chinese overseas investment and growing credit extension are recent phenomena since 2000. Such arguments point to the fact that the Chinese economy is integrated into the lower production levels of the international value creation and the presence of Chinese companies abroad is not yet at the level of Western companies (see Lardy 2002; Zhou 2009; Gao/ Yu 2011; Wade 2011). For other authors, it is added that the renminbi, despite growing internationalization, cannot challenge the USD or the worldwide dominance of the US financial sector (see Panitch/Gindin 2012; Scherrer 2015; Babones 2017; Germain/Schwartz 2017). Other authors emphasize that China is not yet at the same level militarily and technologically as the USA and NATO (see Holslag 2010). For numerous authors, national barriers limit China’s further rise. So the Chinese economy is said to be in a structural crisis that requires new reform impulses for domestic consumption and liberalization in other sectors. Otherwise, the high growth rates would not be sustainable in the long run. In addition, there is an inflated real estate sector, bad loans from shadow banks and a high level of indebtedness of companies (cf. Naughton 2010; García-Herrero/Santabárbara 2011; Walter/Howie 2011; Ten Brink 2012; Gorrie 2013; Starrs 2013; Elliot/ Kroeber/Qiao 2015; Tsai 2015; Hung 2016; Glaeser et al. 2017). There is broad agreement among the scientific community on the above-mentioned structural problems of the Chinese economy. However, the role of the BRI should be appreciated here, as the Chinese leadership is founding alternative forums for international cooperation and, through the investment activities of Chinese companies in partner countries, is reducing overcapacities and gaining access to raw materials. For authors in the liberal institutionalist tradition, China’s rise is peaceful because the country is increasingly embedded in the liberal world order and maintains economic interdependence with other states (cf. Liang 2007; Ikenberry 2008a, b; Karabell 2009; Steinfeld 2010; Nölke 2015). However, this conclusion requires a re-evaluation because China is driving its own initiative forward with the BRI in order to become more independent of established global institutions.

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While the Chinese government partially supports the liberal order in areas where it appears opportune to do so, for example in promoting a liberal and open trade order, there has been a disconnection between Western countries and China in recent years. For example, the USA and China imposed tariffs on each other in the billions, starting with individual products such as solar modules and washing machines in January and steel and aluminum in March 2018. The trade conflict widened in 2018 and 2019 to include ever-broader lists of products, until well over half of bilateral trade was subject to tariffs (cf. Bown 2021). Furthermore, the trend of decoupling manifested itself in the technology sector. The USA imposed export bans on key technologies, in particular semiconductors, and at the same time prohibited US companies from purchasing such products of Chinese origin. In response, the Chinese leadership announced that, based on the 3-5-2 rule, it would replace US technology in state agencies with national products over a period of three years. In addition, European countries and the USA tightened their investment regime in order to deny Chinese investments, which, from the Western perspective, are motivated and financed by state industrial strategies, access to critical technologies and infrastructure. Some authors see state capitalism, in which the state directs the economy through stateowned, state-loyal and state-financed companies, as the central challenge to market capitalism (cf. Choate 2009; Bremmer 2010). Other authors, on the other hand, speak of neoliberalism with Chinese characteristics, which is based on the long-term strategy of consensual development of states within a Sinocentric world order (cf. Rucki 2011; Strange 2011). Authors following constructivism emphasize the importance of learning and socialization processes of the Chinese government with an increasing behavioral convergence towards established global norms (see Johnston 2003; Legro 2005; Kent 2007; Johnston 2008; Benabdallah 2019). However, such approaches underestimate the externalization of Chinese role models, visions and values within the BRI, which partially represent an alternative to the norms and standards of established international financial institutions. In this way, China gradually advances from a Norm Follower to a Norm Maker. To be mentioned here is, for example, the Chinese development model in general, or specifically the pragmatic granting of loans to all countries that recognize the People’s Republic as a representation of China (see Benabdallah 2019). The question of whether China will replace the USA as a benevolent or ruthless hegemon is also discussed in the scientific literature (see Snidal 1985; Keohane 1984; Lemke 1997; Walt 2005; Bromley 2008; Brooks 2012). The benevolent or ruthless character of a hegemony can be examined above all by taking up the perception of civil society, which has so far been neglected in studies.

2.2  Investigations on the Chinese Belt and Road Initiative

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However, the perception of Chinese engagement in the civil society arenas of BRI partner countries in the Global South could be given greater importance: “The actions of subordinate states are the critical determinants of the way in which various foreign policy initiatives and hegemonic goals are realised” (Beeson 2018b: 250). Against the background of the America-First policy, the US government increasingly questions preferential trade conditions for states in the Global South, such as the Generalized System of Preferences or the African Growth and Opportunity Act. China, on the other hand, appears as an advocate for these countries and intensifies its trade, investment and credit relations (see Carmody/Owusu 2007; Carmody/Taylor 2010)—a trend that is reinforced by the BRI.

2.2 Investigations on the Chinese Belt and Road Initiative The BRI builds on the ancient Silk Road, which emerged during the Western expansion of the Han Dynasty (approx. 206 BC-220 AD) and created a trade network of thousands of kilometers between China and the present-day Central Asian countries, India, Pakistan and Europe. While tea, jade and silk came from the East to the trade route, for example, gold and silver flowed to Asia. In addition, the ancient Silk Road led to a circulation or mobility of ideas, religions and people. Today, the BRI comprises more than 140 countries, the connectivity of which is to be increased above all by infrastructure and communication projects. The BRI is divided into a terrestrial (SREB) and maritime (MSRI) connection, with ‘Belt’ standing for the land connection with six economic corridors and ‘Road’ for the sea route. President Xi Jinping announced the SREB during a Kazakhstan trip in September 2013 and the MSRI during an Asia-Pacific Economic Cooperation summit in Indonesia in October 2013 (see Pantucci 2016a). In the theoretical classification of BRI, a realistic perspective prevails according to which BRI is a clearly defined, top-down grand strategy with geopolitical and geo-economic goals (see Aoyama 2016, Pantucci/Lain 2016a; Wang 2016; Mendez/Alden 2021). Other authors dispute this classification and see BRI rather as the utopia of an alternative world order (see Gong/Ding 2018; Liu/Dunford 2016; Nobis 2018; Wang/Liu 2019). For some authors, the focus of the analysis should rather be on internal transformation processes, in the course of which political interest conflicts and power struggles come to light and influence the design and implementation of BRI (see Jones/Zeng 2019; Yu 2018; Ye 2019). Constructivist analyses show the diffusion of alternative Chinese norms and practices (see Benabdallah 2019; Vangeli 2019). In studies with a critical perspective,

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the role of BRI for the spatial expansion of Chinese capital to overcome the semiperipheral status in the world system is appreciated (see Zhang 2017; van der Merwe 2019). However, there is consensus in the scientific literature that BRI is now omnipresent in the statements of the Chinese leadership and in practice hardly separable from Chinese foreign policy. Some central elements of BRI cooperation are undisputed. These include Chinese investments in infrastructure projects, deepening trade relations and increasingly the internationalization of the Chinese currency (see Pantucci/Lain 2016a; Liu et al. 2017; Ploberger 2017; Sun/ Zoubir 2017; Du/Zhang 2018; Fung et al. 2018; Cui/Song 2019; Flint/Zhu 2019; Wang/Qiu/Choi 2019; Zhang 2019; Zhao et al. 2019). However, due to the vague description of the initiative, it remains unclear what qualifies BRI projects as such (see Ekman et al. 2017; Griffiths 2017). Since the current debate often remains on an abstract geopolitical or regional level and tends to generalize (see Blanchard 2018), it would be fruitful for further discussion to examine the concrete effects of BRI on the basis of individual countries and projects. In a next step, patterns of BRI engagement could be identified in a regional comparison. With regard to the motives for the adoption of BRI, there is consensus in the debate that its foundation comes against the background of cooling economic growth rates, stagnating exports and industrial overcapacity. In addition, BRI is intended to modernize and more strongly integrate into the national economy and global trade the western provinces, such as Yunnan or the Xinjiang Autonomous Region. This could, from the perspective of the Chinese leadership, alleviate ethnic tensions and contain the feared transfer of Islamic radicalism from Central Asia. BRI is also seen as an attempt to respond to the US Pivot to Asia and weaken US dominance in the Indo-Pacific region (see Clarke 2016; Ferdinand 2016; Pantucci/ Lain 2016b; Yu 2017; Tekdal 2018; Ye 2019; Clarke 2020; Hayes 2020). The dimension of deepening inter-societal relations has been left out of the debate so far. It is often stated in analyses that China’s soft power is limited (cf. Beeson 2018b: 250). For the security of China’s engagement, its positive perception by civil societies in the BRI partner countries is central. The accompanying measures of China as well as the civil society reaction patterns in the BRI partner countries are only hinted at anecdotally in some studies (cf. Chen 2018; Chen/ Fazilov 2018; Reeves 2018). This is linked to another deficit in the debate so far. For the most part, these are top-down analyses in which the diversity of actors is neglected. So while it is considered certain that the BRI is part of a fundamental reformulation of foreign policy under President Xi and that a variety of private and state-owned companies as well as national and provincial authorities are integrated (cf. Li 2016; Summers 2016; Blanchard/Flint 2017; Mumuni/Murphy

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2018; Hu 2019; Jones/Zeng 2019; Rolland 2019; Shi/Hoebink 2020), the actors involved in China could be better outlined through the examination of individual investment projects. There is a geographical focus on the BRI corridors in South (East) Asia (cf. Chen 2018; Chung 2018; Garlick 2018; King/Du 2018) as well as Central Asia (cf. de Pedro 2010; Pantucci/Lain 2016c; Wilson 2016; Zhou/Esteban 2018; Shariatinia/Azizi 2019), as these regions are in the immediate vicinity of China and Xi Jinping announced the BRI there. Particular attention is paid to the China-Pakistan Economic Corridor, which, with an investment volume of around 50 billion USD, creates an overland transport corridor between Xinjiang and the Pakistani port of Gwadar. Geopolitically, it is of central importance because China is striving to reduce its dependence on the Straits of Malacca and to challenge Indian dominance in South Asia and the Indian Ocean (cf. Len 2015; Blanchard 2017; Brewster 2017; Sun/Zoubir 2017; Eder/Mardell 2018; Ghiasy/Su/Saalman 2018; Malik 2018; Salik 2018; Chakma 2019; Roy 2019). The BRI is the subject of controversial debates about the benefits of BRI projects for China and the partner countries. The risks for the Chinese government and companies are that China is working with backward economies under unstable conditions and that the Chinese presence is often viewed with suspicion (cf. Ferdinand 2016; Pantucci/Lain 2016d; Wang 2016; Zhang/Wu 2017). In addition, it is criticized that the implementation of the BRI is largely regulated through bilateral channels. Through the non-transparent contract design, the participation of Chinese companies and workers in the projects is ensured, while corruption and authoritarian regimes are strengthened in partner countries and debt increases. In addition, the ecological risks of BRI projects as well as lack of labour and social standards are criticized (cf. Pantucci/Lain 2016d; Balding 2018; Hurley/Morris/Portelance 2018; Rafiq 2019). Pakistan and Sri Lanka are often used to illustrate the risks for BRI countries and to bring China’s hegemonic ambitions in the BRI into focus. In Pakistan, high investments under the China-Pakistan Economic Corridor led to a payment crisis that required an IMF intervention. In Sri Lanka, the government was unable to repay Chinese loans and then leased the Hambantota port to a Chinese consortium for 99 years. In particular, the Sri Lanka case fueled the public debate about the indebtedness of BRI partner countries to China. However, some authors criticize the narrative of a debt trap and point out that China’s engagement creates room for maneuver for developing countries (see Bräutigam 2020; Carmody 2020; DeBoom 2020; Lai/Lin/Sidaway 2020; Singh 2021). In view of this criticism, it appears to be of importance to prepare the development of individual BRI projects from the planning to the operational phase in a scientifically sound

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­ anner in order to gain differentiated insights. The dynamics of these projects m should be examined over the years without exaggerating individual aspects and making premature statements about the implications of the BRI for participating countries.

2.3 (East) Africa as Part of the BRI Only in a few studies is a look beyond the political and economic importance of the BRI in Asia. This applies in particular to African countries, which account for around a quarter of partner countries. However, there is a lack of scientific debate on Sino-African cooperation within the framework of the BRI: “[L]ittle attention has been paid to exploring the role of African countries in China’s Belt and Road Initiative” (Lau 2020: 159). In individual studies, the BRI in (East) Africa is placed in the tradition of Sino-African relations under the umbrella of FOCAC, with individual projects and the participation of individual African countries in the BRI being outlined (see Pautasso 2016; Pino 2016; Breuer 2017; Ehizuelen 2017; Wissenbach/Wang 2017; Cabestan 2019; Fowler 2019; Githaiga/Wang 2019; Gu/Qiu 2019; Wang / Wissenbach 2019; Xuejun 2019; Zhou 2019; Abegunrin/Manyeruke 2020; Ado 2020; Han/Webber 2020; Carrai 2021; Chen 2021). In the context of such studies, it is emphasized that there is still little known about Sino-African relations under the mantle of the BRI—in particular with regard to individual projects in East Africa: “[T]here is a lack of project-level analysis and documentation relating to China’s overarching economic strategies in the East African region” (Fowler 2019: 1). The first approaches to the examination of individual BRI projects, such as the Kenyan Mombasa-Malaba Standard Gauge Railway, remain on a generic level. There is a lack of a comprehensive examination of the entire project period, from project planning to construction and operation. In addition, social reactions are neglected in previous studies. In order to assess the impact of the BRI and the security of Chinese engagement in African countries, local perspectives on the BRI should therefore be given more attention (see Benabdallah 2019; Garcia/Xu 2019). The subordinate focus on China’s BRI in Africa is surprising, as the continent of the People’s Republic serves as a laboratory for a more proactive foreign, trade and security policy. Key elements of the BRI had their predecessors in SinoAfrican cooperation—a context that has so far been given only subordinate attention in the debate. In the research debate, one has further dealt with the political, economic and ideological interests of China in Africa. The aim is to promote the diplomatic recognition of China. In China’s diplomatic approach, in p­ articular

2.3  (East) Africa as Part of the BRI

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anti-hegemonic and anti-colonial elements are to serve as a mobilizing and unifying bond with African countries. In addition, China is striving for support for its own projects in international organizations (cf. Lau 2020). The ideological interests include the placement of the Chinese development model as an alternative concept to the Washington Consensus (cf. Zhao 2015b): “By portraying itself as an advocate for the developing world and emphasizing the rhetoric of SouthSouth cooperation, China has arguably sought to offer itself up as an alternative model to Western dominance” (Taylor 2011: 33). China’s economic interests lie in the permanent energy security through imports of oil and other raw materials from Africa. In addition, sales markets for Chinese goods and technology are to be won and investment opportunities for Chinese companies created. The triad of Sino-African economic relations outlined in the research comprises trade relations, foreign direct investment and development aid (cf. Alden 2005b; Campbell 2008; Alden/Davies 2006; Taylor 2006; Kolstad/Wiig 2011; Shen 2015; Busse/Erdogan/Mühlen 2016; Chakrabarty 2016a; Chakrabarty 2016b; Chen 2016; Mlambo/Kushamba/Simawu 2016; Nicolas 2017; Tian/Fan/Liu 2018; Tian/Yumei/Chao 2018; Chan 2019; Lau 2020). However, the provision of credit is another significant dimension of Sino-African relations that is overlooked. The granting of credit is an integral part of Chinese development aid (cf. Bräutigam 2011; Bräutigam/Huang/Acker 2020). The Forum on China-Africa Cooperation, founded in 2000, served to intensify bi- and multilateral relations in the political, economic and ideological field. This was the first multilateral dialogue forum of the People’s Republic with a region in the Global South (cf. Melber 2013; Alden/Large 2015; Jakóbowski 2018; Mokry 2018). Some authors assess the Sino-African relations within the FOCAC as a test field for the intertwining of development aid and economic engagement, for example in the establishment of agricultural demonstration centers and special economic zones (cf. Bräutigam 2011; Morgan/Zheng 2019). A central research debate revolves around the question of whether China’s approach in Africa differs from that of OECD countries, or whether China reproduces neocolonial relationships. On the one hand, some authors emphasize that, in contrast to OECD donors, China also cooperates with autocratic states and does not interfere in internal state affairs. While China pragmatically grants loans to almost all countries, Western states and some international financial institutions tie their development aid to conditions such as democracy or the rule of law (cf. Alden/Large/Soares de Oliveira 2008; Bräutigam 2011). Other authors emphasize the complementarity of Chinese and African interests, because the latter also have a diverse interest in cooperation with China: China offers favourable loan conditions, invests in infrastructure, the annual investment need of which according

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to the AfDB is USD 130–170 billion (cf. AfDB 2018: 63), promises access to new technologies and promotes the continent’s natural resources (cf. Alves 2013; Corkin 2014; Asongu 2016; Cheru 2016; Li/Shaw 2016; Besada/O’Bright 2017; Emmanuel 2017; Ursu/van den Berg 2018; Githaiga et al. 2019; Humphrey/ Michaelowa 2019; Ndzendze/Monyae 2019). For other observers, China is a promoter of existing international institutions and does not hold an alternative model for engagement with Africa ready (cf. Taylor/Xiao 2009; Taylor 2014). For some authors, however, China’s engagement in Africa is a new form of colonialism, as the financing commitments for investment projects are linked to access to natural resources, the participation of Chinese workers and companies (cf. Power/Mohan 2010; Curtis 2013; Sanusi 2013; Hanauer/Morris 2014; Wang/Elliot 2014; Kabemba 2016). For some researchers, Africa is confronted with a dominant partner again, which leads to trade imbalances and has a negative impact on African industrialization potential, for example through cheap textile imports from China (cf. Kaplinsky 2008; Taylor 2010; Sindzingre 2013; Taylor 2014; Taylor/Zajontz 2020). For other authors, China’s engagement in Africa has negative political and social implications and strengthens corruption and authoritarian regimes (cf. Kleine-Ahlbrandt/Small 2008; Dreher et al. 2016; Brazys/Elkink/Kelly 2017; Isaksson/Kotsadam 2018; Githaiga et al. 2019). In addition, social and environmental standards are undermined (cf. Bosshard 2008; Ben Yishay et al. 2016). Finally, some authors note an increasing indebtedness of African countries to the People’s Republic of China (cf. Bräutigam/Hwang 2016; Were 2018; Kinyondo 2019). In another debate, scientists dealt with the question to what extent African actors have leeway vis-à-vis Chinese actors. In many studies, a powerful China is generally conceptualized that forces its will on African states. In contrast, a growing body of research shows that African states have a significant influence on shaping relations with China (see Kragelund 2012; Mohan/Lampert 2012; Corkin 2013; Kragelund/Carmody 2015; van Staden/Alden/Wu 2018). African elites can thus instrumentalize relations with China to maintain their political and economic power and to promote natural resources (see Bayart 2000; Corkin 2013; Taylor 2014; Phillip 2018). Whether the Sino-African relations will lead to a win-win partnership therefore depends on the long-term development strategies of African governments to strategically involve external actors, promote industrialization and diversification of economies, and demand technology transfer (see Cheru 2016; Qobo/le Pere 2018; Kinyondo 2019; Anthony 2020). Although the role and importance of African agency in Sino-African relations is increasingly emphasized, there are still few studies on how African actors exercise it vis-à-vis Chinese actors. Since the BRI is the flagship diplomatic policy of Chinese foreign

2.3  (East) Africa as Part of the BRI

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policy, appropriate studies could show to what extent African states use the BRI to achieve their own development goals. So far, studies on Chinese activities in Africa have focused mainly on economic matters. There is a lack of comprehensive views of the BRI in Africa, which brings together the different dimensions of Chinese engagement, including trade, investment, inter-societal cooperation and security policy. In Africa, for example, the growing security policy engagement of China is becoming apparent. It manifests itself in anti-piracy missions off the coast of Somalia, the establishment of a naval base in Djibouti, arms deliveries and engagement in peacekeeping missions (see Aning 2010; Anthony/Hengkun 2014; Large 2016; Pautasso 2016; Boutin 2018; Pant/Haidar 2017; Cho 2018; Walsh 2019; de Coning/Osland 2020; Munyi 2020). A key implication of the growing engagement in security policy is that the Chinese leadership embeds its own measures in multilateral missions, but now interprets the principle of non-interference more flexibly (see Aido/Hess 2015; Barton 2018; Alden/Jiang 2019). Under the guise of the BRI, China’s security policy engagement, such as the growing role of private security companies, has been examined in isolated cases (see Eder/Lang/Rudolf 2017; Legarda/Hoffmann 2018; Legarda/Nouwens 2018; Zheng/Xia 2021). In addition to the security policy flank of investments and trade relations, the Chinese leadership is also intensifying its engagement in the media and cultural sector. The first outlines of the research field show that the Chinese government regularly sends experts to train medical and technical personnel. With scholarships and further education measures, the Chinese government is addressing foreign journalists, students, engineers and party cadres (cf. Benabdallah 2016, 2019). In the media sector, previous studies have highlighted that Chinese television and radio stations are increasingly expanding into Africa. In 2012, China Central Television (CCTV) opened its first overseas station in Nairobi. However, Chinese media have so far found it difficult to gain a foothold in the market dominated by Western media houses and to mediate between Chinese media policy and the predominantly free African media market (cf. Gorfinkel et al. 2014; Zhang/Mwangi 2016). In the cultural sector, it is above all Confucius Institutes that are to promote the Chinese language. Their foundation seems to have a positive effect on trade and investment flows (cf. Akhtaruzzaman/Berg/Lien 2017). The consideration of these flank measures therefore appears to be of central importance in order to show the implications of the BRI for the everyday experiences of African societies.

3

Theory and Analytical Perspective

This paper relies on a neo-Gramscian approach to shed light on the externalization of Sino-capitalism within the BRI in East Africa. A hegemonic approach appears to be a useful way to grasp the multi-dimensional nature of Chinese engagement in East Africa and its implications for the countries involved. First, the Gramscian theory and understanding of hegemony will be located in the academic debate. Based on Antonio Gramsci’s remarks, the assumptions for the global level are to be made fruitful. Even if this paper relies on the remarks of different authors, this should not justify arbitrariness, but meet the claim to transfer the neo-Gramscian assumptions to China in the era of Xi Jinping. This paper deals with central concepts of the (neo-)Gramscianism, in particular “state-civil society complex”, “historical block” and “political or hegemonic project”. In Sect. 3.4 it is reflected to what extent these concepts can be applied to the Chinese context. The central argument is that the state-civil society complex controlled by the CPC drives the externalization of Sino-capitalism to secure national development. The BRI is the political project with which the Chinese state-civil society complex wants to promote the development of East Africa. This is flanked by sub-projects in the field of security policy and culture to address the civil society arenas in the partner countries. After the theoretical explanations and the operationalization, the research methods are presented in Sect. 3.5 which are based on an evaluation of relevant databases of international institutions and think tanks to show the structural interlocking between China and the East African BRI partner countries. The ideal and institutional externalization of Sino-capitalism is mainly examined by evaluating the communiqués of the Belt and Road Forums and FOCAC summits. The implications of the BRI for the everyday experiences of the partner countries are supplemented by an evaluation of two surveys of the Afrobarometer. © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 S. Züfle, The Political Economy of China’s Belt and Road Initiative in East Africa, https://doi.org/10.1007/978-3-658-41161-9_3

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The content-analytical reconstruction of three key infrastructure projects in East Africa is based on the evaluation of local newspaper articles. The empirical basis is supplemented by individual guideline interviews. In Sect. 3.6 the theoreticalmethodological approach is reflected from a postcolonial perspective.

3.1 The Neo-Gramscianism as a Critical Theory Perspective In the social sciences there are numerous discussions about the theory concept, which revolve around different ontological, epistemological and methodological basic positions. Neo-Gramscian authors also positioned themselves in the epistemological debate in the 1980s between positivists and post-positivists. According to Robert Cox’s famous dictum “theory is always for someone and for some purpose” (Cox 1996: 87), problem-solving and critical theories can be distinguished. A problem-solving theory “takes the world as it finds it, with the prevailing social and power relationships and the institutions into which they are organised (…) The general aim (…) is to make these relationships and institutions work smoothly by dealing effectively with particular sources of trouble” (Cox 1981: 128/129). Neo-realist, neoliberal-institutionalist approaches or world system theory are thus problem-solving theories. These assume that the basic properties of the international system are constant: Neo-realism focuses on states, neoliberal institutionalists on regimes that states choose to implement their interests, and world system theory divides states into the categories of centre, semi-periphery and periphery. These approaches contribute to the fact that the existing social, political and economic power relations with their inequalities and contradictions continue to exist (cf. Bieler/Morton 2003). A critical theory, on the other hand, “does not take institutions and social and power relations for granted but calls them into question by concerning itself with their origins and how and whether they might be in the process of changing (…) Critical theory is directed to the social and political complex as a whole” (Cox 1981: 129). In critical theories, according to Cox, institutions and power relations are not seen as given, but their origin is questioned and a possible potential for change is insinuated. With such approaches, the emergence of the existing world order with its dominant norms, institutions and practices is illuminated. Based on this, social forces are identified from which an emancipatory project for an alternative and more just world order could emerge (cf. Bieler/Morton 2003). Neo-Gramscianism claims to be a critical theory perspective itself and to pursue a non-deterministic approach to explaining social change. For Stephen Gill,

3.1  The Neo-Gramscianism as a Critical Theory Perspective

29

neo-Gramscian representatives aim to overcome the subject-object dualism of positivist social science (cf. Gill 1993: 16). Neo-Gramscian approaches are based on a materialist conception of the world order, with a central role being played by social structures. Less reliance will be placed on scientific methods such as observing human behaviour or statistical analysis. Instead, in the historical-critical approach, a confrontation takes place with the complex social and political phenomena in International Political Economy. At the same time, it is assumed that the existing power and domination relations contain specific contradictions that are articulated in certain situations (cf. Bieler/Morton 2003). The transferability of neo-Gramscian perspectives to global North-South relations is called into question by the continued violence and cultural dominance by states from the global North (cf. Persaud 2016). In contrast, the present work is to be understood as a pioneer in the investigation of the validity of neo-Gramscian arguments in South-South relations. A neo-Gramscian approach is an adequate tool to show the hegemonic tendencies of the externalization of Sino-capitalism in East Africa. The present work takes a pioneer role in the application of neoGramscian arguments to the People’s Republic of China and the BRI. Although there are isolated approaches that show the acceptability of the Chinese development model in Africa using the example of the textile sector (cf. Ulbrich 2014), against the background of the BRI, this work is the first study in which the BRI is perceived as a political project, based on which the Chinese state-civil society complex generalizes central elements of Sino-capitalism. A neo-Gramscian analytical perspective has numerous advantages, which can address some research gaps. This allows the investigation of both elite discourses and civil society’s perception of the BRI. It can be checked whether the East African population supports or rejects the generalization of the Chinese development model and its accompanying measures. For example, it can be examined to what extent the BRI leads to the sinification of societies, accompanied by modernization impulses and productivity increases. This makes it possible to draw conclusions as to whether the externalization of the Sino-capitalist development model and, as a result, the Chinese engagement actually have an impact on everyday life in the societies of the BRI partner countries. In addition, the neo-Gramscian perspective brings together the material and ideational resources for creating a hegemonic order. Previous studies following constructivism and neorealism fail to bundle material and social argumentation lines. While realistic arguments focus one-sidedly on the relative distribution of power capacities, constructivist analyses neglect the material change that affects social processes between states (cf. Sørensen 2008). With neo-Gramscianism, this deficit can be overcome by considering historical structures as a specific

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c­ onfiguration of forces consisting of material capabilities, ideas and institutions. Thus, the Chinese state-civil society complex is able to secure the deepening of material interdependence by an attractive ideational and institutional order for other states. In general, Neo-Gramscianism is understood as a research perspective in the present work, in which the work of different authors is taken into account. Neo-Gramscianism is not a clearly delineated IB grand theory like neorealism, but rather a superordinate theoretical framework that houses different currents. What the different authors have in common is that they make the concepts of the Marxist theorist Antonio Gramsci usable for the analysis of international politics (cf. Bohle 2012: 165). He stands in the tradition of historical materialism like Karl Marx or Eric Hobsbawm, with which the change in social relations is to be explained, whereas representatives of structural Marxism, such as Louis Althusser or Nicos Poulantzas, rely on historical knowledge for the analysis of the capitalist state and society and prefer a more static conceptualization of the mode of production (cf. Cox 1981: 134f.). The most prominent representative of the neo-Gramscian perspective is Robert Cox, who made Gramscian’s remarks usable for the international level at the beginning of the 1980s. Based on his analysis of British and US hegemony in the 19th and 20th centuries, Cox came to the conclusion that a state can occupy a hegemonic position if it designs and promotes an order with a claim to universal validity that other states regard as compatible with their own interests. In addition to Cox, the Amsterdam School around Kees van der Pijl also developed a research program that, like Cox’s remarks, inspired many authors (cf. Bohle 2012: 165). Stephen Gill, a Cox student, is also worth mentioning, who, with the empirical application of neo-Gramscian arguments to US hegemony after the end of the East-West conflict, promoted the further development of the perspective. He showed under which conditions a transnational accumulation regime and a hegemony of transnational capital arise (cf. Gill 1986). With regard to NorthSouth relations, it was Enrico Augelli and Craig Murphy who, with the help of Gramscian terminology, examined the erosion of the alliance of developing countries by US foreign policy at the beginning of the 1980s (cf. Augelli/Murphy 1989). The present work is based primarily on the original remarks by Robert Cox, as he places a focus on the materialist component of global hegemony. In this way, the criticism of some authors is taken into account in the present work, for whom neo-Gramscian approaches overestimate the importance of ideology in the formulation of economic policies. The balancing of ideas, institutions and material capacities would be inappropriate, as capital does not wait for the ­articulation

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of a specific ideology of monetarism. Instead, the articulation of an ideology is significant for the political legitimation of policies already implemented (cf. Burnham 1991: 83). As a starting point for the investigation of the generalization of the Sino-capitalist development model in East Africa, the present work therefore chooses material externalization, as emphasized by Cox and other authors (cf. Cox 1981: 147; Cox 1996: 138; Jacobitz 1991: 15). On the other hand, the ideological and institutional externalization of the Sino-capitalist development model should illustrate the securing of material entanglement through models and visions. In order to bring in a stronger process dimension into research work, in particular the concept of the political or hegemonic project is addressed (cf. Bieling 2010: 34). In the present work it is argued that the political project starts from and is externalized by a Chinese state-civil society complex. This represents a departure from the criticism of some authors who, according to neo-Gramscian perspectives, reduce the state to a transmission belt that adjusts the national economy to the conditions of the global economy (cf. Panitch 1994). By attempting to examine a political project of the Chinese state-civil society complex, further criticism is also addressed. Thus, some authors state that neo-Gramscian perspectives lack the ability to take into account potential alternatives to the current order because they are too concerned with consolidating neoliberalism (cf. Drainville 1995). The present work is to be seen as an attempt to further develop neo-Gramscian arguments and make them usable for the Chinese context and South-South relations. At the same time, the examination can reflect the basic difficulties in operationalizing and the limits of applying neo-Gramscian perspectives.

3.2 The Concept of Hegemony in International Relations The term hegemony is derived from Greek and means ‘leadership’, whereas the related term empire means ‘domination’. While hegemony is characterized by allegiance and assumes a fundamental voluntariness and acceptance, empire stands for a stronger emphasis on coercion (cf. Menzel 2015: 10). The term Leadership is also frequently used in this context. The distinction can be seen in the continuum of Empire over hegemony to Leadership designed by Sandra Destradi. While an Empire is based on the control under the threat and use of military force, she understands Leadership as the pursuit of common goals, such as the construction and strengthening of international institutions (cf. Destradi 2010: 904). Hegemony, on the other hand, can take different forms, such as an order

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in which the normative convictions of a hegemon are socialized by other states. A hegemon therefore acts in its own interest and pursues goals that it presents as collective goals towards subordinate states. In addition, hegemonies exercise a combination of different incentives on the basis of their material and ideational resources in order to establish their claim to leadership in subordinate states on a broad basis (cf. ibid.: 917). Other concepts highlight different manifestations of hegemony. For example, Thomas Pedersen differentiates between unilateral hegemony, which is based on coercive measures, and cooperative hegemony, which plays an active role in institutionalization and involves other states through Side Payments and PowerSharing mechanisms (cf. Pedersen 2002: 683). Miriam Pyrs explains the concept of hegemony using three dimensions. Under perception, she understands the self-perception of a hegemon as such and the acceptance of its leadership role by other significant states, especially in the regional neighborhood. Under projection, she subsumes such measures with which the enforcement of one’s own interests in a region is intended. The unilateral provision of non-exclusive, public goods, e.g. regional infrastructure and order, rounds off the concept (cf. Pyrs 2008: 8f.). If the established theories of international relations are used, two central discussion threads in the “hegemony research” can be distinguished. A first debate revolves around the question of whether the hegemon pursues a benevolent policy or relies on coercive measures (cf. Destradi 2010: 913). One of the most prominent realist approaches is the theory of hegemonic stability1 , which goes back to Charles Kindleberger. For him, a hegemon fulfills an international order function, e.g. the guarantee of the open world trade system by the USA after the Second World War. Public goods are available to all participants in a market for consumption. In addition, the use of a good by a consumer does not obstruct the general usability. Other states can therefore profit as Freerider from the provision of ­public goods by the hegemon acting benevolently in this sense. In Robert Gilpin’s neo-realist approach, on the other hand, it is emphasized that the individual state

1 For

Kindleberger, a hegemon must fulfill five essential functions to stabilize the world economy: First, it keeps a relatively open market for goods in crisis industries alive. In addition, a hegemon provides loans countercyclically or at least continuously. It monitors a system of relatively stable exchange rates. In addition, it coordinates macroeconomic policies. Finally, it falls to the role of Lender of Last Ressort, by buying claims and securities, or providing liquidity through other means. If it appears as Lender of Last Ressort in a financial crisis, the international financial system is stabilized and such crises are coped with (cf. Kindleberger 2014: 370f.).

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is a utility maximizer and primarily pursues national interests. Although it provides public goods such as stability, free trade and security, it demands a kind of tax from the subordinate states so that they participate in the maintenance of the system. Due to the power asymmetry, Gilpin assumes that most states accept and pay this tax (cf. Gilpin 1981: 145). A second line of discussion concerns the power resources that underpin and sustain hegemony (see Destradi 2010: 913/914). In an anarchic milieu in which states act as utility and power maximizers, the hegemon is, for Charles Kindleberger, a militarily and economically dominant state (see Kindleberger 2014: 385). For him, it is primarily material incentives, such as integration into the world trade system, that underpin a state’s hegemonic claim. In contrast, poststructuralist authors emphasize that discursive practices play a key role in grounding a hegemonic claim. A hegemon aims to have foreign elites internalize its vision of the global order as their own (see Nabers 2010: 932). Joseph Nye expanded the military and economic dimensions of hegemony, which he referred to as Hard Power, to include elements of Soft Power. The foundation of hegemonic power is therefore no longer based on military force and conquest. Instead, a state seeks moral justification, such as an ideology and institutions that are advantageous to other states, in order to establish cultural leadership (see Nye 2002). Neo-Gramscian authors make an ambitious attempt to bring together material and ideational power resources. For Robert Cox, the term ‘hegemony’ is often equated with the dominance of one state over other states (see Cox 1996: 135). While material capacities are necessary for a state to establish and maintain its power base, the consent of the dominated classes and states to a hegemonic project is also reflected in the acceptance of ideas and institutions (see Bieler/Morton 2004: 87). The concept of hegemony integrates, alongside economic, political and ideological elements, everyday life and the lived reality of a society in a particular historical era, in order to make clear the totality of the situation of domination (see Jacobitz 1991: 10).

3.3 The (Neo-)Gramscian Understanding of Hegemony Neo-Gramscian perspectives go back to Antonio Gramsci (1891–1937). In his prison writings (1929–1935), the Italian politician and Marxist dealt with the capitalist societies of the 1920s and 1930s. Gramsci’s concepts emerged from his engagement with history, particularly his own experiences within the Third International and his opposition to fascism (see Cox 1996: 124/125). His analyses

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were focused on the relationship between civil society and the state, while international relations were of secondary importance (see ibid.). Robert Cox took up Gramcian hegemony and made it usable for studies at the global level. Nevertheless, the writings of other authors will be used below, through which the further delineation of the neo-Gramscian theoretical perspective was advanced, for example with regard to the concepts of the state-civil society complex or political and hegemonic project.

3.3.1 Hegemony With Gramsci The concept of hegemony developed by Gramsci is based on two pillars. On the one hand, he examined in European societies the degree of bourgeois hegemony. He came to the conclusion that the hegemony of the bourgeoisie was most developed in Scandinavian countries and included concessions to subordinate classes, which would manifest themselves in particular in social democracy. The hegemonic order would be acceptable to and supported by the working class in this way. The hegemony would be so deeply anchored in civil society that it would not have to appropriate the state, as the state’s top offices would recognize hegemonic structures (cf. Cox 1996: 126). Based on this observation, Gramsci expanded the concept of the state in his hegemony concept. He subsumed executive organs such as government and administration under political society. In civil society, on the other hand, institutions such as the church, the educational system, or the press can consolidate a hegemonic social order and limit political society (cf. Gramsci 1991: 783; Bieling 2010: 41). The second pillar of the Gramscian concept of hegemony builds on Machiavellian thought. Like Machiavelli, Gramsci saw power as a necessary intertwining of consent and coercion. A hegemony exists for Gramsci when the consensual aspect of power prevails. Coercion, on the other hand, is latent and only used in rare cases. Hegemony secures the conformity of behavior of the majority of the population over a long period of time (cf. Cox 1996: 127). Through this Machiavellian reception, the concept of hegemony is loosened from its historical application to specific social classes and acquires a certain dynamics. It can be more broadly used to analyze relationships that are generally characterized by domination and submission. This also makes an application at the international level possible (cf. ibid.). In his reflection on the experiences of the Bolshevik Revolution in Western Europe and Russia, Gramsci concluded that social conditions, in particular the strength of the state on the one hand and civil society on the other, would differ

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greatly. In Russia there is a police state, while civil society is not very developed. A small working class, led by a group of professional revolutionaries, was therefore able to conquer the state with a broad mobilization (War of Movement) without significant resistance from the rest of civil society (cf. Gramsci 1991: 874; Cox 1996: 128). In contrast, civil society was much more developed under bourgeois hegemony in Western Europe. Therefore, a revolution would have been doomed to failure in the long term due to the resistance of civil society. Instead, the working class must confront the hegemonic structures in Western Europe by laying the social foundation for the establishment of a new state (War of Position). First, it is necessary to win the consent of further parts of civil society before a restructuring of the political and economic state order is possible. In order to create the basis for an alternative state under the leadership of the working class, alternative institutions and intellectual resources must first be established within society. In addition, it is necessary to mediate between workers and other subordinate classes and to forge a unifying bond. However, the formation of a counter-hegemony is made more difficult by the fact that bourgeois hegemony creates incentives for some groups in order to co-opt them into the existing order (cf. Gramsci 1991: 874; Cox 1996: 128/129). In this context, Gramsci coined the term “historical block”, which is a central element of the concept of hegemony. The historical block refers to a social order in which dominant forces generalize their interests in a specific epoch and form a hegemony on the basis of a web of material capacities, institutions and ideologies. The historical block creates a social consensus on production and working conditions for a certain period of time. It requires a hegemonic social class, but also incorporates those who are dominated. A new block is formed when a subordinate class, for Gramsci the working class, in turn establishes a hegemony over other subordinate groups, e.g. small farmers (cf. Bieler/Morton 2004: 90). Intellectuals belong to a social class and play a central role in the construction of a historical block, because they design common patterns of thought and forms of organization for the members of a historical block (cf. Cox 1996: 132/133). In addition, Gramsci pointed out that some European societies would remain in a “dialectic of revolution-restoration” (Cox 1996: 129). In such systems, the industrial bourgeoisie could not assert itself. Instead, a passive revolution would take place, which would selectively take up elements of bourgeois hegemony, but which would often be accompanied by a Caesarism. A strong leadership personality would intervene to break the impasse between the traditionally dominant classes and the industrial bourgeoisie (cf. Gramsci 1991: 102). Thus, in late 19th century Italy, the northern industrial bourgeoisie had been dependent on the

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s­upport of southern landowners. Also the petty bourgeoisie had benefited from this constellation and held positions in the state bureaucracy. After the First World War, the passive revolution continued and it was possible for fascism to win the support of the petty bourgeoisie as well as of workers and peasants (cf. ibid.: 130). A second element of the passive revolution is the Trasformismo. In this strategy, leaders of subordinate groups are won over to assimilate the potentially threatening ideas for the hegemonic order and to adapt them to the policy of the dominant coalition. For Gramsci, the state corporatism of fascism was an attempt to adapt the practices of US capitalism to Italian conditions (cf. ibid.).

3.3.2 State-Civil Society-Complex, Historical Block and Political Project—The Neo-Gramscian Concept of Hegemony on a Global Level The Canadian political scientist Robert Cox made Gramsci’s assumptions about the formation of a historical block and a hegemony applicable to studies on a global level. For Gramsci, changes in international power relations and the world order were a result of social relations at the national level. For him, the state was the basic unit of international relations, because social conflicts took place within the state arena (cf. Cox 1996: 133/134). In his transfer to the global level, Cox creates an analysis grid, which includes a triangular relationship of social production relations or production relations, state forms and the structures of the international order and economy. Within this analysis grid, the development of historical structures can be traced, which provides information about the power and domination relationships at the international level (cf. ibid.). Social production relations provide insight into the “structures, forces and practices of social formations” (Bieling 2010: 39/40). According to Cox, social forces are decisive for the formation of hegemony, because power arises from social processes and less from given material capacities (cf. Cox 1981: 138). Social means in this context that “the production of other social areas is not simply economically determined” (Bieling 2010: 40). Instead, production is itself an arena for social conflicts in interaction with political and cultural influences. Production is broadly conceived and refers to the production and reproduction of both physical goods, knowledge and social relationships as well as of morality and institutions that are considered prerequisites for the production of physical goods (cf. Cox 1989: 39; Bieling 2010: 40). The different manifestations indicate that “the process of capitalist production and accumulation is organized by a comprehensive set of social relations and power relations” (Bieling 2010: 40).

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This includes the web of relationships of different constellations, such as between managers and employees, state and private companies, and lenders and borrowers. On a global level, social production relations are determined by states and through global contracts (cf. ibid.). The second level of hegemonic articulation refers to the state forms. In neoGramscian perspectives, the outstanding importance of the state is maintained: “[T]he state in this conception is understood as a social relation” (Bieler/Morton 2004: 159). Although state actors and institutions still have a fundamental importance, for example in the development and implementation of binding rules. However, state action is integrated into civil society and socio-economic relationships and discourses in which hegemonic interpretive patterns and role models are generated (cf. Bieling 2010: 39). In the arenas of civil society, the fight is for moral and intellectual leadership. The dominant power field, which includes both state and civil society actors groups to solidify a hegemonic order, is referred to as the state-civil society complex. This provides insight into “how socio-economic potentials are politically articulated in public discourse and state action” (ibid.: 40/41). According to Cox, an international hegemony is based on a state that establishes and promotes an order with a claim to universal validity, which other states consider compatible with their interests. It is above all powerful states, measured by their material capabilities, that, as a result of an economic and social transformation, try to expand their achievements beyond national borders. A development model that also has an impact beyond national borders is often referred to as a transnational historical block. The historical block integrates a variety of interests, includes common economic and political objectives and is considered an intellectual and moral unit (cf. Bieler/Morton 2003). It is characterized by a historical constellation in which a “coherent interplay of economic accumulation, political-institutional regulation and civil society discourse” (Bieling 2010: 38) becomes evident. The formation of a historical block is historically contingent and “largely depends on the ability of social and political actors to universalize their interests in the form of generally accepted ideas, norms, rules and institutions” (ibid.). In order to consolidate hegemonic claims, however, the hegemon should ensure that the historical block is not an elitist project, but is translated into the everyday philosophy of subjugated nations (cf. Jacobitz 1991: 30). In addition to the structural reproduction of hegemonic relations on the basis of material interweaving, it is political projects that consolidate a hegemonic order. The formulation of political projects takes place in internal or external problem and crisis situations. In public debate and discussion, an attempt is made not only to diagnose the problems, but also to process them. (cf. Bieling 2013a:

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286; Bieling 2013b: 90). Political projects are the result of negotiation processes and compromises within the state-civil society complex and can be defined as “programmatic and political-operative crystallizations of different interests and discourses” (Bieling 2010: 34). They are based not only on complementary or similar interests within the state-civil society complex, but also on normative attitudes, ideas, visions and guidelines (cf. Bieling/Deppe/Tidow 1998: 24; Bieling 2013b: 90). The solutions and interpretations formulated in national debates have a global feedback effect and influence the political-economic reproduction relations (cf. Bieling 2010: 34; Bieling 2013a: 286). When it comes to the formulation and design of a political project, the state plays a significant role. Through its superordinate power function and material resources, numerous capacities are available to organize social compromises and alliances. Thus, the state can bring together rivaling forces and integrate them into the state-civil society complex. This particularly affects political systems in which there is a superordinate interest between competing forces to maintain the general reproduction relations of domination (cf. Brand 2013: 305). Whether the formulation and externalization of a political project succeeds is historically open and the site of social and discursive struggles. It is conceivable that political projects contribute to consolidating the established power relations if the solutions to a crisis situation are based on existing compromise and consensus structures. However, political projects also hold the potential to call into question the development path of a country. Hans-Jürgen Bieling points out that the outreach of political projects is linked to the successful addressing of different discourse levels. These include 1) individuals and think tanks that take on a moral and intellectual leadership role, 2) opinion policy multipliers, and 3) diffuse everyday experience. If these levels reinforce each other, a high degree of design power of the political project can be expected (cf. Bieling 2013b: 92). Building on this, a differentiation must be made between a political and hegemonic project. The importance of a hegemonic project for the structures of the global order and economy goes beyond that of a political project. While a political project of a state-civil society complex is designed to work out and implement solutions to national crisis situations, the terminology of the hegemonic project allows for a stronger delineation of the consequences of this process for the structures of the global order and economy. With hegemonic projects, various dimensions are addressed in order to establish consensus-based orders that are considered advantageous for their own development by other states. A key dimension includes the close material interweaving between the hegemon and the subordinate states, in particular through investment, credit, and trade relations. A hegemonic project also involves the establishment and promotion of institutions. Furthermore,

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the development model expands beyond borders and is (partially) reflected in the economic planning and strategies of the subordinate states (cf. passive revolution in Sect. 3.3.4). Another element of a hegemonic project is the implementation of major infrastructure projects that not only have the potential to positively influence the everyday experience of the population, for example through productivity gains, but also to set technical, economic, and political standards.

3.3.3 The Hegemonic Elements of a Historical Structure Within the three planes of hegemonic articulation there are three power resources with ideas, material capacities and institutions, the coherent interplay of which is decisive for the stability of a hegemony. The power resources are interdependent and reinforce each other, so they should not be considered separately. Ideas include, on the one hand, intersubjective meanings and shared ideas about basic properties of social relationships. Ideas also include collective images of the social order and the legitimacy of existing power relationships as well as the meaning of justice and public goods. While intersubjective meanings are more broadly based in a specific historical structure and form a common foundation for social discourse, collective images often compete with each other. Through the collision of competing images, alternative development paths are revealed and a possible material and institutional basis for the development of an alternative historical structure is formed (cf. Cox 1981: 135ff.). With regard to material capacities, in the global expansion of a development model, trade relations, rising foreign direct investment and the granting of loans to other countries are particularly noteworthy (cf. Cox 1981: 136). However, not only the financial aspect is to be considered, but also the internationalization of knowledge based on technology and the associated ability to develop new technology, to initiate productivity gains and to set standards and standards (cf. Cox 1981: 147; Cox 1996: 138; Jacobitz 1991: 15). The expected convergence of economic development levels is a stabilizing factor of hegemony. For example, the export of high-tech goods to recipient countries can lead to an industrialization boom. However, due to the capital strength of its companies and their technological superiority, a hegemon is able to bring whole industries to a standstill in other countries. The supremacy of the hegemon can even culminate in the fact that he destroys the political autonomy and economic foundations of subordinate states (cf. Jacobitz 1991: 15/16). The third power resource within a historical structure comprises international institutions. International organizations, rules, and norms are founded by

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a hegemonic state. At the very least, the support of such institutions is a basic prerequisite for a globally expanding hegemony. The rules laid down in international organizations serve to expand the prevailing economic and social forces; at the same time, subordinate interests are to be incorporated through minimal adjustments to the rules (cf. Cox 1996: 138). They stabilize expectations of future behavior, define policy guidelines for states, and thus legitimate national practices (cf. Bieling 2010: 42). This simultaneously harmonizes national policies and development plans. Conditioned by their economic and political performance, state-civil society complexes are integrated into the global order to varying degrees: Smaller, economically backward complexes act as Regime Takers and follow the defined guidelines of the global institutions. Economically strong and politically influential state-civil society complexes, on the other hand, take into account the interests of smaller states with minimal concessions, but otherwise act as Regime Shapers (cf. ibid.: 43).

3.3.4 Passive Revolution and Counter-Hegemony The term ‘passive revolution’ at the international level means that countries in which the social and economic transformation of the hegemonic state has not taken place, incorporate isolated elements of the hegemonic order without dissolving established power structures (cf. Cox 1996: 137). This is an extern or Top-down initiated upheaval of social structures (cf. Bieling 2010: 38). Peripheral states rather adopt economic and cultural elements of the hegemonic order than the political model (cf. Cox 1996: 137). The “generalization of hegemonic structures” can lead to the fact that “the social forces (semi-) of peripheral states (…) by material benefits and concessions as well as widely shared images of social modernization” (Bieling 2010: 38) are integrated into the hegemonic block on a transnational level. In return, rival interests and political projects are material and discursively neutralized or excluded (cf. ibid.). Therefore, a hegemonic order is generally more pronounced and consistent in the center, while more contradictory developments manifest themselves in the periphery (cf. Cox 1996: 137). In analogy to the concept of Trasformismo, elites from peripheral states are confronted with the task of operating within the existing international system in order to achieve a general improvement of the socio-economic situation in their country through a passive revolution (cf. ibid .: 139). A change is possible if, in the form of an emerging historical block, a social and political alternative to hegemony is articulated in international forums. However, potentially antihegemonic visions are absorbed and adapted to the prevailing hegemonic doctrine

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in international institutions. Cox considers it illusory that an War of Movement at the international level can achieve a radical change in the international structure, since a broad political basis is lacking for this (cf. ibid .: 139/140). In order to achieve a structural change in the world order, a deep-seated change of social relations and the political order is necessary, on the basis of which a new historical block can emerge (cf. ibid .: 140). The decline of a hegemon begins when a historical block loses its cohesion, the economic basis erodes and images, visions and moral principles no longer take hold in the everyday reality of subordinate states. The contours of a new hegemonic structure become visible first of all economically, before they are translated into the superstructure, e.g. B. international organizations (cf. Jacobitz 1991: 11 ff.).

3.4 Operationalization This section reflects to what extent the central conceptualizations of (neo-) Gramscianism for this work can be applied to the political-economic structures and processes of the People’s Republic of China in the era of the Belt and Road Initiative. For the present work, the neo-Gramscian concepts of state-civil society complex, historical block and political or hegemonic project are decisive. It is argued that the concepts can be used for China’s engagement in East Africa. The state-civil society complex is dominated by the CPC, above all, through technological instruments of power and nationalist currents such as the Social Credit System (SCS) and the China Dream, although some actor groups maintain partial independence in the implementation of national key projects. Sino-capitalism is a state-driven project with close networks between the party, the state, state-owned enterprises and state-owned banks, focused on crucial infrastructure projects. First, the Going-out-Policy and later the BRI are to secure national development. The BRI is seen as a political project by means of which the state-civil society complex seeks to externalize Sino-capitalism in an internal crisis situation. Since this thesis argues that the BRI has numerous consequences and can be seen as a hegemonic project, some dimensions of the political project should also be shown which could contour the potentially hegemonic tendencies of the BRI.

3.4.1 State-Civil Society Complex Steered by CPC In China, the state-civil society complex is essentially shaped by the CPC, whose influence permeates all areas of the state, the economy and society. The CPC’s

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supreme goal is to maintain political power. After the socialist identity crisis and the power vacuum left by Mao Zedong, legitimacy is to be ensured by economic instruments. The guarantee of stable growth rates of per capita income is to improve the living standards of large parts of the population. Therefore, the government is obliged to ensure high economic growth through economic programs. In addition, other actors, such as state-owned enterprises and state-owned banks, are mobilized and committed to the overarching goals of the state-civil society complex steered by the CPC. In relation to the concept elements ‘state’ and ‘civil society’, it must be noted that ‘state’ in the Chinese context in particular means the symbiosis between party and state. The Communist Party of China instructs state-owned enterprises, state-owned banks and insurance companies to implement the BRI through increased overseas activities and, in particular, infrastructure investments. Among the economic actors, state-owned banks, insurance companies and state-owned enterprises are included here. In the historical block, they play a central role, as they are involved in the operational business of the externalization of the Sinocapitalist development model: state-owned enterprises implement large investment projects, while their business activities are financed by state-owned banks or insured by insurance companies. The state-owned banks include the Exim Bank, the China Development Bank (CDB) and the China Agricultural Bank. The China Export and Credit Insurance Corporation (Sinosure) was founded in the implementation phase of the Going-global policy in 2001 and insures Chinese exports and investments abroad against the background of specific country risks (cf. Mumuni/Murphy 2018: 30). In recent years, the Communist Party of China has strengthened its influence on all companies. With regard to SOEs, defined here as companies in which the state holds a stake of more than 50%, the control by the Chinese leadership is evident, for example, in the fact that the Senior Management is appointed by the party organization department. The business strategy of state-owned enterprises is based on first achieving success on the national market before integrating into the global value chain. SOEs are also required to cooperate with any state that recognizes the People’s Republic of China as a legitimate representative of China, based on the principle of non-interference. They also support the prestige projects of Chinese diplomacy (cf. Alden/Davies 2006: 90). The Communist Party of China strengthened its access to all companies through the National Intelligence Law of 2017. Chinese companies are now required to support the work of security authorities. However, SOEs, like state-owned banks, also have their own interests. For example, they lobbied in the 1990s for increased Chinese overseas activities (cf. Zhang 2017: 319). Despite the access by the central leadership of the Communist Party

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of China, these actors retain partial independence when it comes to the implementation of national large-scale projects (cf. Jones/Zeng 2019). This also applies to private companies, which have gained importance in recent decades and whose economic success is important for the prosperity of the country and the legitimacy of the Communist Party of China regime (cf. Schubert/Heberer 2017: 115). The party penetrates all state organs and society in order to exercise absolute control through compulsion and nonsense elements. The concept of civil society appears contradictory at first glance in the Chinese context. Thus, the term became the “keyword of anti-dictatorial criticism” (Kocka 2000: 18) in the circles of the late Soviet civil rights movements. Today, civil society is generally considered the opposite pole in a democratic system and includes universal suffrage, freedom of opinion and the press, equality before the law and parliamentary representative bodies (cf. Shils 1991: 48/49). Nevertheless, it must be noted that to this day no generally valid definition of the term exists. Rather, three theoretical currents crystallized in the debate: For representatives of political liberalism, civil society should act independently of the state and exercise a control function. The state is therefore obliged to enforce the human and civil rights of every member of society. Representatives of deliberative democracy models such as Jürgen Habermas developed a normative understanding of civil society, which is characterized in this context by discursive debates and different procedures of social and political participation (cf. van den Brink 1995: 13 ff.; Akkaya 2012: 45 ff.). In a neo-Gramscian perspective, civil society does not necessarily function as an opposite pole to the state, but consists of heterogeneous interests that interact with the state sphere and form alliances with common political goals. In China, civil society is a state-controlled and steered civil society, as the state sets the framework for civil society discourse. The population’s discipline and control of public opinion, entrepreneurial activity, and implementation of laws are increasingly being carried out through Big Data technologies such as the Social Credit System (SCS). Already foreseen by the State Council in the Guiding Opinions Concerning the Construction of a Social Credit System in 2007, 18 central government departments subsequently built Social-Scoring systems. The program received new momentum in 2014 when the State Council published the Planning Outline for the Construction of a Social Credit System. According to this, a nationwide SCS is to come into force by 2020 (cf. Kostka 2019: 1537). The SCS creates an automated social control of individuals, companies, social organizations, and government agencies. These actors are to be obliged to moral and legally compliant behaviour by a system of benefits and sanctions. Sanctions include, for example, restrictions on mobility for air and rail travel or limited access to credit. In contrast, system-compliant

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behaviour is rewarded with tax benefits and simplified access to government services. Continuous self-monitoring is to ensure behavioural adaptation in large parts of the population. Through this technical regulation, the CPC reduces dissent in the population in order to have to rely less on unpopular coercive measures (cf. Kostka 2019: 1568). The SCS is particularly popular with the elite and the better educated and affluent population who live in urban areas and benefit from the CPC’s economic programs (cf. Kostka 2019: 1586; Weiss 2019: 14/15). However, the CPC is by no means detached from civil society actors, but rather steers the discourse in civil society levels. A significant catalyst to secure the consent of civil society is nationalism. Xi Jinping’s vision of the “revival of the Chinese nation” through the China Dream finds positive resonance in large parts of the population. The economic pragmatism of the CPC to restore national pride is largely accepted by the population: “Most Chinese people still regard the economy as the basis for national comprehensive strength, and (…) support the elevation of economic interests to the level of a main policy objective” (Yan 2018: 7). The demands of the population partly go beyond the position of the Chinese leadership and put pressure on them to show certain political reactions. So the CPC selectively takes up social impulses. The recourse to the restoration of ancient greatness drives popular nationalism, which increasingly converges with state-orchestrated nationalism. In doing so, the Chinese government pursues a two-pronged strategy: In matters of defence of national interests, national sovereignty, and reunification with Taiwan, it tolerates and encourages popular nationalism. But it also restricts it in order to not endanger international reputation, for example in the face of threatened anti-foreign demonstrations (cf. Zhao 2013: 537 ff.; Gries/Steiger/Wang 2016). The media play an essential role in channeling nationalism. The media-state relationships are increasingly bidirectional: “Chinese media can exercise greater influence on Chinese foreign policy making and implementation through information dissemination, interest and opinion articulation, and policy recommendation” (Wang/Wang 2014: 234). Even if the CCP controls the content of newspapers, television and websites to the greatest extent possible and censors it, the exploitation of content boundaries by publishers and journalists is fueled by the increasing commercialization of the media landscape in China. In particular, when it comes to relations with Japan, Taiwan and the USA, the media put pressure on the foreign policy apparatus and expect the political leadership to take a position in a timely manner (cf. Shirk 2011: 247/248). Experts from the academic sector and think tanks are often heard in the media. They gain political importance because the members of the Politburo have little geopolitical knowledge and foreign policy experience (cf. Yu 2018: 230).

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3.4.2 Central Elements of the Sino-Capitalist Development Model Sino-capitalism contrasts the liberal-democratic variant of Anglo-American capitalism and can be defined as follows: “Sino-capitalism’s institutional structure is a unique duality that combines top-down state-led development with bottom-up entrepreneurial private capital accumulation” (McNally 2012: 744). This results in three central features, which are to be outlined in the following. The interpersonal relationships are shaped by Chinese values that ​​ aim to build long-term reciprocal relationships. These informal networks in the Chinese context are referred to as Guanxi and regulate access to essential resources such as credit, licenses or markets (cf. May 2014: 95). Based on these networks, private business interests gained gradually increased political and economic influence in the course of modernization impulses since 1978, anchored in China’s party state and contributed to the adoption of business-friendly policies (cf. Heberer/Schubert 2019: 495). While the state still controls the financial sector and industrial value creation, competitive sectors have emerged in retail and manufacturing. Above all, companies in the provinces along the east coast were able to access international capital and technology as well as establish a productive production in special economic zones through the Joint-Venture compulsion imposed by the Chinese state (cf. McNally 2012: 752). The broad alliance between the political and economic elite benefits both sides. There is a broad consensus between the state apparatus and large parts of the CCP to support the global expansion of companies. Private and (semi-) state-owned companies therefore maintain close relationships with party officials and state authorities to secure their global business activities (cf. Ten Brink 2014: 122; Milhaupt/Zheng 2015: 683). Another feature of the development model is the central role of the state in economic planning and promoting Sino-capitalist accumulation. From above, goals for economic growth and the implementation of trade and industrial policy programs are set. Nevertheless, there is still a political space for provinces and companies. Provincial governments compete for investment capital and budgetary financial inflows through programs of the central government. SOEs are still of central importance for major infrastructure projects and critical sectors such as mining and finance at both national and provincial levels. They receive preferential conditions for loans and land acquisition. Since 2003, the centrally coordinated state-owned enterprises have been under the control of the State Asset Supervision and Administration Commission (SASAC), thus creating the necessary space for central authorities to accumulate financial resources and direct economic activities (see ibid.: 753). The Chinese state apparatus is anything but

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a coherent institutional actor (see Sect. 4.5). The implementation of industrial policy is often overshadowed by the complex relationships within the apparatus. There are numerous rivalries between the authorities at national and provincial levels as well as within the central government. However, the common interest lies in the continued high growth rates of the Chinese economy, which are considered fundamental to the legitimacy of the CCP regime. The state obliges companies and banks to policies and objectives such as the five-year plans. Above all, mega-infrastructure projects play a central role in growth and development: “Growth-lifting solutions should focus on implementing ‘bottleneck-releasing’ investments (…) which (…) raise longer-term growth prospects” (Lin/Wang 2017: 6). In order to transform and diversify the economy and create an industrial upswing, public interventions and investments in megainfrastructure projects in the transport sector are required, which are flanked by industrial parks and special economic zones: “Investing in infrastructure alone is not sufficient to propel the growth engine (…) [The] idea (…) is to ‘package’ or combine infrastructural building with Eco-industrial parks, Special Economic Zones (SEZs), green urban development and structural transformation” (Lin/ Wang 2017: 7). As a third element, Sino-capitalism is characterized by an export-oriented growth strategy against the background of globalization. Anglo-American institutions and values entered ​​ China as part of the opening and liberalization. In December 2001, the People’s Republic of China joined the WTO. The financial center of Hong Kong ensured access to international capital markets. Through the opening to foreign investment, processing industries and retail centers arose on the Chinese east coast. However, the opening remained regulated and the Joint Ventures ensured the transfer of technology to China by the Chinese leadership. At the same time, the Chinese leadership improved the market position of national companies with their subsidies in strategic industrial sectors (see ibid.: 755).

3.4.3 From the  Going-out-Policy to BRI—Political Projects of the Emerging Hegemon The focus of this work is on the development of Sino-capitalism and the accompanying circumstances and consequences of this process within the BRI. However, the Belt and Road Initiative is not a new project of the state-civil society complex to promote the development of Sino-capitalism. Early approaches can

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already be found in the Going-out- or Going-global-Policy, which was first integrated into the Tenth Five-Year Plan in 2001. This encouraged Chinese companies to open up new export markets and invest abroad, particularly in infrastructure projects, while relying on Chinese labor (cf. Mumuni/Murphy 2018: 15). For the Chinese understanding, this policy meant a profound change, as the SOEs should increasingly look outward to enable a stronger integration of China into the world economy. The Chinese state-civil society complex thus intensified industrialization and the development of the export economy to ensure the sustainable economic growth of the People’s Republic and thus the legitimacy of the regime. This is particularly true against the background of a crisis situation in the early 2010s. In the period 2010–2019, national and global framework conditions changed and condensed into a development blockade for the Chinese state-civil society complex. In particular, the Chinese leadership recognized that doubledigit and high single-digit growth rates are not sustainable in the long term. In addition to this perceived crisis situation, industrial overcapacities and a provincial development gap came about. Overcapacities as a difference between production capacity and current production were exemplarily shown in relation to steel, aluminum and cement. The overcapacities for crude steel were still 132 million tons in 2008 and grew to 327 million tons by 2014. The national utilization rate was only 71% in 2014. For electrolytic aluminum, the overcapacities increased from 4.9 to 9.2 million tons between 2008 and 2015, and aluminum had a utilization rate of 76% in 2015. For cement, the national utilization rate was 73% at the end of 2014. The overcapacities increased from 450 to 850 million tons between 2008 and 2014 (cf. European Union Chamber of Commerce in China 2016: 15 ff.). Another challenge for the Chinese economy was the avoidance of the Middle Income Trap. On the one hand, China was no longer just the workshop of the world with low wage costs. On the other hand, innovation and production of high-tech goods took place to a large extent outside of China. For Chinese companies, it is therefore becoming increasingly important to find new ways to be profitable. Participation in the BRI is therefore an important vehicle for companies to gain a stronger foothold in other markets (cf. Carmody/Taylor/Zajontz 2021: 4). Stronger integration into the global economy could underpin the sino-capitalist development model. Therefore, the BRI is regarded as a political project in this paper, creating a favourable environment for the unfolding of sino-capitalism. The global openness of the BRI is intended to increase China’s economic interdependence and political interdependence with other countries, while

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s­imultaneously reducing overcapacities, e.g. in relation to steel, aluminium and cement. In addition to this strategic dimension, however, the BRI is primarily designed to establish a global connectivity programme that offers many developing countries development prospects. Investment projects in the infrastructure sector are at the centre of this, such as ports, railway lines, roads, oil and gas pipelines or the expansion of the telecommunications network. This is made possible by the enormous availability of capital, which provides many developing countries with far-reaching financing options for key development projects. This paper assumes that the material, intellectual and institutional externalisation of sino-capitalism has numerous consequences, which go back to the partial independence of individual Chinese actors in the implementation of BRI investment projects. The BRI is therefore becoming a hegemonic project. The hegemonic character of a political project is primarily due to the processing of the infrastructure sector, which is of paramount importance for the BRI. This paper therefore builds on the “infrastructural turn”, which includes a new priority for infrastructure, connectivity and mobility in domestic and foreign policy, as well as a reterritorialisation of politics. Infrastructure is by no means physical artefacts, but rather arenas of socio-political struggles or, in the words of Dirk van Laak, “materially congealed negotiation processes” (van Laak 2020: 15). From a political-economic perspective on the BRI, questions of infrastructural production and financing, regulation and standards, and terms of use are particularly important. Against the background of the ‘infrastructural turn’, turnkeyinfrastructure projects are of importance because they often go hand in hand with market entry into BRI partner countries and jobs and local production capacities. In addition, it can be assumed that central actors of the Chinese state-civil society complex secure access to the project in all phases of the infrastructure project through the contract design and thus also set political standards, for example procedural regulations. In addition to financing the infrastructure projects and granting loans by Chinese banks, the Chinese state-civil society complex also secures its influence. The loans have a long-term orientation and can be referred to as “patient capital” (Lin/Wang 2017: 11). In the infrastructure sector, the investment horizon is more than ten years. With the financing of large infrastructure projects, the opportunity is created to secure concessions in other diplomatic affairs from the outset, to participate in the design of project and operational plans and to determine the repayment conditions. In the allocation of financial resources, supporters can be rewarded, while funds can also be withheld in order to secure further diplomatic concessions from a BRI partner country (cf. Hillmann 2019: 2).

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In the planning and construction phase, the Chinese state-civil society complex sets technical standards, for example the track width, for railway projects and secures the long-term involvement of Chinese construction companies and suppliers in the implementation and maintenance of the investment project. Technology transfer is also linked to these conditions. At the level of ownership rights and in the operational phase, access for foreign competitors can be restricted. The influence is all the greater the more infrastructure facilities are operated by Chinese companies. In the repayment of loans, supporters can be rewarded with a partial debt relief, while the outstanding loan volume can also be used as a lever with indebted countries (cf. Hillmann 2019: 2). The externalization of Sino-capitalism also has the consequence that the infrastructure projects have implications for the economic structure and economic policy orientation of a country as “turnkey” projects. The BRI is particularly aimed at countries in the Global South. The realization of crucial infrastructure projects has the potential to accelerate the transformation from an agricultural to a more industrialized economy. A central role is played by the special economic zones and industrial parks, which can promote industrialization and export growth. The successful implementation of major infrastructure projects offers the opportunity to stay in a country permanently and possibly to receive further construction contracts in the infrastructure sector or in adjacent sectors. In regions with a significant infrastructure investment deficit, China can therefore pursue a long-term approach with the aim of finding solutions to national crisis phenomena, such as a low level of development and productivity, to the mutual benefit through its own capital (Lin/Wang 2017: 16). Central institutional arrangements of the political project are, with regard to China’s engagement in East Africa, the FOCAC as well as the Belt and Road initiative with the BRF. In doing so, the Chinese leadership strengthens its relationships with other states, above all in the Global South. Although FOCAC and BRF are primarily inter-state forums that include political contacts at the highest state level, parallel meetings of social actors, including representatives of companies, take place. The Chinese state-civil society complex addresses the BRI both to elites and to civil societies in peripheral countries. The institutions transport alternative ideas and models for the securing of Chinese engagement. In order to protect economic interests in BRI partner countries, such as the safety of Chinese workers or the property of Chinese companies, China is expanding its security policy cooperation with countries along the BRI. This also aims to provide public goods in the region, such as security, stability and free trade. Through inter-societal cooperation, for example within the framework of scholarships and t­raining

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measures, a transfer of technology is to take place in countries of the Global South in order to promote their development. Through these sub-projects, the state-civil society complex addresses the everyday consciousness of the peoples and creates the basis for the acceptance of the political project in the civil society arenas of East Africa. In addition, FOCAC and BRF offer the Chinese state-civil society complex the opportunity to take up the ideas of African elites and societies. The processing strategies and reactions to the political project are decisive for the Chinese efforts to generalize central elements of the sino-capitalist development model. As the concept of the passive revolution makes evident, the externalization of a historical block in peripheral countries does not lead to the dissolution of established power structures. The advantage of the Chinese model for countries in the Global South is that it is compatible with traditional power structures. The sino-capitalist development model has a high degree of radiation and reaffirms the development state debates and agendas in developing countries. For authoritarian rulers, orientation towards the Chinese model could mean an increase in economic performance, which in turn could reduce dissatisfaction among the population. It is therefore to be expected that African countries will find elements of the sino-capitalist development model in the development state policies of the East African BRI partner countries.

3.5 Reconstruction of BRI Infrastructure Projects in East Africa Against the Background of Material, Ideational and Institutional Entanglement This subchapter presents the methodological framework of the work. In order to show which concrete effects the BRI and individual infrastructure projects have, the region of East Africa is used as a case study. The investigation of the structural interlocking between East Africa and China is carried out by means of economic indicators. Policy documents from BRF and FOCAC are used to shed light on the ideological and institutional externalization of Sino-capitalism. The societal perception is examined by the mirror of the Afrobarometer. The focus of the work is on the societal processing of infrastructure projects in Ethiopia, Kenya and Tanzania. The central processing narratives are reconstructed by means of a content analysis of newspaper articles. Finally, guideline interviews are also used. From the three research questions of the work, some research priorities and steps are developed, which structure the analytical approach. At the same time, the limits of the data available are reflected in this section.

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3.5.1 Investigation of the Structural Interlocking as well as the Ideological and Institutional Foundations of the Political Project In order to investigate the effects of the unfolding of Sino-capitalism on the structures of the international order and economy, it is first necessary to locate them in the currently prevailing hegemonic order. After all, the structures of the global order and economy influence state and civil society complexes and, in particular, their strategies for organizing social production relations (cf. Bieling 2010: 43). In addition, the actor groups of the Chinese state-civil society complex relevant for the generalization of the Sino-capitalist development model are to be illuminated. In particular, it should be shown which role they play in the implementation of the BRI in partner countries. Subsequently, the local reactions and accompanying circumstances resulting from the externalization of Sino-capitalism can be illustrated by means of the example of East Africa and whether hegemonic tendencies manifest themselves. In reference to the second research question, it is to be examined to what extent the Belt and Road Forum and FOCAC serve the ideological and institutional generalization of central elements of the Sino-capitalist development model. In order to understand this logic of the BRI, various policy documents of the Chinese leadership as well as the two final communiqués and the two overviews of the BRI initiatives of the Belt and Road Forums 2017 and 2019 are to be evaluated. Since the present work is focused on China’s BRI in East Africa, the FOCAC is to be added as another institution, which is considered to be a predecessor of the BRF and serves the Chinese state-civil society complex as an instrument of the externalization of Sino-capitalism in Africa. The evaluation includes the seven final declarations, seven action plans and other FOCAC documents in the period 2000–2018. The interest in knowledge lies in the externalization of elements of Sino-capitalism and the guiding principles of Chinese cooperation with East African countries. Guiding principles basically include strategic goals (visions), orientation patterns for the implementation of the BRI (values) and economic standards or norms. The challenge for the researcher is basically to define the BRI or to analyze individual projects. The exact definition of the BRI as well as the criteria for participation and support by other countries are unclear. Therefore, a pragmatic approach is taken in this work by referring to the official BRI website. There is a list of countries that have signed a Memorandum of Understanding on cooperation with China under the BRI. Even if these MoUs are rarely published, they are considered by China as a symbolic recognition of the initiative. Due to the lack

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of information about the participating countries and BRI projects, policies and projects that preceded the announcement of the BRI in 2013 are also included in this work, but were subsequently referred to as BRI projects. Finally, the BRI in Africa builds on existing initiatives under the umbrella of FOCAC. Because of the vague description of the BRI, it appears to be of importance to approach its concrete mode of operation on the basis of case studies. This is done in the present work in a multi-stage process on the basis of the East African region. When talking about East Africa, this is done on the basis of the United Nations Geoschema, in which the following 20 states are subsumed under Eastern Africa: Ethiopia, Burundi, Djibouti, Eritrea, Kenya, the Comoros, Madagascar, Malawi, Mauritius, Mayotte, Mozambique, Réunion, Rwanda, Zambia, the Seychelles, Zimbabwe, Somalia, South Sudan, Tanzania and Uganda (cf. United Nations Department of Economics and Social Affairs Statistics Division 2019). The focus is on this African sub-region because, historically, it has served as a gateway to Africa for China and is explicitly considered to be part of the maritime Silk Road (cf. Pautasso 2016; Breuer 2017; Ehizuelen 2017). In addition to the ideational and institutional power resources, the economic interdependence between China and East Africa is taken into account. In order to answer the first research question, it should be shown which role China plays as an economic partner of the East African BRI partner countries. Based on neoGramscian approaches, it is above all trade relations, foreign direct investment and the granting of loans that are associated with the externalization of a development model (cf. Cox 1981: 147; Cox 1996: 138; Jacobitz 1991: 15). Within the scope of the work, the entire Chinese investment volume in East Africa and in each East African BRI partner country is considered for the period 2006–2019. The investment figures are also divided by year, sector and type of company. In principle, there is a lack of reliable data on Chinese investment activities within the framework of the BRI. However, the most comprehensive database appears to be that of the American Enterprise Institute (AEI), which records all Chinese investments with a volume of at least 100 million USD since 2005 and is therefore used as the basis for the presentation of Chinese investment activities in the present work. Since Chinese investments in the Global South are often associated with increased uncertainty for Chinese companies, traditional foreign direct investment (FDI) is not the preferred investment vehicle, but special (construction) contracts, which are included in the database by the AEI as Construction Contracts (AEI 2020). This is a relevant addition in order to adequately capture the comprehensive nature of Chinese investment in East Africa. These construction contracts are mostly agreements between, on the one hand, Chinese companies or banks and, on the other hand, governments, state authorities or SOEs in the BRI partner countries.

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At the same time, however, this approach has the disadvantage that Chinese investments are subsequently difficult to compare with those of other countries whose investment activities are mainly focused on conventional FDI. In addition, this approach tends to underestimate the actual investment volume of China. Since the threshold is set at 100 million USD, investments by smaller Chinese companies are neglected in particular. However, this is precisely where a fundamental problem arises in the availability of investment data for smaller and medium-sized Chinese companies (cf. Ying 2019). Since the actual investment activities of Chinese companies are therefore difficult to trace, a focus on investment volumes >100 million USD appears to be reasonable, since these projects are usually made public and can thus be checked. In addition, it is assumed that above all SOEs are obliged within the framework of the BRI to invest abroad in large infrastructure projects with a corresponding investment volume in order to open up new markets. Another challenge arises from the lack of comparability of Chinese investments with those of other countries. To show the importance of Chinese investments for East African countries, the share of Chinese ADI holdings in total ADI holdings of the countries will first be measured on the basis of the database of the International Trade Center (ITC) for the years 2010, 2013 and 2017. The selection of these years results from the lack of data availability. In addition, the ITC database allows for a selective comparison of ADI holdings from China with countries such as the United States, France or the United Kingdom for individual years in the period 2013–2017. However, not all years have investment figures for OECD countries, as the investment volume of individual companies should be excluded due to the low number of investment projects. As a second economic indicator, credit relations are used. A fundamental challenge is that China is not part of the Paris Club, which reflects a standardized and transparent reporting system for credits and debts. The official Chinese figures only partially reflect the actual value of the outstanding debts of BRI partner countries to China. A study from 2019 made it clear that the ‘hidden debts’ are approximately at the same level as the officially reported debts and thus almost twice as high (cf. Horn/Reinhardt/Trebesch 2019). The most scientifically recognized database for Chinese credits in Africa comes from the ChinaAfrica Research Initiative (CARI) at Johns Hopkins University. The figures are strictly speaking not debts, but credit commitments. Such credits are paid out in several tranches over an average period of five years (cf. Bräutigam/Huang/Acker 2020: 3). In the present work, the total amount of Chinese credit commitments for East Africa in the period 2000–2018 as well as broken down by country and sector is considered. To illustrate the role of Chinese credits in relation to GDP

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and in comparison to other donors, various parameters of the World Bank Debtor Reporting System are used. This includes the outstanding obligations of East African countries to bi- and multilateral donors in 2019 as well as the Chinese share of debt service in 2020 and 2021. In order to investigate whether China has become the most important trading partner of East Africa, the bilateral trade volumes are to be compared with those of other countries. At the same time, the aggregated data of all East African BRI partner countries should give an indication of the importance of China in trade matters for the region in comparison to other trading partners, including India, France, the United States and the United Arab Emirates. In addition, it should be possible to derive from the sectoral differentiation of the trade data to what extent the trade between East Africa and China is balanced. The trade volumes are based on data from the United Nations Conference on Trade and Development (UNCTAD) for the period 2000–2019. Under the US administration of President Trump, the existence of trade deficits or surpluses has been increasingly brought into the public spotlight. The trade balance has become a key factor in the orientation of US trade policy. However, the export and import figures that allow statements about trade surpluses or deficits are only to a limited extent an adequate analytical tool. What is decisive for the trade balance statistics is in which country the final assembly of a product takes place. Even if this production step only accounts for 5% of the value creation process, the product is credited 100% to the country in which the final assembly takes place. The OECD provides a starting point for avoiding this ambiguity with its concept of Trade in Value Added. The aim is to correct the trade balances according to the share of the countries involved in the value chain of a good (see OECD 2019). However, these data are only available for China, not for the East African countries. In addition, these statistics are published with a considerable time delay, so that this study is based on the conventional view of trade volumes. However, a sole focus on economic cooperation would not do justice to the BRI. Rather, it is characterized by a multi-dimensional approach, which flankes the BRI with numerous—including media, cultural and security policy—subprojects. This focus of the study should also be made clear by the evaluation of the BRF and FOCAC summit documents for the period 2000–2019. With these measures, the Chinese state-civil society complex addresses not only East African elites, but also the everyday awareness of the population. In order to show to what extent the Chinese engagement in Africa is rated positively against the background of the BRI (see research question 3), surveys of the Afrobarometer

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are evaluated. They include, among other things, questions about the perception of Chinese influence in Africa. In particular, the seventh and eighth rounds of the Afrobarometer surveys from the years 2014/15 and 2019/20 contain questions about Chinese engagement in Africa. However, it should be noted that not all East African BRI partner countries are included in the survey rounds. In addition, sometimes different countries were interviewed, so that the comparability of the results is limited. In the most recent Afrobarometer survey, only the three BRI partner countries Ethiopia, Kenya and Uganda were considered, while nine countries were included in 2014/15.

3.5.2 Analysis of Three BRI Infrastructure Projects in East Africa The examination of major infrastructure projects is intended to illustrate to what extent hegemonic tendencies of the BRI manifest themselves in East Africa. With this pillar of empirical observation, all research questions are to be addressed. The central dimension of such a hegemonic project is formed in the present work by the large infrastructure projects in the countries of Ethiopia, Kenya and Tanzania. The choice of countries results from the fact that these have been central partners of China from the beginning within the framework of the BRI and also have historically had close relations with China (cf. FOCAC 2015b; Ehizuelen 2017: 9; Wu/Alden/Sidiropoulos 2017). With regard to the infrastructure projects, these are the most financially ambitious BRI projects in these countries (cf. AEI 2020). The research interest of the present work lies in the examination of the entire project phase of three BRI infrastructure projects: 1) Mombasa-Malaba railway project (Malaba), 2) Addis Ababa-Djibouti railway line (Ethiopian section) and 3) port and special economic zone of Bagamoyo (Tanzania). The work relies on local newspaper articles to shed light on the entire project phase of the infrastructure projects and their social perception over time. Newspaper articles are a promising source for investigating social science questions. They allow for a long-term analysis and are accessible over a longer period of time (cf. Taddicken 2019: 1157). The present work is based on the database allafrica, in which newspaper articles from all African countries are bundled. With the help of a keyword search (cf. Appendix 3.1 in the electronic supplementary material), the articles from Ethiopian, Kenyan and Tanzanian newspaper houses are to be integrated. For each of the projects, two national newspaper houses and The East African, a media company with a regional focus on East Africa, are used. The period of

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Quantity

80 60 40 20 0

2007

2008

2009

2010

Mombasa-Malaba SGR

2011

2012

2013 Year

Port and SEZ Bagamoyo

2014

2015

2016

2017

2018

2019

Addis Ababa-Djibouti SGR

Fig. 3.1   Number of newspaper articles examined. (Source: Own representation)

investigation begins with the first mention of the project and ends on December 31, 2019 (cf. ebd.). The annual distribution of articles (cf. Fig. 3.1) makes it clear that reporting has increased since the announcement of the BRI in September/October 2013, which underscores the groundbreaking importance of the bulky projects for the perception of the BRI in (East) Africa. The fact that the BRI projects were received in the local media to different degrees is mainly due to political reasons. According to the PolityV index, Kenya is to be classified as a mature democracy (cf. Marshall/Gurr 2020a). In a democracy, media freedom is more pronounced and the media market is more dynamic. Therefore, the majority of articles in this work are also for Kenya. Ethiopia and Tanzania are to be classified as incoherent autocracy or democracy over time (cf. ibid.). In these countries, the scope for newspaper houses is often limited. In addition, state-controlled media houses deliberately choose how to report on China and the BRI. Nevertheless, relevant elite and civil society processing patterns of the BRI can also be seen in tendentially autocratic systems. Media reports are also used in other studies to examine Sino-African relations, including relations between Kenya and China: “Media reports in Kenya are fairly reliable given the freedom of the media and the relatively high professional standards of journalists” (Wang/Wissenbach 2019: 284).

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3.5.3 Content Analysis of Newspaper Articles In order to investigate infrastructure projects in the BRI partner countries of East Africa, this work relies on a qualitative content analysis2 . A content analysis is a “method of evaluating texts that arise in data collection within the context of social science research projects” (Mayring/Fenzl 2019: 633). With this method, the content and formal properties of messages are to be illuminated in a systematic and intersubjectively comprehensible manner (cf. Früh 2015: 29). The work is based on the concept of the content-structuring qualitative content analysis by Udo Kuckartz (cf. Kuckartz 2016). With the help of qualitative content analysis, the cornerstones of the major BRI infrastructure projects in East Africa are to be illuminated and such topics are to be identified that are most often mentioned in the national processing narratives of Chinese engagement. The content-structuring content analysis was developed by Udo Kuckartz primarily for interviews. Due to the way in which the categories and codes are generated in a multi-stage process, it is also suitable for the analysis of newspaper articles (cf. Kuckartz 2016: 97f.). The selection and delimitation of the empirical material is carried out by means of a keyword search (cf. Appendix 3.1 in the electronic supplementary material), which in the database allafrica led to 786 newspaper articles from seven press houses in Ethiopia, Kenya and Tanzania. All newspaper articles are recorded in full and each article is counted as an analysis unit (cf. Taddicken 2019: 1159). Based on the 7-phase model of the qualitative content analysis by Udo Kuckartz, all newspaper articles are first read (cf. Kuckartz 2016: 100). Since the author has little prior knowledge of the East African BRI infrastructure projects, all newspaper articles are first read. This phase is referred to by Udo Kuckartz as the “initiating text work” (cf. ibid.: 101). All texts are studied carefully and those text passages are highlighted that, in the opinion of the author of this work, point to cornerstones of the construction projects, social processing patterns of the infrastructure projects and the priorities of the national development agendas against the background of the unfolding of Sino-capitalism. Based on the determination of these three main categories (phase 2), the entire text

2 For

traceability of the methodological approach, the electronic supplementary material contains an appendix that includes the codebook with a description of the procedure as well as the characterization and distribution of frequency of the individual categories and codes (cf. Appendix 3 in the electronic supplementary material).

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material is segmented and assigned to the respective main category in phases 3 and 4 (cf. ibid. ff.). In the fifth phase, the author defines the individual categories and codes within the grouped text material. By dealing with the empirical material, the central topic complexes are identified and subordinate categories with individual codes are formed within the main categories (cf. Fürst/Jecker/Schönhagen 2016: 216). Although the main categories such as the media processing of the crucial infrastructure projects and the national development priorities of the East African BRI partner countries are already emerging from the research questions against the background of the unfolding of Sino-capitalism. However, the subordinate categories and the codes are primarily formed inductively by dealing with the text material (cf. Kuckartz 2016: 101f.). Inductive code formation also ensures openness for the social processing of infrastructure projects (cf. Sect. 3.6). This should make it possible to identify as many strands of social reaction to China’s engagement in BRI partner countries as possible. In phase 6 of the content analysis, the author refines the division of the 786 newspaper articles into individual text segments and sequentially labels them with the differentiated category and code system. In total, along the three main categories 71 codes in 13 categories are found in the analysis (cf. Appendix 3.3 and 3.4 in the electronic supplementary material). The general principles for the generation of categories and codes are “the principles of parsimony and comprehensibility: as simple as possible, as differentiated as necessary” (ibid.: Kuckartz 2016: 108). When coding, it occasionally happens that individual text segments encompass several themes. But for Kuckartz, it is precisely this that is a characteristic of content analysis, that a single code can be assigned to such a text segment (cf. ibid.). For example, text segments were labeled with the codes ‘increase in debt’ and ‘repayment terms / restructuring of debt’. To analyze the newspaper articles, the author printed out all newspaper articles and coded the text segments manually. With a view to the clear structuring, grouping and evaluation of the frequencies of categories and codes, the author used the “Microsoft Excel” program. Based on the different analysis forms in phase 7 of the qualitative content analysis, the focus in the present work was on the evaluation of the frequencies of the categories and codes (cf. ibid .: 118). It should be shown which processing narratives of the BRI infrastructure projects dominate in the civil society arenas. This is embedded in the qualitative presentation of the research results or explanation of “prototypical examples” (ibid .: 119) in order to illustrate how the authors of the newspaper articles position themselves in the civil society discourse (cf. ibid .). A visualization of the collected research data is also attempted. In order to illustrate the importance of the

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individual categories in the processing of the large infrastructure projects, circle diagrams are to supplement the presentation of the empirical analysis in Sects. 6.1,6.2 and 6.3 (cf. ibid .: 120). In the presentation of the empirical results of the content analysis, reference is made to the results of two investigation steps. The research interest lies in step 1 on the description of the central characteristics and key points of a construction project. The investigation of the key points of the construction project includes three categories, which shed light on the actors involved in the planning, financing and implementation of the major infrastructure projects, the time course of the construction work and technical key figures of the projects (cf. Appendix 3.3 in the electronic supplementary material). In total, there are 14 codes in these categories. These codes are of a descriptive nature in order to include the technical conditions in the analysis in addition to the processing of the infrastructure projects in the civil society arenas. No frequency survey is carried out for these codes and the results are included in the presentation process in Chap. 6. In a second step, the research interest of the present work is directed to the central topic complexes of the media processing of the BRI infrastructure projects. A change in public perception is also conceivable, since the projects are planned and built over several years. The content analysis should show which codes and categories emerge most often from the newspaper articles and dominate the public discussion. In investigation step 2a, attention is paid to the civil society processing of the infrastructure projects, whereby a clear reference to the BRI projects is recognizable in the categories. Seven categories—indebtedness, profitability in operating phase, ecological impacts, social impacts, regional implications, local participation and control as well as everyday experience and reality of life—can be distinguished from 35 codes that occur mainly in all three case studies and allow comparability (cf. Appendix 3.3, 3.4 and 3.5 in the electronic supplementary material). In a subsequent step, it should be examined which implications the unfolding of Sino-capitalism has for the East African BRI partner countries. Investigation step 2b looks beyond the individual infrastructure projects and examines to what extent central elements of Sino-capitalism, such as the focus on infrastructure projects, industrialization, export-oriented growth and the role of the state, are emphasized in the economic orientation of the BRI partner country. The infrastructure sector includes transport networks, including roads, railway lines and waterways, as well as supply and disposal facilities, which include both energy, water and communication networks and intangible infrastructure to improve human capital, such as education and the health sector (cf. Klodt 2021). This

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is distinguished from the reference to the expansion of the transport sector, for example when it comes to strategic port plans or railway projects in the development plans of the BRI partner countries. In addition to this more general perspective, another category should show to what extent the Chinese development model structures the debate on national development plans. This category complex is concluded by a consideration of the dynamics of bilateral relations with a focus on the assessment of China as a development partner. In the three categories of investigation step 2b—exemplary character of Sino-capitalism, priorities of the national development model and China as a development partner—2b, 22 codes can be distinguished (cf. Appendix 3.3, 3.4 and 3.5 in the electronic supplementary material).

3.5.4 The Guideline Interview In order to secure the empirical basis of the work, the investigation is supplemented by another pillar in the form of guided interviews. This is the most common form of a qualitative research interview, which is based on the use of a guide. The guide serves “the mediation of the two contradictory requirements of structure and openness in the interview” (Strübing 2018: 102). With the guided interview, a comprehensive set of research topics is covered and case comparisons are possible. This is also important for the present work, as various research questions, which arise from the structural dimension of Chinese engagement in East Africa, such as trade and investment relations, and then focus on individual infrastructure projects, are integrated. Both a standardized questionnaire and a weakly structured interview have pitfalls. While the former could prevent the interviewee from sketching out content not considered by the researcher, the latter could address topics that do not touch the subject of the investigation (cf. ibid.: 102). The guided interview offers a middle way between these options by taking into account relevant topics without the interviewee being too restricted by the formulation of the questions. Central questions are addressed in all interviews and elaborated in the guide. In addition, supplement and deepening questions can be formulated in a keyword-like manner and structured along a conceivable course of the conversation. The demanding character of the guided interview results from the fact that the questions should not simply be worked through chronologically, but the conversation should be guided by attentive moderation of the flow of the conversation and anticipation of possible alternative answers from question to question. The specification of possible answers should only be done in an emergency, for example when the

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i­nterviewee does not know what to do with a question. The guide is intended to serve as a memory aid, to which reference is made when changing topics in order to continue the conversation (cf. ibid. 102/103). The “methodological basic idea (…) is that the interview is organized as an almost everyday conversation free of methodological rigidity” (ibid.: 103). The interviewees should be encouraged to present their evaluations and their view of the range of topics and to interlock various topic complexes. An essential prerequisite is therefore, in addition to competent moderation, the creation of a trusting atmosphere between interviewer and expert. In addition to the quality of the interview guide elaborated in advance, the competent and confident handling of it is essential in the interview situation. The interviewer should not hide behind his guide and work through it diligently (cf. Hopf 1978: 102). Because in this way, under certain circumstances, topics brought up by the interviewees could be dismissed as unimportant, even though more profound questions would be appropriate. If, on the other hand, the interviewee is forced to follow the structure of the guide, the time for in-depth questions diminishes. In addition, it may be that some topics are only mentioned in view of a closing time window in order to deal with as many topics as possible (cf. Strübing 2018: 103 ff.). In this case, the primary goal is to fill in the gaps in the evaluation of newspaper articles and to deepen the connections raised therein. In this context, for example, the processing of the sino-capitalist development model and its importance for national development plans as well as the implications of infrastructure projects for the working and living conditions of the population are to be mentioned. For this purpose, experts are targeted who can be both “witnesses of the processes that interest us” (Gläser/Laudel 2004: 10) and “part of the field of action” (Meuser/Nagel 2001: 73) themselves. In the present research project, for example, an employee of a think tank was interviewed who himself participated in the formulation of Kenya’s China policy. The original planning envisaged the conduct of a large number of interviews during a multi-week research trip to East Africa. However, this project has been made impossible by the rapidly spreading Corona pandemic since the beginning of 2020. Therefore, only isolated online interviews, which were carried out using the “Microsoft Teams” program, supplement the empirical basis. The interview partners cover different areas of society, including think tanks, NGOs or trade unions. The conduct of online interviews also poses great challenges for transcription. The sometimes unstable Internet connection led to a time-delayed and interrupted transmission, so that individual sentences could no longer be completely reconstructed in the evaluation process. In this case, the corresponding gaps were marked with ‘(…)’. In addition, personal contact on site with the i­nterviewees

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was not possible. A trusting atmosphere is also more difficult to achieve in the virtual format if the two parties are not yet known to each other. In general, however, due to the lack of networks in East Africa, the return rate on interview requests was very low. As a result, the researcher conducted only four interviews between January 14 and April 14, 2021. The conduct of interviews on site would have had the advantage that the researcher could have built up networks more quickly and, on the basis of the snowball principle, possibly become aware of further interviewees. Nevertheless, the author tried to apply this principle also to the online interviews. However, he often did not receive any feedback on his requests on the recommendation of previous interviewees, or had to expect long waiting times, which meant uncertainty for the entire research process.

3.6 Reflection of the Operationalization and the Methodological Approach A fundamental challenge for the research project arises from the fact that the author writes as a “white European” about developments in the Global South and comes into direct contact with East African societies through the interviews. In particular, from a postcolonial perspective3 various difficulties arise from this, which need to be reflected: A first challenge concerns the concept of “science” itself, which in countries of the Global South often has a negative connotation. Adventurers and pseudo-scientists collected information in the era of colonialism and apparently prepared scientific findings on the intellectual ability and traditions of African societies. As a contrasting foil, these “scientists” presented an European audience with romanticizations, simplifications and generalizations of the primitive and exotic Other. The racist attribution of character traits and development levels to certain ethnicities often deepened the gulf between them and promoted violence and injustice in African societies (cf. Smith 2012: 1ff.). Another criticism relates to the often-held claim of Western researchers to know a lot about a subject and to make conclusions after short encounters with a small group of people in African societies. By such a methodological approach, the cultural appropriation and arrogance of the West is cemented, while at the

3  However,

scholars in the Global South themselves criticize the term postcoloniality, because it is considered an invention of Western intellectuals and fixes their right of interpretation and control of the world (cf. Smith 2012: 13).

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same time the right of self-determination of indigenous peoples and societies of the Global South is restricted (cf. ibid.). Through the collection, classification and dissemination of knowledge about societies in the Global South, research becomes a central arena of imperialism—with effects that are still felt today: “Research is one of the ways in which the underlying code of imperialism and colonialism is both regulated and realized” (ibid .: 7). Ethnocentric assumptions and exploitative practices can also be found in scientific disciplines. Exploitative practices arise, for example, when field research—for example, based on interviews—is used to collect information for the generation of knowledge, without the researcher providing some form of reciprocal consideration. This could consist, for example, in making the theoretical basis and methodological approach in the research project transparent, sharing and reflecting (cf. ibid.: 16). In the present case, after the interviews, the author prepared an English-language handout in which the essential theoretical arguments, the methodological approach and the central results were summarized in order to partially refute the allegation that East African societies could only benefit to a limited extent from the research results. By operationalizing the research questions, it is possible to take into account the perspectives of East African societies. Instead of acknowledging Chinese supremacy, this work takes into account the processing of BRI in East Africa. The interest in knowledge lies precisely on the local perspectives in African societies. Therefore, newspaper articles from local media houses are mainly used as empirical material. In addition, the author approaches the investigation of infrastructure projects without detailed prior knowledge. The codes are inductively gained by dealing with all newspaper articles, which reduces ethnocentric assumptions. By formulating research questions, the possibility is left open to identify further connections in the data material. The identification and generalization of accompanying circumstances and consequences of BRI implementation in East Africa and of civil society reactions to Chinese engagement take place after careful consideration of the infrastructure projects of the three research countries.

4

China’s State-Civil Society Complex in the Structures of Global Order and Economy

This chapter is to trace the embedding of the state-civil society complex led by the Communist Party of China in the structures of the global order and economy. Against the background of US hegemony and the Dollar Wall Street Regime, China incorporated parts of the existing hegemonic order, which contributed significantly to exorbitant economic development in the last 50 years. Since the assumption of office by Xi Jinping, however, an increasing preference for the promotion of its own institutions can be observed, by means of which the Chinese development is to be secured by the generalization of Sino-capitalism. The central political project in this context is the BRI, which is multidimensional and not only intensifies economic and political cooperation, but also inter-societal contacts. Finally, the central actors of the state-civil society complex are to be illuminated. One focus is on such actor groups that are involved in the implementation of the BRI in East Africa.

4.1 US Hegemony and Dollar Wall Street Regime The state-civil society complex led by the Communist Party of China is confronted with a US-led hegemony in the externalization of Sino-capitalism. After the Second World War, the USA took over the leading role in international politics and economy and promoted the creation of an open, global trading system based on the General Agreement on Tariffs and Trade (GATT) and a stable currency system within the Bretton Woods institutions World Bank and IMF. Through the system of fixed exchange rates, foreign currencies were linked to the USD, which in turn was linked to the gold standard. The leading role of the USA contributed significantly to the fact that the conditions for continuous economic © The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 S. Züfle, The Political Economy of China’s Belt and Road Initiative in East Africa, https://doi.org/10.1007/978-3-658-41161-9_4

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growth were created in Western Europe, South Korea and Japan until the 1970s (cf. Milner 1998: 115). The USA established hegemonic relationships with other capitalist states in the Western camp, based on a close interweaving in terms of trade, production and security. At the same time, the US hegemony was established in the working and living conditions of Western societies and led to productivity increases (cf. Panitch/Gindin 2008: 24). Also in the 1970s, US American banks expanded and strengthened the international use of the USD, which marked a prerequisite for the transition to the dollar Wall Street regime (DWSR) (cf. Gowan 1999). Through the centrality of the USD in the international financial system, the US American financial market was strengthened, as foreign investors and central banks made their investments and reserves in dollars. The dollar was thus considered an optimal resource for liquidity, innovation and competitiveness (cf. Ibid.: 24). However, at first there were contradictions in the construction of US American financial strength, as it was accompanied by economic recession due to oil crises, resistance of the unions and an expansionist monetary policy. Therefore, it was difficult for US authorities to control double-digit inflation, the depreciation of the USD and the outflow of capital (cf. Richards 2015: 78 ff.). The US authorities initiated the end of the Bretton Woods System (BWS) when they decoupled the USD from the gold standard in 1971 and made it the sole anchor of the global currency system. Loose monetary policy beforehand led to high inflation and large capital outflows. FED chairman Paul Volcker limited the growth of the money supply and allowed interest rates to rise to any level in order to stabilize the inflation rate. The phase of high interest rates was characterized by considerable capital inflows from Japan, emerging economies and West Germany and contributed to the appreciation of the dollar, which restored confidence in the US currency (cf. Schmalz 2018: 102). After FED chairman Volcker had ended the expansionary monetary policy, the DWSR consolidated and the USA became the leader of a global order in the 1980s, characterized by the financialization of companies and society: “The US government, via the operations of the Treasury Department and Federal Reserve, is capable of exerting unmatchable influence over the political and economic decision-making of virtually all of the other nations of the advanced capitalist and developing worlds” (Richards 2015: 78). In contrast to the BWS, the DWSR is characterized in particular by open capital markets, a system of flexible exchange rates and international currency competition. Other developed economies saw it as a model and modernized their institutions in a market-oriented manner (cf. Cafruny/Ryner 2007). The two central pillars are the USD as the global anchor currency and Wall Street with a strong private financial sector (cf. Bieling 2013a: 288). The strength

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of the USD results from the fact that global exports are denominated in USD; in particular, oil is priced by OPEC in USD. The USA also has the advantage of financing its trade deficit through US bonds. US companies also have to deal with fluctuating exchange rates in subordinate foreign markets (cf. Richards 2015: 79ff.). In addition to the USD, the DWSR is based on the dominance of US financial markets, which are considered the most important trading venues for international financial relations. While central banks and trade balances were the primary determinants of currency stability in the BWS, the USA strengthened private financial institutions in the 1980s, which increasingly took over the role of central banks, for example in terms of the creditworthiness of countries and companies. In addition, the USA was increasingly able to regulate the global financial system, as national financial systems and currency values became vulnerable to developments on Wall Street. The private trade in currencies and government bonds also means that exchange rates and interest rates are now determined by global financial markets, with central decisions being made by US policy and private financial institutions on Wall Street (cf. ibid.: 88). The DWSR goes hand in hand with a minimal role of the state, which is subsumed under the term ‘neoliberalism’, which is defined as follows: “[A] theory of political economic practices that proposes that human well-being can be best advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade” (Harvey 2005: 3). Since the late 1970s, a preference for a neoliberal orientation can be observed in democratic government systems. The externalization of neoliberalism partially involved a violent enforcement in developing and emerging countries through military interventions and the instrumentalization of financial crises, which, for example, led to restructuring programs in Latin America in the 1980s: “The global neoliberalization project formed the cornerstone of a US-sponsored, finance-led business counter-offensive aimed at the reinvigoration of global capitalism (…). Simultaneously, the global spread of neoliberalism also provided the key political-economic changes required for the ongoing viability of the DWSR as a system governing international monetary and financial relations” (Richards 2015: 138).

That the international dominance of the USA is still based on the military power of the US military becomes clear when looking at global defense spending. US defense spending makes up more than one third of global military spending. They were just under 732 billion USD in 2019, followed by Chinese spending with a volume of 261 billion USD. Chinese military spending was at an all-time high

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in 2019 and doubled since 2010. US and Chinese military spending together exceeds military spending from the rest of the world. Measured as a percentage of GDP, US defense spending was 3.4% in 2019, while in China it was 1.9%. On a per capita basis, Chinese defense spending was 182 USD and in the USA 2,224 USD. The share of defense spending in government spending was 9.4% in the USA, 5.4% in China (see SIPRI 2020). The neoliberal agenda came to a head in the Washington Consensus of the 1990s. According to this, governments should promote liberalization, privatization and deregulation policies. In this context, Stephen Gill coined the terms ‘New Constitutionalism’ and ‘Disciplining Neoliberalism’. The latter has a comprehensive character of domination, as it assumes the influence of capital on individuals, classes and states. The structural power of capital unfolds in the market economy on all these levels and gains further power over individual nation-states through globalization (see Bohle 2012: 168). The historical block associated with the DWSR is led by a transnational capitalist class that supports liberalization and deregulation policies. It includes multinational corporations and banks, politicians and bureaucrats in Western states, and global organizations such as the IMF, WB, and WTO (see Katz 2006: 335). Nevertheless, individuals of the social order are also subjected, in particular through new types of private and public surveillance such as video cameras in public spaces or the introduction and storage of digital fingerprints. In this way, more and more areas such as the human body, education or health sector, as well as new countries are placed under the dominance of capital (see Bohle 2012: 169). Its political-institutional culmination is experienced in the new constitutionalism by the disciplinary neoliberalism: “Focusing primarily on the transnational dimension, new constitutionalism envisages this neoliberal hegemony as mobilized through an institutionalized, disciplinary, meta-framework of binding transnational rules, laws and legally enforceable agreements. These serve to ‘lock in’ the market, private property, sound finance and capital mobility as ‘automatic’ or constitutionalized constraints on the ‘progressive’ interventionist capacities of formally independent nation-states” (Strange 2011: 541).

Behind this is a political project of the transnational capitalist class to externalize liberal democracy as the sole development and future model. This emphasizes market efficiency and discipline, the increase in competitiveness through macroeconomic steering, as well as the consistency and long-term reliability of economic policy. Last but not least, the new constitutionalism also stands for the restriction of public control and democratic responsibility towards the neoliberal agenda (see Gill 1992: 165; Gill 1995: 399; Gill 2003: 132).

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4.2 China’s Selective Appropriation of Hegemonic Elements The dominance of the USA in financial policy matters sketched in the previous subchapter is also manifested in the shares of global GDP, represented within the triangle China-EU-USA in Fig. 4.1. In 2019, the USA held just under 25% of the global GDP, followed by the EU with around 21%. But China’s share is growing continuously. When China joined the WTO in 2001, its share of global GDP was only just under 4%. Ten years later it was already over 10% and in 2019 16%. If GDP is corrected for fictitious monetary conversion factors, so-called purchasing power parities, the differences of the different price levels can be arbitrated. If this corrected indicator is used as a basis, China overtook the EU in 2015 and has since held the largest share of global GDP. One year earlier, China’s share had already exceeded the US share of global GDP at purchasing power parity. In view of the dominance of the USA or the DWSR in the structures of the global order and economy, it was initially necessary for the Chinese state-civil society complex to position itself within the existing structure in order to create a favorable environment for the national development and expansion of the Chinese economy. The positive balance sheet of the Chinese transformation resulting from the economic indicators is largely due to the fact that the Chinese state-civil society complex integrated itself into the existing hegemonic order of neoliberalism

40% 35%

Share [%]

30% 25% 20% 15% 10% 5% 0%

1980

1983

1986

1989

1992 China

1995

1998 Year EU

2001

2004

2007

2010

2013

2016

2019

USA

Fig. 4.1   Share of global GDP, nominal and corrected for purchasing power parity (dotted line). (Source: Own creation based on IMF 2021)

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under US leadership. Although the neoliberal agenda was rarely implemented in an ideal-typical manner, some liberal elements can already be found in the early phase of opening under Deng Xiaoping, marking a transition from the planned economy1 to the socialist market economy with Chinese characteristics. The Nixon visit to China in early 1972 was a decisive moment, not only for the resumption of diplomatic contacts between the USA and the People’s Republic, but also for the gradual diversification of trading partners and an increasing cooperation between China and Japan and Western Europe. At the Third Plenum of the Eleventh Central Committee of the Communist Party of China at the end of 1978, the reform-oriented forces around Deng Xiaoping prevailed and promoted four modernizations in agriculture, in the industrial sector, in science and technology, and in the military. In the agricultural sector, they loosened state control and strengthened the private sector. The decollectivization created the possibility of selling surpluses on the market after fulfilling the state requirements. In addition, the Chinese leadership set market-economic impulses to promote industrial development, especially by private small businesses in industry and crafts. The competence of managers in state-owned enterprises was also strengthened, for example in the recruitment of employees, in the purchase of raw materials, in the orientation of the enterprise, and in the stronger participation in their profits (cf. Schmalz 2018: 111 ff.). In the 1980s, the central leadership largely continued this reform course. A central element of foreign economic policy was the establishment of the first special economic zones in the provinces of Guangdong and Fujian in 1980 and in Hainan in 1988. There foreign companies could settle and benefit from low customs duties and export-promoting measures. However, access to the domestic market was still largely denied to foreign companies by non-tariff trade barriers. They were also forced into joint ventures with local companies in order to initiate a transfer of technology to China. In 1984, the Chinese government loosened price controls and strengthened the financial leeway of provincial governments. In addition, the deregulation of the labor market, including the abolition of the right to strike, followed. Rural collective associations were also given access to cheap credit. However, the opening of China was initially limited to a few regions

1 Even

in the communist phase under Mao Zedong, the Chinese leadership set the course for the later opening and economic transformation. For example, the state invested in the expansion of infrastructure, such as roads and railway lines, and promoted industrialization, so that the share of industry in GDP was high due to heavy industry or machine building (cf. Schmalz 2018: 108f.).

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and sectors. In this period, the financial sector remained isolated and the RMB was still not convertible. Overall, the Chinese leadership followed an experimental approach in this period. Reform and opening were not a straight process, but contradictory and limited to individual years with key impulses. This was due to the fact that reform-oriented and conservative forces were struggling for the country’s ideological course. The reform forces gained influence above all through the economic success of the special economic zones (cf. ebd.). China’s economic development went hand in hand with a continuous expansion of infrastructure. This includes, for example, the expansion of oil and gas pipelines, the progressive electrification and the densification of the transport network (cf. Bai/Qian 2010). For the present work, the transport sector in particular plays an essential role: “Transportation infrastructures are among the foremost issues in the development of China; and include roads, railways, ports, airports, and waterways. They have been one of the major engines of China’s economic growth” (Bayane/Yanjun 2017: 30). The origins of investment in infrastructure go back to the Maoist era. For example, the railway network was expanded from 22,400 to 48,600 km between 1952 and 1978 in order to create access to heavy industry in the northern provinces and to transport large quantities of raw materials at low cost (cf. Démurger 2001: 99 ff.). However, the share of the transport sector remained constant at around 10% of government investment until the 1990s. The first expressway from Shanghai to Jiading was opened in 1988 (cf. Hou/Li 2011: 1351). It was not until the Asian crisis that an ambitious investment policy was announced in February 1998, under which roads, railway lines and power plants were to be built over a three-year period with a volume of 750 billion US dollars. In 1998, the share of the transport sector in public investment in plant and equipment rose to 30% (cf. Démurger 2001: 99f.; Hou/Li 2011: 1351). Today, the transport network has continued to grow. The length of the highways was 4.6 million km in 2015 and is expected to increase to 5 million km by the end of 2020 according to the 13th Five-Year Plan (cf. Bayane/Yanjun 2017: 30ff.). The railway network comprised 121,000 km in 2015—an increase of just under 38% compared to 2005. It is expected to grow to 150,000 km by 2020 and to be electrified by 70% (cf. ibid.). The number of civilian airports is expected to increase from 207 in 2015 to 260 in 2020 (cf. ibid.). The Tiananmen Massacre in 1989 marked a watershed for China’s political and economic development. A heterogeneous opposition alliance turned against the growing social polarization and political authoritarianism. After the suppression of the uprising, economic growth became the central state goal. In order to avert the legitimacy crisis after 1989, the Chinese government implemented neoliberal reforms, such as market incentives in production and on the labour

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market (cf. Rucki 2011: 348). For example, from 1992 onwards, managers of state-owned enterprises (SOEs) were able to set prices, production volumes and wages. In addition, the government accelerated the partial privatization of numerous SOEs through the Company Law of 1993, which were also opened up to foreign direct investment (cf. Rucki 2011: 348; Blanchette 2021: 3f.). The integration into the existing world order became a focus of national policy in the 1990s and was based on participation in international trade and division of labour as well as integration into the global financial system (cf. Yu 2014: 3f.). This was also facilitated by the fact that China had already joined the IMF and the World Bank ten years earlier—in 1980. In 1994, the authorities abolished numerous controls on foreign exchange, interest rates and dividends in order to ensure the convertibility of current account transactions demanded by the IMF. China chose to maintain a close link to the USD and the nominal exchange rate remained stable at first, before the increasing current account surplus and the cut in US interest rates by the FED as a result of the bursting of the dotcom bubble put the RMB under appreciation pressure (cf. Schnabl 2017: 34f.). The Asian crisis of 1997/98 affected the emerging economies of Indonesia, Malaysia, the Philippines, South Korea and Thailand particularly hard, while the effects for the Chinese economy were moderate. A combination of three elements came together here: First, US banks and companies pushed for the opening and liberalization of future markets in East Asia. Second, Japan lost its role as the economic locomotive of the region as a result of the devaluation of the yen. Third, a competitive displacement process began with the development of China. As a result of this pressure situation, a spiral of increased borrowing, currency devaluations, insolvencies in the industrial sector and high volatility in financial markets was caused, which led many countries into recession, accompanied by a massive increase in unemployment. As a result of the intervention of the IMF, some countries were forced to implement structural adjustment programs and open up to foreign investment. China also had to deal with the consequences of the Asian crisis, in particular with bad loans from state banks as a result of the low transparency standards. Overall, however, the country was able to fall back on huge current account surpluses and a strong domestic market. In addition, the control of capital flows and the closed financial market increased the resilience of the Chinese economy in the Asian crisis (see ibid.). In the political leadership, market-liberal forces continued to prevail around the turn of the millennium with Zhu Rongji and Jiang Zemin and hoped for a stronger integration into the global economy and growing export business. The restructuring of the SOEs in 1999 under the motto “grasp the big, release the small” involved the merger of some SOEs into large conglomerates, which were

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to be controlled either by the central government or provincial governments. While thousands of small SOEs were privatized, the central leadership of the CPC ensured through the cut of the large conglomerates that it continued to control strategically relevant industries such as steel, energy, banking or telecommunications (see Blanchette 2021: 4). In order to justify the national reforms, the central leadership also pointed to the external pressure of the planned WTO membership. This is against the background that the USA also determined the international agenda in trade policy terms and were leading in the negotiations on the founding of the WTO in 1995. With the WTO membership in 2001, China adapted to the hegemonic order and promised, in addition to the reduction of tariff and non-tariff trade barriers, to end the discrimination against foreign companies, e.g. through joint ventures and forced technology transfer (see McNally 2012: 756). The Chinese leadership committed itself to strengthening private ownership and reforming competition law by subjecting SOEs to stronger transparency rules and market-based principles. In this phase, the state-civil society complex controlled by the CPC positioned itself as a Rule Follower: “[B]y 2008, China had fully embraced the three requirements of hegemonic neoliberalism as understood through the Gramscian lens: the marketization and financialization of productive forces (…) the promulgation of an ideology that prioritizes and naturalizes market logics, and the full deployment of Chinese institutions to support this system of production” (Rucki 2011: 351).

The liberalization of trade relations demonstrates the acceptance of the hegemonic order. In view of the stagnating multilateral trade liberalization under the WTO, bi- and plurilateral trade agreements have become the modus operandi and since 2001 China has concluded numerous such agreements (cf. Table 4.1), in particular with countries in the Asia-Pacific region and along the BRI. When choosing FTA partners, some patterns can be identified. An important political criterion, for example, is the recognition of the market economy status by the trading partners, which brings with it stricter hurdles for anti-dumping investigations against Chinese products. China favors FTAs with countries that have already concluded a large number of trade agreements and export raw materials to China (cf. Müller/Seabra 2019). China’s accession to the WTO facilitated a rapid expansion of trade and GDP, resulting in ever-increasing trade surpluses. Integration into the existing trade architecture has helped China become the world’s leading exporter since 2009. If the share of national exports in global goods and services exports is measured, it

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Table 4.1   China’s trade agreements

Bezeichnung

Typ und Umfang

Inkrafttreten

Free trade agreement— 01.01.2005 (goods) ASEAN-China 01.07.2007 (services) (Brunei, Indonesia, Cambodia, goods and services Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) Preferential trade area— 01.01.2002 (China’s accesAPTA sion; goods) (Bangladesh, China, India, Laos, goods and services 17.06.2013 (services) Sri Lanka, South Korea) Australia-China

Free trade agreement— 20.12.2015 goods and services

Chile-China

Free trade agreement— 01.10.2006 (goods) goods and services 01.08.2010 (services)

China-Costa Rica

Free trade agreement— 01.08.2011 goods and services

China-Georgia

Free trade agreement— 01.01.2018 goods and services

China–Hong Kong, China

Free trade agreement— 29.06.2003 goods and services

China–Macau, China

Free trade agreement— 17.10.2003 goods and services

China–New Zealand

Free trade agreement— 01.10.2008 goods and services

China–Singapore

Free trade agreement— 01.01.2009 goods and services

China–South Korea

Free trade agreement— 20.12.2015 goods and services

Island–China

Free trade agreement— 01.07.2014 goods and services

Pakistan–China

Free trade agreement— 01.07.2007 (Güter) goods and services 10.10.2009 (Dienstleistungen)

Peru–China

Free trade agreement— 01.03.2010 goods and services

Switzerland–China

Free trade agreement— 01.07.2014 goods and services

Source: Own creation based on WTO 2021; Note: The agreements notified to the WTO are taken into account

4.2  China’s Selective Appropriation of Hegemonic Elements 25

China's GDP [USD billion]

14000

20

12000 15

10000 8000

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6000

5

4000 0

2000 0

Annual economic growth [%]

16000

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-5 Year GDP [USD billion]

Annual GDP growth

Fig. 4.2   China's GDP [USD billion] and annual economic growth (right y-axis), 1970– 2019. (Source: Own compilation based on World Bank 2021d)

can be seen that the EU, with a share of just under 35%, is still the world’s largest trading bloc in 2019. At the same time, a continuous increase in the Chinese share from 6% in 2005 to 11% in 2019 is clearly visible (see UNCTAD 2021a). China’s foreign exchange reserves also continued to grow after the turn of the millennium and exceeded the 1,000 billion USD mark for the first time in 2006. The gradualcapitalist path led to a booming economy with constant high growth rates (see Fig. 4.2) and a growing standard of living that lifted millions of Chinese out of poverty2 . The annual GDP growth rate has been above 6% since 1990. In absolute terms, GDP was around 360 billion USD in 1990 and tripled by 2000. Since 2000, GDP has increased eleven-fold to around 14,300 billion USD in 2019 (see World Bank 2021d). At the same time, the Chinese leadership deepened key elements of the Chinese development model. The “contradictory (…) interplay between deepening private capitalist accumulation and revitalizing the state sector” (Schmalz 2018:

2 However,

the Chinese development model was not without contradictions. It was based on a low-wage regime and lack of social and environmental standards. In addition, the Chinese economy was dependent on the global economy due to the high share of foreign trade in GDP (see Schmalz 2018: 164).

4  China’s State-Civil Society Complex in the Structures of Global … 2500

250

2000

200

1500

150

1000

100

500

50

0

1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 Year FDI stock [USD bn]

Annual FDI flow [billion USD]

FDI stock [USD billion]

76

0

FDI flow [USD bn]

Fig. 4.3   Stock (left y axis) and flow of Chinese FDI [USD bn], 1981–2019. (Source: Own compilation based on UNCTAD 2021b)

162) meant maintaining state control over the economy. Companies were listed on the stock exchange, but remained partially state-owned, especially in the sectors of infrastructure, energy and finance. The Chinese government supported SOEs with a number of measures, including cheap credit, subsidies and state contracts. This also applied to the support of increased trade and investment activities of Chinese companies since 2000. As Fig. 4.3 shows, the stock of China’s outward foreign direct investment rose from just under 28 billion USD in 2000 to more than 300 billion USD in 2010. After the announcement of the BRI in late 2013, ADI continued to rise sharply, increasing sixfold to around 2.1 trillion USD in 2019. While the annual outflow of investment abroad was just over 1 billion USD in 2000, it reached 100 billion USD for the first time in 2013 and then rose to 196 billion USD by 2016, before subsequently declining, inter alia, due to the increasingly stringent investment regimes in Western countries and the tightening of capital controls by the Chinese government (see UNCTAD 2021b).

4.3 China’s Proactivity in International Affairs Since 2013 Even though the Chinese state-civil society complex integrated into the existing structure of the international order and economy, it retained its own dynamics and only selectively implemented the hegemonic model. With the BRI, the framework

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for an alternative international order is being created. These trends are not only rooted in the impressive economic indicators, but also in the perceived superiority of the Sino-capitalist system with its rapid recovery after the global economic crisis of 2008. As a result of the capital-restricting policies to stabilize the RMB exchange rate, Chinese companies were not too closely linked to the subprime mortgage markets. State funds and SOEs were also only limitedly affected by risk-averse investment strategies. Only the default of trade credits and the declining demand for consumer goods in the USA and the EU had negative economic consequences for the People’s Republic (see Rucki 2011: 346/347). In response to the global crisis, the Chinese government put together an economic stimulus package of just under 600 billion USD, which included extensive investments in the country’s infrastructure. In addition, the government stimulated national consumption and implemented salary increases and a basic health insurance for the working lower class in order to reduce economic inequalities (see Schmalz/ Ebenau 2014: 52). The limited effect of neoliberal hegemony in China was also shown in that the Chinese state-civil society complex held on to or deepened central elements of Sino-capitalism. The strengthening and subsidizing of state-owned enterprises went hand in hand with uneven credit distribution, over-investment in government-priority sectors, non-tariff trade barriers, own standards and the Corporate Social Credit System (see Huotari/Weidenfeld/Arcesati 2020). Market access in China is made more difficult for foreign companies, while in its digital ecosystem China lets large e-commerce companies such as Alibaba or Tencent flourish, which are then to become internationally active (see ibid.). This approach follows a typical pattern of the Chinese state-civil society complex. In order to generate economic growth and thus to secure its own legitimacy, SOEs are primarily mobilized. This growth model contradicts the neoliberal agenda, which pleads for deregulation and privatization of companies. China, on the other hand, used the global crisis to strengthen the role of the state in economic planning. The currency devaluation followed a state-directed strategy to maintain export business (see Rucki 2011: 348ff.). The divergent policy responses to the financial crisis coupled with the different recovery speeds of the economies led to a strengthening of China: “Very real shifts in economic power and credibility have emerged from the recession with developing states, particularly China (…) taking on a new confidence in their dealings with the developed world” (ibid.: 354). In this phase of the global crisis, the Chinese state-civil society complex came to the realization that as a Rule Follower it can only inadequately promote reforms of the existing order that would recognize China’s weight in global affairs. On the international level, the Chinese leadership intended to reform

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established institutions, including the World Bank, IMF and UN Security Council. In addition, alternative institutions, including BRICS and AIIB, were to be set up to create a balance to Western supremacy in international organizations. Within the BRICS forum, particular mention should be made of the reserve fund, which, with a deposit of 100 billion USD, is to stabilize the member states Brazil, Russia, India, China and South Africa against short-term capital outflows and exchange rate fluctuations. In addition, the New Development Bank, also with a planned deposit of 100 billion USD, finances infrastructure projects in BRICS and developing countries. The establishment of the BRICS Development Bank and AIIB reflected the frustration of the Chinese government over the unwillingness of Western countries to transfer responsibility and voting rights to China in international financial institutions (see Ren 2016). In a reform package of 2010, an increase in voting rights for emerging countries was indeed planned. However, with more than 15% of the voting rights each, the EU and the USA still hold blocking minorities (see ibid.). In addition, the Chinese government criticized that in the Asian Development Bank (ADB) and the Bretton Woods institutions, space had been given to subordinate infrastructure financing. This is to be seen against the background of an ADB report from 2009, which revealed a huge investment need in Asia. In the period from 2010 to 2020, investments of 8 trillion USD in national infrastructure and 290 billion USD in regional infrastructure projects in the transport and energy sector would be necessary (cf. ibid .: 436). With the foundation of the AIIB, the aim was therefore to strengthen economic development and integration as well as connectivity in (East) Asia. At the same time, mistrust should be dispelled, for example by co-financing with other multilateral development banks. In addition, the loans should not be made exclusively for BRI projects. These modalities contributed to the fact that some Western countries joined the AIIB despite US American opposition (cf. Callaghan/Hubbard 2016: 136; Chen/Liu 2018: 14). Within the WTO, the incompatibility of the Sino-capitalist development model with neoliberal dogma became increasingly apparent. Economic development in China was associated with an increase in state steering capability. For Western countries, China’s state-directed industrial policies, which provide for a central role for state-owned enterprises and their promotion through subsidies, are in contradiction to WTO rules. Since China’s status as a developing country is still controversial, it is difficult for OECD countries to impose trade protection instruments on China, such as anti-dumping duties. Above all, the conflict between the USA and China intensified against this background and culminated in the dysfunctionality of the WTO appeal system, as the USA refused to appoint

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new appeal judges for the Appellate Body. The US-China Decoupling illustrates that the world is at risk of breaking down into two ecosystems with shared value chains. By setting up its own institutions such as the BRI, the Chinese state-civil society complex is less subject to the justification pressure of established global organizations, but can act as a Rule Shaper itself shaping the rules of cooperation.

4.4 The BRI as a Political Project of the Chinese StateCivil Society Complex By the official announcement of the BRI in September and October 2013, the Going-global policy acquires a new quality. The present work focuses on the global implications of the BRI. However, it should not be left unmentioned that the BRI has an essential national significance for the state-civil society complex. China’s opening since 1978 has been closely regulated and limited to some regions and economic sectors. The Going-out policy and the boom through the Sino-capitalist development model benefited the export industries of the coastal regions significantly more than the subsidized and largely isolated domestic economy (cf. Ulbrich 2014: 267). With the terrestrial corridors of the BRI, the economic development of the western provinces and autonomous regions is now also to be boosted. From the perspective of the state-civil society complex, this could reduce social dissatisfaction. By minimizing the provincial development gap and a general increase in prosperity, there would still be the possibility of involving further actors in the field of the state-civil society complex controlled by the CPC. In order to make the BRI internationally known, MOFA, MOFCOM and NDRC published the six-page document “Visions and Actions on jointly building Silk Road Economic Belt and 21st-century Maritime Silk Road” in March 2015, which served as the starting point for more specific action plans of the Chinese government or individual ministries. Building on the ancient Silk Road, the Silk Road Spirit is highlighted in the 2015 policy document, which has been passed down from generation to generation and is characterized by peace, cooperation, openness, inclusiveness, mutual learning and benefit (cf. NDRC/MOFA/MOFCOM 2015). The BRI builds on this and presents itself as a comprehensive project from which numerous peoples around the globe would benefit from the integration of the development strategies of participating countries. The BRI strengthens the global free trade regime and the open world economy, but at the same time creates new forms of international cooperation and global governance. China also commits itself to pushing forward the process of opening up its economy: “The Initiative will enable

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China to further expand and deepen its opening-up, and to strengthen its mutually beneficial cooperation with countries in Asia, Europe and Africa” (ibid.). The BRI cooperation is to be based on internationally accepted principles. In one breath, the UN Charter, the five principles of peaceful coexistence, openness to cooperation with all countries, regional and international organizations, harmony between civilizations, and respect for the development model and path of other countries are mentioned. Cooperation should also be based on market principles and serve mutual benefit. In this way, the BRI could become a framework for Win-Win relationships that would enable joint development, joint prosperity, peace and friendship between participating countries (cf. ibid.). In the 2015 policy document, five vaguely defined cooperation priorities are mentioned (see Table 4.2), from which the multi-dimensional character of the BRI emerges. As the first priority, policy coordination should be used to improve intergovernmental relations, to identify and expand common interests, and to coordinate and harmonize development strategies. Based on the respect for mutual sovereignty, the countries along the BRI should secondarily improve their connectivity with regard to infrastructure projects and technical standards. The security of oil and gas pipelines is to be increased by connecting energy infrastructure, and cross-border energy supply networks are to be put in place. In the communications sector, a digital Silk Road is to be created. The third priority includes financial integration. This includes, for example, the expansion of bilateral currency swap agreements or the establishment of the AIIB and BRICS New Development Bank and the Silk Road Fund. The cooperation priority of ‘unimpeded trade’ includes a deepening of investment and trade cooperation, the elimination of trade barriers and cooperation in customs matters. The number of bilateral investment protection agreements is to be increased and double taxation is to be avoided. In this cooperation priority, cooperation in future-oriented industrial sectors is also planned, e.g. biotechnology, IT or renewable energies. While companies from all countries are invited to invest in China, Chinese companies are encouraged to invest in the expansion of infrastructure in BRI partner countries. The cooperation priority should also be considered against the background of the industrial strategy ‘Made in China 2025’. With this strategy, the People’s Republic is aiming for technological leadership in ten key sectors, including robotics, artificial intelligence, autonomous driving or cloud computing. New markets in the Global South appear interesting for the sale of Chinese technology and products, as there is little competition there so far and the demand for cheap goods, such as household and electronic appliances, is high (see Ten Brink 2015: 679).

People-to-people bonds • Academic exchange • Employment and competence development • Volunteer work • Youth and women’s exchange • Cultural exchange • Media cooperation • NGOs (including education, poverty reduction, environment) • Public administration • Personnel exchange and cooperation • Political parties and parliaments • Prevention and treatment of diseases • Social security • Sport • City partnerships • Think tanks • Tourism • Entrepreneurship • Science and technology

Financial integration • Financial regulation with risk and crisis management • Establishment of AIIB, BRICS NDB, SRF and SCO financial institutions • Internationalization of RMB bonds • Loans and bank loans • Sovereign funds and private equity funds • Strengthening of the China-ASEAN Interbank Association and SCO Interbank Association • Currency stability • Currency exchange agreements

Unimpeded trade • Emerging industries (renewable energy, IT, robotics) • Fisheries and aquaculture • Forestry • Trade liberalization and facilitation • Investment facilitation • Agriculture • Supply chain management • Marine science • Enforcement of law • Raw materials industry • Standards • Statistics • Taxes • Electricity generation • Animal husbandry • Tourism • Environmental protection • Customs procedures

Infrastructure Connectivity

• Air traffic • Infrastructure expansion • Shipping logistics • Safety of gas and oil pipelines • Transport regulations • Customs procedures • Cooperation of ports

Policy coordination

• Intergovernmental cooperation • Intergovernmental mechanism for macro policy exchange • Expansion of shared interests • Increase of mutual political trust • New cooperation consensus • Coordination of development strategies • Programs for regional cooperation and negotiations for the settlement of disputes • Policy support for the implementation of practical cooperation and large projects

Table 4.2   The five cooperation priorities of the BRI

4.4  The BRI as a Political Project of the Chinese State-Civil Society Complex 81

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With the cooperation priority of ‘people-to-people exchanges’, the densification of the inter-societal relations of the participating countries is to be achieved, while also strengthening the public support for the bi- and multilateral implementation of the initiative. Therefore, a comprehensive cultural, media and academic exchange is to be achieved. The Chinese government annually provides around 10,000 government scholarships for countries along the BRI. Cultural programmes also include joint book fairs, art and film festivals. Training measures are aimed at medical personnel and engineers, for example. The communication and friendly relations between political parties, parliaments, non-governmental organizations (NGOs) and cities are also to be promoted (see NDRC/MOFA/ MOFCOM 2015). By the end of 2019, 138 countries had signed a Memorandum of Understanding (MoU) with China on cooperation within the framework of the BRI (see Annex 1 in the electronic supplementary material)—40 of them in Africa. The transformation of the global order is to be based on a close economic interconnection between China and the participating countries, in addition to the ideal and institutional components. First and foremost, Chinese investments in BRI partner countries are to be mentioned here. In the period from October 2013 to the end of 2019, Chinese total investments abroad amounted to 1,254.7 billion USD, of which 58% fell on countries along the BRI with around 730 billion USD. The annual investment volume in BRI partner countries ranged between 110 and 134 billion USD in the period 2014–2018, before it fell back to 87 billion USD in 2019 (see AEI 2020). In addition to Chinese capital controls, investment reviews in various countries for national security reasons and global economic uncertainty caused by the US-China conflict were some of the reasons for this (see Scissors 2020). As Fig. 4.4 shows, BRI investments are mainly concentrated in the regions of Asia and Sub-Saharan Africa. In the mostly underdeveloped countries there are investment and long-term business opportunities for Chinese companies. Almost half of all investments go to Asian countries. Since the announcement of the BRI, Sub-Saharan Africa has received investments totaling 158.3 billion USD and ranks second in the AEI terminology behind China’s East Asian neighbors. Despite the numerous cooperation branches (see Table 4.2), investments are focused on sectors in which Chinese companies have a market advantage due to their own experience of economic development. The energy and transport sector account for almost two-thirds of all BRI investments. The energy sector accounts for 283.3 billion USD (39%) and the transport sector for 188.5 billion USD (26%) (see AEI 2020).

4.5  China’s State-Civil Society Complex and the BRI

Europa 9%

America 7%

83

East Asia 26 %

MENA 15 %

Subsaharan-Africa 22 % West Asia 21 %

Fig. 4.4   China’s BRI investments by region, October 2013–2019. (Source: Own creation based on AEI 2020)

4.5 China’s State-Civil Society Complex and the BRI The Chinese state-civil society complex is controlled by the Communist Party of China (CPC). The CPC’s central leadership mobilizes state agencies, provinces, companies, and state-owned banks to implement the Belt and Road Initiative (BRI). The following sections will now take a closer look at the key players and their role in BRI implementation in East Africa. The formulation and decisionmaking process in Chinese foreign policy is generally seen as a black box: “Chinese foreign policymaking is now arguably the world’s most complicated foreign policymaking process” (Zhang 2016: 22). Nevertheless, various groups of actors can be distinguished who play a central role in the implementation of the BRI in East Africa. Civil society actors in China are left out, as they play a subordinate role in the implementation of the BRI in East Africa. In general, it is semistate think tanks in particular that are gaining political weight, as members of the Politburo often have little foreign policy experience. In the context of the BRI, Chinese think tanks and research institutions are also to play a leading role in promoting the initiative and assisting the government in planning and shaping the future (see Rolland 2019: 24ff.). This was demonstrated, for example, by the fact that the think tank Center for China and Globalization successfully proposed in

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2017 to change the official name of the Belt and Road Strategy to Belt and Road Initiative in order to reduce mistrust in many countries towards the goals of the BRI (see He 2019: 191).

4.5.1 The CPC’s Central Leadership at the Top of the State-Civil Society Complex Generally, the foreign policy decision-making apparatus of the People’s Republic of China is characterized by a high degree of centralization and personalization (see Ning 1998: 76). Almost all crucial foreign policy decisions, such as positioning vis-à-vis the superpowers United States and Soviet Union or in the Korea question, were made by the central leadership (see ibid.: 94). A central role in the political system is played by the Paramount Leader, who is not only party chairman and president, but also chairman of the Central Military Commission. Xi Jinping has held this position since his assumption of office as General Secretary of the Communist Party of China in 2012 and as President of China one year later. At the core of political power is the currently seven-member Standing Committee of the Politburo, whose sessions are chaired by Xi Jinping. This body is considered the highest decision-making body in foreign policy matters (see Jakobson/ Manuel 2016: 103). In another power circle around the Standing Committee of the Politburo follows the Politburo. In this currently 25-member body, long-term decisions, such as the change in foreign policy orientation, are discussed. In addition, the Paramount Leader uses study units to introduce new foreign policy concepts and explain key decisions. The members of the Politburo are elected by the Central Committee of the Communist Party of China, which meets annually and officially adopts foreign policy policies. The 205 members of the Central Committee in turn hold the highest offices in the state bureaucracy at national and provincial level (see ibid.: 104f.). That the party chairman plays a key role in Chinese foreign policy is shown by Qingmin Zhang in his application of Hermann’s typology, which explains the foreign policy behavior through the personality of the political leaders (see Hermann 1980), to the Chinese Paramount Leader (see Zhang 2014). With the assumption of office of the fifth leadership generation around President Xi Jinping, a more proactive engagement of the Chinese government in international politics can be observed. Xi has a great interest in foreign policy issues and is considered the central coordinator of Chinese foreign and security policy (see Jakobson/ Manuel 2016: 108). The self-confidence of Chinese foreign policy is rooted in an inner-political consolidation of Xi’s power through an extensive anti-corruption

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campaign. Xi also centralized the foreign and security policy decision-making process by establishing a National Security Commission in 2013 and chairing numerous Leading Small Groups or commissions, including for national security, Taiwan relations and foreign affairs, which are the central bodies for policy coordination and implementation of decisions of the Politburo. He also set in motion a profound military modernization and restructuring to consolidate the loyalty of the PLA to the Communist Party of China (see Krupakar 2017; Chase 2018; Cooper 2018). At a working forum of the Communist Party of China in October 2013, Xi Jinping presented his foreign policy goals. Of particular note are the strengthening of regional economic integration and security cooperation as well as the deepening of global influence in cultural affairs (see Pantucci/Lain 2016a). Xi Jinping’s leading principles and strategies that characterize China’s domestic and foreign policy consist of three elements: “the concept (China Dream), the blueprint (BRI) and the Two Centennials (deadlines for achievement)” (cf. Hayes 2020: 31). As “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”, these elements were incorporated into the Chinese constitution in 2017 (cf. ibid.). The China Dream means in the national dimension the fight against corruption as well as a guarantee of security and prosperity. For some authors, the Chinese dream is China’s return to a glorious position on the global stage. The “revival of China” refers to the restoration of national dignity after a century of humiliation. In addition to economic development, this nationalist impetus is to ensure the legitimacy of the Communist Party of China (cf. ibid.: 33). The two centennial deadlines are crucial for the claim to leadership of the Communist Party of China. These refer to the goal of creating a moderately prosperous society by the 100th anniversary of the Communist Party of China in 2021 and a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious by the 100th anniversary of the People’s Republic of China in 2049 (cf. Ferdinand 2016). The central leadership in general and Xi Jinping in particular play a leading role in the announcement of the BRI in 2013 and the regular recourse to the initiative at diplomatic events. In his speeches, Xi Jinping sets the guidelines and visions and emphasizes that the BRI creates a community of destiny (“Community with a shared future for mankind”) between the participating countries. At the Forum for Political Parties in December 2017, Xi stressed that the community of destiny is intended to strengthen cooperation between nations and create harmonious relations between them: “[T]o connect the prospects and destinies of every nation and country closely together, share weal and woe, and turn planet Earth into a harmonious family” (Xinhua 2017). The idea of a community of destiny is deeply rooted in Chinese culture and means the symbiotic development

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and mutual dependence between different actors. This is based on the recognition that the survival and development of one’s own is interwoven with the survival and development of other actors. It follows that cooperation should be entered into for mutual benefit, from which both sides benefit. Ideally, this is underlined by the “win-win situations” and the principle of common development. The latter implies that national programs and policies bear responsibility for both national development and the international community (cf. Liang/Zhang 2019: 9f.). A speech in which the key points of Sino-capitalism as well as the central motives and guiding principles of the BRI were made clear, was held by Xi Jinping at the beginning of 2017 at the World Economic Forum in Davos. In his speech, the Chinese President pointed out that the countries in a globalized world are dependent on each other, but would also increasingly formulate similar interests (see State Council Information Office 2017). The right to development should be granted to all countries. Through an open global economy, the framework conditions should be created to coordinate development plans and to achieve Win-Win cooperation. In particular, the international community should intensify its efforts to strengthen global connectivity, so that the basis for development, growth and prosperity can be laid for all countries. At the same time, the global economic order should be reformed to adapt to the new dynamics and poles in the international economic architecture. In particular, emerging and developing countries should be given a greater say in international financial institutions. With regard to the characteristics of development models, Xi stated that they should be balanced and inclusive and improve the socio-economic situation of the population (see ibid.). China had chosen an individual development path, but would never impose its development model on other countries: “No country should view its own development path as the only viable one, still less should it impose its own development path on others. This is a path of pursuing common development through opening-up. China is committed to a fundamental policy of opening-up and pursues a win-win opening-up strategy. China’s development is both domestic and external oriented; while developing itself, China also shares more of its development outcomes with other countries and peoples” (ibid.).

Instead, the focus is on joint development and opening up to the outside world. China is ready to share the experience of its own development with other countries. In this context, Xi mentioned the Silk Road Initiative, which is intended to promote the economic development of the participating countries by increasing connectivity, connecting economies and creating jobs (see ibid.).

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4.5.2 Coordination of BRI Implementation by the PartyState Apparatus The foreign policy decision-making process involves a variety of interests and positions of ministries and party organs that exert a significant influence on policy formulation and implementation. In principle, foreign policy decisions are made by the Communist Party of China rather than the government (see Zhang 2016: 22). The Party’s overriding goal is to stay in power in the long term and have absolute control over the country. The state-civil society complex controlled by it ensures employment, growth and prosperity (see Yu 2018: 225). In addition, the Party has various areas that play a key role in foreign policy. The International Department, formerly known as the International Liaison Department, maintained contact with communist and socialist parties during the Cold War. Nowadays, the area basically coordinates the relationships with political parties and movements abroad that are to be strengthened as part of the BRI (see Jakobson/Manuel 2016: 105). Since the long-term goals, strategic vision and policies in Chinese foreign and trade policy are often vague, the implementation and interpretation of the overarching policies require coordination by the ministries (see Yu 2018: 228f.). Central coordination bodies are the Leading Small Groups (LSG), which usually report to the Standing Committee of the Politburo. The importance of an LSG is shown by the body from which it is set up and by the respective party position held by the chairman. An increasing importance in foreign policy under Xi is borne by the military, which is basically considered the armed arm of the Communist Party of China: “The PLA remains the ultimate backstop of the CCP’s rule in China, but its professionalization has given it autonomy in the running of military administration and operations” (Zhang 2016: 20). The military has a parallel structure and relative autonomy over its operational activities. It influences foreign policy when national security is affected. The two vice-chairmen of the Central Military Commission are represented in the Politburo (see ibid.). In addition, representatives of the military sit on the foreign policy decision-making commission and on numerous LSGs. In addition, the party penetrates the state apparatus with its bureaucratic units. At the head of the state is Prime Minister Li Keqiang, who chairs the State Council, which carries out the daily administration of the country. The State Council coordinates economic development and submits draft laws to the National People’s Congress and the Standing Committee of the Politburo. In foreign affairs, it

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monitors the negotiations of international treaties. In major investment projects, it is directly involved in the approval process (see Mumuni/Murphy 2018: 25). Under the State Council are numerous ministries and specialized agencies. Since the members of the Politburo are at the top of the Chinese hierarchy above all foreign policy-visible actors, such as the State Council responsible for foreign affairs, the bureaucratic organs compete for the favor of Xi Jinping and other members of the Standing Committee. State Council and Foreign Minister Wang Yi ranks behind 30 people and is on the same level as 20 other people (see Jakobson/Manuel 2016: 106). The Ministry of Foreign Affairs interprets and implements the policy decisions of the Chinese leadership and maintains government-level relations with other states. Nevertheless, a declining importance of the Ministry of Foreign Affairs can be seen in that all ministries at national and provincial level set up organizational structures for international cooperation and affairs. Between 2010 and 2015, 300 occasions were recorded on which the spokesman of the Ministry of Foreign Affairs had to announce at a press conference that he could not offer any information and that one should contact the competent ministries (see Zhang 2016: 19). Although the MOFA can set and enforce its own rules for employees in embassies, other agencies involved in the foreign policy decision-making process are on the same hierarchical level and are not obliged to implement instructions from the MOFA (see Jakobson/Manuel 2016: 106). China’s integration into the structures of the global order and economy is accompanied by a diversification and pluralization of foreign policy organs. Wenbing Huang and Andreas Wilkes differentiate 26 organs in the central government that are involved in the foreign policy decision-making process (see Huang/ Wilkes 2011: 2). The MOFCOM is the most important institution in the internationalization of Chinese SOEs. It monitors foreign direct investments, designs and implements policies and regulations such as the Going-global policy. It also negotiates bilateral and multilateral investment and trade agreements and represents the People’s Republic in the WTO (see ibid.: 3). Within the MOFCOM, various areas are operated with specific responsibilities. The Department of West Asia and African Affairs advises the Chinese leadership and companies in investment decisions by providing information on the political, social and economic environment in African countries. The Department of Foreign Economic Cooperation regulates Chinese companies abroad. All Chinese companies active on the African continent have to register with this authority if their investments exceed 10,000 USD. At the same time, this authority can revoke licenses for companies at any time (see Mumuni/Murphy 2018: 26).

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In financial matters, two ministries are to be mentioned. The Ministry of Finance designs development strategies and macroeconomic policies and manages the revenues and expenditures of the central government, including the annual budget (see Huang/Wilkes 2011: 4). Its importance for China’s Africa policy is limited to the management of the budget for development aid expenditure in cooperation with MOFCOM and MOFA (see Hanauer/Morris 2014: 25). The State Administration of Foreign Exchange also manages and controls foreign exchange transfers and provides the State Council and the IMF with data on the Chinese balance of payments (see Huang/Wilkes 2011: 3). The NDRC plays a central role in Chinese policy as it designs programs for national economic development and industrial policy. Its goal is to create a favorable environment for Chinese companies in Africa. Therefore, it leads a mechanism that provides for intergovernmental investment cooperation with African states and promotes Sino-African cooperation in economic and technological terms. The central decision-making body is the Foreign Investment Department. The NDRC is also responsible for tariff reductions and exemptions for LDCs in Africa. Investments in the raw materials sector with a transaction value of more than 30 million USD as well as in non-raw materials with more than 10 million USD require approval by the NDRC. If the investment volume is 200 or 50 million USD, the State Council must be consulted in the approval process (cf. Mumuni/Murphy 2018: 27/28). In addition, specialized agencies below the ministerial level are involved in Chinese foreign trade. The State Asset Supervision and Administration Commission (SASAC) monitors the competitiveness and profitability of state-owned enterprises by integrating them into the decision-making process on operational issues and appointing managers. On a national level alone, the SASAC controls 120 state-owned enterprises. In the context of the Going-global policy, this authority has drawn up a list of 166 Chinese companies that are considered ‘flagship enterprises’ and receive preferential treatment from the Chinese government. Institutions that operate directly under the State Council, such as the China Banking Regulatory Commission, which has been responsible for approving investment projects of Chinese banks since 1992, and the China Insurance Regulatory Commission, which monitors the activities of Chinese insurance companies abroad (cf. ibid.: 29/30). NDRC, MOFA and MOFCOM are the central mobilization bodies of the BRI and jointly published the central policy document in 2015 (cf. Sect. 4.4). The NDRC is therefore the leading BRI authority. In addition, special BRI action plans have been drawn up by individual ministries, so that 15 more ministries are now involved in the implementation of the BRI. The Ministry of Culture is

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to improve cultural exchange and cooperation mechanisms with other BRI countries. The Ministry of Education drew up an action plan in 2016 to increase the mobility of Chinese students and finance a study stay in China for foreign students (cf. King 2020: 223). In order to integrate the maximum number of actors into the state-civil society complex, the BRI policy document of 2015 contains vague guidelines. The BRI serves the pragmatic claim of the government and party to secure the support of as many actors as possible. This makes the BRI flexible and able to accommodate competing interests at the same time (cf. Jones/ Zeng 2019). In addition to developments at the national level, the BRI is also unfolding a subnational dynamics. In total, numerous provinces are participating in the BRI (see Table 4.3). According to the policy document of 2015, the four municipalities directly under the central government Beijing, Shanghai, Tianjin and Chongqing, the five autonomous regions Inner Mongolia, Ningxia, Xinjiang, Guangxi and Tibet, eleven provinces as a whole and cities from another seven provinces are mentioned. The integration of a variety of provinces makes it clear that the central leadership is trying to take into account as many interests as possible in the formulation and implementation of the overarching foreign and trade policy project in the era of Xi Jinping. The main interest of the provinces is in turn that the investment projects of the state-owned enterprises associated with them are selected. In this case, provincial governments can expect generous budgetary support. In addition, provinces have received a lower share of state income since the tax reform in 1994, but have higher expenditure responsibilities. When approving investment projects at home

Table 4.3   Chinese provinces, autonomous territories and government-owned cities in the BRI

Region

Mention at provincial level

Mention at city level

Inland

Chongqing

Anhei, Henan, Hubei, Hunan, Jiangxi, Sichuan

Coast

Beijing, Fujian, Guangdong, Hainan, Shanghai, Tianjin, Zhejiang

Shandong

Northeast and Northwest

Gansu, Heilongjiang, Inner Mongolia, Jilin, Liaoning, Ningxia, Qinghai, Shaanxi, Xinjiang

Southwest

Guangxi, Tibet, Yunnan

Source: Own creation based on NDRC/MOFA/MOFCOM 2015

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and abroad, they therefore play a central role. They are evaluated on the basis of their economic growth, which is why industrial policy measures are being promoted to drive economic development (see Jones/Zeng 2019: 1422ff.). Influential provincial governors rank in the party-state cadre hierarchy ahead of ordinary ministers. So the Minister of Transport ranks 41st in the party-state cadre hierarchy, while the Governor of Chongqing is listed 14th (Yu 2018: 229). A governor can therefore override the decisions of a government member with regard to the BRI. A dynamics was set in motion by the BRI, as a result of which provincial governments together with specific ministries in Beijing compete for projects. Other provinces form alliances with SOEs, while others communicate directly with members of the BRI LSG (see Jones/Zeng 2019: 1425). Given the variety of actors and interests involved in the implementation of the BRI, a central decision-making and coordination function is essential. The Leading Small Group for the BRI, founded in 2015, meets monthly, resolves disputes between different state organs and makes decisions on the further development of the BRI. While the downstream administrative office is located in the NDRC, the LSG is subordinate to the State Council and was initially led by Vice Premier Zhang Gaoli. In addition to Zhang Gaoli, who was responsible for finance and industry until his retirement, it was the task of the former State Councillor Yang Jiechi, now a member of the PB, to mitigate foreign concerns about the BRI and diplomatic tensions. Vice Premier Wang Yang was responsible for the topics of trade and commercial engagement and Wang Huning for public relations. Yang Jing was responsible for the party-state coordination of the BRI until 2018, when he was charged with corruption. Vice Premier Han Zheng now heads the BRI LSG (see Rolland 2019: 26).

4.5.3 State-Owned Enterprises and State-Owned Banks at the Center of BRI Implementation The CPC instructs economic actors to implement the BRI through operational activities in BRI partner countries. In particular, state-owned banks, insurance companies and state-owned enterprises3 are to be mentioned here. In the context

3  However,

the number of private companies investing and trading abroad has also increased under the “Going-global” policy and BRI. For the historical block, however, the SOEs are decisive, as they implement the large prestige projects of Chinese diplomacy in the infrastructure sector.

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of African state-owned banks, the Exim Bank and CDB are of particular importance. Both institutions were founded in 1994 and are state-owned. The Chinese Ministry of Finance is the only shareholder and the State Council oversees their activities. In addition to its 25 national branches, the Exim Bank has four more abroad, including one for East and Southern Africa in Johannesburg. In addition, it has relationships with almost 1,400 banks in 160 countries. Its main task is to enable Chinese companies to export and import, in particular mechanical and electronic products, infrastructure projects and new technologies (cf. ibid.: 28). In addition, it provides loans for large infrastructure projects. The CDB has a national focus in principle, although the foreign portfolio has expanded since 2000. Its mission is to develop China’s infrastructure, such as highways, railway lines, gas pipelines, power plants and telecommunications lines. Since 2007, it has managed the China-Africa Development Fund, which is intended to support Chinese companies in investing and trading in Africa (cf. Morgan/Zheng 2019: 10). State-owned enterprises are another group of actors involved in the implementation of BRI. They are supposed to support prestige projects of Chinese diplomacy, but the relationships between the party or state on the one hand and state-owned enterprises on the other hand are more complex. The relationships work in both directions, because state-owned enterprises also exert influence on official policies. Even before the adoption of the Going-out policy, SOEs were striving to invest in Africa and Latin America in the mid-1990s (see Zhang 2017: 319). In addition, it is not only state-owned enterprises that have close relationships with the party and state. While the investment activities of SOEs are much more influenced by the BRI and industrial policy programs such as ‘Made in China 2025’ than is the case with private companies (see Fuest et al. 2019), Chinese companies need the support of the state for successful operations in China and global expansion (see Cheney 2019: 14). In the era of Xi Jinping, an increasingly close penetration of companies by the CCP can be seen, for example, on the basis of the National Intelligence Law or the Corporate Social Credit System, whereby the rigid boundaries between private companies and SOEs become blurred: “[I]f China Inc. was typified by (relatively) clear demarcations between ‘stateowned’ and private, in the new era these lines have become obscured to the point of irrelevancy by a concerted effort to expand the role of the CCP [Chinese Communist Party] throughout the economy, both public and private” (Blanchette 2021: 3).

The conceptual separation between state-owned enterprises and large private companies is also not meaningful in the Chinese context because private companies need to maintain close networks with the party in order to gain access to

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the market and subsidies (see Milhaupt/Zheng 2015: 668). The historical development of private companies can be seen as a watershed with the Chinese Company Law of 1994, as a result of which private companies could register. In 1997, the privatization of state-owned enterprises was attempted with the exception of the central large SOEs under the motto ‘grasp the large, let go the small’ (zhuada fangxiao). As a result, companies with mixed and complex ownership structures emerged. However, the examination of shareholders does not give much insight into the company structure. For example, SASAC controls 100% of the parent companies of 115 SOEs, which in turn have up to 100 subsidiaries. State-through and -access is often difficult as a result (see ibid.: 676). In view of the complex ownership structure, the importance of political networks (Guanxi) is growing: “These bridges consist of dense, stable networks of relationships fostered through rotations of managers, personnel exchanges, and the wearing of multiple hats (on behalf of SOEs, the government, and the Party) by managerial elites in China” (ibid.: 683). Of the 100 largest private companies, 95 companies’ founders or controlling shareholders are members of party-state organs, such as the National People’s Congress or the Consultative Conference, in which networks between banks, SOEs and regulators are strengthened and private companies become part of the establishment (see ibid.: 684). Access to private companies is achieved through non-legal control, for example in industrial associations and chambers of commerce. Where there used to be ministerial regulation, it is now former employees of the authorities who, at the head of associations, communicate state policy guidelines (cf. ibid.: 685f.). In addition, regular interviews are conducted by the NDRC in order to explain state priorities and promote or enforce their support. In this way, the CPC secures the loyalty of private companies and draws them into the state-civil society complex. Companies also invest in their political relationships with the party and the state in order to obtain low financing conditions and not to be dependent on high interest rates in the shadow banking system (cf. ibid.: 690). Since the CPC itself has a great interest in economic growth and social stability, it willingly supports innovative companies such as Huawei through special benefits: “The Chinese partystate likes to dine and dance with private business so that it is able to continue to control the politics while becoming enriched and strengthened by the market” (Xing/Shaw 2013: 106). However, the Chinese state-civil society complex should not be seen as a single actor, but is characterized by the competition between different groups of actors. In Africa, the competition of Chinese companies was illustrated by studies in the agricultural sector in Mozambique and Zimbabwe (cf. Jing et al. 2016). The large state-owned enterprises should also not be seen as a monolithic actor.

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They compete for large contracts (cf. Ten Brink 2015: 676f.), as was manifested in the struggle between the oligopolistic oil companies for the award of energy projects in Africa (cf. Liou 2009). In addition, state-owned enterprises are often associated with a provincial government and pursue their own agenda, which may differ from national plans (cf. Jones/Zeng 2019). State-owned enterprises play a fundamental role in the implementation of the BRI in Africa. “The proliferation of Chinese enterprises in Africa is (…) the result of a well-executed and coordinated strategy by the Chinese government, combining political will and goals with a wide range of mechanisms and resources comprising of political and financial institutions” (Mumuni/Murphy 2018: 23). The state provides the companies with extensive information about a BRI partner country as well as advice and contact-making with African governments and companies (cf. ibid.: 22). The financial support of the Chinese government comprises two instruments: Direct support extends to the reimbursement of costs incurred prior to investment activity, such as the costs of feasibility studies or the purchase and translation of regulatory documents. As another instrument, the credit terms include interest rate reductions granted by state banks for an average of one to five years. As a result of tax incentives, financial guarantees or interest-free loans from state banks, Chinese companies have an advantage over their competitors, who are mostly dependent on the capital market (cf. Ten Brink 2015: 671). This has the consequence that on the African EPC market, six of the ten largest companies come from China, including China Communications Construction, China Railway Group and Sinohydro Group (cf. Sun/Jayaram/Kassiri 2017: 23f.).

5

The Material, Ideational and Institutional Externalization of Sino-capitalism in East Africa

Empirical analysis begins by situating the announcement of the BRI in 2013 within the development of Sino-African relations. In particular, this paper takes the FOCAC as a precursor to the BRI. Subsequently, this chapter explains the participation of East African states in the BRI. The ideational and institutional dimension of the externalization of Sino-capitalism is examined on the basis of the BRF and FOCAC communiqués. Afterwards, the material entanglement is addressed on the basis of investments, credits and trade relations between China and East Africa. The security policy, media and cultural protection of Chinese engagement is also appreciated. Finally, the chapter looks at the civil society reactions and the assessment of Chinese engagement in East Africa against the background of the unfolding of Sino-capitalism in the everyday and life experience of partner countries.

5.1 The Development of Sino-African Relations In contrast to the relations between Africa and some Western countries, SinoAfrican relations are not loaded negatively by slavery or colonialism. The journey of Admiral Zheng He to East Africa in the 15th century is often cited as the beginning of relations between Africa and China. With the seven voyages of the fleet under imperial mandate, it was intended to explore trade opportunities with other world regions. Today his journeys are referred to as the precursor of the maritime Silk Road (cf. Xing 2019: 6; Bodomo/Che 2020: 64). During the Cold War, the Chinese government supported independence movements in Africa. The common anti-colonial and anti-imperial position was manifested in

© The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 S. Züfle, The Political Economy of China’s Belt and Road Initiative in East Africa, https://doi.org/10.1007/978-3-658-41161-9_5

95

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the ­participation in the Bandung Conference in 1955 (cf. Luo 2011; Luo 2013; Shambaugh 2013). The Tazara Railway embodied Sino-African friendship at that time. Between 1970 and 1975, the Chinese government built the connection from the Tanzanian port of Dar es Salaam to the city of Kapiri in Zambia, thus giving the landlocked country of Zambia access to Tanzanian ports and making it less dependent on the apartheid regimes in South Africa and Rhodesia in foreign trade (cf. Samuelson 2020: 112). Africa is seen as a testing ground for the future shaping of Chinese foreign policy, in which economic interests, regional concerns and the provision of public goods are integrated (cf. Alden/Large 2015). The overriding political goal has long been the sole recognition as the legitimate representation of China and thus the break in diplomatic relations with Taiwan. So far, 53 of the 54 African countries (cf. Appendix 2 in the electronic supplementary material) have supported the “One China Policy” and recognized the People’s Republic of China as the sole representation of China: 40 of them in the era of Mao Zedong, two under Hua Guofeng, five under Deng Xiaoping, three under Jiang Zemin and two under Hu Jintao. The transfer of voting rights in the United Nations was made possible by African votes. In UN Resolution 2758 of October 25, 1971, 26 votes from the African camp were cast for the transfer of the seat in the UN Security Council and the General Assembly from Taiwan to the People’s Republic of China. Sino-African relations intensified with the establishment of FOCAC in 2000. It was the first institutionalized, multilateral dialogue forum of the People’s Republic with a group of developing countries. The forum is based on the principles of the Bandung spirit, such as equality, inclusiveness and national sovereignty. The ministerial conference takes place every three years and the result is recorded in the form of an action plan. The management of the Follow-up committees is housed in the MOFA and is carried out in cooperation with the African delegations in Beijing (see Jakóbowski 2018: 665). The overview of FOCAC declarations and action plans in the period 2000–2018, shown in Table 5.1, shows that the scope and volume of Sino-African cooperation have expanded since the establishment of the Forum (see also Sects. 5.4, 5.5 and 5.6). That East Africa has also been an important region for the Chinese leadership since the beginning of the BRI project cooperation is illustrated by the state visits of Xi Jinping to Tanzania (2013), Zimbabwe (2015) as well as Rwanda and Mauritius (both 2018). In addition, heads of state and government from East Africa took part in the Belt and Road Forums. Only two heads of state from Africa visited the BRF 2017—Ethiopia’s Prime Minister Hailemariam Desalegn and Kenya’s President Uhuru Kenyatta. Two years later, four of the five African heads of

• Establishment of FOCAC •  China-Africa Cooperation Program for Economic and Social Development • Debt relief in the amount of 10 billion RMB (approx. 1.5 billion USD) for heavily indebted countries and LDCs

Beijing (China), 10–12.10.2000

• Credits amounting to 10 billion USD for the support of infrastructure projects and social development in Africa • Increasing the CADF to 3 billion USD • Special credit line amounting to 1 billion USD for the development of African SMEs • Expansion of the duty-free import of African goods to 95 % of the exports of LDCs, 60 % thereof by the end of 2010 • Training of 20,000 African experts

• Credits amounting to 20 billion USD, inter alia, for infrastructure projects, agriculture, SMEs in African countries • Increasing the CADF to 5 billion USD • Duty-free imports for 97% of the goods of African LDC • Training of 30,000 African experts • 18,000 scholarships within the framework of the China-Africa Cultural Cooperation Partnership Program

Sharm El-Sheikh (Egypt), 08–09.11.2009

Beijing (China), 19–20.07.2012

(continued)

• Preferential loans in the amount of 3 billion USD for infrastructure projects • Preferential export credits in the amount of 2 billion USD • Establishment of the China-Africa Development Fund (CADF) • Expansion of the duty-free import of African goods • Cancellation of all interest-free government loans from heavily indebted countries and LDCs that were due at the end of 2005 • Training for 15,000 African professionals

Beijing (China), 03–05.11.2006

Addis Ababa (Ethiopia), • Duty-free import of goods from African LDCs 15–16.12.2003 • Training for 10,000 African professionals

Main contents of the declarations/action plans

Location/date FOCAC

Table 5.1   Overview of FOCAC declarations and action plans 2000–2018

5.1  The Development of Sino-African Relations 97

• Establishment of a fund for Sino-African cooperation on production capacity with a volume of 10 billion USD • Preferential loans totaling 35 billion USD for African countries • Continuous increase of the CADF to 10 billion USD • Continuous increase of the fund to support African SMEs to 6 billion USD • Waiver of all government loans from LDCs, landlocked and island developing states due in 2015 • Training and further education of 200,000 African experts • 30,000 scholarships • Training of 1000 African journalists • Chinese ADI stock in Africa by 2020: 100 billion USD • Sino-African trade volume by 2020: 400 billion USD

• Desired investment volume of Chinese companies in the amount of 10 billion USD • Establishment of a special fund in the amount of 5 billion USD to finance African exports to China • Interest-free loans and loans at preferential conditions in the amount of 35 billion USD • Development financing for African countries in the amount of 10 billion USD • Cancellation of all government loans due at the end of 2018 from LDCs, landlocked and island developing countries • Duty-free imports for 97% of goods from African LDC • 50,000 scholarships • 50,000 training measures

Johannesburg (South Africa), 03–05.12.2015

Peking (China), 02–04.09.2018

Source: Own creation based on FOCAC 2000a,b; FOCAC 2003a,b; FOCAC 2006a,b; FOCAC 2009a; FOCAC 2012; FOCAC 2015a,b; FOCAC 2018a,b.

Main contents of the declarations/action plans

Location/date FOCAC

Table 5.1   (continued)

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5.1  The Development of Sino-African Relations

99

state and government came from East Africa—Ethiopia’s Prime Minister Abiy Ahmed, Kenya’s President Uhuru Kenyatta, Djibouti’s President Ismail Omar Guelleh and Mozambique’s President Filipe Nyusi (see The Diplomat 2017; The Diplomat 2019). The fact that these countries were represented by their executive heads in Beijing underlines the importance they attach to the BRI: “In international politics, contacts at the highest level between two countries are not only symbolic of the importance top leaders attach to the bilateral relations, but also very effective in getting things done” (Zhu 2013: 94). China’s symbolic recognition of the BRI is through the signing of a MoU. Before the second BRI summit in 2019, the Chinese leadership sought the highest possible number of supporters. A total of 40 states in Africa signed such a MoU, 14 of them from East Africa, as shown in Table 5.2. The East African countries of Eritrea, Comoros, Malawi, Mauritius, Mayotte and Reunion are not yet part of the BRI. The majority of the signings took place during President Xi Jinping’s Africa trip in July 2018 and the FOCAC summit in September 2018. Even though key countries Ethiopia, Kenya and Tanzania only officially joined the BRI relatively late, their support was materialized by corresponding infrastructure projects, the construction phases of which already fall into the early phase of the BRI and which were declared as BRI projects.

Table 5.2   Participation of African countries in the BRI

Year

State (Signing of MoU)

2015

South Africa (04.12.)

2016

Egypt (20.01.)

2017

Madagascar (26.03.), Ethiopia (12.05.), Kenya (16.05.), Morocco (17.11.), Djibouti (23.11.)

2018

Tunisia (12.07.), Libya (17.07.), Senegal (21.07.), Rwanda (23.07.), Ivory Coast (28.08.), Sierra Leone (20.08.), Cameroon (31.08.), Somalia (31.08.), South Sudan (31.08.), Gabon (01.09.), Ghana (01.09.), Guinea (01.09.), Liberia (01.09.), Mozambique (01.09.), Zambia (01.09.), Angola (02.09.), Equatorial Guinea (02.09.), Mauritania (02.09.), Namibia (02.09.), Senegal (02.09.), Seychelles (02.09.), Sudan (02.09.), Algeria (04.09.), Congo (04.09.), Nigeria (05.09.), Zimbabwe (05.09.), Chad (05.09.), Burundi (06.09.), Gambia (06.09.), Cape Verde (06.09.), Tanzania (06.09.), Uganda (06.09.)

2019

Mali (25.07.)

Source: BRP 2019 and numerous press releases; Note: As of 31.12.2019, East African countries are in italics.

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5.2 Externalization of Sino-Capitalism within the Framework of FOCAC The origins of the externalization of Sino-capitalism and the BRI are reflected in the FOCAC Ministerial Conferences in the period 2000-2012. With the start of BRI project cooperation in 2013, an expansion of Chinese engagement in Africa can be observed. The guiding principles and visions of the BRI have been mentioned in the FOCAC declarations since then. The summits in 2015 and 2018 also showed the ambitious plans of the Chinese leadership to intensify economic relations with a focus on the implementation of transformational infrastructure projects of Chinese companies in Africa and the promotion of industrialization.

5.2.1 The Externalization of Sino-Capitalism in the Context of the FOCAC Summits 2000–2012 The first FOCAC summit took place in Beijing in 2000 and brought together the ministers of foreign affairs, trade, international cooperation or economy of 44 African countries and China. It is to be seen against the background of the Goingglobal policy and thus the beginnings of the externalization of Sino-capitalism. The FOCAC founded a strategic partnership between Africa and China on the basis of equality and mutual recognition. With the final declaration, the foundation stone was laid for the forum: “We agree that the China-Africa Cooperation Forum is a framework for collective dialogue between China and African countries on the basis of equality and mutual benefit and that to seek peace and development is our common objective” (FOCAC 2000a). In view of a large gap between the wealthy north and the poor south, China fraternized with the African states and distanced itself from the current world order. Since both African states and China are developing countries and have basic common interests, they should promote the establishment of a just and equitable world order (‘just and equitable new international political and economic order’) (cf. ibid.). Central to this is the principle of non-interference in the internal affairs of sovereign states. A necessary reform of the international financial institutions should be directed against the human rights conditions of economic development aid. The restructuring of the debt of African states must not be accompanied by political conditions or at the expense of development aid (cf. ibid.). China committed itself to reducing or completely suspending the debt of African states by 10 billion RMB (approx. 1.6 billion USD) in the following two years (cf. FOCAC 2000b).

5.2  Externalization of Sino-Capitalism …

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In addition, the ministers adopted a program for cooperation on economic and social development, in which a deepening of cooperation in the areas of trade and investment was envisaged (see ibid.). China committed to providing development assistance to African states, which would strengthen local industries, create employment and be oriented towards national development priorities. China also committed to sharing the experience of its own development, such as the advantages of special economic zones. Cooperation in infrastructure matters should be deepened and the capacities of the local population for independent management, for example of transport infrastructure, should be expanded. This program also includes infrastructure-for-resources deals: “The Chinese side may also consider accepting various forms of payment such as payment in kind, to ease African countries’ financial burden and help increase their export to China” (ibid.). In 2003, representatives of 44 African states and China met in Ethiopia. The Addis Ababa Action Plan was in continuity with the Beijing Declaration of 2000. Cooperation in international affairs also showed an increasing convergence: “As evidenced by their common position, mutual support and joint efforts to safeguard their common interests on major issues of principle such as national sovereignty and territorial integrity, non-interference in internal affairs (…) and the right to development” (FOCAC 2003a.). The ideological patterns driving the development of Sino-capitalism include the vision of shared development and the harmonization of development programs. Thus, the Chinese state-civil society complex linked up with the implementation of the New Partnership for Africa’s Development and regional integration processes in Africa and declared itself ready to deepen its engagement in the priorities set out therein, such as infrastructure development, technology transfer and increased agricultural productivity. Above all, in the infrastructure sector, the Chinese leadership encouraged companies to invest in African infrastructure projects. In the trade sector, China announced the duty-free import of goods from African LDCs from 2004. That Chinese companies were increasingly looking to Africa as part of the Goingglobal-Policy was also reflected in the fact that African states should achieve a bureaucratic simplification of investment projects: “Both sides agree to take investment facilitation measures by also focusing on simplification of approval procedures for Chinese companies, which are interested in investing in Africa” (ibid.). In 2006, the Chinese leadership adopted its first Africa policy, which was intended to establish a strategic partnership with the continent. Here too, the vision of shared development, to be advanced through mutual learning and understanding of development agendas, was prominent. The Chinese leadership allied itself with the countries of the global South, which play a subordinate or

102

5  The Material, Ideational and Institutional Externalization …

­ arginalized role in the current world order: “China supports African nations’ m desire to be an equal partner in international affairs” (MOFA 2006). In 2006, representatives from 48 African countries already took part in the FOCAC summit in Beijing. The intensification of Sino-African relations was manifested in numerous areas of cooperation. In the agricultural sector, China announced the dispatch of 100 experts for agricultural technologies to Africa as well as the establishment of ten demonstration centers in order to improve agricultural productivity and general supply situation. In addition, the China-Africa Development Fund was set up with an envisaged volume of 5 billion USD in order to support established companies from China investing in Africa (cf. FOCAC 2006b). This primarily relies on Chinese SOEs, which are also supposed to set up economic and trade cooperation zones in African countries, including Zambia, Mauritius, Nigeria, Egypt and Ethiopia. In the field of trade, China committed to further opening its market and increasing the number of duty-free goods from 190 to 440. The infrastructure sector remained a central area of cooperation, particularly in the fields of transport, telecommunications and energy. In addition, a doubling of development aid for African countries by 2009 was announced (cf. ibid.). That the networks of political elites in China and Africa are to be intensified is evident from various Follow-up reports of the FOCAC summit 2006. Thus, 67 delegations from political parties in Africa visited China, and in return 25 delegations from the CPC in Africa were in the period 2006–2008 (cf. FOCAC 2008). In addition, the MOFA institutionalized a strategic dialogue and political consultation mechanism with 28 African foreign ministries (cf. FOCAC 2009b). Against the background of the global financial crisis, representatives in Sharm El-Sheikh demanded in 2009 reforms of the international financial system, aimed at a stronger say of developing countries: “[T]o increase the representation and say of developing countries and build an international financial system that is fair, just, inclusive and orderly” (FOCAC 2009a). The stronger representation of Africa in international financial institutions was also reflected in the final document of the FOCAC summit 2012 (cf. FOCAC 2012). This also shows that the Chinese leadership is in solidarity with other countries in the Global South and strives for a reform of the world order, characterized by a stronger representation of previously marginalized regions. At the FOCAC 2012, the increase of agricultural test centers to 20 facilities was decided. In terms of investments, the final document provides for an increase of the CADF to support the investments of Chinese companies in Africa. The infrastructure projects are mainly supposed to strengthen regional integration and are supported by loans amounting to 10 billion USD. In the field of trade, the scope of duty-free exports of African LDCs to China is to be expanded (cf. ibid.).

5.2  Externalization of Sino-Capitalism …

103

5.2.2 The Influence of the Belt and Road Initiative on the FOCAC Summits since 2015 The announcement of the BRI in 2013 was also reflected in the FOCAC summit documents. Just two years after the announcement of the BRI, the Chinese leadership adopted its second Africa policy before the FOCAC summit in 2015. The guiding principle of shared destiny, which was reinforced by the BRI, was found here: “China and Africa have always belonged to a community of shared future” (Xinhua 2015). The BRI is not only supposed to realize the Chinese dream, but at the same time it is to become the African countries’ development dream, which is to be fulfilled by the convergence of national development programs. In particular, it is to be linked to the industrialization and modernization of Africa envisaged in the AU Agenda 2063: “Both the Chinese dream and the African dream aim to enable people to live a more prosperous and happier life” (ibid.). Derived from the guiding principle of shared destiny, the principle of harmonization and compatibility of development goals can be found: “The development strategies of China and Africa are highly compatible” (ibid.). However, since the economic strengths are differently pronounced, the partners need each other for cooperation and development. China’s advantage, for example, lies in its own development experience, applied technologies, financing options and a large market that could become a significant destination for African goods and resources. Africa has two fundamental obstacles to development—outdated infrastructure and inadequately trained personnel. The creation of jobs is therefore particularly necessary to set in motion an economic development that raises the standard of living of the population and drives industrialization and agricultural modernization forward. Towards the desired joint development, China contributes through the development of infrastructure and training measures in African countries: “[T] o connect assistance to developing countries, including those in Africa, for their independent and sustainable development with China’s own development, achieve win-win cooperation and common development” (cf. ibid.). The FOCAC summit took place in Johannesburg, South Africa, in 2015 and thus took place after the change of leadership to Xi Jinping and the official announcement of the BRI in 2013. The guiding principles and visions that were found in the final declaration aimed at further strengthening Sino-African relations. China’s political leadership presented itself as an advocate of African countries and intended to promote the growth process of both sides with the principle of joint development. In contrast, the Western states are largely responsible for the misery of African economies: “We believe that the North-South imbalance in development is an important factor hindering the strong recovery and sustained

104

5  The Material, Ideational and Institutional Externalization …

growth of the world economy” (FOCAC 2015a). In addition to criticism of the current international financial architecture, there was a reference to the Chineseinitiated institutions for the expansion of African infrastructure: “We welcome the establishment of the BRICS New Development Bank, with its (…) African Regional Centre in South Africa, with a focus on supporting development in Africa, in particular on infrastructure and sustainable development projects” (ibid.). With this statement, the Chinese argument was confirmed that insufficient space was given to infrastructure financing in the established financial institutions and that Chinese engagement could bring about the exploration and development of Africa. Chinese companies bring experience from national development with them and benefit from the demands for increased infrastructure investment in Africa laid down in the FOCAC action plans. The communiqué highlighted China’s transformation in a positive light and pointed to the fact that imitation by African countries could also lead to economic growth: “We are committed to the path of peaceful development and its contribution to world peace, stability and economic growth, and are of the view that China’s economic restructuring and progress will help Africa advance its own industrialization and modernization processes” (ibid.). In contrast, the BRI was only mentioned in passing and the desire was expressed to explore the potential synergy effects between the maritime Silk Road and the African integration and development agenda: “Actively explore the linkages between (…) 21st Century Maritime Silk Road and Africa’s economic integration and sustainable development agenda, and seek more opportunities to promote common development and realize our common dreams” (ibid.). The reference to the realization of the common dream was linked to Xi’s vision of the Chinese dream. By imitating key elements of the Sino-capitalist development model, African states could also achieve welfare gains (see ibid.). Through joint development, cooperation and connectivity between African countries and China are to be deepened. Xi also emphasized this principle in his opening speech: “China-Africa relations have today reached a stage of growth unmatched in history (…) Let’s join hands (…) and open a new era of China-Africa win-win cooperation and common development” (FOCAC 2015c). In comparison to previous FOCAC summits, the Chinese leadership set ambitious goals for the Sino-African partnership. The volume of trade is to increase from an annual 220 billion USD (2014) to 400 billion USD per year by 2020. By 2020, the stock of ADI is also to triple—from 32.4 billion USD in 2014 to 100 billion USD in 2020 (see FOCAC 2015b). In order to promote infrastructure projects, funds in an amount of 60 billion USD are to be mobilized. Of this, 35 billion USD are to be used for loans with preferential conditions and 5 billion

5.2  Externalization of Sino-Capitalism …

105

USD for interest-free loans. In addition, the CADF set up a special credit system for the development of African SMEs, which was increased by 5 billion USD. In addition, the action plan provided for the establishment of a fund to increase industrial and agricultural production capacities with a start-up capital of 10 billion USD (see ibid.). In the final document, China committed itself to making Africa a priority of development policy and to deepening cooperation in order to promote African industrialization (see FOCAC 2015b). In addition, the Chinese leadership indicated that it was willing to relocate labor-intensive industries to Africa in order to create employment, higher tax revenue and technology transfer there. These plans were also based on the principle of joint development. In the construction of special economic zones and industrial parks in Africa, China declared itself willing to take into account the partner countries’ market rules and industrial strategies (see ibid.). The Chinese state-civil society complex points out that the construction and financing of major infrastructure projects in the prevailing order has received less attention: “Underdeveloped infrastructure is one of the bottlenecks hindering independent and sustainable development in Africa” (ibid.). The infrastructure projects were caught between the combination of national development needs and the profitability of the projects. The focus was on the development of roads and railway lines. In the China-Africa Railway Cooperation Plan (2016–2020), the densification of a railway network in Africa was planned, accompanied by industrialization programs. The Chinese leadership committed to sending experts to African countries to provide support in the design of industrialization programs and their implementation. In return, African countries committed to simplifying their regulatory framework to create an attractive environment for Chinese investment (see ibid.). At the FOCAC in September 2018, delegations from 53 of 54 African countries were present in Beijing—only the Kingdom of Eswatini recognizes Taiwan as the legitimate representation of China in Africa as the only African country. The Chinese government announced investments of up to 60 billion USD in Africa for the next three years. The reference to the Belt and Road Initiative can be found at the beginning of the preamble of the action plan and Africa is recognized as a significant partner in BRI cooperation: “The two sides will take the Belt and Road Initiative as an opportunity to strengthen multi-dimensional, wideranging and in-depth cooperation for mutual benefits and common development” (FOCAC 2018b). The next three years should be based on the guiding principle of ‘China and Africa: Toward an Even Stronger Community with a Shared Future Through Win-Win Cooperation’ and bring forward the mutually beneficial

106

5  The Material, Ideational and Institutional Externalization …

c­ ooperation in all areas (see ibid.). In order to enable African countries to achieve independent and sustainable development, eight overarching initiatives are to be pursued, including an industrialization program, an infrastructure connectivity initiative, a trade facilitation initiative or an initiative to deepen inter-societal relations (see FOCAC 2018b). In addition, the synergy effects between the BRI and the Agenda for Sustainable Development of the UN as well as the Agenda 2063 of the AU and the development strategies of African countries are highlighted. By linking development strategies with the focus areas of the BRI, Win-Win relationships are created from which all parties are to benefit: “The closer connectivity in policy, infrastructure, trade, finance and people-to-people ties, strengthened industrial capacity cooperation under the Belt and Road Initiative, and greater cooperation in the planning of African infrastructure and industrial development will lend new impetus to the win-win cooperation and common development between China and Africa” (ibid.).

The results of cooperation in the areas of trade, investment, financing and infrastructure are highlighted: “We believe that economic and trade cooperation remains the anchor and the propeller for China-Africa relations” (ibid.). In particular, the Chinese contribution to the expansion of railway infrastructure is appreciated, in which China acts as a strategic partner. A new area of cooperation are new technologies such as cloud computing, big data and mobile internet. China intends to support African countries in the construction of smart cities with the corresponding infrastructure and use information and communication technology to ensure public safety and combat terrorism and crime. Chinese financial institutions are to contribute to industrial development. While the Chinese leadership shows itself to be open to a flexible restructuring of outstanding debts, there is no reference to other multilateral banks for the first time since the FOCAC Ministerial Conference in 2000. The reference to infrastructure projects is that they should be profitable, ecologically and socially sustainable: “The two sides will aim to pursue efficient and high-quality development, focus on the economic and social benefits of projects, step up mutually beneficial cooperation (…) and maintain the sustainability of the debt of relevant African countries” (ibid.). The Chinese leadership commits itself to better adapt future projects to the needs of partner countries and to ensure their profitability. With regard to international relations, the principles of mutual respect and equal consultation are emphasized, while power political and protectionist tendencies are rejected: “We (…) firmly reject Cold-War mentality and power politics, and embrace the new approach to state-to-state relations that favors dialogue over

5.3  East African States in the BRI

107

confrontation, partnership over alliance” (ibid.). This can be seen as a reference to the protectionist and nationalist US policy under the administration of Donald Trump. In return, China is ready to share the practices and experiences of its own reform and opening phase with African countries.

5.3 East African States in the BRI In May 2017, the first BRI summit was held in Beijing with 1,600 representatives from over 140 countries and more than 80 international organizations. President Xi stated that the BRI was a century project and ushered in a new world order (see Yuan 2018). Among the 279 specific results and plans, he provided an additional 14.5 billion USD for the Silk Road Fund, which serves as a funding source for BRI projects for the Chinese government. At the same time, CDB and Exim Bank increased their lending by 36.2 and 18.8 billion USD, respectively, for these investment projects. In addition, the Chinese government promised 8.7 billion USD for humanitarian measures in the areas of food, health and poverty reduction (see Cai 2018: 833). 29 heads of state or government adopted a communiqué at the BRF in which the BRI is mentioned as one of many global initiatives to deepen global cooperation, especially trade and investment. In particular, smaller states are to be more closely involved in the web of international economic relations: “It helps to work for a globalization that is open, inclusive and beneficial to all” (ibid.). Relations with such states are to be deepened at various levels of society: “We stand for strengthening physical, institutional and people-to-people connectivity among all countries. The least developed countries, landlocked developing countries, small island developing states and middle-income countries deserve special attention to remove bottlenecks of development and achieve effective connectivity” (ibid.).

The BRI cooperation principles set by the Chinese leadership are recognized but partly modified. This is an indication that the state-civil society complex agrees to minor changes in order to integrate as many actors as possible. These principles include consultation on an equal footing, mutual benefit, harmony and inclusiveness, market-based and transparent procedures in public procurement. High environmental standards and a good balance between economic growth and social progress should characterize the individual BRI investment projects. With regard to cooperation measures, a passage is repeatedly found which aims at the

108

5  The Material, Ideational and Institutional Externalization …

adaptation of the development agendas of the participating countries: “Pursuing dialogue and consultation in order to build synergies in development strategies among participating countries” (ibid.). In this context, it becomes clear that such economic sectors are prioritized which are of central importance for the Sino-capitalist development model: “Strengthening cooperation on innovation, by supporting innovation action plans for e-commerce, digital economy, smart cities and science and technology parks. (…) Promoting practical cooperation on roads, railways, ports, maritime and inland water transport, aviation, energy pipelines, electricity, fiber optic including transoceanic cable, telecommunications and information and communication technology” (ibid.).

Before the second Belt and Road Forum in April 2019, the Office of the Leading Group for Promoting the Belt and Road Initiative published the document “The Belt and Road Initiative: Progress, Contributions and Prospects”. In the context of this inventory, it is pointed out that the BRI has been received positively since its inception. The Belt and Road Initiative promotes the joint development, connectivity and prosperity of the participating states: “The Belt and Road Initiative originated in China, but it belongs to the world. It is rooted in history, but oriented toward the future. It focuses on Asia, Europe and Africa, but is open to all partners. It spans different countries and regions, different stages of development, different historical traditions, different cultures and religions, and different customs and lifestyles. It is an initiative for peaceful development and economic cooperation, rather than a geopolitical or military alliance. It is a process of open, inclusive and common development” (Office of the Leading Group for Promoting the Belt and Road Initiative 2019).

In addition, the achievements to date are set out in the five cooperation priorities. In terms of policy coordination, it is emphasized that the digital Silk Road is a key part of the BRI and that agreements have been concluded in this area with 16 countries. In addition, there are 85 agreements on standardization and protection of intellectual property with 49 countries and regions as well as with 18 countries in the energy sector. With regard to trade, the ongoing liberalization is appreciated. So 83 countries have joined the ‘Initiative on Promoting Unimpeded Trade Cooperation Along the Belt and Road’. Financial integration manifests itself in the fact that Chinese banks have opened further branches in BRI partner countries. Inter-societal alliances include the Silk Road International League of Theaters, Silk Road International Museum Alliance, Silk Road International Library

5.3  East African States in the BRI

109

Alliance and the Silk Road International Alliance of Art Museums and Galleries. In addition, 38,700 students from BRI partner countries benefited from a scholarship for a study visit to China. Agreements on the recognition of university degrees were concluded with 24 countries. In addition, China opened 153 Confucius Institutes in 54 BRI countries. The increase in social contacts is to flank the political project and create a positive image in the civil society arenas of the partner countries. At the same time, China secures the mobility of workers through visa facilitation with 57 countries (cf. ibid.). The flanking of the BRI is to be ensured by a special dialogue mechanism that addresses political parties, parliaments, think tanks, NGOs, media, universities and companies. The aim is to set up diverse communication platforms for exchange and cooperation that are intended to contribute to the success of the BRI. In this sense, the BRI serves not only to neutralize competing discourses and images of the future, but also to consolidate elite networks and anchor them in the everyday consciousness of civil society in the BRI partner countries. Other states are to participate in the experiences from the Chinese transformation process: “Bringing China’s development achievements to other B&R countries” (ibid.). Above all, the intensification of trade relations and Chinese investments is to ensure the participation of other countries in China’s development success. Chinese investments are designed to promote the development of partner countries and to strengthen the know-how available in these countries through technology transfer and further training measures (cf. ibid.). At the second Belt and Road Forum in 2019, 36 heads of state or government adopted a communiqué that is much more comprehensive than its predecessor. It refers to international insecurity. Although the US administration is not mentioned explicitly, the communiqué rejects unilateralist and protectionist tendencies that are not in line with WTO principles—a reference to the ‘America First’ policy of the US administration. China, on the other hand, is at the forefront of rule-based multilateralism. The guiding principle of community of destiny and the principle of common development are formulated as the goal of the BRI. These formulations are also closely linked to the Chinese dream. Through participation in the BRI, other countries can also participate in the Chinese dream if they engage in deep cooperation with China. However, the Chinese leadership also allows further development of the BRI in order to address as many other countries as possible. This can be seen, for example, in the fact that deficits in the areas of debt, lack of ecological sustainability and profitability of individual BRI investment projects are acknowledged. Compared to the communiqué of the

110

5  The Material, Ideational and Institutional Externalization …

BRF 2017, there are more indications that cooperation should be even more open, green and clean in the future, especially with regard to infrastructure projects: “We will strive to build high-quality, reliable, resilient and sustainable infrastructure. We emphasize that high-quality infrastructure should be viable, affordable, accessible, inclusive and broadly beneficial over its entire life-cycle, contributing to sustainable development of participating countries and the industrialization of developing countries” (ibid.).

In addition to supporting the final declarations of the Belt and Road Forums, China’s East African partner countries also participate in specific cooperation programs and alliances (cf. Table 5.3). In 2017, the East African countries signed nine agreements with Chinese authorities. Two years later, there were already 14. With participation in nine programs and alliances, Ethiopia is leading, followed by Kenya with seven agreements and Mozambique with three agreements. The cooperation programs are characterized by a variety of themes. They range from credit agreements for industrial parks and infrastructure projects, to cooperation in the IT sector, to standardization or cooperation in the field of quarantine. Environmental issues or cultural exchange are also addressed as part of an international museum alliance. The Annex to the Communiqué of the BRF 2019 also lists some economic corridors of the BRI, which include projects in East Africa, including the Addis Ababa-Djibouti economic corridor, the northern corridor from Mombasa to the Great Lakes region or the transport corridor from the Kenyan port of Lamu via South Sudan to Ethiopia (see BRF 2017b; BRF 2019b).

5.4 Economic Interdependence between China and East Africa The material interdependence will be illustrated in the following sub-chapter on the basis of investment, credit and trade relations. The material externalization of Sino-capitalism forms the basis for the emergence of a hegemonic order (cf. Cox 1981: 147; Jacobitz 1991: 15; Cox 1996: 138). Through close interdependence, China is able to be perceived as an economic motor in East Africa, which at the same time secures its own development path, but also has numerous consequences. If available, China’s economic interdependence will be compared with that of other economies, including the United States, France and the Netherlands.

Mosambik

Kenya

Djibouti

Ethiopia

Economic and trade cooperation agreement; loan agreement on industrial park and infrastructure projects

BRF 2019

Loan agreement on inland container depot project

Cooperation and Priority proaction plan ject list of production capacity and investment cooperation

Framework BRI International agreement Green Developon export ment Coalition and credit insurance

Cooperation and action plan

Cooperation and action plan; Trilateral Cooperation Agreement on Renewable Energy; BRI International Green Development Coalition

Syndicated loan to Coral South FLNG Project

Healthcare medical diagnostic integrated project

BRI Sustainable Investment Facility Project

Tax treaties and protocols

(continued)

International Alliance of Museums

Infrastructure Financial Policy coordina- Unimpeded Infrastructure Financial Peopleconnectivity integration tion trade connectivity integra- totion people bonds

Economic and trade Loan agreement on road cooperation agreement; Joint Initiative project on Strengthening Standards Cooperation, Loan Agreement on industrial park and infrastructure projects

Unimpeded trade

BRF 2017

Table 5.3   Results of the Belt and Road Forums 2017 and 2019

5.4  Economic Interdependence between China … 111

BRF 2019

Cooperation agreement on inspection and quarantine Framework Agreement of production capacity

Industry and Information Technology Cooperation Document

(continued)

Infrastructure Financial Policy coordina- Unimpeded Infrastructure Financial Peopleconnectivity integration tion trade connectivity integra- totion people bonds

Source: Own creation based on BRF 2017b; BRF 2019b.

Uganda

Tanzania

Rwanda

Unimpeded trade

BRF 2017

Table 5.3   (continued)

112 5  The Material, Ideational and Institutional Externalization …

5.4  Economic Interdependence between China …

113

5.4.1 China’s Investments in East Africa With a share of around 40%, East Africa is the most important destination for Chinese investments in Africa under the BRI. In the period October 2013–2019, investments in East Africa amounted to 62.6 billion USD. This is clearly higher than in the period 2006–2012, as can be seen in Fig. 5.1. Investments reached a peak in 2012 and 2013, which underscores that Africa has been an integral part of the BRI since its announcement and that some projects were launched before the official start of the initiative or declared afterwards as BRI key projects. In 2015, investments reached a peak of just under 16.5 billion USD, before levelling off at 9 billion USD (cf. AEI 2020). The decline in 2019 is due, inter alia, to increased uncertainty due to Chinese capital controls and the deterioration of the global economy as a result of the multidimensional US-China trade and technology conflict. With Fig.5.2 illustrates that the countries of Zambia, Tanzania, Ethiopia and Kenya received the largest investment inflows under the BRI. Chinese investments in Zambia amounted to 11.1 billion USD, in Tanzania to 10.9 billion USD, in Ethiopia to 10.7 billion USD and in Kenya to 9.2 billion USD (cf. ibid.). When investments in the East African BRI partner countries are broken down into individual sectors, it becomes apparent that the transport sector accounts for almost 40% with 21.5 billion USD, followed by energy with 18.0 billion USD and real estate with 9.7 billion USD. It is mainly railway lines (10.6 billion USD) and

Annual investment [USD billion]

25 19.8

20

17.1

16.5

15

10

5

0

8.8

7.8 5.2 3.0

2006

0.4

0.6

2007

2008

8.9

9.9 6.1

4.5 1.8

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Year

Fig. 5.1   Flow of Chinese investment to East Africa. (Source: Own creation based on AEI 2020)

114

5  The Material, Ideational and Institutional Externalization …

Uganda 3 % Mozambique South Sudan 6%

Madagascar 3%

Djibouti 2%

Rwanda 1% Zambia 18 %

5%

Tanzania 17 %

Zimbabwe 13 % Kenya 15 %

Ethiopia 17 %

Fig. 5.2   China’s BRI investments in East Africa by country, October 2013–2019. (Source: Own creation based on AEI 2020)

roads (8.8 billion USD) that are being built by Chinese companies in the transport sector. In the energy sector, a focus is on hydropower plants (5.8 billion USD), power lines (5.3 billion USD) and coal-fired power plants (2.6 billion USD) (cf. ibid.). This makes it clear that the externalization of Sino-capitalism takes place within the framework of the political project primarily in those sectors in which the Chinese mega-conglomerates have a comparative advantage, but at the same time want to reduce overcapacity. The investment priorities in the transport and energy sectors also make it clear that the BRI is a connectivity project to boost East Africa’s development. The suspicion that the Chinese state-civil society complex instructs stateowned enterprises to invest in BRI partner countries in order to externalize Sinocapitalism is confirmed in East Africa. Chinese companies have invested a total of 155 projects in East Africa since October 2013. Table 5.4 lists all companies that have invested more than one billion US dollars in East Africa in recent years. On this basis, all 17 companies involved in 107 investment projects are to be classified as SOEs. This includes state-owned enterprises that are associated with a province, e.g. Guangdong New South Group or Shandong Gaosu (cf. ibid.). This shows that the central leadership is able to mobilize provinces and involve them in the political project.

5.4  Economic Interdependence between China …

115

Table 5.4   Chinese companies in East Africa, October 2013–2019

Company

State-owned Number of enterprise projects

Volume of projects [Billion USD]

Aviation Industry Cooperation of China

Yes

3

1.0

China Communications Construction Yes Corporation

20

5.4

China Energy Engineering

Yes

4

1.5

China National Building Material

Yes

4

2.0

China Railway Construction

Yes

16

9.7

China Railway Engineering

Yes

10

4.3

Guangdong New South Group

Yes

1

1.9

Jiangxi International Economic and Technical Cooperation

Yes

2

1.3

Power Construction Corporation

Yes

16

6.0

Shandong Gaosu

Yes

1

2.1

Sichuan Hanlong

Yes

1

2.7

Sinohydro

Yes

1

2.0

Sinoma

Yes

4

1.2

Sinomach

Yes

13

4.0

Sinosteel

Yes

2

1.4

State Construction Engineering

Yes

7

2.7

State Grid Corporation of China

Yes

2

1.3

Source: Own creation based on AEI 2020.

To what extent China will become the most important investment partner in East Africa can be seen by comparing it with other countries. In terms of all of Africa, the World Investment Report 2020 (see Fig. 5.3) shows that in 2018 the Netherlands had the highest ADI stock in Africa. It rose from 2014 to 2018 by 33.9% to 79 billion USD. In contrast, the United States (-30.4%), the United Kingdom (−26.9%) and France (−11.7%) all saw significant declines in ADI stocks. China, on the other hand, had the highest growth rate at 43.8%. Investment stocks in Africa grew from 32 billion USD in 2014 to 46 billion USD in

116

5  The Material, Ideational and Institutional Externalization …

90

79

80 70 60

69

67 59

60 53

49

50

48

40

46 32

30 20 10 0

Netherlands

France

UK 2014

USA

China

2018

Fig. 5.3   Top investors in Africa by country [billion USD]. (Source: Own creation based on UNCTAD 2020: 28)

2018, just behind those of the United Kingdom and the United States (see UNCTAD 2020: 28). However, it should be noted again at this point that in UNCTAD statistics the traditional FDI calculation is used with investments ≥ 10% in a company. China prefers specific construction contracts for its investments in Africa. The AEI considers both foreign direct investment flows and construction contracts. In the period 2006–2019, the volume of annual construction contracts exceeded foreign direct investment on average by 3.5 times (see AEI 2020). This illustrates that Chinese investments in Africa are much higher than the 46 billion USD reported in the World Investment Report 2020. The data basis for comparing Chinese investments with those of other investors in East Africa is still limited. One indication of the importance of Chinese investments can be seen in the percentage share of total ADI holdings (see Fig. 5.4). Between 2010 and 2017, an increase in the Chinese share can be seen for most countries, for example for Ethiopia from 9 to 11%, for Djibouti from 4 to 17%, for Kenya from 4 to 12%, for Zambia from 13 to 15%, for Zimbabwe from 7 to 37% or for Tanzania from 3 to 9%. In contrast, for example, a decrease can be seen in Burundi from 49 to 4%, while the share in Mozambique remained constant at 2% (see ITC 2021; UNCTAD 2021b). On the other hand, it is possible to compare the investment holdings of the main investors in Africa using the ITC database. However, it should be noted in

117

60% 50% 37 %

40% 30% 20% 10%

17 % 10 %

4%

12 %

15 %

11 %

5%

2%

8%

9%

5%

9%

To ta l

K en ya M ad ag as ca M r oz am bi qu e Rw an da Za m bi a Se yc he lle s Zi m ba bw e Ta nz an ia U ga nd a

0%

Et hi op ia Bu ru nd i D jib ou ti

China's share of FDI stocks [%]

5.4  Economic Interdependence between China …

Country 2010

2013

2017

Fig. 5.4   Percentage share of China in ADI holdings of East African countries. (Source: Own creation based on ITC 2021; UNCTAD 2021b)

this regard that this comparison of investment holdings (see Table 5.5) is only fragmentary and at best possible for some countries. Nevertheless, with the exception of Tanzania, it can be seen that China is the largest investor in the BRI partner countries of East Africa (see ITC 2021). However, it should also be noted that foreign direct investment accounts for only 14.5% of BRI investment in East Africa between October 2013 and December 2019, if the AEI data are used as a basis. Investments in 133 construction contracts with a volume of 53.6 billion USD are opposed to 22 ADI projects worth 9.1 billio USDn. On average, the construction contracts exceed the ADI volume by 11.8 times per year (see AEI 2020).

5.4.2 Chinese Credits for East African Countries In the past 20 years, numerous African countries have become indebted to China. This is particularly due to the growing need for infrastructure investment, which amounts to 130–170 billion USD annually, while the financing gap is around 108 billion USD (see AfDB 2018). To finance infrastructure projects, many African countries turned to loans from the Paris Club and other bilateral donors in the 1980s and 1990s. However, these donors increasingly restructured the priorities of their development cooperation. They placed a new emphasis on sustainable development and only financed subordinate projects in the infrastructure sec-

118

5  The Material, Ideational and Institutional Externalization …

Table 5.5   Investment stocks of largest investors in East Africa [mn. USD]

Investor

2013

2014

2015

2016

2017

Burundi

China

9,8

13,2

12,4

12,4

10,3

USA

0,0

1,1

1,0

1,0

1,0

Kenya

China

635,9

853,7

1099,0

1102,7

1543,5

France

269,6

Netherlands 1775.7

Madagascar Mozambique

Rwanda

483,8

565,6

776,1

2760.5

1404.7

174.0

UK

783.7

902.3

773.7

696.5

549.0

USA

396,7

493,5

399,5

459,9

381,5

China

286,1

352,6

347,7

297,6

766,3

France

146.1

362.7

135.4

198.1

245.1

China

508.1

653.9

724.5

782.3

872.9

UK

208,7

262,6

214,0

180,7

122,9

USA

635,6

1175,2

496,7

674,9

China

73,3

110,7

123,6

89,4

99,3

12,1

11,2

11,5

10,4

USA Sambia

281,6 2299.6

China

2164,3

2272,0

2338,0

2687,2

2963,4

France

232,4

233,8

174,2

167,1

151,4

USA

114,6

152,1

78,4

64,1

54,7

Seychelles

China

103,5

114,4

160,1

246,7

231,3

France

195.2

156.8

139.8

151.7

201.1

Zimbabwe

China

1520.8

1695.6

1798.9

1839.0

1748.3

UK

102,0

138,2

140,6

79,2

Tansania

China

716,5

885,2

1138,9

1192,0

1280,3

Uganda

Netherlands 783.6

1397.6

1214.9

1001.8

USA

198.4

1292.2

1242.3

1412.4

464,1

China

383,8

UK

94,0

USA

104,0

93,0

1302.8

722,2

1006,5

575,9

148,7

129,1

106,2

46,9

68,3

39,5

Source: Own creation based on ITC 2021; Note: The table includes such country relationships in which investment data were available for at least four out of five years.

5.4  Economic Interdependence between China …

119

tor. Increasingly, African countries turned to China. However, there is also a risk in infrastructure financing for these countries, as volatile commodity prices can impair their repayment capacity (see Bräutigam/Huang/Acker 2020: 2). Even though China now regularly submits reports to the Bank for International Settlements in Basel, it is not precisely documented how much credit China provides to African countries (see Dieter 2019: 23). Based on the CARI data, different Chinese donors can be distinguished in principle. The Chinese government provided its first loan to Guinea in 1960, and 212 loans totalling 3 billion USD in the period 2000–2018. The largest lender to Africa from China is the ExportImport Bank. It provided its first loan to Africa in 1995 and signed 589 loan agreements totalling 82 billion USD in the period 2000–2018. This is followed by the China Development Bank with a volume of 37 billion USD in the form of 158 loans. It made its first loan commitment in Africa in 2007. In addition to stateowned banks, Chinese commercial banks have been active in Africa since 2001 and have provided 52 loans totalling 10 billion USD. A more recent development since 2016 is consortium loans, totalling 7 billion USD (see Bräutigam/Huang/ Acker 2020: 4). In the period 2000–2018, the Chinese government and state-owned banks provided 1,076 loans totalling 148.2 billion USD to African countries. Of this, 276 loans (25.7%) totalling 45.7 billion USD (30.8%) went to East African BRI partner countries. The annual volume of loan commitments in the 2000s was just under 500 million USD. Since 2010, there has been an increase, with a peak of 8.5 billion USD in 2013, before the annual loan amount decreased again. On average, since 2010, 4.5 billion USD has been committed annually in loans. Since the announcement of the BRI in 2013, just under 32 billion USD has been made available to East African BRI partner countries in the form of loans—this represents 69.7% of the loans since 2000. The sectoral breakdown of loans since 2000 shows transport in the lead (18 billion USD), followed by energy (12.4 billion USD), telecommunications (5.1 billion USD) and industry (2.5 billion USD). Ethiopia received the highest loan volume with its 52 loans totalling 13.7 billion USD, with the 2.5 billion USD loan committed in 2013 for the construction of the Ethiopian section of the Addis Ababa-Djibouti railway line standing out. Zambia received a total of 69 loans totalling 9.7 billion USD. The largest loan amount was 1.5 billion USD for the Kafue Gorge Lower Hydropower Project with a capacity of 750 MW in 2017. Kenya is in third place with 40 loans totalling 9.1 billion USD. The largest loan was for 5.1 billion USD and was granted in 2014 and 2015 for the construction of the Mombasa-Nairobi-Naivasha railway line (see CARI 2020).

120

5  The Material, Ideational and Institutional Externalization …

In addition to the representation of the promised credit volume, it should also be stated whether China will become the most important credit provider to the East African countries. Based on the debt stock at the end of 2019 (see Table 5.6), it is clear that China is the most important bilateral lender to eight of the ten BRI partner countries. China holds more than 70% of bilateral debt in Ethiopia, Djibouti, Kenya, Zambia and Uganda. The Chinese share is around 40% in Mozambique and Rwanda, while it is below 30% in Burundi, Madagascar and Tanzania. In Burundi, China is the fourth largest donor after India, Saudi Arabia and Kuwait, and in Tanzania the second largest donor after Japan (see World Bank 2021e). Looking at the total debt stock of the East African BRI partner countries, Ethiopia, Djibouti, Kenya, Zambia and Uganda stand out. Ethiopia had outstanding debt to China of 8.4 billion USD at the end of 2019, equivalent to 30% of the total debt stock and 9% of GDP. Nevertheless, the World Bank’s share is still higher at 36%. In Djibouti, however, China now holds 55% of the total debt, which amounted to 1.2 billion USD at the end of 2019, equivalent to 36% of GDP. In Kenya, China overtook the World Bank and holds the highest share of the country’s debt with outstanding 7.5 billion USD, equivalent to 24% of the total. China also holds the highest share of Zambia’s debt with 29%, equivalent to 3.4 billion USD or 15% of Zambian GDP. In Uganda, the outstanding debt to China was 2.1 billion USD, equivalent to 24%, although the World Bank holds a higher share at 39%. Overall, it can be concluded that China was the most important creditor to Djibouti, Kenya and Zambia at the end of 2019 (see ibid.). To look at the immediate consequences for the economic situation of the East African countries, a look at the repayments due in 2020 and 2021 is also warranted. Here it becomes clear that China’s share of credit repayments is higher than its share of outstanding obligations. This indicates that numerous loans are at the end of the grace period and must now be repaid. It also becomes clear that the volume of repayments will increase from 2020 to 2021. For example, Kenya is to repay 849 million USD in 2020, equivalent to 34% of the total repayments. One year later, this amount will increase to over 1 billion USD, equivalent to 39% of the total. China holds the highest share of repayments in Djibouti. In 2020 it is 58% and in 2021 it will increase to 66% with a repayment volume of 114 million USD. In Ethiopia, the repayment volume will increase by 45% to 921 million USD between 2020 and 2021, equivalent to 45% of the total repayments. In Uganda, the repayment sum will increase by 27% to 182 million USD over the same period, equivalent to 44% of the total. In Mozambique, the share will be 28% in 2021 and in Zambia 23% (see ibid.).

13

73

28

India (37) Saudi Arabia (33) Kuwait (21) China (14)

China (1195) Kuwait (164) Italy (45)

China (7493) Japan (1371) France (753)

Burundi

Djibouti

Kenya

Madagas- China (135) car France (84) Russia (53)

79

76

China’s share [%]

Ethiopia China (6535) India (377) Libya (237)

Greatest bilateral donors [Mio. USD]

Bilateral Debt 2019

135

7493

1195

14

8352

Debt stock to China [Mio. USD]

8

1

36