Countryfile

MALAwI

The government of Malawi has finally established diplomatic relations with mainland China, ending months of speculation over moves to sever its diplomatic ties with Taiwan. This brings to an end a 42-year relationship. Lameck Masina reports.

Taiwan dumped for China

Malawi becomes the third Taiwanese ally to defect to China over the past 18 months. Chad dumped Taiwan in August 2006, followed by Costa Rica in June 2007. The decision follows the signing of a five-point memorandum of understanding on 28 December in Beijing between Malawi and China which called for the establishment of diplomatic ties between the two countries, mutual and economical support – and the recognition of only one China and that Taiwan is an alienable part of China’s territory. Announcing the switch at a press conference in the capital Lilongwe on 14 January, foreign affairs minister, Joyce Banda, said Malawi had considered the many opportunities the government would gain from China. She added that the new diplomatic relationship would open up a vast market in that country and that Malawi would be able to look forward to investments that might now come from China. China had already pledged over $6bn in aid to Malawi, including funding of Shire-Zambezi Waterway Project – a dream project of president Bingu wa Mutharika. Reports indicate that China has

End of a 42-year-old relationship. In happier times, Malawi’s President Bingu wa Mutharika (right) accompanied by Taiwan’s President Chen Shui-bian, reviews a guard of honour during a state visit to the island.

also pledged to fund the construction of a sports stadium, a youth centre, a science and technology university, and to take over the funding of all projects currently being undertaken by Taiwan. Taiwan has been funding the construction of the Karonga-Chi

tipa road and the new parliament building in the capital Lilongwe, among other major bilateral development activities. A major health facility, the Mzuzu Hospital, has already been financed by Taiwan. Banda told reporters that the switch would not affect projects

currently run by Taiwan. “When we had an opportunity to sit down and discuss all the details of this relationship, every angle and aspect of Malawi’s relations with Taiwan was taken care of and high on the agenda were projects carried out by Taiwan. Whatever projects are going on they will be completed according to schedule,” she said. However, when the local media first reported in November that Malawi had been secretly sending high powered delegations to mainland China to discuss the establishment of diplomatic relations, government officials had denied the reports. They said that as a member of the UN, Malawi was free to discuss anything with any country which was also a member of the United Nations. Malawi’s intention to dump Taiwan for China was first discussed at cabinet level in 2004, soon after Mutharika came to power, but Taiwan got wind of the development from a cabinet minister who leaked the information to the Taiwanese ambassador to Malawi. Taiwan reacted by inviting Mutharika to Taipei where the government was offered helicopters and other vessels which have not yet arrived in the country because of logistical problems. But locomotives that were donated during that trip arrived in the country in 2006 and were commissioned by Mutharika and Taiwanese official amid much fanfare and pomp.

Treading carefully In December, Taiwanese Foreign Ministry spokesperson, Phoebe Yeh, speaking at a news conference in Taipei, said that her ministry had

52

African Business | February 2008
sent two officials to Malawi because of the reports that Malawi and mainland China intended to sign an agreement to establish formal ties. “We will be paying close attention. China wants to win over Taiwanese diplomatic relations,” Yeh said. Malawi’s first president, Dr Hastings Kamuzu Banda, refused to establish diplomatic ties with mainland China because of that country’s communist policy. China has so far established strong footholds in most Southern African countries. The development has shrunk Taiwan’s worldwide allies to only 23, against 171 that support China. Meanwhile, Swaziland is the only country in Southern Africa with diplomatic ties with Taiwan. China had been aggressively seeking partnership in Africa in recent years to attract natural resources and meet energy needs at home. During the press conference in Taipei, Yeh warned Malawi and African governments that they risk their natural resources being plundered by China. “Are there any resources in Malawi? You’d need to dig to find out. Resources in Africa are going to be finished off. This move is to destroy Taiwan’s relations,” she told reporters. China has considered self-ruled Taiwan as part of its territory since the end of the Chinese war in 1949 and wants to isolate the island internationally and pressure it into unification by making diplomatic allies switch loyalties to Beijing. Economists and opposition politicians in Malawi described the government’s diplomatic switchover as not only timely but also a move in the right direction. The economists said it was about time Malawi enjoyed the economic benefits of relations with China, which has become one of the world’s leading economies. They said countries like South Africa and Botswana had prospered in terms of infrastructure development as a result of bilateral trade with China. The Leader of the Opposition in parliament, John Tembo,

Zambia

Pros and cons of China-Zambia relations

Since the establishment of diplomatic relations between Zambia and China on 29 October 1964, Zambia has seen China as an “all-weather friend that can be relied upon”. China had been providing active support to the Zambian government in its efforts to consolidate political independence and its struggle with Western neo-colonialist control. The two countries signed several bilateral and multilateral trade deals and agreements on economic and technical co-operation. Bilateral relations were enhanced with China’s assistance in constructing the TanzaniaZambia Railway (Tazara), widely seen as a monument to the friendship between China and Zambia and even between China and Africa. The railway line, which runs between Kapiri Mposhi in northwest Zambia to the Indian Ocean port of Dar es Salaam in neighbouring Tanzania, was primarily a means to export Zambia’s copper, reducing reliance on apartheid South Africa’s ports. New forms of co-operation of mutual benefit between China and Zambia have been explored in recent years and have achieved substantial progress. These include the joint management of Mulungushi Textile Mill since 1996, built with Chinese aid in 1982 and the opening of a branch of Bank of China in 1997 in Zambia, the first branch opened by the bank in the sub-Saharan region. In 1998, China National Nonferrous Metals Industry Construction Co. (Group)

Mainland China’s President Hu Jintao waves to crowds after being welcomed at Lusaka International Airport by Zambian president, Levy Mwanawasa last year.

invested $20m in the Zambian Chambishi Copper Mine. The city of Luzhou in southwest China’s Sichuan Province established sister-city relations with the Zambian city of Kabwe. Despite the cordial relations between China and Zambia, resentment towards Chinese businesspeople is widespread among Zambia’s small-business community as Chinese imports displace locally made goods. Low-paid workers employed by Chinese enterprises also complain of poor working conditions. The Federation of Free Trade Unions (FFTUZ) in Zambia has alleged that Chinese companies are the main culprits in the use of casual labour, where no social security payments are made and low pay is the norm. FFTUZ president Joyce Nonde also blamed the country’s weak legal framework which she said allows foreign investors to abuse Zambian workers with impunity. According to statistics from the

Chinese embassy, investment by its nationals in the Zambian economy stands at more than $300m, spread across 160 enterprises and employing more than 10,000 Zambians. Zambian traders in the capital Lusaka are said to be unhappy with Chinese traders who have taken up shops in the sprawling market of Kamwala, the city’s oldest trading place. The Zambian traders complain that Chinese retailers have brought in cheaplypriced garments which have lured customers away from the Zambian manufactured apparel. Despite the resentments, a strong economic tie between Zambia and China continues to flourish. China has expressed interest in helping the country build a multimillion dollar national sports stadium that would be ready for the All Africa Games that Zambia hosts in 2011. The country currently lacks a proper stadium for the event.

said China and India were fast becoming “diplomatic superpowers” and any well-meaning government would go to them to gain maximum benefits. However, critics have warned that Malawi should tread carefully in its new marriage with China because some African countries like Zambia, Namibia, Zimbabwe and Tanzania have had to deal with backlashes from their citizens complaining that Chinese

traders had invaded the market with cheap goods and pushed out local traders. But Banda said the delay in switching to China had put Malawi at an advantage because it would enable the country to learn lessons from its neighbours. “What matters is the entry point. What you put on the table. We are at an advantage because we can scrutinise all those issues that have negatively affected our neighbours.”

Taiwan described the move as “a great humiliation and something that a self-proclaimed democratic country with 42-year-long relations with Taiwan should not do”. According to reports, the Taiwanese embassy in Malawi will close within the next three months. Malawi also closed the Libyan embassy in October saying there was little business between the two countries.

African Business | February 2008 53