The U.S. Can Provide an Alternative to China in Sub-Saharan Africa
China’s influence in sub-Saharan Africa is allegedly closely coordinated, and effective, if not unstoppable. The Chinese government seeks to dominate the supply of critical minerals, gain political influence, and undermine the West using state subsidies, low wages, state-party-enterprise coordination, and disregard for legalities to secure access. China gives African states money and infrastructure in exchange for resources and influence. However, as our extensive research and reporting on the case of Zambia demonstrates, China’s success in the region is not as coordinated or effective as claimed, and can be contested.*
Zambians’ views of China are not universally positive. Moreover, China’s influence in Zambia is not monolithic. Many small Chinese operators came to Zambia to gain autonomy from dominant state-owned enterprises and an overbearing party-state. In Zambia, for these small businesses, “The mountains are high and the emperor is far away,” as the ancient Chinese saying goes. These small operators also often resent their larger compatriots. These factors give the United States and other countries opportunities they can exploit. The consequence for Western inaction is Beijing’s continued dominance of Zambia. And while each country in the immediate region is unique, their commonalities mean that the lessons of Zambia can be generalized.
In short, Washington must change the way it thinks about both the mining sector and the priority of sub-Saharan Africa in U.S. foreign policy in order to secure critical resources and undermine China’s influence. The U.S. government must treat the mining of copper, cobalt, and other rare metals the way it now treats semiconductors—as a strategic industry worthy of support by Western governments. To ignore sub-Saharan Africa is to ignore the world’s most critical source of strategic resources and its fastest-growing populations. The U.S. government is starting to act on a small scale, but its efforts are still too slow and small.
China’s Advantages
China’s economic ties with Zambia date back nearly to the latter’s independence in 1964. Hundreds of Chinese laborers originally came to work on the Tazara railway, which was completed in 1975, and Chinese companies have operated continuously in the country ever since. Some of those workers stayed behind to start their own small businesses, and in many cases, they also started families. The result is a large Chinese diaspora in Lusaka and other major cities.
The relationship between Zambia and China expanded and intensified as China’s economy took off in the 1980s and 1990s, giving rise to its greater dependence on imported resources. Thousands, if not tens of thousands, of Chinese citizens—estimates vary widely—came to Zambia over the past 25 years. Most of them are concentrated in the relatively small area of the northern Copperbelt province, home to Zambia’s sizeable copper reserves.
The Chambishi Multi-Facility Economic Zone, or MFEZ, exemplifies China’s commitment to this region. A variant of a special economic zone, the Chambishi MFEZ is populated by a range of Chinese state-owned enterprises, or SOEs, anchored by the China Non-Ferrous Metal Mining Co., or CNMC. These include CNMC subsidiaries such as Nonferrous China Africa Mining, Chambishi Copper Smelter, and Sino-Metals Leach Zambia, along with supporting companies including Weichai Group, Honestone Investments, ZAM Fastest Logistics Group, Foton Motor, Lingong Machinery Group and Jinfa Steel.
The MFEZ SOEs and larger private companies are co-located with closely aligned logistics, machinery, raw materials, and financial enterprises. The corporate relationships among SOEs are complex, but the effective result is vertical integration. Conglomerates can operate mines at a loss because they generate profit at other points in the value chain. This puts less well-connected Western mining interests at a distinct disadvantage in the region.
Many recognize that the CCP’s primary motivations for funding projects in Zambia are to buy influence and to facilitate mineral exports. If a road or bridge does not connect to a Chinese project, China will rarely fund or build it.
The Chinese mining companies are renowned for their aggressive cost-cutting, achieved by paying low wages, ignoring safety and environmental laws and regulations, and bribing local officials. The low labor costs likely achieve the greatest cost savings. Chinese workers at large-scale enterprises view their jobs much like American service members view combat deployments: Basic needs like food, medical services, and housing are provided by their employer, but they should expect long hours for low wages, a spartan lifestyle, and little interaction with the local population since they are typically confined to industrial sites outside the main population centers. Although the pay is low, workers tolerate these conditions because they make more money than they did or would back home in China.
These companies pay Zambians comparable wages but, unlike the Chinese employees, local nationals rarely receive food, medical care, or housing, and also usually have multiple dependents to support. Many Zambians are desperate for work, and these jobs offer stability, as the companies operate without regard to market conditions.
Western companies, by contrast, pay their Western employees well, and pay local nationals above-market rates. As a 30-year veteran of the Zambian mining industry explained, “Western and South African companies provide their employees with their own rooms, and executives usually get two-bedroom apartments in town. Chinese workers might sleep 10 to a room while all the executives share the same house.”
The Gray Economy
Chinese SOEs cut corners, but because their operations are highly visible, they make at least some effort to comply with Zambian law. This is not the case for the hundreds of Chinese small businesses and independent investors in the Zambian mining sector. It is this more complicated gray economy that Westerners tend to overlook.
Independent Chinese investors arrive in the country with literal suitcases full of cash and begin deploying capital. As one local mining consultant put it, “They’re often cutthroat and will just create chaos to get what they want.” The Chinese diaspora run a range of small businesses, and those in the mining sector typically secure offtake agreements with locally run small-scale mines and run their own gray market smelters. Impurities are often added to copper cathodes to make them difficult to trace back to a specific source, or to mimic the chemical composition of a large-scale mine’s output. The cathodes then leave Zambia through the same logistical networks used by large-scale mines. The result is a parallel value chain of small-scale copper, manganese, and (soon) lithium production in Zambia, owned largely by Chinese nationals, including gray market entities.
Aggressive and even violent business practices are common, workplace safety is at best an afterthought, and environmental regulations are widely regarded as obstacles to be circumvented. Conversations with Zambians in several sectors, including the government, reveal that Chinese businesses and investors operate just as they would at home, largely because the business environment throughout much of Africa operates in much the same way. Indeed, China and Zambia rate comparably on corruption indices.
It is important to recognize that Zambians and Westerners view corruption differently: Where Westerners see graft, many Zambians see wealthier people helping others without means. If officials facilitate a $100 million investment, why shouldn’t they receive 0.001 percent of that transaction for their trouble? This allows Chinese operators to operate with greater speed and flexibility than Western businesspeople, who adhere to stringent anti-corruption regulations. As one geologist noted, “I wouldn’t call the Chinese ‘corrupt’; they’re just infinitely flexible.” However, Zambians do not tolerate all corruption equally, and scope and scale matter. Despite the occasional high-profile prosecution, corruption remains endemic throughout many countries in sub-Saharan Africa, regardless of Chinese influence, and rule of law is rarely guaranteed.
Another advantage of the Chinese diaspora is increased interaction with locals, leading to greater access and opportunity. Chinese operators spend their time in the field using their network to identify and vet deals, which often close in days or weeks, while Western businesspeople spend most of their time in hotels and government offices in Lusaka and larger cities. Chinese financial and legal risk tolerance is far higher than that of their Western counterparts, in part because they understand the local environment well enough to gauge those risks quickly. If Western investors are looking at a deal, they ought to assume at least one Chinese investor has already decided to pass on it, one Zambian mining consultant said.
Zambian Perspectives on Chinese vs. Western Investment
Chinese and Western investors have different goals. A Zambian mining consultant claimed that “Chinese investors seem much more interested in controlling the resources than in the underlying economics.” That squares with the Chinese Communist Party’s overall objective. Chinese investors take a venture capital approach: Many deals will fail, but those that succeed will carry their entire portfolio, and they can flip investments to larger Chinese enterprises for profits.
Most Zambians recognize that virtually all their roads, rail lines, bridges, airports, high-rise buildings, and telecommunications infrastructure sprung from Chinese and not Western support. However, the country remains underdeveloped and in serious need of additional infrastructure. Many Zambians are acutely aware that no Western companies are leading infrastructure projects in Zambia.
Zambians believe that the West imposes unrealistic conditions and takes too long to make decisions; in contrast, they appreciate the speed and pragmatism of Chinese dealmaking. As a senior figure in the logistics sector put it, “If we ask the IMF for a $50 million loan, it’s a 200-page document. If we ask the Chinese for a $1 billion loan, it’s literally a one-page document. Who do you think we’re going to ask for a loan?”
Zambians appear almost unanimous in wanting Western capital and partners, even if the initial engagement process is frustratingly slow.
Western investors are notorious for taking months to make decisions and for asking questions that strike most Zambians as irrelevant or even nonsensical. “Just this week, I’ve been asked about the percentage of disadvantaged employees in one industry and how many cows are in the country,” one employee at a government agency said. “Cows! Most of our population doesn’t even have access to electricity. Do Americans actually think we’re going to prioritize a cow census?”
On the other side of the ledger, many in Zambia question China’s motives; object to Chinese companies’ treatment of Zambian workers; resent that Chinese workers take Zambians’ jobs; and believe that China interferes in Zambia’s internal politics and corrupts Zambia’s economy, legal system, and ecology.
Many recognize that the CCP’s primary motivations for funding projects in Zambia are to buy influence and to facilitate mineral exports. If a road or bridge does not connect to a Chinese project, China will rarely fund or build it. Moreover, many Zambians believe China’s policy is to create intentional debt traps to cement Zambian obligation to Beijing. Even Zambians accustomed to graft frequently expressed amazement at the brazenness and scale of Chinese bribery. Such bribery is arguably scaring off deep-pocketed Western investors, which adds to the frustration and resentment of those investors, the Zambian government, and the Zambian people. In 2018, the Zambian opposition National Democratic Congress went so far as to recognize Taiwan and reject the one-China policy, arguing that the government in Beijing interfered in Zambian politics in favor of the governing Patriotic Front.
Perhaps an even more incendiary issue is that many Chinese businesses—particularly those in the informal sector—treat local employees poorly. Allegations of predatory business practices, low wages, disregard for workers’ safety, and overt racism are commonplace, while local partners are frequently forced out of business ventures at the first opportunity. Zambians appear almost unanimous in wanting Western capital and partners, in part because Zambia remains poor and underdeveloped, but also because Westerners are known for honest business dealings, even if the initial engagement process is frustratingly slow.
The Way Forward
The words and actions of U.S. officials are misaligned. Policymakers have spoken about the need to reduce or eliminate U.S. reliance on China for access to strategic minerals. However, concrete examples of policies to achieve this goal are few.
Four actions by the U.S. government could help narrow this gap:
Fund desired outcomes. Expand subsidies and other incentives to the mining sector that are currently in place for U.S. manufacturers of semiconductors, solar panels and EVs. Tax incentives, insurance policies, purchase agreements, and loan guarantees can quickly help move tens of billions of efficiently managed private sector dollars toward targeted areas.
Publicize China’s harms to sub-Saharan Africa. Use all available means to highlight the consequences of working with China: low wages, dangerous and unhealthy working conditions, ecological destruction, and corrupted government. Distinguish those outcomes from the Western alternative.
Enhance diplomatic and foreign economic engagement. Recognize that sub-Saharan Africa is strategically important not only because of the metals and minerals in the land, but because it has the fastest growing populations in the world. This means that the region requires presidential attention, high level visits and exchanges, training, trade preferences, and developmental finance for infrastructure—especially for power generation and distribution.
Take advantage of the Chinese who oppose the CCP and Chinese state-owned enterprises. Many of the Chinese who settled in Zambia would likely welcome cooperation with the West. They have established access, experience and relationships. The West can offer capital, expertise, and legitimacy. Western firms would have to carefully vet their Chinese partners, but this is a surmountable challenge.
Over time the U.S. can create an alternative that empowers governments in sub-Saharan Africa to demand better performance and labor standards from their Chinese partners or choose Western partners instead. Merely protesting China’s presence in the absence of viable alternatives creates the impression that Western governments would prefer that African countries remain bereft of basic infrastructure and investment.
*Information in this article is based on interviews conducted in Zambia in January and February 2024 with multiple individuals who have extensive experience in the Zambian mining sector, including current and former employees of mining companies, consultants to mining companies, and Zambian government officials.
Ben Kallas is CEO and co-founder of Searchlight, a company that conducts on-the-ground field assessments to support Western investments in challenging environments. He spent eight years as an intelligence and reconnaissance officer in the Marine Corps and received his B.A. in political science from Middlebury College and his MBA from Harvard Business School.
Glenn Chafetz is the director of 2340 Group, a research nonprofit that works with governments, businesses and NGOs to defend against intellectual property theft, attacks on critical infrastructure and disinformation. He has previously taught at American University and the National Intelligence University, and before that served in both the State Department and the CIA.
Header Image citation:Then-Zambian President Edgar Chagwa Lungu and Chinese President Xi Jinping shake hands during a signing ceremony in Beijing, China, March 30, 2015 (AP photo by Feng Li).
