News / Africa

US-China Rivalry Exemplified in Obama Visit to Tanzania

Chinese President Xi Jinping (R) shakes hand with traditional dancers upon his arrival at Julius Nyerere International airport in Dar es Salaam, Tanzania, March 24, 2013.
Chinese President Xi Jinping (R) shakes hand with traditional dancers upon his arrival at Julius Nyerere International airport in Dar es Salaam, Tanzania, March 24, 2013.
Gabe Joselow
One of the goals of U.S. President Barack Obama’s upcoming tour of Africa is to promote U.S. business interests across a continent now dominated by China. The competition between the economic giants is playing out in Tanzania, the last stop on Obama’s tour.

While in Tanzania’s economic hub, Dar es Salaam, the president is due to meet Monday with American and African business leaders to find ways to get U.S. companies a foothold in African markets.

U.S. companies have been trailing behind China in African investment, and China recently overtook the United States as Africa’s largest trading partner.

Even Obama’s visit to Tanzania follows in the wake of Chinese President Xi Jinping’s trip to the East African country in March.

Falling behind

The director of the Africa Center at the Atlantic Council in Washington, J. Peter Pham, said the United States has some catching up to do.

“China is well ahead not because it necessarily offers the best deal, but rather because it often offers the only deal," said Pham. "American businesses, by and large, have not - with the exception of those involved in resource extraction - have not really fully discovered the potential in the African market.”

Pham said the United States also has failed to sustain some of the previous investments it has made in Africa, allowing China to get the upper-hand.

Take Tanzania as an example. In 2008, under former U.S. President George W. Bush, the U.S.-funded Millennium Challenge Corporation signed a nearly $700-million compact with Tanzania to improve roads and other infrastructure in the country.

It is the most funding the aid agency has ever awarded. But much of that money is going, more or less directly, to Chinese companies who have won construction contracts to implement the projects.

Chinese face time

So not only do Chinese firms benefit from the work, but Tanzanian citizens see Chinese construction crews building roads and laying pipes.

Pham says hiring Chinese firms to do American-financed work is, in a way, self-defeating for U.S. interests.

“If the purpose of foreign assistance is to win hearts and minds - ordinary people do not look into the fine print of who finances what, they see who does what,” he said.

The United States has downplayed any concerns about China’s growth in Africa or that they are in direct competition.

“There is a lot of, I think, angst [worry] about things that change in trade relationships and when relationships change and new players come in. But I do not think there is a lot to be too concerned or upset about the rise of China,” said South Africa-based U.S. Senior Commercial Officer Larry Farris.

Farris added that development, no matter who is behind it, is good for Africans.

Mercenary approach

China and the United States also have a markedly different approach to African aid and investment.

When Xi visited Tanzania in March he emphasized that his country would always offer assistance with no political strings attached.

American assistance, though, often is tied to political or economic reforms.

University of Nairobi political science chair Adams Oloo said the United States has a tricky task in balancing its ideals with its business interests.

“While China on the other hand is like, ‘I will do business with anybody, what goes on inside that country is none of my business.’ And I think that is quite a challenge for the West, how to counter China and the East while at the same time holding the values that they want to see implemented in East African countries,” said Oloo.

This trip is Obama’s second visit to Africa since he visited Ghana during his first term in office in 2009, during which time he spent less than 24 hours on the continent.

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Comment Sorting
by: Ngwilo Mwakyusa from: Dar es salaam
June 29, 2013 3:24 PM
China comes to Africa with a policy of "win-win situation" on the other hand offering assistance with no political and economic strings tied which is quite different from USA.....without changing their policy toward africa they will be left far behind by China

by: Nick Marwa from: Europe
June 28, 2013 1:35 PM
Love Obama, Love Tanzania

by: Ngoni Simelane from: Johannesburg
June 26, 2013 5:56 AM
The statement by Peter Palm that “China is well ahead not because it necessarily offers the best deal, but rather because it often offers the only deal" is false... China is well ahead because it does not attach economic or political conditions to doing business with Africa. The ignorant statement by Palm is an example of the kind of outdated postulations that analysts and academics that are out of touch with 21st century Africa continue to make... and that will continue to see the United States under perform in the Africa growth story because they are being ill advised.

by: Davis K. Thanjan from: New York
June 25, 2013 8:45 PM
The US provided 700 million dollars to Tanzania for development of infra structure by the Chinese government construction companies! Chinese were the only bidders for the construction projects in Tanzania. After all the money is spent President Obama is going to Tanzania to improve trade relations between the two countries. President Obama cannot redeem the American stupidity.

by: Bajie Zhu
June 25, 2013 7:27 PM
The reality is that China has certain core competitive advantages. By holding the nation's denizens for decades on end to lower living standards, China now has the world's largest steel, cement, aluminum, construction machinery, and other related industries. Doing infrastructure using Chinese teams (both hardware and software and personnel) costs 30% less than any Western offerings, AND the Chinese companies still make profit at those prices. So the normative is that the Chinese crews are going to get the infrastructure and construction jobs all around the globe.

Instead of beating heads against walls and trying to beat the Chinese at that game, a developed nation like America has to go back to its core competencies and concentrate in areas in which the U.S.A. has a comparative advantage.
In Response

by: Adam Mkwela from: MBEYA,TANZANIA
June 27, 2013 10:06 AM
Its not true that we are the only ones dealing with the Chinese. Its just the new game in town. Ask NIKE,APPLE and all the big global players currently off-shoring their manufacturing to the P.R.C.These guys are little smarter...!

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