China’s "soft power" offensive in Africa

As western powers cut back their spending on international broadcasting, China launches an offensive to win the continent's hearts and minds.

China has launched a drive to win "hearts and minds" in Africa just as western powers – including Britain and America – are cutting back on their spending on international broadcasting.

In January China Central Television (CCTV) launched its first African hub in Nairobi.

At 8pm in the Kenyan capital CCTV Beijing hands over to its Nairobi team for “Africa Live”, an hour-long flagship program designed to be a “new voice” for African news and build Sino-African relations.

Its Africa bureau chief, Song Jianing, says he has major plans for expansion. “I want to grow in leaps and bounds,” he told a seminar at St Anthony’s in Oxford.

This comes on the heels of the Chinese news agency, Xinhua, which already has an established reputation for fast, accurate news. Wang Chaowen, the agency’s Africa director says her operation covers 47 African states, with 28 branch offices.

A glance at almost any African newspaper will see the result, with Xinhua articles faithfully reproduced.

Nor is it just the traditional media. In 2011 Xinhua launched a news service for mobile phones, in Africa, in both English and Chinese.

This expansion has not been without its difficulties. Chinese state media produce well-crafted news "good news" stories and have an effective coverage of economic developments.

Their coverage of stories in which Chinese companies or Chinese government interests are challenged are than less impressive.

Asked why CCTV failed to provide an expose of Zimbabwe’s Marange diamond mines, in which Chinese companies have a direct interest (pdf), Song Jianing replied: “we did our best – we sent a reporter, but the management would not give us an interview.”

Traditional western journalistic techniques of covert filming were clearly out of the question.

The Chinese drive to win the battle for "soft power" extends well beyond delivering  news.

The launch of the Forum for China-Africa Co-operation in 2000 saw a concerted drive to reinforce co-operation through exchange visits and training programmes for African journalists.

More than 200 African government press officers received Chinese training between 2004 and 2011 in order to produce what the Communist Party propaganda chief, Li Changchun, described as “truthful” coverage of development supported by China’s activities.

This has been backed by an extensive programme of infrastructure development, with everything from satellite equipment for Ugandan television, to building work for Equatorial Guinea radio.

Some of this technological aid has been used to censor, rather than promote, the flow of information. Chinese equipment is reported to be used to bug phone lines and internet communications in Ethiopia.

Just as China plans a media offensive, including plans to deploy 100,000 journalists to the developing world, focusing on Africa, the West is cutting back.

The BBC World Service is still reeling from the cuts announced in January 2011. This will see the loss of 650 jobs by 2015.

The BBC African Service has closed its Portuguese broadcasts and scaled back across the board. The popular daily African morning show “Network Africa” has been merged into the world-wide English broadcast. The magazine, Focus on Africa, which was the BBC’s calling-card across the continent, has closed to save a miserly £50,000.

While the Foreign Office is content with these cuts, the United States is far more exercised by the contest for influence.

As Hilary Clinton told a Senate hearing earlier this year: “We are engaged in an information war and we are losing that war,” she said. China and Russia have started multi-language television networks, she said, even as the US is cutting back in these areas.

Pang Xinhua, the managing editor of China Central Television Africa talking to local journalist. Photograph: Getty Images

Martin Plaut is a fellow at the Institute of Commonwealth Studies, University of London. With Paul Holden, he is the author of Who Rules South Africa?

Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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