Resident Fellow  Mauro De Lorenzo

The news that China will lend the Democratic Republic of Congo $5 billion to rebuild its infrastructure in exchange for mining concessions should not be a surprise. Under the draft accord signed last week, Beijing will loan $3 billion for big infrastructure projects, including a 3400 km highway between the north-east city of Kisangani and Kasumbalesa on Congo's southern border with Zambia, and the construction of a 3200 km railway to link Congo's mining areas in the south with the western Atlantic port of Matadi. To this construction list is to be added 31 hospitals, 145 health clinics and two universities. The remaining $2 billion will go towards rehabilitating Congo's decrepit mining infrastructure and setting up joint mining ventures. The repayment terms include mining concessions and toll revenue deals to be given to Chinese companies.

This sort of deal is in the pattern of China's 21st century engagement with Africa. It offers significant new opportunities to Africa if the continent's leaders take a strategic approach to negotiation and to balancing their foreign relations with the rising powers of the developing world.

China has rapidly become the most assertive investor nation in Africa. Its trade with Africa has increased from $11 billion in 2000 to $56 billion last year. More than 800 Chinese state-owned enterprises are today active on the continent, while Angola is now China's largest supplier of oil in Africa. Chinese firms have invested more than $6 billion in Africa in 900 projects--notably in the oil sector.

Premier Hu Jintao has visited 17 African states over the past 12 months--more than any other head of state. The November 2006 Africa summit in Beijing was the largest diplomatic gathering ever held in China. At this summit, the hosts pledged to double China's African aid and to offer $5 billion in loans and credits by 2009, while it has also granted government scholarships to almost 20,000 people from 50 African countries and sent about 16,000 medical professionals to Africa.

China's engagement is loaded with promise and fraught with dangers for Africa. One upside is in China offering investment in African infrastructure, something western governments and multilateral organisations do only slowly, if at all. China's surge of low-price imports also offers African consumers greater, more affordable choice.

Less positively, these same imports threaten small, vulnerable African manufacturers and construction companies. Indeed, China's own manufacturing prowess makes it extremely difficult for African nations to follow the same light industry-based, export-focused route to development.

There is another, less direct downside. Just as western countries are getting their act together to uniformly promote better standards and institutions of governance in exchange for aid, China does not feel the same pressure to adhere, even though it may be in its own best interests and safer for its investments in the long run.

There is also a fear that China's method of engagement with Africa is similar to an earlier post-colonial mode: we will give you expertise, aid and infrastructure in exchange for raw commodities, with little concern for democracy or civil society niceties.

The risk is that China will inadvertently detach executive power from popular discontent by giving bad rulers the financial and material means to remain in power.

For Africa to extract the most value from its heightened strategic importance, the continent will have to design its foreign policies around the assumption that China's interests in Africa are basically selfish. Just as China did when it negotiated access to itself with foreign companies in the 1970s and 1980s, African governments should seek to make technology transfer and value addition a condition in their contract and concession negotiations with foreign firms.

Africa can best hedge against the risks inherent in China's competition on the continent--and seize the attendant benefits--by working to enhance its relations with other rising powers in the developing world, particularly Brazil, India, Malaysia, Vietnam, Indonesia, the Gulf States, and even a revived Russia. These states, and their increasingly globalised companies, are able to offer many of the same forms of aid and investment that China can. This will help ensure that no African state is so dependent on China for crucial imports or investments that it loses all leverage with the Asian giant.

It is up to African leaders to make the most of this new global environment, which, despite continuing trade protectionism in western markets, is the most favourable to Africa since independence. Coupled with Africa's own gains in governance and sound economic policy making, Africa's as yet incomplete integration into the global economy promises to unleash some of the most profound economic, political, and social change in its history.

But the rewards can only be reaped if African policy makers make hard-nosed, strategic calculations about African interests and how to achieve them. That's what it means to put African people first.

Mauro De Lorenzo is a resident fellow at AEI. Greg Mills heads the Brenthurst Foundation.