Stephen Hayes is president and CEO of the Corporate Council on Africa.
China and Japan have seldom been allies on anything, and World War II certainly didn't help the relationship. Neither did the battles in the previous century and the two Sino-Japanese wars leading up to World War II. Japan's barbarity in China, at times, rivaled the German's worst in Europe and Russia.
It has not been forgotten by the Chinese, even if nearly all the participants in the war have passed away and both countries are now in a pragmatic mode of seeing the world. Human beings forgive easier than history does. History has a long-term memory. The individual generally tries to forget the abuses of the past in order to get through the next day. Life is too short to always look back, but the definition of history is entirely formed through the rear-view mirror. The course of policies of Ships of State are divined by history. Course adjustments are wielded by individuals, the options of change are limited by the past. History endures. Individuals die.
And so it is now, with history in mind, that Japan worries about the growing Chinese colossus across the Sea of Japan or the China Sea, depending upon from which coast you look into the same waters. Japan is especially concerned about China's growing dominance in Africa.
As we entered the new millennium, China's trade volume with Africa was about $6.55 billion. A little more than a decade later, it has grown more than 30-fold, to more than $200 billion annually. More than two thousand Chinese companies now operate in Africa, compared to 600 from Japan. (While no one seems to have the exact figures, an official at the U.S. Department of Commerce estimated that about 900 U.S. companies are doing business with Africa.)
Japan feels it can ill-afford to be cut off from the resources of Africa, now more necessary to its future since the nuclear power plant disaster and the earthquake that devastated East Japan. China's increasing dominance of those resources is a perceived concern to Japan's future.
Japan has become so concerned that it formed a public-private council to address the matter. It is made up of the Ministry of Foreign Affairs, the Ministry of Economy, Trade and Industry and twenty private companies, including the so-called "Big Six" trading companies. The Council was formed ostensibly to promote the fifth Tokyo International Conference on African Development.
However, the recommendations of the Council presented to Japan's Prime Minister Shinzo Abe on May 21 specifically addressed the perceived threat from China, urging all that "Africa be seen as a vital trading and investment partner." The report urged Japan to train Africans for employment with Japanese companies and to use official development assistance in a more strategic manner, including support of vocational training. While these recommendations are noteworthy, they are also a less-than-subtle poke at China's practice of bringing its own work force to complete projects and provide labor.
More than forty Heads of State from Africa will attend the Tokyo conference, and each one will meet with Abe. This almost matches the record number of African Heads of State who met with Chinese leadership three years ago in Beijing at a China-Africa Conference on Cooperation. Japan has not put conditions on the behavior of the nations involved before deciding to meet with a Head of State. Like China, Japan has taken a more pragmatic approach to the future than has the Obama administration, which tends to reward behavior of nations with a meeting with the president, and punishes by denying such a meeting.
Perhaps another partnership that is needed is stronger Japan-U.S. cooperation on Africa, especially through their respective private sectors. Both countries need to be engaged more actively economically in Africa for the benefit their own economies.
In the U.S., though we tout a recovery, job growth has not accompanied the returning growth, and there remains a growing gap between the rich and the poor and a shrinking middle class. In Japan, the threat of another energy crisis and accompanying economic collapse is as close as the next major earthquake. The last one is estimated to have reduced Japanese power capabilities by 15 percent. The destruction of the nuclear power plant also put Japan back on course for fossil fuels as its major source of energy. Iran is a major supplier of oil to Japan and that has also been reduced through embargoes. Africa becomes increasingly critical for fuel and also for the expansion of the Japanese economy. Africa is also now the largest emerging market in the world. Neither the United States nor Japan can afford to lose significant ground to China.
American companies, to develop new markets in Africa, need financing. U.S. banks have been extremely slow to support loans to businesses investing in Africa, seeing returns as high-risk. Japan has also been risk-averse and has preferred to follow others, especially the United States, into new markets.
However, the growth of China's investments in Africa has given Japan new impetus. It is no longer waiting on others.There is an opportunity now for the United States and Japan to more actively cooperate on Africa. Japan can offer financing to U.S. companies, and U.S. companies, by partnering with Japanese companies, can offer more secure partnerships and less risk. The combination of the two could become a powerful vehicle for their respective economic interests, and offer African nations greater alternatives to China's investment strategy. We shall see.
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