User:Ttanc2/China–Tanzania relations

Foreign relations with China

Tanganyika’s recognition of the People’s Republic of China in 1964 made it the tenth African state and the first to do it within days of independence. Military and political unrest in the 1960s in mainland Tanzania and Zanzibar further strengthened ties between the two countries. On January 12, 1964, the Zanzibari Revolution dramatically increased Chinese influence on the island as China quickly recognized the new regime and provided development assistance and military aid. Additionally, the mutiny of the Tanganyikan army on January 19, 1964, led President Nyerere to request external military assistance to rebuild his army which, was answered first by the Chinese, who became primary suppliers of military assistance to the Tanzania People’s Defense Force. Moreover, Tanzania’s resistance to alignment with either cold war superpower and continued emphasis on the liberation of Southern Africa created hostility with the West. In 1970, China became the major supplier of military assistance to the Tanzanian armed forces and became the largest bilateral source of development aid.

China’s Belt and Road initiative foreign policy

Modern economic and infrastructural cooperation between Tanzania and China is highly connected to China's Belt and Road Initiative (BRI). In 2013, China expanded its Belt and Road Initiative as a form of foreign policy mainly to construct an overland network of infrastructure to better connect Chinese trade and further economic integration to other regions of the world, with a particular focus on East Africa, Asia, and Eastern Europe. The initiative includes building and financing railways, highways, power grids, gas & oil pipelines, telecommunications infrastructure, industrial parks, special economic zones, shipping facilities, information technology, alternative energy sectors, and more. The Chinese government and Chinese companies coordinate these efforts with Tanzanian stakeholders through free trade agreements, generous lines of credit, and other measures intended to generate an investment-friendly environment for foreign investors.

Economic background

In the post-independence period, Tanzania inherited a colonial market economy where agriculture accounted for 59% of GDP in 1961 compared to other sectors of the economy such as transport, construction, mining, commerce, services, manufacturing, and more, making drastically smaller contributions. 1967 to 1985 is considered the Ujamaa era; introduced by the Tanzanian ruling class; Ujamaa is a form of African socialism that creates a socialist principled society without conflict and exploitation. This socialist ideology focused on fighting poverty, creating an egalitarian society, self-reliance, and distributive justice mainly through nationalization and villagization. Nationalization resulted in an economy controlled by the state as all privately owned businesses became public property including banks, manufacturing companies, milling, mining, and all other major enterprises. Villagisation was designed as a rural development program that assembled people living in sparsely populated areas to work on communal farms, build self-reliance, and collectively up-lift living standards. Following the Ujamaa era, phase I of restructuring began in 1986, which included liberalization of exchange and trade, liberalization of the agricultural sector, and implementation of various civil service reforms. Phase II of restructuring occurred in 1996 with widespread privatization, liberalization of the financial system, development of market-oriented economic and regulatory reforms, trade reforms, changes in monetary & fiscal policy, and financing from foreign donors.

Infrastructure background

Much of the infrastructure in Tanzania dates back to the colonial period when it served the purpose of extracting economic resources and exercising territorial control. Exporting economic resources such as cash crops, metals, minerals, and other natural resources meant that many colonial railways ran from the country's interior to coastal ports in cities like Dar es salaam. This infrastructure inherited from the colonial period fails to meet the demands of Tanzania's growing population and changing logistical needs. In the 2016 World Bank Logistics performance index, Tanzania ranked #60 worldwide and had an infrastructure score of 2.81 out of 5.

Projects and agreements

Tazara

The Tanzania-Zambia Railway (Tazara) is a 1,860 km long railway from Dar es Salaam, Tanzania, to Kaprimposhi, Zambia, to link Central and Southern Africa with East Africa to facilitate trade, tourism, and inter-state cooperation. On September 5, 1967, the first agreement regarding the railway was signed by China, Tanzania, and Zambia, representing the beginning of China's formal commitment to the project in that they agreed to provide the technical and professional manpower needed for each phase of construction. By 1970 China officially agreed to finance the project by providing a $401 million interest-free loan shared equally between Tanzania and Zambia. The loan was repayable over 30 years with a 5-year grace period and required repayments to be made in third-party currency or from the two countries exports. The railway project implemented by the Chinese Engineering Construction Company included the construction of 320 bridges, 22 tunnels, and 2,225 culverts along the trains pathway and required additional financing from the Chinese to cover the cost of power, rolling stock, steel rails, signaling equipment, cement, stations, a training school, workshops, and other related infrastructure. Since 2010, China has continued its technical and financial support for the Tazara by funding and upgrading the railway to achieve increased operational efficiency to help meet growing passenger and trade demand.

Unity Bridge

The Ponte da Unidad/Umoja, also known as the unity bridge, is a 720-meter-long bridge connecting Tanzania with Mozambique across the Rovuma River. The China GeoEngineering Corporation implemented the project with funding from the Tanzanian and Mozambique governments at a total cost of US$26.8 million. The bridge, which opened in May 2010, is lowering business costs in the region by facilitating a more accessible route for trade and travel between Southern African and East Africa.

National stadium

In 2007 the Beijing Construction Engineering Group completed the construction of the Tanzanian National Stadium located in Dar es Salaam. The new stadium was estimated to cost more than $60 million, with the Tanzanian government contributing more than half of the project's total financing. The stadium is considered another landmark accomplishment in Sino-Tanzanian relations, a sentiment communicated by former Chinese Premier Wen Jiabao, who emphasized the high-quality construction and importance of the two nations' cooperation in his visit to the site in 2006.

Bagamoyo Port

Bagamoyo is the site of a Chinese-run special economic zone with a mega-port constructed by China Merchants Ports Holdings. In 2012, The Tanzanian government, Oman, China Merchants Ports Holdings came to an agreement on a flagship Belt and Road initiative project with a total investment of over US$10 billion. In addition to the port itself, the 3,000-hectare site will link Tanzania's new Standard gauge railway and the Tanzania-Zambia railway. However, the project faced several challenges, including in 2016, when the project was briefly canceled.

Mining

In September 2011, China's Sichuan Hongda Co. signed an agreement with Tanzania to mine iron ore and coal; the joint venture with Tanzania's National Development Corporation is worth more than US$3 billion. The project has given the Tanzanians access to agreements with the Chinese government, including financing of natural gas pipelines, power plant developments, as well as a port, railway, and roadway upgrades. These mineral resources are concentrated in areas distant from the coast, posing infrastructural and logistical challenges that constrain economic activity like trade. This is evident from prospecting companies and their mining partners looking at major South and Eastern Tanzania projects citing infrastructure as the primary deterrent to investment. Mining companies require infrastructural networks that can handle high tonnage loads, which are widely absent and lack government stakeholder support and investment. However, the Central Development Corridor has engaged in significant planning to improve infrastructure in the northwest gold mining region and the nickel and iron-ore deposit regions along the borders with Rwanda and Burundi. Institutional infrastructure is available via the Central Corridor Transit Transport, which maintains and regulates roadways but has done little to improve rail and power grid improvements.

Information and Communications Technology (ICT)

Chinese financial institutions and technology companies supported Tanzania's telecommunications revolution of the 1990s and 2000s. In February 2009, the Tanzanian National ICT Broadband Fibreoptic Backbone (NICTBB) was launched to provide higher capacity ICT services at a more affordable rate to make Tanzania East Africa's digital hub. The project was financed with US$264 million in loans from China's Exim Bank and was implemented by the Chinese International Telecommunications Construction Corporation (CITCC) and Huawei. In 2010, phase II of the NICTBB project launched with an additional US$100 million in loans from China's Exim bank with the stipulation that Chinese suppliers and equipment be used for the project; therefore, the partnership with the CITCC and Huawei continued. The project is being used to lower costs of communication, promote e-learning, e-health, e-commerce, e-government, and facilitate the development of science and technology.

Zanzibar International Airport

In January 2011, the Chinese Beijing Construction Engineering Group began upgrading Tanzania's Zanzibar international airport by renovating terminal 2 and constructing terminal 3. The Tanzanian government received US$70 million in financing from China's Exim Bank to support the project, which is projected to support the travel of 1.5 million passengers annually. In addition to expanding air transport for passengers, the project also improves air transport of goods to and from Zanzibar by providing a safe and reliable airport for large aircraft and a high volume of flights.

Chinese Agreement Details

Chinese loan agreements implore friendly language and utilize a soft power approach emphasizing mutually beneficial cooperation, friendly relations, equality, mutual support, and shared prosperity. However, Chinese loan agreements often have strict requirements regarding contracting firms and material sourcing agreements. For example, China's Exim Bank requires that 70% of contract procurements (machinery & materials) originate from China. It is estimated that about 89% of African infrastructure projects financed through China are implemented using Chinese contractors. The enthusiasm surrounding China's loans is primarily influenced by the fact that Chinese development assistance is not correlated to the recipient countries' commitments to democracy, good governance, or human rights, which are common conditionalities for Western countries.

Chinese Managerial Enclaves

Enclaves are distinct territorial, cultural, or social units enclosed within the boundaries of a foreign territory. Chinese enclaves have formed in Tanzania, evident from Chinese workers not venturing into the local community, consuming local entertainment, or gaining cultural exposure outside of work, which is often company policy. Chinese enclaves have been formed primarily due to language barriers as older Chinese managers often do not speak English and younger managers struggle with the Tanzanian's heavily accented English. Additionally, very few Chinese workers speak Bemba, a dialect of East Africa's Copperbelt, or Swahili, the national language of Tanzania. In the cities of Chambishi, Kitwe, and Urafiki Chinese management teams live in segregated houses known as the "China houses" or the "Chinese compound". These residential quarters for Chinese workers often include their own security guards, ping-pong tables, cooks, television, video and DVD media from China, athletic spaces, vegetable gardens, and livestock. The salaries of workers living in the Urafiki compound go directly to their bank accounts in China to encourage saving, the staff is only provided an allowance to buy items like fruit or toiletries because entertainment and necessities are provided in the compound; this further alienates workers from the local population.