China’s Stadium Diplomacy

Abstract

Ten minutes drive from the coastal Angolan city of Benguela, on the edge of what was once an abandoned banana plantation, a massive white steel structure emerges from the surrounding shanties and barren fields. Only a single paved road runs alongside it. Benguela’s stadium is one of four built for the 2010 African Cup of Nations, an event designed to showcase Angola’s charge toward modernity. The event resembles, on a somewhat reduced scale, the World Cup. But with the barriers Angola needed to hurdle to prepare for its hosting duties, the event may as well have been the Olympics. Only 10 years after a 27-year civil war, much of Angola’s national infrastructure remained shattered, with land mines marking conflict zones across its landscape. In the 18 months leading up to the African Cup, more than 900 workers toiled to build the stadium on undeveloped lands on the outskirts of the city. From the upper levels of the stands, there is a view of the Atlantic ocean. Centuries ago the glittering blue waters brought Portuguese colonists to the shores of Angola. More recently, the coastal waters greeted another arriving force—shipping vessels carrying the supplies of Chinese construction companies. When it was filled, the 35,000 seats shook with soccer fans living and breathing for each pass as they watched the nation’s most prized pastime. But now on most weekends, the stadium sits empty, save for a few local celebrations and matches. Some 700 overseers, engineers, and laborers were brought from the Chinese mainland to assist on the project. Alongside the expert Chinese workers were 250 local Angolan laborers. A growing diaspora of as many as 70,000 Chinese migrants populate Angola, which, along with a growing list of other developing countries, has found the generous pocketbooks of China’s foreign aid policy in the form of infrastructure projects. By most projections, the four Angolan stadiums alone cost $600 million. Turn-key stadium projects funded and built by Chinese aid dollars have cropped up across the continent, and the Chinese are not quick to let these African recipients forget. On the eastern coast of Africa, a similarly funded stadium project now stands in Maputo, Mozambique. A white sign marks the front of the structure with emblematic red Chinese characters and Portuguese, displaying the words, “The friendship between China and Mozambique will last forever like heaven and earth.” In a sterile boardroom in Cairo, the Confederation of African Football (CAF) begins its deliberations regarding future hosts of the African Cup of Nations. Prospective nations submit formal proposals to CAF headquarters, making their cases to host the biennial event. Nations pour countless hours of preparation into the bid that could bring an influx of athletes, fans, and media to their soil, providing a short-term economic boost and incalculable national pride. The costs, however, could linger for decades. At least until the Chinese came along. Though China is not present at the deliberations, its influence is palpable. The last three hosts of the African Cup—Angola, Equatorial Guinea, and Gabon—all received stadium projects along with their nominations as host. For the 2012 edition of the tournament, co-hosts Equatorial Guinea and Gabon received new soccer stadiums, most notably the Stade d’Angondj, a 20-month project ending with a 40,000 capacity stadium built by the Shanghai Construction Group. Nicknamed the Stade de l’Amitié (Friendship Stadium), its cornerstone brick was laid by Gabonese Sports Minister Rene Ndemezo’Obiang and Chinese Vice Minister Fu Ziying. The job was entirely funded by China. “From an official perspective we’re delighted to see the opportunity for African nations to be granted the opportunity to have such infrastructure and a long term map of their use,” says CAF General Secretary Hicham El Amrani, whose group administers the African Cup. “From a fan perspective, I cannot answer for them, but whether it is Chinese, Americans, French, or whoever built the stadium, what [African nations] need is a stadium that has easy access and is user friendly.” Whether it needs the strings attached, of course, is another question. China’s stadium diplomacy has been evolving since it began giving aid to African countries in 1956. Today, Chinese aid focuses on themes of “equality, mutual benefit, and no-strings attached,” according to China’s Information Office of the State Council. This apparently straightforward and economically focused approach to foreign aid and subsidized loans has made the Chinese model attractive to many policymakers and populations around the world. Still, there are some deeply fraught and often carefully concealed agendas here. “It’s all about money for [China],” says Henry Musey, a soccer coach in Ghana. “Giving loans to these countries generates money for China so it’s got its positives and its negatives. China is in it for its own benefit.” Although only a sliver of China’s 256.29 billion yuan, or $38.54 billion, in foreign assistance doled out between 1950 to 2009 went to the building of stadiums, the structures serve as permanent reminders of China’s aid efforts in each location. Beijing has been creating infrastructure projects for decades throughout Africa including railroads in Zambia, bridges in Mali, and schools in Angola—all nations with vast mineral resources that China covets dearly. Indeed, the diversity of China’s aid projects contrasts with more traditionally Western forms of aid such as loans that specify the proper usage of funds or require certain democratic reforms. Moreover, disaster relief, while certainly humanitarian in its goals, leaves a more anonymous and transient impression with the target population than a permanent stadium. This contrast also draws a sharp distinction between the United States’ highly prescriptive and market-oriented “Washington Consensus” development model and China’s more malleable investment-with-aid engagement. The American-supported policy package for promoting growth in developing countries has frequently been charged with widening income inequalities. While diplomatic recognition of China is imperative, currying favor with resource-rich nations that can help bolster the manufacturing-heavy Chinese economy is central to the decision-making process. The selection of recipients for Chinese aid in the form of stadiums in Africa and Latin America is far from random. While stadiums are only a small component of China’s greater foreign aid policy, the massive, modern structures stand, even to the most marginal members of society, as a tangible reminder of Chinese assistance. Five years ago, Costa Rica severed diplomatic ties with Taiwan and officially recognized the People’s Republic of China. Following the diplomatic switch, Beijing negotiated a free trade agreement with the small Central American nation, bought $300 million in Costa Rican bonds and set up a Confucius Institute in San José. But the most obvious result of the new relationship—Costa Rica National Stadium—opened in March 2011 in the capital, built at an estimated cost of $100 million. Displays of cultural pride from both nations marked the opening ceremonies. The three-tiered, 35,000-seat stadium has two giant television screens, medical facilities, office buildings, a small sports museum, a banquet hall, and an extravagant staircase serving as the southern portal. More recently, the creation of a Chinatown in the center of the nation’s capital has captured the country’s attention. The 45,000 Chinese residents in Costa Rica have become an important political and cultural force and are the second largest Chinese population in Central America. Instead of creating the initiative with the local community, San José Mayor Johnny Araya solicited funding for the project directly from the mayor of Beijing, Guo Jinlong, appealing to Chinese pocketbooks and national interests in an effort to promote engagement between the two nations in the United States’ backyard. The mutually beneficial agreement will bring tourism dollars to the site and continue to spread the cultural influence of China throughout the city. The efficiency and tireless attitudes of Chinese workers also drew admiration from the local population during the building of the stadium. “It’s a beautiful stadium, really top notch, and nothing had been built before like that,” says Chema Volio, a nearby resident. “Costa Rica has been known for being really underdeveloped in terms of infrastructure, so the efficiency with which it has been built is really impressive.” The story of Costa Rica is not unusual in Latin America. Of the 23 nations that still recognize Taiwan, 11 are found in Latin America. That number continues to dwindle as China makes economic inroads through infrastructure projects and deepening trade relations. Many are catching on to the rewards that come with Chinese friendship. A cascade of Caribbean islands have switched their alliances, recognizing Beijing. With the change, many have successfully secured their own stadiums. One such flip-flop occurred in Grenada, and with it a near-disaster filled with irony. At the christening of the new $40 million stadium in 2007, built with Beijing’s aid, the band played Taiwan’s national anthem. The PRC officials, who’d arrived for the opening, squirmed with discomfort.Just three years earlier, Grenada had faced Taiwan’s anger. The island’s prime minister, Dr. Keith Mitchell, paid a surprise visit to Beijing, upsetting the then prevailing relationship with Taiwan. While Taiwan had previously pledged $40 million to rebuild the hurricane-ravaged nation, Mitchell played hard ball in Beijing and secured a more lucrative deal for Grenada. Taiwan’s Ministry of Foreign Affairs condemned the move. “The government of the Republic of China regrets Prime Minister Mitchell’s lack of foresight,” the statement said. “We have stated sincerely our intention of not participating in a meaningless game of ‘dollar diplomacy’ with China, and will never let Grenada waver between the two sides of the [Formosa] Strait in order to seek profits. The government of the Republic of China expresses its serious protest against, and condemns, the People’s Republic of China for its use of ‘dollar diplomacy’ to drive us out of the international community.” While China’s aid projects have been criticized as merely avenues to access the natural resources of developing countries, these stadiums act equally as catalysts for diplomatic recognition. The One-China Policy of the PRC has been an important factor in encouraging the switch, preventing the diplomatic recognition of both Beijing and Taipei simultaneously. The policy is evident in the spread of China’s foreign aid. Every country in Africa has benefited from Chinese aid with only one exception—Swaziland, one of only four Taiwan holdouts in Africa. While Western aid dollars have dwindled, China’s engagement in Latin America has only grown. Trade between Latin America and China has risen to $142 billion according to state-run news agency Xinhua, a third higher than Africa’s $106 billion. In 2011, China gave $4 billion in loans to Venezuela and $2 billion to Ecuador, with one swipe becoming the largest creditor to both nations, and on terms that many international lending institutions would frown upon. China has been criticized for offering low-ball lending rates throughout Latin America and Africa, sometimes at several points lower than OECD’s country risk premiums. The Export-Import Bank of China generally offers lower interest rates than the U.S. Ex-Im Bank, prompting nations that are too high risk for more conventional lenders to leap at offerings far below market rates, and which may often be paid back in oil or other natural resources. Ecuador is a notoriously poor loan recipient. It defaulted back in 2008 on an International Monetary Fund loan, destroying its credit rating and investors’ confidence. China’s generosity looks beyond this misstep and perhaps wisely secures its repayment through the flow of petroleum products. In Venezuela, Chinese lending practices have reached a fever pitch. With election season rapidly approaching, the vociferously anti-American incumbent, Hugo Chávez, faces criticism from opponents regarding his openly close relationship with Chinese benefactors. State-owned oil company PDVSA’s relationship with China has drawn criticism for deals made at the state level rather than through private mechanisms, thereby weakening PDVSA’s operations and its ability to function independently in the world oil and financial communities. China’s continued economic and political engagement with countries with a history of humanitarian conflict has often raised eyebrows in the international community—most recently over its dealings with Syria. China, as well as Russia, has vetoed two UN resolutions denouncing the violence in Damascus, citing its doctrine of non-interference. Throughout the Syrian conflict, the flow of crude oil to China has remained uninterrupted. Eventually, China was persuaded to cave on its unequivocal support for Syria, which suggests it is susceptible to unyielding pressure by the international community. However, such pressure has rarely proven successful. Across Africa, China’s relationships with resource-rich countries vary little from its ones in Latin America. Angola is now the second largest crude oil provider to China after Saudi Arabia—a relationship vital to Angola’s economic foundations. Angola has enjoyed one of the world’s largest GDP expansions in the last decade—an annualized rate of some 11.1 percent, according to the CIA Factbook. Angolan President José Eduardo dos Santos summed up the China-Angola relationship bluntly in 2006: “China needs natural resources, and Angola needs development.”Following 20 months of construction on the Stade de l’Amitié in Gabon, darkness greeted diehard soccer fans gathered at the stadium’s inaugural game. Flickering floodlights and a sudden power outage meant more than 20 minutes delay for Gabon’s friendly match with Brazil. Moreover, players trudged off the field with soggy cleats after a downpour left the field full of hazardous puddles. Leading up to the 2012 African Cup of Nations, Gabon and Equatorial Guinea faced stringent deadlines for the completion of the stadium projects. But when Gabon faced drainage issues and repeated delays in completion of the stadium, the Confederation of African Football threatened to strip the country of its hosting privileges. Coming to the rescue, the state-owned Shanghai Construction Group—by now a seasoned player in the building of stadiums around the world—kicked its efforts into overtime. It managed to deliver the Stade de l’Amitié half a year sooner than the original projected date, but with issues that lingered to the very start of the tournament. To build the stadium, the group imported Chinese engineers, managers, and laborers. While the project did create some local employment opportunities for Gabonese workers, China’s infrastructure projects have been widely criticized for displacing resident labor. Labor usage varies widely according to the nation involved, but in virtually every case, Chinese workers are embedded in the projects. Loan deals in Angola have controversial stipulations mandating the employment of Chinese laborers in infrastructure projects. Reports of physical conflict between Chinese and African workers have developed across the continent, including armed of Chinese and However, in some countries the of the even on has as much to with the nation’s history as with the its In such as Angola, and high rates of and a of workers Chinese construction from on many infrastructure is for its and building but when its projects come at the of local employment and it to local workers, the relationship with the host country often Chinese the and of from their own President in 2007, his local was than Some 250 of the nation’s capital a field workers in Reports of were to In over in the of at least Though Chinese mines are not the only with poor workers have much of a when it came to in the The Chinese company threatened with they President of the with the Chinese in the in the opportunity to its are a of are not with of the “The of China be that there is more than one view of China in Though stadium building is a component of China’s foreign aid in than in Africa or Latin an China its When the in China in with its infrastructure to build the stadium, for an unusual China in its loan repayment in diplomatic or trade it development to a in the That The land the of the capital, development would on mainland Chinese to build and The diversity of the not to the cultural of a nearby national would a to the project and would a contrast to the nation’s and Moreover, the project would require the of many living in the and the of with and media the development was in its will toward the growing power of its Today, the of and marks the center of what has become The and several other Chinese have brought of Chinese across the The with the of a that from the of While may be as and the up of and by Chinese migrants has China’s has to the of around the to continued of the nation as well as market that may not be to in have not China’s engagement in infrastructure projects in the trade with would billion, trade with other developing and as China’s third largest of the projected massive China and a free trade the most on the the that so often and stadiums, much of the surrounding Chinese often While China is deeply and in its own sports it what to be a at the 2012 African Cup of Nations, a made through China’s The stadium projects function as of power in China’s dealings with developing nations, but the and engagement of the Chinese the construction of stadium projects has some to the these long as the is or diplomatic these nations with their stadiums little to the In Angola, the four once new stadiums of the African Cup of Nations have into a permanent have National and a out soccer Though in Angola have long as soccer the of the nation’s in the international sports toward In the United foreign aid of the billion in is being threatened with Still, American China’s $38.54 billion foreign assistance from 1950 to While these of Chinese aid vary widely on of aid, its continues to In the developing nations their trade infrastructure projects that are free or and and loan The future suggests in the of China’s economic and aid engagement in the developing world. But at the of the these stadiums may of rather than of the Chinese are to be off vast of these in the form of while a nation of still and China may to be the The of aid assistance left by the has China easy access to the developing world. Western countries have long Africa a disaster of modern a of economic opportunity and The to Latin America. In when a future fraught with conflict, China has its the to the Chinese into these nations, it needs to a contrast to Beijing’s While most countries approach aid as to an set of the a out China’s from both private and state interests can for what China has the developing world when the last fan the stadium, it will be the that in development that will the in this diplomatic game.