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Japan Takes On China Far From Home—in Africa

China’s annual trade and investment with Africa is now estimated at around $200 billion, up from $10 billion in 2000. Japan’s is barely 25 percent of that. In 2011, China’s direct investment in Africa was $3.17 billion; Japan’s was $460 million.

China’s foreign minister traditionally tours the continent in his first overseas visit of the Chinese new year. Within weeks of becoming president in March 2013, Xi Jinping flew to Tanzania, South Africa and the Democratic Republic of Congo, announcing billions in new infrastructure and investment deals.

Japan’s new strategy has borrowed from China’s, and in many ways Abe’s January tour mirrored Xi’s last year. In Ivory Coast, the recovering economic and political powerhouse of francophone Africa, he spoke to leaders from across West Africa, promising $83 million to support peace in the Sahel region. In Mozambique, where Asian energy majors have joined a rush for the richest discovery of offshore natural gas in decades, he announced funding for a $174 million gas-fired power plant.

It was in Ethiopia, though, that Abe emphasized Japan’s differences.

He talked about Japan’s postwar ascent and its “development state,” the government-guided economy that backs “champion” companies and balances state intervention with private sector competition. Pledging education, investment and guidance in management techniques—in particular Kaizen—Abe laid out a future of consensus-based aid that emphasized African ownership of the continent’s future.

Although many African leaders and economists admire the Chinese development model, which has lifted the country from poverty to a global economic leader in less than 30 years, they have found that the reality of massive Chinese interest in their countries has often been the hollowing out of their nascent manufacturing sectors, leaving them with cash but no jobs for their young, restless populations.

The balance of trade between China and most of Africa is depressing reading: Oil, gas and minerals are shipped out; finished goods of all kinds are brought in. Last year, the then-central bank governor of Nigeria, Sanusi Lamido Sanusi, articulated many Africans’ concerns, calling the structure of the relationship “the essence of colonialism.” Abe’s speech in Addis Ababa seemed to be laser-targeted at the principal criticisms leveled at China and its mercantilist push into Africa.

Tokyo has played down the competitive dimension of its Africa strategy. Beijing has not. In response to Abe’s visit to Ethiopia, Xie Xiaoyan, the Chinese ambassador to the African Union, gave a press conference in which he called the prime minister “the biggest troublemaker in Asia” and said he considered Japan’s activities in Africa to be part of a strategy to contain China’s expansion.

He may be right. Although Tokyo appears to be handling its interests with more sensitivity, its goals in Africa are similar to Beijing’s.

The Fukushima disaster prompted Japan to shut down its nuclear generators, increasing the pressure to find new sources of gas. Japanese industry has begun to worry about the long-term viability of its mineral supplies. When Indonesia, which supplies 51 percent of Japan’s nickel, banned exports of unrefined metals in January of this year, it sparked a diplomatic row that is still unresolved. China has begun to restrict supplies of rare earth metals, which are critical to the manufacture of advanced electronics.

Africa has the world’s largest unmined deposits of minerals; the largest unexplored territories likely to yield coal, oil and gas; and the largest reserve of undeveloped arable land.

It also has something in short supply in Japan: growth. Even after two decades of economic stagnation, Japanese companies have been hesitant to push out into frontier markets. As African economies grew year-on-year, Japan’s most visible consumer presence was—and remains—the secondhand Mitsubishis and Toyotas in wide service as taxis.

In Addis Ababa, China’s commercial power is hard to miss. Chinese contractors are building the new metro line being cut through the middle of the city. The Chinese-built African Union headquarters towers over the stacks of corrugated iron lean-to shops on the edge of the city center. About 25 miles away, a Chinese-backed industrial park hosts the Huajin shoe factory and a Lifan car assembly plant. Countless products, from the plastic sandals sold at market stalls to the flat-pack desks in the Ministry of Industry, are Chinese-made. Even the coffee cups used in Ethiopia’s daily coffee rituals are stamped Made in China.

For Japan, making a visible impact, in the shadow of the huge Chinese presence, will undoubtedly be difficult. Maintaining hard-won good will among African policymakers and populations while simultaneously pursuing national interests could be harder still.

Over a traditional Ethiopian lunch of injera in Addis Ababa, Kimiaki Jin, the head of JICA’s Ethiopian office, tries to shrug off the difficulties of scaling up. Asked what has changed since Abe’s grandstanding, the diplomatic Jin says simply, “For the Ministry of Foreign Affairs, visibility is very important.”

Jin is in many ways an archetypal Japanese development worker. First posted to Ethiopia as a volunteer in 1990, he is practical, apolitical and consumed with the practical details of project work. On his third tour in the country, he says making large and visible donations has never been the priority: “What we wanted to do was create results on the ground.”

That approach, he insists, will never change, no matter what the competition does or how much it spends.

“We don’t believe in giving big fish without first teaching people how to catch them,” he says.

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