As China’s trade relations with other world powers continue to attract attention, African leaders have gathered in Beijing for the third summit of the Forum on China-Africa Cooperation (FOCAC). The two-day forum began last Monday, 3 September, on the theme of ‘China and Africa: Toward an even stronger community with a shared future through win-win cooperation’.
Initiated in 2000, FOCAC has been deemed an effective platform for strengthening China’s relationship with African countries and for establishing long-term and stable partnerships. In addition to heads of state, the chairperson of the African Union, the UN secretary-general, and 27 international and African observer groups will be in attendance. The agenda of this year’s summit was well in-line with China’s massive, transcontinental infrastructure project, the Belt and Road Initiative (BRI), as well as the UN 2030 Agenda for Sustainable Development, the African Union’s Agenda 2063, and the development strategies of individual African countries.
China’s relations with and role in Africa have no doubt come under scrutiny and have been met with skepticism from the traditional world order. It is too soon to tell if there will be negative long-term consequences, which there very well might be – for Africa or the world in general. But at present, China is bringing an alternative approach to the table, and the possibility for a shift in the way external powers engage with economically underdeveloped countries.
China’s approach to Africa is a mix between what we’re used to seeing from the ‘traditional’ global powers of the West and something that breaks away from the neo-imperialist framework. Indeed, the continent’s rich natural resources are coveted by China, as they were by Western imperial powers. Wariness of Chinese resource extraction is to be expected, as mineral mining in Africa has been the source of egregious human rights violations for decades.
Nearly all of the countries in sub-Saharan Africa are rich with mineral reserves much needed by a rapidly expanding economy like China’s. Africa has at least 46% of the world’s supply of manganese (used to manufacture steel) and 50% of the world’s cobalt reserves are in the Democratic Republic of Congo alone. Also of interest to Chinese manufacturers are Africa’s coltan resources, which is an integral mineral used in the production of electronics, including cell phones.
China has surpassed the US and Europe as Africa’s biggest trading partner. Most African countries run large trade deficits with Beijing, exporting minerals and buying Chinese manufactured goods. It is no surprise that China is keen to capitalise on some of the continent’s rapidly growing economies. While huge numbers on the continent remain in poverty, certain countries such as Kenya and Ghana have a growing middle class, i.e., they are seeing an increase in consumerism. And this is lucrative for Chinese manufacturers. Africa’s emerging consumer class is especially attractive due to the decline in demand for Chinese goods from markets in Europe and the US.
But the form of Chinese assistance in Africa is quite different to that of the US and other Western powers. African countries typically receive financial or material aid from Western governments, an approach one could argue simply places a bandage over complicated and embedded structural problems. Clearly this approach has yet to result in the inclusive and sustainable development of Africa.
“Inadequate infrastructure is believed to be the biggest bottleneck to Africa’s development”, Chinese President Xi Jinping has stated. And the way that the Chinese government seeks to clear that bottleneck is where China and the West’s approaches to African development diverge. China’s assistance to Africa typically comes in the form of export credits and loans (often with little or no interest), which are also quickly accessible, flexible, and usually have no strings attached. The IMF estimates that as of 2012, China owned about 15% of sub-Saharan Africa’s external debt. By 2015, nearly two-thirds of new debt taken on by African countries was from Chinese loans.
There have been concerns, however, about the high trade imbalance between China and sub-Saharan African countries. Arguably, in order to boost the benefits of Chinese investment in African countries, manufacturing should be shifted to the continent rather than remaining in China. The CEO of South Africa’s Standard Bank Group said that the trade imbalance was one of the primary concerns raised during the 2018 FOCAC Summit. Manufacturing also needs to be established on the African continent in order to avoid what some are calling a new form of [economic] imperialism.
Clearly, China is big on Foreign Direct Investment (FDI) in Africa, which gives observers a bit of hope. The 2018 UN Habitat report, The State of African Cities 2018: The geography of African investment, indicates that there is in fact a diversification in Chinese investment in Africa, as well as an increase in the number of countries receiving investment. From 2003 to 2014, flows of Chinese FDI into Africa rose, peaking in 2008 and stabilising by 2014. During this period, China’s FDI stock in Africa increased from $491 million to $32.4 billion. And data show that, counter to popular claims, China is not solely interested in capitalising on Africa’s mineral resources; the picture is much more nuanced. Between 2008 and 2014, the relationship between Chinese investment and a recipient country’s natural resources proved much less significant than in the previous decade, a trend that many hope to see continue.
What is all of this investment for? Infrastructure. One of the major problems plaguing Africa is the lack of connectivity between cities, between rural and urban areas, and between people and opportunities. Healthcare, education, and sanitation infrastructure remains lacking. China is of course famous for its Belt and Road Initiative, which is set to connect huge swathes of the world via land and maritime infrastructure corridors. So far, China’s projects in Africa have been in-line with the plans and goals of the BRI.
But FOCAC is focused on partnership, not just China investing in and ‘lifting up’ African economies. This means that African leaders and businesses will have to utilise Chinese investment in infrastructure projects in tandem with other sources of financing and partnerships. This past August, the US and Kenyan governments announced the United States-Kenya Trade and Investment Working Group and promised to find financing for a superhighway between the capital of Nairobi and the port of Mombasa. Then last week at the FOCAC summit, President Kenyatta secured financing – contingent upon feasibility studies – for the completion of phase 2B of the Standard Gauge Railway between Naivasha (about 90 km northwest of Nairobi) and Kisumu (further inland along Lake Victoria). In combination with the superhighway, as well as the $3.2 billion Chinese-funded, built, and operated Madaraka Express railway between Nairobi and Mombasa, these projects all set Kenya in a better position for international trade. Nigeria and Ghana also walked away from the summit with signed deals, Cooperation Agreements, and Memoranda of Understanding with China for projects in line with the BRI.
Other African governments will need to strategically harness Chinese investment and infrastructure projects, and combine them with opportunities provided by other foreign sources. Also, African leaders will have to honestly use Chinese ‘no-strings-attached’ financing for sustainable infrastructure development, and not simply for vanity projects, as President Xi Jinping has stated. Corruption will be a significant hurdle for Africa to overcome in order to see their countries fully take advantage of Chinese policy on the continent.
This raises another issue, and a significant difference between Chinese and Western approaches to foreign assistance. Whereas the West tends to impose values (often in accordance with foreign policy interests) on the countries it gives aid to, China is strictly about business. The Chinese government refrains from imposing its political or foreign policy agenda on African countries. Focusing on trade and investment only, Africans are more open to China’s presence, as it is in many ways the antithesis to the neo-colonial mind-set of Western governments which seek to actively intervene in local African politics.
One could argue strongly that a government which has subjected its people to human rights abuses doesn’t deserve trade deals and investment. This is a very valid point and is completely understandable. But in the end, the lack of trade, FDI, and infrastructure do nothing but worsen stagnant or declining economic development and thus hurt only the most vulnerable. Whether or not this approach of compartmentalising foreign policy and economic development is morally sound by Western standards, China’s approach is so far showing more promise than the status quo interventionist policies.
Because China is not simply throwing aid money at the problem and then walking away, its interests in Africa’s economic success are longer-term. This could bode well for the continent. FDI has proven to be one of the most sought-after forms of financial assistance, and infrastructure is undoubtedly critical to inclusive and sustainable development. China seems to be proving its role as the big player on the African continent, but it will take honest, transparent, and industrious work on the part of African governments to benefit either party. As projects move forward, the African public will also have to play a role as best they can in overcoming perhaps the most significant challenge: finding a way to hold their governments accountable, something that has largely evaded the continent since the days of colonialism.