In this still young century, China has emerged as by far Africa’s biggest economic partner, establishing a vast footprint across the continent at breakneck speed. As many ties with the west have declined – especially following the 2008-09 global financial crisis – Chinese engagement shows no sign of diminishing. This will be underlined when heads of state gather in Beijing for the next Forum on China-Africa Cooperation Summit in September.
A colossal effort by state agencies has made this possible, adding substance to the narrative that, fuelled by huge government loans and appetite for commodities, state-owned Chinese companies are dominating construction of much of the continent’s infrastructure while a hard-bargaining Beijing seeks natural resources for China Inc. At their crudest, western critics compare this alleged ‘pillage’ of African resources with the depredations of 19th century European powers. The promise of recycling China’s huge hard currency balances still offers big opportunities for hard-pressed African treasuries.
However easy, all-embracing arguments underplay the complexity and depth of China’s interactions with Africa. Among the reasons that China is number one in so many economies, McKinsey & Company’s June 2017 report Dance of the Lions and Dragons showed that a huge inflow of Chinese entrepreneurs may be having an even bigger impact in many sub-Saharan markets than government-led initiatives. It highlighted “three main economic benefits to Africa from Chinese investment and business activity: job creation and skills development, transfer of new technology and knowledge, and financing and development of infrastructure”.
Zhejiang Normal University’s Center for African Economic Studies head Liu Qinghai argues that “the benefit [of exchanges] has been mutual, and so far favours Africans”, as shown by the combined value of Chinese outward foreign direct investment (OFDI) to Africa, which reached $39.9bn by end-2016. Liu sees a “double standard” at work, citing US data that show mining represented two-thirds of American OFDI on the continent at end-2015, while it took 26% of Chinese OFDI at end-2016. The second largest recipient of Chinese financing in Africa (24% of it for energy) is resource-poor but Chinese investor-friendly Ethiopia.
In many respects, China’s engagement to Africa continues to outpace understanding of its operations and intentions. Japanese, other Asian and western governments and corporates are trying to understand how to work with the vast Belt and Road initiative – intended to deepen China’s investment, infrastructure and other commercial ties across Eurasia and Africa – and with Beijing-sponsored alternative global development finance institutions: the Asian Infrastructure Investment Bank, New Development Bank (originally called Brics Bank) and the Silk Road Fund.
The devil is in the detail, as Chinese firms remain deeply involved in African resource plays. Chinese demand declined sharply in the commodities downturn, and high levels of Chinese financing to impoverished resource-rich countries have increasingly come to be seen as a problem, but from bauxite in Guinea to diamonds in Zimbabwe Chinese firms are major players in deals that, all too often, lack transparency.
At the same time, the idea of China as only a second division diplomatic and military power is fast fading. Zimbabwean generals made a point of openly consulting with Beijing before removing (previously stalwart ally) president Robert Mugabe last November (AE 358/23). President Xi Jinping’s China has started to project its ‘hard power’, publicly opening a military base in Djibouti and moving to take over Gaadhoo Island in the Maldives as an Indian Ocean outpost. Ever more African militaries are sending their officers to China for training.
Muscular diplomatic triumphs are celebrated, such as the recent re-establishment of relations with Burkina Faso. Like its western and Asian competitors, China has found its huge re-engagement with Africa comes hedged with political and other risks. Narratives based on past behaviours are convenient, but too often they fall short for all concerned.
- Browse our subscription options.