Business News

As China moves to cement ties,geo-economic realities loom

China-Africa relations are entering a fresh chapter amid a turbulent global economic landscape, tilting balance of geopolitical and financial power muscle-flexing among superpowers and the new scramble for the largely youthful and resource-rich Africa.

Of the top five global superpowers—United States (US), China, Russia, Germany and United Kingdom (UK)—China appears to be in command of the race, having taken full advantage of the semi-retreat of the US and its Western allies from Africa after September 11 2001.  

China saw the chasm left behind and marched right in, says Abel Kayembe, an international relations expert and legislator for Dowa West Constituency under Malawi Congress Party (MCP).

China President Xi

Kayembe, who is also a former deputy minister of Foreign Affairs and International Cooperation, said in an interview last week that the 9/11 terrorist attack on The Twin Towers in New York in 2001 induced a strategic shift of Western development support and investments from Africa to fighting terrorism in Afghanistan, Iraq and other parts of the Middle East.

“This West’s strategic shift of focus to these geopolitical zones in a way created a geopolitical and geo-economic space for China to establish itself as an economic partner for Africa, Malawi included,” said Kayembe, holder of a PhD in international relations and political diplomacy.

Indeed, two years after 9/11, China convened the first Forum for China-Africa Cooperation (Focac) in Beijing in November 2003, a tri-annual platform that has become the defining strategic bulwark and staging area of China’s engagement with the continent of 1.5 billion people and a gross domestic product (GDP) of over $3 trillion.

Ten years later in 2013, China created the Belt and Road Initiative (BRI), Beijing’s global development architecture for enabling its foreign direct investment (FDI) via massive infrastructure financing, especially in sectors of transport, energy and mining.

BRI and Focac have become Beijing’s most powerful tools for helping to operationalise its ‘Going Out’ blueprint developed at the turn of the century to encourage its private sector and public enterprises to invest across the globe and help expand the country’s access to international markets, resources and technologies.

Today, more than 3 000 Chinese firms operate in Africa, 70 percent of whom are private enterprises—a clear sign that it is private sector-led businesses, not necessarily State’s, that are leading Chinese trade and investment on the continent.

China’s strategic penetration of and engagement with Africa is based on what it calls mutually-beneficial cooperation between developing countries as opposed to the one way donor-recipient dogmatic pontifications on democratic governance to which Western countries condition their “aid”.

Thus, China has projected itself and emerged as an “all-weather” partner for most African countries, declares Reinford Mwangonde, a governance expert who has worked with several African governments and institutions.

“In times of moral and political leadership decay on the African continent, China offers support without tying it to any conditionality on governance, accountability and all the jazz that comes with democratic governance,” says Mwangonde, who also worked as a governance advisor in the Office of the President and Cabinet during Peter Mutharika’s reign.

“That is different from what the Western world and the Bretton Woods Institutions, International Monetary Fund (IMF) and World Bank promote. In that respect, most African countries are willing to sit down with China without worries of being subjected to a governance and corruption index,” Mwangonde says.

China has become Africa’s largest trading partner driven by programmes such as BRI, according to IMF.

Beijing has also expanded its bilateral creditor portfolio to Africa from two percent prior to 2005 to over 17 percent to date, providing the continent with much-needed financing for infrastructure development, according to the World Economic Forum (WEF).

FDI from China to Africa has surged from just $75 million in 2003 to $5 billion in 2022, accounting for 4.4 percent of the continent’s total FDI, says WEF.

But while Beijing has chalked relative success with Africa over the past two decades, the recent deceleration of economic growth in China on one hand and Africa’s own struggles with crippling public debts and deteriorating socio-economic conditions in individual countries on the other, give impetus for the two partners to rethink their engagement approaches to reboot trade and investments, which are currently buffering, to solidify their co-dependent economic progress and uplift their people’s living standards

Already, China’s investment and loans to Africa have dropped in recent years, coincidentally at a time of slowdown in China’s economic growth.

For example, China’s new loan pledges to the continent stood at just around US$1 billion in 2022 against $28.5 billion in 2016.

Even China’s financial commitments at Focac have been dwindling.

Granted, the $51 billion in loans, investment and aid over the next three years that China committed at this year’s September 4-6 Focac beats the $40 billion promised in 2021.

It, however, falls short of the $60 billion pledges made in 2018, with infrastructure financing suffering the most cuts.

The relationship also has wrinkles around the issue of trade, with import-export imbalances historically favouring China.

As of 2022, China enjoyed a trade surplus of $40 billion with Africa.

On the other hand, the European Union imports more than it exports in trading with Africa with whom it has deficit of US$61 billion, a pattern Beijing needs to work on to bring credibility to the win-win narrative it advances on its partnership with Africa.

Moreover, while Africa largely imports value-added manufactured goods, most of China’s imports from Africa are raw materials such as minerals, a situation that has left some African leaders grumpy.

At last month’s Focac, Beijing gestured expansion of access to its market, offering zero-tariff treatment for 100 percent of tariff lines to 33 African least developed countries, including Malawi, but critics say this does not go far enough as China was already importing 97-98 percent of the said tariff lines.

By contrast, at the 2021 Focac, China committed to buy $300 billion worth of Africa goods over the succeeding three years, but there was no such announcement at last month’s forum.

Beijing is acutely aware of the challenges—and the grumbling—and seeks to get to the bottom of the concerns with a view to reaching mutually beneficial levels.  That is because it values its partnership with Africa.

In fact, when Xi Jinping became general secretary of the Chinese Communist Party and president of China in 2012, one of his first State visits was to Africa and to be specific Tanzania, where he held talks with president Jakaya Kikwete then.

At a seminar on “Deepening the Friendly Mutual Understanding between China and Africa to Build an All-Weather China-Africa Community with a Shared Future for the New Era” held in Beijing mid this month, three key questions shaped the discussions: What is the image of China in the eyes of Africa? What are the factors affecting Africa’s view of China? How best should the story of the China-Africa relationship be told?

Fifteen attendees from eight African countries, including Ethiopia, Malawi, Nigeria, South Africa, Tanzania, Uganda, Zambia and Zimbabwe drawn from the media, political parties and think-tanks participated in the seminar, including this journalist.

From the Chinese side, nine attendees were present drawn from the International Department of the Communist Party of China, Chinese think-tanks and universities.

And the discussion was candid, if not blunt.

“Some of the things I will say may not make for comfortable listening, but they must be said because as friends, we must not give a romanticised view of our [China-Africa] relations,” warned Jessie Kabwila, a former member of the Malawi Parliament and University of Malawi academic who, just prior

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button