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China’s latest pledge of more than US$50 billion to Africa over three years makes the countries’ trade relationship more imbalanced while further cementing China’s role as leader of the Global South, observers said.
African nations that are already highly dependent on China for economic growth will rely even more on their biggest bilateral trade partner, noted Bates Gill, senior fellow for Asian security at American think tank National Bureau of Asian Research.
He added that China “clearly has the upper hand”.
“This is a classic example of what I would call a Sino-centric multilateral organisation where China takes the lead in setting the agenda … and individual nations have little choice but to go along in agreeing with this vision of China’s,” he told CNA’s East Asia Tonight on Thursday (Sep 5).
More than 50 leaders of African nations are in Beijing for the Forum on China-Africa Cooperation that will end on Friday. The three-day summit, China’s largest diplomatic event since the COVID-19 pandemic, is held every three years.
The funding pledged by China includes US$30 billion in credit lines, US$10 billion in investment by Chinese companies and military aid. Chinese President Xi Jinping also promised to provide at least 1 million jobs in Africa.
Around 20 per cent of Africa’s exports go to China while about 16 per cent of the continent’s imports come from China, according to the International Monetary Fund (IMF). These amounted to a record US$282 billion in total trade volume in 2023.
While many Chinese goods flow into African countries, “very little” beyond minerals and metals exported by about 10 African nations are exported to China, noted Joshua Eisenman, professor of politics at University of Notre Dame in the United States.
“It has not really been a fair deal so far in terms of the trade remaining quite imbalanced in almost all cases, bilaterally,” he told CNA938’s Asia First on Friday.
“One of the things that African leaders are there (at the summit) to do is to secure more opportunities for their goods to penetrate into the China market.”
The summit and China’s commitment are widely seen as its attempts to strengthen its influence in Africa, as it seeks to challenge the global order led by the US.
China has pitched itself as the leader of the Global South – a term that refers to developing countries around the world, of which African countries form a major bloc.
“(China’s) relationship with Africa really facilitates that notion that China is the leader of the Global South and has the Global South’s interest at heart, juxtaposed to the West, which China puts forward as a more … self interested,” said Eisenman.
He added that Africa is an outlet for Chinese firms with an overcapacity for goods like electric vehicles and solar panels at a time when Europe and the US have tightened rules on such Chinese imports.
“We’ve also seen it in other sectors, (where) many Chinese firms – especially in terms of cell phones, social media, banking, different kinds of payment systems – have really targeted the African market and prioritised the African consumer in a way that Western firms have not,” he said.
Xi pledged US$140 million in military aid, the largest amount that China has earmarked for this purpose at the summit.
Noting that China’s assistance includes training and exchanges for military and law enforcement personnel, as well as more security-related exports to Africa, Gill said this would increase China’s security-related footprint.
It moves past Beijing’s traditional emphasis on development, he said.
“We’re seeing an increase in its interest to expand security-related activities and cooperation with African countries,” he added.
“That’s something new, and it’s definitely worth watching.”
While Xi made wide-ranging commitments to Africa, it will be up to Chinese companies to make the investment decisions, Gill said. He added that three years is a short period to see the outcomes of such investments.
If the investments are realised, though, they will be a “huge step forward” for advancing some of the needs in Africa, he said.
However, he noted that lending by China does not come with rules surrounding environmental standards, workplace safety and good governance that typically come with loans from other organisations like the World Bank.
Jana de Kluiver, research officer at African organisation Institute of Security Studies, described Xi pledging jobs for Africans as a “very promising” development.
“It does engage in a local context, more than we have seen previously, which is a positive shift,” she said, noting previous criticism that Chinese investment does not necessarily trickle down to the African people.
While Xi said China would carry out 30 infrastructure projects across the continent as part of its Belt and Road initiative – which has drawn criticism as saddling countries with debt – he also proposed smaller plans.
He described these 1,000 projects as “small and beautiful”.
“This type of trend is something that’s much more sustainable to African economies that are struggling to repay debt, and it also has a quicker turnaround in terms of profitability for the Chinese implementing partner,” said de Kluiver.
“In a lot of ways, although larger infrastructure projects are also required in the long term, and it’s an important aspect to have in place, at least within the current context, it is a safer option to go for the smallest, beautiful approach.”