China's back in Africa, but does the continent benefit? | REUTERS
Summary
TLDRChina's post-pandemic economic cooperation with Africa, under the Belt and Road Initiative, is focusing on trade and investment rather than sovereign lending. While Chinese leaders highlight infrastructure projects and record trade as proof of their support for Africa's modernization, much of the investment is directed towards extracting critical minerals like copper and cobalt. Despite increased Chinese investment in Africa, concerns arise over the growing trade deficit and the potential for a relationship reminiscent of colonial-era exploitation, with Africa's exports to China declining and a focus on raw material imports.
Takeaways
- 🌍 China's economic cooperation with Africa is rebounding after the global health crisis, with a focus on the Belt and Road Initiative.
- 🏗️ Chinese leaders highlight new construction projects and record two-way trade as evidence of their commitment to Africa's modernization.
- 📉 Despite this, Chinese sovereign lending in Africa has declined to its lowest level in two decades, and a rebound is not expected.
- 🤝 Chinese policymakers are encouraging companies to invest in equity and operate infrastructure projects they build for foreign governments.
- 🚗 The $668 million Nairobi Expressway, built and operated by China Road and Bridge Corporation, is an example of successful public-private partnership in Africa.
- 📊 Although global Chinese non-emergency lending has shifted towards special purpose vehicles, this trend is less pronounced in Africa.
- 💰 Chinese investment in Africa increased by 114% last year, primarily focusing on critical minerals essential for the global energy transition.
- ⛏️ In 2023, Chinese investments in Africa's mining sector, especially for minerals like copper, cobalt, and lithium, reached nearly $11 billion.
- 📉 Africa's trade deficit with China is widening, with a 46% increase last year, as the continent's exports to China fell by 7%.
- 🛑 Despite pledges to boost agricultural imports and manufacturing in Africa, China's economic relationship with the continent remains heavily focused on the extraction of raw materials.
Q & A
What has been China's primary focus in its economic cooperation program after the global health crisis?
-China's primary focus has been on Africa, as evidenced by analysis of lending, investment, and trade data, highlighting the continent's modernization through the Belt and Road Initiative.
How does China present its economic cooperation with Africa through the Belt and Road Initiative?
-Chinese leaders cite billions of dollars in new construction and record two-way trade as evidence of a win-win commitment to supporting Africa's modernization.
What is the complexity in China's relationship with Africa as revealed by the data?
-The relationship is heavily weighted towards the extraction of minerals, despite China's portrayal of a win-win partnership.
How did China's engagement in Africa change before and after the global health crisis?
-Before the crisis, China's engagement was driven by sovereign lending for infrastructure projects like ports, hydropower plants, and railways. After the crisis, sovereign lending has decreased significantly, with a pivot towards trade and investment.
What shift has occurred in Chinese policy regarding infrastructure projects in Africa?
-Chinese policymakers are encouraging companies to take equity stakes and operate the infrastructure they build, rather than relying solely on sovereign lending.
What is an example of a successful public-private partnership in Africa involving a Chinese company?
-The $668 million Nairobi Expressway, built and operated by the state-owned China Road and Bridge Corporation, is an example, as it has exceeded revenue and usage targets since opening in August 2022.
What has been the trend in Chinese non-emergency lending globally compared to Africa?
-Globally, 45% of Chinese non-emergency lending went to special purpose vehicles from 2018 to 2021, but in Africa, this figure was only 27%.
How has new Chinese investment in Africa changed recently, and what sectors are primarily targeted?
-New Chinese investment in Africa increased by 114% last year, heavily focused on minerals essential for the global energy transition and China's economic plans.
What has been the impact of China's focus on critical minerals on Africa's trade deficit with China?
-Africa's trade deficit with China has ballooned, with two-way trade reaching a record $282 billion last year, while the value of Africa's exports to China fell by 7%.
What criticisms have been raised about China's economic relationship with Africa, and how has China responded?
-Some analysts argue that China's relationship with Africa echoes colonial-era economic relations, dominated by the extraction of raw materials. China rejects these assertions, emphasizing Africa's capacity and wisdom to develop its external relations.
Outlines
📈 China's Economic Focus on Africa Amid Global Recovery
China's economic cooperation with Africa is recovering post-global health crisis, with a primary focus on lending, investment, and trade. Chinese leaders highlight the billions of dollars committed to new construction and record two-way trade as evidence of a win-win partnership under the Belt and Road Initiative (BRI). However, the relationship is nuanced, with a significant focus on mineral extraction. Before the crisis, China's engagement was driven by sovereign lending, financing large infrastructure projects across Africa, peaking in 2016. However, such lending has since declined, and Chinese policymakers are encouraging companies to take equity stakes in infrastructure projects, such as the $668 million Nairobi Expressway. This shift indicates a broader strategy involving more private investment in Africa.
🔄 Shifts in Chinese Investment Patterns in Africa
While China has traditionally focused on lending for infrastructure in Africa, recent trends show a pivot towards trade and investment, particularly in critical minerals essential for the global energy transition and China's economic revival. New Chinese investment in Africa saw a significant increase, but was largely concentrated in the mining sector. This shift also extends to infrastructure development, with significant investments in countries like the Democratic Republic of Congo for mineral extraction. Despite these investments, Africa's trade deficit with China is growing, and efforts to diversify imports from Africa have seen limited success. Chinese leaders have pledged to support Africa's manufacturing and agricultural sectors, but the relationship remains heavily one-sided, dominated by raw material imports. China's foreign ministry defends its approach, emphasizing Africa's autonomy in choosing its partners.
Mindmap
Keywords
💡Belt and Road Initiative (BRI)
💡Sovereign Lending
💡Public-Private Partnership (PPP)
💡Critical Minerals
💡Trade Deficit
💡Mineral Extraction
💡Modernization
💡Economic Cooperation
💡Infrastructure Investment
💡Global Energy Transition
Highlights
China's economic cooperation program is bouncing back after the global health crisis, with a primary focus on Africa.
Chinese leaders cite billions of dollars in new construction and record two-way trade as evidence of their commitment to supporting Africa's modernization through the Belt and Road Initiative.
Despite this commitment, the relationship is heavily weighted towards the extraction of minerals, indicating a more complex dynamic.
Before the health crisis, China's engagement in Africa was driven by sovereign lending for infrastructure projects like ports, hydropower plants, and railways.
Chinese sovereign lending to Africa peaked at $28.4 billion in 2016 but is now at its lowest level in two decades, with no rebound expected.
Chinese policymakers are pushing companies to take equity stakes and operate infrastructure they build for foreign governments, such as the $668 million Nairobi Expressway.
The Nairobi Expressway, built and operated by the China Road and Bridge Corporation, has exceeded revenue and usage targets since its opening in August 2022.
Globally, 45% of Chinese non-emergency lending from 2018 to 2021 was to special purpose vehicles, but in Africa, this figure was only 27%.
Chinese officials point to a pivot to trade and investment in Africa, arguing that Belt and Road Initiative trade boosts the continent's wealth and development.
New Chinese investment in Africa increased by 114% last year, heavily focused on minerals essential to the global energy transition and China's economy.
Investments in Africa hit nearly $11 billion in 2023, the highest level since tracking began in 2005, with $7.8 billion going into mining for minerals like copper, cobalt, and lithium.
The hunt for critical minerals is driving infrastructure construction, with Chinese companies pledging up to $7 billion in infrastructure investment in the Democratic Republic of Congo.
Africa's trade deficit with China has widened as two-way trade reached a record $282 billion last year, but Africa's exports to China fell by 7%.
Efforts to boost African exports of agricultural products and manufactured goods to China have faltered, leading to a more one-sided relationship.
Some analysts argue that the current economic relationship between China and Africa has echoes of colonial-era Europe's economic relations with the continent, a claim China rejects.
Transcripts
China's Flagship economic cooperation
program is bouncing back after the
global Health crisis with Africa as a
primary
focus that's what's been shown through
analysis of lending investment and trade
data chines leaders are citing the
billions of dollars for new construction
and record two-way trade as evidence of
their win-win commitment to supporting
the continent's modernization through
the Bel and Road
initiative the however reveals a more
complex relationship that is heavily
weighted towards the extraction of
minerals before the Health crisis
China's engagement in Africa was heavily
driven by Sovereign lending financing
ports Hydro power plants and Railways
across the
continent that peaked at 28.4 billion in
2016 according to the global China
initiative at Boston University but
Chinese Sovereign lending is now at its
lowest level in two decades and a
rebound is not
expected instead Chinese policy makers
have been pushing companies to get some
skin in the game by taking Equity stakes
and operating infrastructure they build
for foreign governments the
$668 million Nairobi Expressway is one
example it was built and is run by the
state-owned China Road and Bridge
Corporation through a public private
partnership since opening in August 2022
it has beaten revenue and usage targets
but few Chinese firms are following
cbc's example in
Africa globally some 45% of Chinese
non-emergency lending was to special
purpose vehicles from 2018 to 2021 the
most recent years for which figures from
us Research Center a data are available
but the figure was only 27%
for
Africa when asked about a decline in
lending for African infrastructure
Chinese officials point to a pivot to
trade and investment arguing belt and
Road initiative trade boosts the
continent's wealth and development
China's foreign Ministry said the
government encourages Chinese companies
to actively develop new modes of
cooperation such as ppps to bring more
private investment to
Africa new Chinese investment in Africa
increased 100 14% last year according to
the Griffith Asia Institute at
Australia's Griffith
University however it was heavily
focused on minerals essential to the
global energy transition and China's
plans to revive its flagging
economy data from Washington based Think
Tank the American Enterprise Institute
showed Investments hitting nearly 11
billion in
2023 that's the highest level since it
began tracking Chinese economic activity
in Africa in
2005 some $7.8 billion of that went into
mining for minerals like copper Cobalt
and
lithium the hunt for critical minerals
is also driving infrastructure
construction as well in January for
example Chinese companies pledged up to
$7 billion in infrastructure investment
under a revision of their copper and
Cobalt joint venture agreement with
Democratic Republic of
Congo critical minerals and oil have
also dominated trade but efforts to
boost other imports from Africa
including agricultural products and
manufactured goods have faltered that's
seen the continent's trade deficit with
China
balloon 2way trade reached a record $282
billion last year according to Chinese
Customs data but the value of Africa's
exports to China actually fell 7% mainly
due to a decline in oil prices the trade
deficit widened
46% last August Chinese president Xi
Jinping said Beijing would launch
initiatives to support Africa's
manufacturing and agricultural
modernization China has also pledged to
increase agricultural imports from
Africa but the result of all this
potentially is a more one-sided
relationship than China says it wants
that is one dominated by Imports of
Africa's raw
materials some analysts argue there are
echoes of colonial era Europe's economic
relations with the
continent China rejects such assertions
its foreign Ministry said Africa has the
right capacity and wisdom to develop its
own external relations and choose its
Partners China's practical support for
Africa's path of modernization in
accordance with its own characteristics
it wrote has been welcomed by an
increasing number of African countries
[Music]
関連動画をさらに表示
US & EU Announce Multi Billion Lobito Rail Corridor Project to Break China’s Grip on Africa
Intervenção Doutora Fernanda Ilhéu_CityUMacau_BRI: Cooperation for Development and Peace
Why South America Chose China (You Won't Believe What China Built Now)
Why China is Falling Out with the Global South
Agawan sa teritoryo ng Phl at China, malabong makaapekto sa kalakalan ng dalawang bansa
Why the West rejects a new wave of cheap Chinese goods
5.0 / 5 (0 votes)