China's back in Africa, but does the continent benefit? | REUTERS

Summary

China'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.