Analysing China ties with Africa (GS Paper 2, International Relation)
Why in news?
- From January 13-18, the Chinese Minister of Foreign Affairs, Wang Yi, visited four African countries, Egypt, Tunisia, Togo and the Ivory Coast.
- This was Wang Yi’s 11th annual trip to Africa to enhance economic and security cooperation with the continent.
Agenda:
- The major agenda was to implement the outcomes of the China-Africa Leaders Dialogue held in August 2023 in Johannesburg, South Africa.
- It included the execution of three initiatives, including support for Africa’s industrialisation, agricultural modernisation, and cooperation on talent development.
- The visit sets a precedent for the ninth Forum on China-Africa Cooperation 2024 (FOCAC).
- In Egypt, which shares the Rafah border with Gaza, China has communicated its intention to be a global actor, mediating peace in Gaza.
- He met with the leaders of Egypt, Tunisia and the Secretary-General of the League of Arab States, calling for an “immediate and comprehensive ceasefire” in Gaza.
Why is Africa China’s first stop for the past 34 years?
- Sino-African relations go back to the 1950s when China supported several African liberation movements during the Cold War era. In the 70s, African countries’ support was paramount in China acquiring its seat in the UN Security Council.
- Earlier, their relationship focused on ideological support; it was only in 1999 that China encouraged its companies to invest in Africa as part of the “Go Out Policy.”
- In 2000, the FOCAC held its first dialogue, aiming to consolidate China-Africa cooperation under diplomacy, investment and trade. The dialogue aptly outlined the steady growth from trade, to aid, to “mutual security assistance,” under Xi Jinping.
- In 2013, the relationship amplified with China launching its Belt and Road Initiative (BRI), building inroads with 52 African countries as signatories. Currently, China is Africa’s largest trading partner, with over one-fourth of its raw material exported to China.
- The Chinese Loans to Africa database highlights that between 2000 and 2022, loans worth $170.08 billion were granted to 49 African countries. The nature of Chinese presence in Africa has grown from being a mere investor to a strategic actor with the People’s Liberation Army Navy stationing its first international base in Djibouti.
What are China’s objectives in Africa?
Access to key resources:
- Africa supplies 90% of the world’s cobalt and platinum, and 75% of coltan, essential for electronics. China has the largest refineries in Africa for rare earths and minerals that are vital to its emerging tech industry.
- The dominance in the mining sector has made the U.S. dependable on China for key minerals from Africa.
The African alliance and its geopolitical aspirations:
- In the UN General Assembly, Africa is the largest bloc and has the power to swing resolutions on contentious issues like the South China Sea. Africa has been vocal in supporting China in the international arena including its “One China” policy for Taiwan and Hong Kong.
Strengthening the Yuan (RMB):
- China is encouraging Africa to trade in Chinese currency. The RMB offers cross-border yuan-based “panda bonds,” by which foreign governments can issue funds from China at lower interest rates.
- Additionally, China’s debt restructuring of Zambia’s $4.1 billion loan has incentivised borrowers towards RMB. With lower Chinese interest rates and the depreciation of African local currency, the RMB stands as an alternative to the dollar.
Commercial opportunities:
- Africa imports largely from China for finished goods. The African markets for Chinese exports are beneficial for the Chinese economy. Africa’s young population and cheap labour force support Chinese exports globally and in Africa.
What does the visit mean for Africa?
- Africa receives investment, trade and development aid from China in return for natural resources. China has also become a significant source of foreign direct investment.
- Chinese-built infrastructure and industrial parks have provided employment opportunities and has made the idea of “Made in Africa” a reality. Additionally, Chinese support in advancing hybrid crops helped Africa further its agricultural sector. In Africa, cooperation with China is perceived with a high degree of mutual trust and as a ‘win-win partnership’.
- Besides, the China-Africa partnership featuring non-intervention has gained momentum across the continent. Chinese disregard for imposing political conditionality on development aid, unlike the West, has given opportunities to African countries to secure their interests.
Concerns:
- However, the West has voiced fears that Chinese investments are predatory, hinting at debt traps. Although some countries including Kenya and Zambia have poorly managed their debt, other African countries have manageable debt arrangements with China.
- However, the Chinese debt trap narrative cannot be outrightly dismissed. Besides, Chinese ‘non-interference’ rhetoric has given several authoritarian regimes in Africa a space to stay in power.
