The future of Africa-China economic cooperation: Perception versus reality
This article first appeared on the SOAS China Institute Blog on January 18, 2022.
The narrative on Africa-China relations in global media has been persistently one-dimensional, often failing to centre Africa’s views or even China’s views. The global ‘story’ of Africa-China relations is driven by the global north and often reads as though it is rooted in Sinophobia and is stubborn in its archaic view of and inaccurate assumptions about Africa’s abilities. The result is that unless one is an Africa-China specialist or committed to truly understanding the dynamics between the two players, one can get pulled into the hysteria and deep misinformation on Africa-China economic cooperation. I will unpack three stubborn (mis)perceptions of Africa-China relations and present the reality as well as the future of economic cooperation in each area outlined.
Perception 1: Africa is passive and acted on by China
The first perception is that Africa is passive and acted on by China. This part of the narrative describes China as neo-colonial, focused on resource extraction, pushing Africa to trade dependency, and deliberately putting Africa into a debt-trap (which has been disproven by multiple institutions and yet this fable persists). The reality is far more complex and the specifics of the agency of African governments differ on a case-by-case basis. As Van Staden, Alden and Wu point out, African stakeholders have agency and that agency can be both constructive and destructive. The South African Institute of International Affairs, points out that despite a power imbalance, African governments do sometimes get what they want from China; the real situation is quite different from simple exploitation. African agency comes from numerous sources and levels of power including government, private sector, civil society, and the amorphous entity called ‘public opinion’. And because African agency comes from a myriad of sources, it is not coordinated nor in co-agreement, and tends to be reticulated through existing power structures. Further, while the power imbalance between Africa and China is real, this is not unique to China; Mutangadura, de Carvalho and Gruzdet aptly describe Africa as ‘a resilient but marginal player’ in the international system.
The perception that Africa is passive is a myth and is dangerous because the narrative of a ‘passive Africa’ infantilizes African governments in particular and absolves them from being held accountable for decisions made on behalf of their electorate. In terms of the future of Africa-China cooperation, on the African side this will be informed by deeper attempts to coordinate agency between and within African governments, and a more pronounced presence and impact of the agency by civil society and the African private sector.
Perception 2: Africa must choose between China and the USA
The second (mis) perception is that Africa must ‘choose’ in the great power rivalry between the USA and China. The global north seems to be of the view that the world has entered a new cold war; that is how tensions between the USA and China are increasingly being described–and that Africa must choose. Again, here the reality, even within that narrative, is more complex. For example, there has been no ‘great de-coupling’ of any global north country and China. Fortune magazine states that for all the talk of deepening political tensions between the United States and China, there is one area where relations appear to be ‘business-as-usual’, trade. Oxford Economics points out that China’s share of global exports has risen dramatically and has found no evidence in US manufacturers that they are prepared to retreat from China, or to open factories elsewhere to replace Chinese facilities. And while there are specific cases where efforts to decouple are more pronounced such as technology, even there the push to decouple hasn’t excluded all U.S. tech companies from operating in China.
Given that the USA itself is still choosing China despite all the rhetoric, why is there an assumption that Africa’s hand will be forced to choose? Africa remembers the terrible costs it bore in terms of lost lives and economic under-development when it was forced to choose in the Cold War. So, to quote the eminent African ICT leader, Bitange Ndemo, ‘it would be completely unfair to expect Africa to choose’ in this new era of great power competition. Not only that, it is not pragmatic for Africa. I have argued before, the capabilities of the USA and China in Africa are different and frankly, often complementary. Africa values them both, so there is no incentive for Africa to choose either China or the USA. Further, Africa operates in a multilateral world and continues to welcome countries from all over the world to engage with the continent. This is a position repeatedly made by African governments, perhaps the global north should listen. The future here will see a deepening engagement between Africa and China, particularly in investment and private sector development. The impetus for multilateralism in Africa will only continue, particularly with the entry and increased interest of other players from the Global South such as India, Brazil, Turkey, and Arab States.
The First China-Africa Economic and Trade Expo (Changsha, Hunan, China, June 2019). – Photo credit: Huangdan2060 (Wikimedia Commons)
Perception 3: China is pulling away from Africa
The final perception I will discuss is that China is pulling away from Africa. The China-Africa Research Initiative (CARI) at Johns Hopkins University found that Chinese loans to African public sector borrowers fell again in 2019 to $7.7 billion, down 30% from the year before, and that is a significant decrease when measured against the $28 billion that China lent in 2016. Thus, the new narrative is that China is steadily pulling back its lending to Africa because it is: 1) Too acrimonious, risky and costly; 2) Concerns about African public debt sustainability; or 3) Too many civil conflicts and coups. This spin on the relationship is not true. The reality is that China is pulling back massive lending in development finance globally, in other parts of Asia and Latin America, not just Africa. This shift by China seems to be informed by a number of issues such as new structural policy changes where China is consolidating, absorbing and digesting the investments made in the past; a commitment to focus more resources domestically; and an interest to pursue more lending through multilateral bodies rather than bilaterally.
More importantly, a pullback in lending to African governments should not be conflated with a pullback from investment in African economies and the private sector. As I have said before, there is a maturing of state-to-state relations between Africa and China, and the time has come for this mode of engagement to be reviewed and updated. Emerging issues between China and African governments ought to be addressed and there is a need for the volumes of money loaned to Africa by China over two decades to settle and for Africa to pay what it owes China. Thus, what seems to be happening is that China seeks to re-balance an over-exposure to African governments and improve the quality of that engagement. The Forum on China-Africa Cooperation Dakar Action Plan (2022-2024) outlines China’s view on what it will prioritise in its engagement with the continent. There is a tactical pullback from clumpy, capital-intensive and heavy political economy, infrastructure-led economic engagement to more nimble economic engagement focused on a much wider spread of issues including agriculture, industrial development, trade and investment. Interestingly as China is pulling back from heavy infrastructure-led engagement (and with good reason) the EU and the USA are marching in with plans for heavy global infrastructure spends in the US-led B3W and the EU’s € 300bn Global Gateway global infrastructure plans.
Because China’s infrastructure spend has dominated its engagement with Africa, cooperation and partnerships in investment and private sector development have received less attention. However, this form of economic cooperation is significant and growing. The UNCTAD World Investment Report 2021 indicates that China is the fourth largest investor in Africa by FDI stock (above the USA). The EY Africa Attractiveness Report 2021 found that between 2016 and 2020, China was the largest investor in Africa by jobs and capital, and 3rd in terms of number of projects. The China-Africa Business Council (CABC) states that in 2019, Chinese private companies accounted for around 70% of Chinese companies’ investments in Africa. The survey by CABC found that the proportion of reinvestment in Africa was around 30 percent. Thus, the future of economic cooperation between Africa and China will be a deepening of this pivot to less state-led economic engagement and more private sector-led engagement.
This commentary is part of a series following on from the China in the World conference at SOAS.