The Secrets of China’s Economic Statecraft in Africa
This article first appeared in The Diplomat on June 1, 2022.
The role of African governments in the economic development of their countries is crucial, which is why they tend to be centered by foreign governments in strategies focused on economic issues. This article will look the economic relationship between African and Chinese governments, contrast that with the style and approach of the United States, European Union, and United Kingdom, and share insights on the unique strengths of the Chinese approach to economic statecraft in Africa. Economic statecraft can be loosely defined as a construction of economic and financial strategies for securing national economic and financial interest in the international arena, as well as the execution of these strategies.
To point out the obvious, the specific articulation of China’s economic statecraft in specific African countries differs, often informed by the economic structure of the country, political economy dynamics and the features/capabilities of the state in the host country. Secondly, the West is not a monolith, nor is even united or coordinated within itself. However, Western nations have tended to approach Africa in a similar fashion, with a “values” and aid-led style of engagement that is very distinct from China’s approach.
I’ll start with providing an outline on how and why China became such a deep economic partner for African governments so quickly. First, China does not have the negative historical legacy with the continent that many Western nations have. The U.S. and European powers were responsible for the Transatlantic and East African slave trades; colonization; the manipulation of newly forming African states during the Cold War era, as exemplified by the 1961 assassination of Patrice Lumumba; the devastation of the Structural Adjustment Programs; and inequitable globalization.
Due to this historical stain, the West has a legitimacy problem in Africa that China largely doesn’t have. The West’s historical behavior in Africa has essentially delegitimized them as a “tried, true, and trusted” partner for Africa and created a serious trust deficit that China does not have at nearly the same scale. Interestingly, Western governments seem oblivious to the reality of these low levels of trust and given the view that they should be listened to when they lecture African governments on governance or corruption or anything else.
This leads to the next points, which are more directly linked to active statecraft by China. In general, China avoids lecturing or patronizing down-talk. It is aware of and responds to African government sensitivities to being treated with indignity. Beijing’s diplomatic framing and language lacks the paternalistic, self-righteous, and sometimes bigoted framing often found in communications from the U.S., U.K., and EU. Instead, China employs the language of solidarity, compromise, and unity. China also seems to be the first economic superpower that has indicated it is listening to the call from African governments and stakeholders on the “Trade not Aid” agenda put forward in the 2010s. It is only now, over a decade later, that U.S., EU, and U.K. seem to have caught up to and are aligning with this preference.
Because of China’s decision to listen, they have been better at centering and being responsive to African government priorities. As a result, from its inception the relationship has been focused on economic, financial, and commercial topics. It started with a focus on financing and addressing Africa’s infrastructure deficit, meeting a key African government priority that had fallen on deaf ears among other bilateral donors. The economic relationship now includes not only trade and investment ties, but deep Chinese private sector engagement that leverages African capabilities and advantages.
China brought a fresh intellectual style and pragmatic approach that was welcomed in African capitals. This style seems to also be due to factors such as what I call economic proximity – namely, the fact that China was in a similar economic position to many African nations not too long ago – that seems to translate to a familiarity with how the Africa works, a higher appetite for risk, a unique management style, and a nimbleness so often lacking in the Western approach. This all translates into advantages for China in Africa.
In Africa, there are seven levers that external powers need to grasp in their execution of economic strategies – what I call the 7Cs of economic statecraft.
The first is capacity, both that of African governments and of the financiers and implementing partners of the economic program or deal. The second are the conditions (explicit and implicit) linked to financing and related projects. The third is the context of the African country in terms of peace and security, its form of governance, the stage in the electoral cycle, and general economic conditions (GDP growth, poverty rates, etc.). Fourth is the extent of corruption, expressed in terms of fiscal accountability, leakage, and mismanagement. Fifth is the competition both between and within African governments, and between and within external partners and creditors/financiers. Sixth is coordination – again, between and within African governments and between and within external partners and creditors. And the seventh and final lever is commitment to economic deals and partnership terms by different African administrations, and the commitment of external partners to different African governments.
China has been effective, though not perfect, in managing these seven levers, given the traction that China’s economic partnership has received in African capitals. Add to this that the IMF is of the view that Chinese official assistance has had a positive effect on economic and social outcomes, but not on governance, albeit the negative effect here is negligible in size. This not to say the economic engagement has been perfect: key concerns with China’s style include fiscal opacity and contract secrecy, which raise questions about the over-accommodation of vested interests, hidden debts, and contingent liabilities. Further, environmental and social concerns remain pressing, as well as poor project feasibility rooted in issues such as inadequate due diligence and poor financial modelling. But the economic dividends of China’s presence in Africa are also clear. Chinese projects reduce economic inequality within and between regions in Africa, while infrastructure projects reduce travel time and energy costs, create jobs, open trade channels, and foster the transfer of technology and knowledge, for example.
More importantly for African governments, China’s lending has led to the more serious centering and consideration of Africa’s own economic priorities and vision. And these dynamics are playing out at the same time when the promise of liberal democracy and capitalism pushed by Western nations is decidedly tarnished. This model no longer seems to be delivering for the general welfare and prosperity of citizens of these countries, destroying the moral high ground on which Washington, London, and Brussels have stood in “instructing” Africa on how to develop. The U.S. has seen increases in economic inequality, a homelessness crisis, and serious issues with child poverty, for example. The U.K.’s child hunger crisis led to UNICEF feeding hungry British children in 2020, for the first time in its 70-year history. African capitals observed the 2021 U.S. Capitol attack, and most recently the roll back in women’s reproductive rights. And the U.S., EU and U.K. all have increasing challenges with racially motivated aggression and violence.
This doesn’t mean that China’s economic or governance model is perfect. It isn’t. But China’s intelligence has been that it has never told African governments that China has it all figured out, nor have they tried to force the hand of African leaders to follow their model, basing financial support on criteria such as governance style or adherence to certain “values.” There is deep irony in Western nations holding their countries up as examples of development when their model seems to be in such a state of disrepair.
Thus, a Western economic statecraft approach premised on telling Africa to be more like the West is impractical. Indeed, the American and European approach reflects a dated intellectual attitude and style that: 1) assumes their state of development is globally admired; 2) constitutes of bouquet of views that are often old-fashioned, out-of-touch, and seem to lack self-reflection; and 3) is premised on ensuring certain countries maintain or reclaim global power. The last point assumes that everyone thinks that the world is a better place if the Western powers remain “in charge.” But this view is not necessarily shared by everyone.
Perhaps there is room to consider that the rise of China has created a counterpoint of power that creates the space for the expression of long-standing disgruntlement with a world order that prioritizes certain countries and sidelines others. It is not that China is “controlling” African players; the situation is not that simple. The presence of a power that is independent from the West creates room to communicate disenfranchisement and express pushback against what many view as a biased global order. This dynamic was perhaps most recently seen in differences in how African countries voted on the United Nations resolution condemning Russia’s invasion of Ukraine.
In closing, China’s big soft power ability has been a completely different intellectual approach and style in how it has implemented its economic priorities in Africa. And though not perfect, it has been effective given the scale of economic partnership China has developed with African governments in just two decades.