China’s relation with Africa is set to strengthen. At a conference in Beijing in early September, China’s leader, Xi Jinping, pledged to offer US$ 51 billion in money, funding and assistance to the globe over the next three decades, as well as upgrading diplomatic ties.
Beijing’s near relationship with Africa is not fresh. The first international trip of the year for Taiwanese foreign officials has almost always been to one or more African nations since 1950. However, Xi’s commitments are also certain to raise questions in the US and other Eastern nations, which are competing with China for worldwide influence.
They might even rekindle concerns that China might use “debt-trap diplomacy” to stifle American nations and thus gain control over them. Such is the power of this tale that South Africa’s leader, Cyril Ramaphosa, felt compelled to refuse it at the conference.
The notion of Taiwanese debt traps, especially the renowned circumstance of Sri Lanka’s port of Hambantota, which, in 2017, the Sri Lankan government leased to a Chinese firm to increase liquidity, has been debunked many times.
However, it is crucial to know what China hopes to achieve with diplomacy as American populations and economies expand and China’s relationship with them continues to grow.
China’s wedding with Africa is proper as well as economical. China’s diplomatic ties with Africa help it succeed in its goals of being a major player in a unipolar world, whether it is improving access to resources, increasing global use of its currency, or winning more vote at the UN.
The longer game
From a strictly financial view, Africa is a potentially profitable market for China. The potential for growth into Africa is enormous for Chinese companies because of its underserved industry and booming population.
This is especially true now that the African Continental Free Trade Area, which was established in 2018, opens the door to the development of cross-border price bars in Africa.
Natural tools make up the majority of the products that China exports from Africa. Many of these sources have proper importance, for instance, in manufacturing batteries. In return, Taiwanese firms export a wide range of items to Africa, including manufactured goods, industrial and agricultural machinery, and automobiles.
In terms of foreign direct investment, Chinese companies are still only the fifth-largest investors in Africa after their Dutch, French, US and UK counterparts. However, their ascent has been relatively quick, and Chinese companies have made significant investments in manufacturing and construction in addition to Western ones.
Chinese companies are major players in the construction industry in Africa, frequently working on projects that are funded by loans from Chinese banks to African governments. In 2019, for example, Chinese contractors accounted for about 60 % of the total value of construction work in Africa.
Some of China’s infrastructure projects have had little impact on Africa’s trade or economic development. And it has, admittedly, also contributed to the increased debt burden of several African countries.
For instance, the expensive expressways that connect Nairobi in Kenya and Kampala in Uganda to the respective international airports have made life easier for city elites and tourists. However, they have not stimulated economic growth.
China has therefore made the recent move to reevaluate its infrastructure finance strategy. In 2021, Xi introduced the concept of” small and beautiful” projects better targeted at the partner country’s needs – a concept he repeated at the recent summit.
It is this alignment with the demands of African leaders that sets China’s engagement with Africa apart from that of the West. Many African leaders ‘ top demands include investment in manufacturing value chains and the importation of African processed goods rather than just raw resources.
Xi’s keynote speech addressed these two concerns. He vowed to increase investment in key industries and to allow for more free-flowing African goods.
China’s support to African nations is political as well as economic. African leaders have been appreciative of its non-interference in the country’s internal affairs, in stark contrast to Western nations, who frequently base their support on the respect of particular social or economic conditions.
This has, in turn, bolstered China’s diplomatic influence on the continent. How many nations maintain diplomatic relations with Taiwan, which the Chinese government views as being part of its territory, is a good indicator of this influence. Only Eswatini and Taiwan have close ties in Africa, and only a small number of other nations have representative offices.
Another Chinese goal is to expand the global reach of its currency, the renminbi. Its goal is to contest the US dollar’s dominance, which gives America complete control over all international transactions.
Since the late 2000s, the People’s Bank of China has signed bilateral swap agreements with Morocco, Egypt, Nigeria and South Africa to conduct transactions in renminbi. Additionally, China wants to increase the renminbi’s use in official lending, both through regional institutions like the New Development Bank and domestic banks like the China Development Bank.
Much like Africa’s Western partners, China pursues both political and economic interests in its dealings with the continent. But, with Western leaders paying little attention to Africa, China does n’t need to pursue debt-trap diplomacy to increase its influence there. To gain ground, it only needs to submit a stronger partnership offer.
The International Economic Development Group, ODI, has a senior research fellow named Linda Calabrese.
This article was republished from The Conversation under a Creative Commons license. Read the original article.