Sino-African relationship: win-win or debt-trap diplomacy?
China has had unparalleled involvement and success in Africa across trade, investment, and infrastructure financing in the past decade. As Africa’s biggest trade partner and the largest supplier of overseas construction projects, the Sino-African relationship is transforming the African economy and the Chinese geopolitical landscape.
Africa and China, both being the victims of invasions, suppression, and tyranny at the hands of colonialists, have been sympathetic towards and supportive of each other.
The birth of the People’s Republic of China in 1949 opened up a new chapter in their relationship. Initially, as most countries favoured the Republic of China, CPC began lobbying Africa extensively. Since the mid-1950s, a vast number of newly independent African nations established diplomatic relations with China ushering them into a new age of trade. By 1965, up to 70% of UN’s members were from the developing world, which supported China’s cause.
China strategically ramped up its engagement in African countries over the years. They benevolently aided projects like The Tazara Railway, in 1975, in Tanzania and Zambia as proof of their friendship. By 1999, China’s total trade with Kenya was about 4 times that of 1980 and, overtaking India in 2015, reached a colossal $5.3billion in 2018. Chinese goods accounted for over a fifth of all goods coming to Kenya in 2017. By the end of 2002, China had signed cultural exchange agreements with over 40 African countries cementing their relationship.
Although China was making major advancements in the African urban development sphere, it is under the Belt and Road Initiative (BRI) that massive multitudinous infrastructure and developmental projects gained momentum. Projects like $3.2 billion railway in Kenya, $475million light-rail in Ethiopia, and $526million dam in Guinea are lucrative prospects for developing countries with infrastructure deficiencies and a shortage of resources.
China propelled itself as Africa’s biggest economic partner as their trade value skyrocketed to $185 billion in 2018, up by more than 100% in 2009. Africa’s exports to China have also seen a significant rise, up from $60.21billion in 2017 to $80.34billion in 2018. This augmentation has backfired for America as their exports to Africa declined to a mere $25billion in 2018.
As China surpassed the USA in 2017 as the world's largest net importer of crude oil, Africa has started to play an even vital role. In April 2019, China increased its imports of Sudanese oil barrels from 10,000 to 30,000 per day.
China’s aggressive lending practices have been met with scepticism and are deemed predatory, especially from the West. Where China is Africa’s biggest trading partner, it is also the single largest creditor nation owning up to 20% of Africa’s $417bn external debt (2018). However, China rightly pointed out that a further 35% of African debt is held by multilateral institutions such as the World Bank with another 32% owed to private lenders.
From the start of the millennia, China has provided more than $150 billion in loans. In 2015, CARI at John Hopkins University identified 17 countries with high-risk debt exposure to China. Countries most at risk included Zambia and Djibouti, with 73.5% and 77% of its debt owed to China respectively. In Djibouti, public external debt rose by 41% to 85 percent of GDP between 2014 and 2016.
As of 2018, 24 African countries had surpassed the IMF’s 55 percent debt-to-GDP threshold.
Despite the looming debt, according to a 2019 John Hopkins University research paper, African’s don’t view themselves as victims of Chinese exploitation. Alexander Nuetah, assistant professor at the University of Liberia, said,” …China has invested in areas neglected by the West for decades. Some of these investments have given Africa a new face.”
Chinese soft loans, their non-interference policy, and the ability to satisfy the rising demands of goods and services have boosted the Chinese image in Africa. Salde Ngalande, director of the Belt and Road Joint Research Center of the University of Zambia, remarked,” Zambia’s vision for turning into a prosperous middle-income country by 2030 is close to being achieved because of the direct benefits of the BRI infrastructure projects…”. According to the Brookings Institution (2017),” China is seen as more flexible and less bureaucratic.”
Chinese influence is evident by the fact that more African countries attended FOCAC than the similarly-timed UN General Assembly meeting in 2018.
That is because no country has been able to match the breadth and depth of China’s engagement in Africa. With over an estimated 10,000 Chinese firms in Africa, nearly 300,000 jobs have been created. According to the Mckinsey report, more than 80% of employees in these firms are Africans. New competition in the African market has led to the introduction of a new good or service by at least half of these firms, whereas at least one-third of them have introduced a new technology.
Several empirical studies in the grants and relief literature support the conclusion that political interests drive financial aid decisions. It is therefore not unreasonable to expect that, like many Western governments, China uses foreign aid to advance their foreign policy interests.
The fruitful economic relationship has paved the way for a strong political alliance between Africa and China. China has started to play a more dominating role in the UN for the past few years; however, its assertiveness is not unprecedented. In the 1990s, China vetoed the extension of a handful of UN peacekeeping operations entangled with the issue of Taiwan, diminished the resolution during the 1993-94 North Korea nuclear crisis, and restrained support for UN authorization of the first gulf war until certain demands were met.
In 2019, 37 countries came to China’s support in defence of the policies in Xinjiang. The opposition was dominated by Western countries, whereas of the 37, 18 countries were African. In 2020, 53 countries voted in favour of China to successfully pass the controversial Hong Kong law. Of those 53 votes, almost half of them were African and 80% of the supporters had signed onto China’s BRI project.
China also axed $78 million in debt owed by the Cameroonian government whose nominated candidate incidentally withdrew his bid from the election of the ninth director-general of the Food and Agriculture Organization (FAO) in 2019. Chinese nationals now head 4 of the 15 strategic UN institutions.
With the continued and likely growing investment, it is safe to say, China’s interests in Africa’s economic success are long term. The multifaceted infrastructure projects, in the fastest urbanizing place on the planet, will bode well for the continent.
However, for this relationship to be completely solid, several concerns like lack of transparency, China’s image of allegedly exporting its authoritarian model, the impending debt crisis in the developing world, and the environmental hazards must be addressed.