ChinAfrica: Three Questions to Philippe Le Corre

Over 50 African leaders will gather in Beijing starting Monday 3 September for the Forum on China-Africa Cooperation (FOCAC), in a context where China’s debt-laden strategy in the continent is highly criticized. Indeed, African countries have become increasingly instrumental to China’s international strategy in recent years, and during the last FOCAC summit in 2015, Xi Jinping announced $60bn in assistance and loans for Africa. Philippe Le Corre, Senior Fellow at the Harvard Kennedy School and Non-resident Senior Fellow at the Carnegie Endowment for International Peace, shares his analysis.

What is the purpose of the FOCAC? How important is it in China's international strategy?

The Forum on China-Africa Cooperation (FOCAC) taking place this week in Beijing is the sixth one in a row. The FOCAC is convened every three years, and has almost become a ritual, with over 50 African Heads of State usually travelling to the Chinese capital (although it took place in Johannesburg in 2015). Over the years, the Chinese leadership has paid increasing attention to Africa. Many African projects have been included in the Belt and Road Initiative (BRI), which is paramount to President Xi Jinping’s grand strategy. At a time when China’s relationships with the United States and other Western countries are tense, it is worth noting that Xi made a point of travelling to South Africa last month for the 2018 BRICS summit.
 
The Sino-African relationship has primarily been economic in the past 20 years, with China originally looking for natural resources and raw materials. China has been Africa’s main trading partner for nine years now. It built massive infrastructures and supported countries’ oil and mining sectors in exchange for advantageous trade deals. One can expect African industrialization to be discussed in Beijing, with Chinese companies investing in manufacturing and vital infrastructures. No doubt China will renew its official pledge of both financial and technical assistance.
 
The FOCAC also clearly reveals a political ambition, which author Howard French described in his book China’s Second Continent: How a Million Migrants Are Building a New Empire in Africa published in 2014. Many African leaders found benefits in cozying up to China, which is somewhat filling the gap left by Western countries. At the same time, China is winning allies on the international stage. Only one tiny African nation has no diplomatic relations with Beijing. Despite immense pressures to switch sides, eSwatini (formerly Swaziland) still recognizes Taiwan. From Beijing’s viewpoint, making friends, no matter where, has become of paramount importance, and Africa is one of its key-targets.

What is the purpose of Chinese investments in Africa? Do they represent an opportunity or a threat for African countries?

Chinese companies started investing in Africa 20 years ago, when they were searching for raw materials and natural resources. The continent has now become part of Xi Jinping’s trade diplomacy. In 2015, Beijing committed $60 billion of funds, including concessional aid loans, in sectors such as agriculture, industry, services, health, and infrastructure. Although it is difficult to assess the extent to which China fulfilled its commitment, this amount was three times that of the previous FOCAC in 2012. It remains to be seen how much of the promised funding has been disbursed.
 
Chinese companies are also diversifying their business pursuits in Africa, and are increasingly present in manufacturing, utilities and telecommunications. For example, China is promoting its concept of special economic zones (SEZ) across Africa to attract investors, which was well-received by many governments, such as Ethiopia (Hawassa Industrial Park) and Kenya (Uasin Gishu). Whether Chinese SEZ can be exported on the long-term is yet another issue. Meanwhile, Ethiopia now has a 750km long electric railway from Addis Ababa to Djibouti, where China also operates its first military base overseas with over 5,000 troops. The railway has been entirely financed and built by Chinese companies. Another flagship project (also included in the BRI) is Kenya’s 290 mile railway connecting the capital, Nairobi, to the port city of Mombasa. These Chinese infrastructures are an excellent way for China to showcase the BRI and demonstrate its own power around the world, including in the Middle East where Beijing has growing interests. Africa is now one key market for Chinese goods and finance: banks and RMB products are making their way throughout the continent.

Is the Chinese strategy an alternative to Western development aid in Africa?

China’s presence in Africa has been criticized in the West for the country’s controversial business practices, but some African leaders may have different views. A former President of Senegal, Abdoulaye Wade, once said that China had a much greater sense of the personal urgency of development in Africa than many Western nations. According to the AidData Project, China developed the financing of more than 3,000 critical infrastructure projects. It extended more than $86 billion in commercial loans to African governments and state-owned entities between 2000 and 2014, thus elevating Beijing to rank of the continent’s largest creditor. In addition, Chinese investment contributes to the creation of jobs, the development of skills, and the transfer of new technologies, which are all practices often associated to Western business norms.
 
Meanwhile, the European Union is trying to remain a key player. During the EU-Africa Summit in Abidjan in 2017, the EU pledged to mobilize more than $54 billion in “sustainable” investment for Africa by 2020. Both France and the UK, former colonial powers, recently pledged interest in Africa’s development. The US government is also providing help to the continent, through USAID, and a program called Power Africa based on public and private partnerships (80 projects valued at $14.5 billion) has been launched. As for US-Africa bilateral trade, it has fallen from $100 billion in 2008 to $39 billion in 2017. Africa is not a top priority for the Trump Administration, and USAID has gone through major administrative changes. Even the BUILD Act legislation, introduced by the US Congress last Spring to encourage investment in Africa, may not be sufficient to fill this gap, which is rapidly being filled by China.