We now have influential G-2

US President Barack Obama’s trip to China and other East Asian states last week appeared like a routine visit, but it emitted some signals of major significance to African countries and the global economy.

The visit had implications for Africa partly because both China and the US have a strong presence on the continent, and partly because the two are likely to determine the future direction of the global economy.

Not only do the two great powers have ambitions to control much of Africa, they also rely substantially on its natural resources, especially oil and minerals, for which the ordinary African people hardly receive any benefit.

Many of the US policies towards Africa in the past decade were partly aimed at preventing China from establishing influence on the continent.

Even the creation of the newest US military command, Africom, in 2007, was designed to ensure that the US had access to Africa’s resources and to counterbalance the growing Chinese influence on the continent.

Similarly, China’s diplomatic efforts in the past decade, including the hosting of Africa-China summits in Beijing, have been designed to project the Chinese presence on the continent while at the same time trying to erode American and Western influence.

Western decision makers have admitted that China’s presence on the continent has diluted their influence.

For example, at the European Development Days conference in Stockholm last month, the European Commissioner for Development and Humanitarian Aid, Karel De Gucht, claimed that Kenyan Prime Minister Raila Odinga’s remarks that he needed more assistance on infrastructure and less on governance, underlined the influence of China in Africa.

It is China’s rapid industrialisation, high levels of GDP growth, and its capacity to produce large quantities of cheap exports that have given it leverage in the West, in Africa and elsewhere in the world.

These activities have also compelled China to accumulate huge foreign exchange reserves, especially American dollars, which has ensured it supports a strong American dollar.

China has also diversified its sources of energy and minerals, from Africa through Australia to Latin America.

When the global financial crisis hit a year ago, China found itself lending funds to the US and other Western countries, in addition to injecting over $586 billion into its economy as a fiscal stimulus.

At present, China’s share of the global consumption of metals, such as aluminium, copper, zinc, lead and steel are between 40 and 50 per cent. Its share of global nickel consumption is about 60 per cent.

It is for this reason that China needs Africa’s resources.

However, China is not satisfied with merely competing with the US and the rest of the world. It intends to become the dominant player.

Desire for dominance

Nothing illustrates China’s desire for dominance more than its strategy to control the “rare earth” metals, which are increasingly being used in many modern technological devices, including optical fibre communications systems, super-conductors, special magnets, hybrid car components and electronic polishers.

Although China produces 95 percent of the world’s “rare earth” metals, it has been seeking to purchase the mines that produce these metals elsewhere.

President Obama’s visit last week may have cemented a geopolitical duopoly, or a G-2, which may complicate things for the G-8, but nobody knows where China is going to stop.

Makinda is Professor of security, terrorism and counter-terrorism studies and Murdoch University, Australia.