- China’s economic emergence in Africa filled a vacuum created when the West rushed to invest in the new markets of post-cold war USSR and China.
- When US President Trump came to power, China was already a major global economic and geopolitical power having formed a formidable China/Russia/Iran economic and political alliance.
In the course of tracking oil markets over the past 20 years, I have watched China systematically evolve into the second largest global economy, and later into a contending geopolitical power.
It was around 2003 when global oil prices pierced the psychological ceiling of US$30 due to pressure from an overheated Chinese manufacturing sector, which drove the longest ever oil price boom that lasted up to 2014, having peaked at US$140 in 2008.
When the industrial boom brought China to Africa seeking energy and mineral resources, it found a cash-strapped continent unable to fund basic infrastructure development. An opportunity that China embraced by negotiating deals to fund infrastructure development with natural resources, a funding model that China perfected.
This is how infrastructure development and funding, became the hallmark of Chinese presence in Africa. This is when the West (-US, Europe) was preoccupied with the global war against terror to the extent of being blind to Chinese global expansion.
This was also the time when the West through the World Trade Organisation was advocating globalisation and liberalisation of trade, which further helped China’s economic expansion, mostly through unfiltered access to western technologies, education and even capital.
China’s economic emergence in Africa filled a vacuum created when the West rushed to invest in the new markets of post-cold war USSR and China. Africa was left to the mercy of Bretton Woods institutions and their difficult funding conditionalities.
When US President Trump came to power, China was already a major global economic and geopolitical power having formed a formidable China/Russia/Iran economic and political alliance. When President Biden took office, he appeared more focused on Chinese global military ambitions, plus democracy and human rights- very opaque nouns to the Chinese leadership.
China has also been upping its global game to high-level diplomatic engagements, especially with those nations viewed to have problems with the West. There is every evidence of an emerging “cold war” between the West and China, and Africa is likely to be an unwilling pawn.
In Africa, the West is planning a late return after nearly 30 years of virtual absence in key areas of infrastructure development, control of strategic technology minerals, and an export market dominated by China. Recently military cooperation has been added to the Chinese shopping list in developing countries, further compounding the West’s dilemma.
Africa has to navigate through the China vs West divide without having to painfully take sides in a cold war that is in the making. Africa is heavily indebted to China, and still has easy access to further Chinese development credit. Africa is also aware that the “debt capture” can be used by China to coerce countries into geopolitical acquiescence.
We saw this happen last year when China restricted imports of coal from Australia over the mundane subject of the origins of Covid virus.
Africa can make best endeavours to diversify sources of infrastructure funds, including the use of public, private partnership (PPP) models popular with the West. Directionally, Africa should delink project funding from Engineering, Procurement and Construction (EPC) contracts to permit wider project participation. Further, Africa should embark on developing its own construction expertise and capacity to maximise local content and reduce dependence on foreign project contractors.
To correct existing huge trade imbalances, China should proactively make it easy to export African produce to its shores. Above all, African governments should protect local enterprises from unfair competition from Chinese imports.
There persists a major perceptions gap between China and Africa. First, China is conspicuously absent in humanitarian areas creating a perception of uncaring meanness. We need to see Chinese aid organisations working alongside JICA, USAID, DFID, GIZ and others.
Secondly, China negotiates deals to significantly maximise gains for itself at the expense of weaker developing countries. These are unfortunate perceptions that China will need to correct to win genuine Africa friendship.
My observations are that China’s Belt and Road Initiative has already reached the Middle East and is now looking for bridges across the Red Sea into Africa through the Horn of Africa by targeting existing links with Eritrea and Djibouti. Troubled Ethiopia could also be another bridge if the ongoing fissures with the West are not mended.
Going forward, Africa will need to develop its own economic and political independence and resilience to allow the continent to walk geopolitical corridors proudly and freely.