Africa is at the center of China’s flagship economic cooperation initiative, which is making a strong comeback after a period of relative inactivity during the worldwide epidemic. This revival, marked by increased investment in the significant natural resources of the continent, is crucial to both China’s economic aspirations and the global energy shift. But even with this increased financial commitment, the relationship nevertheless follows mostly extractive patterns that replicate previous economic ties instead of developing into the “win-win” partnership that was promised.
Returning Chinese activity in Africa has been observed, according to recent Reuters studies that looked at trade, investment, and financing data. This is a component of President Xi Jinping’s larger Belt and Road Initiative (BRI), an ambitious international infrastructure plan. But the truth on ground shows a continuing focus on extracting valuable minerals from Africa, which has led to some skepticism about the mutual benefits of these engagements.
In the past year, Chinese investment in Africa has surged by 114%, primarily targeting minerals like cobalt and lithium, which are crucial for renewable energy technologies. This data, provided by the Griffith Asia Institute at Australia’s Griffith University, highlights China’s strategic push to secure resources vital for its technological and economic future. However, efforts to broaden the relationship by increasing African exports of agricultural products and manufactured goods to China have not been as successful, resulting in a widening trade deficit with China.
It is also clear that Chinese financial involvement has changed. The prior model, which placed a great deal of reliance on sovereign lending for major infrastructure projects, has been reduced. This cut is indicative of a new cautiousness in Chinese foreign policy, possibly brought about by past initiatives that failed financially and left recipient nations unable to make debt repayments.
China Road and Bridge Corporation (CRBC), a state-owned company, constructed and manages the Nairobi Expressway in Kenya as one of the more effective examples of a public-private partnership (PPP) under the new financial involvement model. The highway has done well since it opened in August 2022, exceeding usage and revenue goals. The PPP model is still not widely used throughout the continent, despite its success. AidData data at the US university William & Mary shows that only a small fraction of Chinese lending in Africa is directed towards Special Purpose Vehicles (SPVs), the typical entities used for PPPs.
The difficulties in changing the economic relationship between China and Africa are seen in the sluggish adoption of PPPs and the persistent focus on raw material extraction. African markets are still seen by Chinese companies as high-risk, and many African nations lack the legislative structures required to facilitate PPPs.
Furthermore, there is still a big problem with the imbalance of trade between China and Africa. Though substantial advancement has been slow, Chinese officials have pledged to promote African industries like manufacturing and agriculture, which are essential for economic diversification and job development. For example, strict health and hygiene laws have prevented Kenya from accessing other markets, even though it has just been able to sell avocados and fish to China.
This long-lasting economic imbalance is highlighted by the constant flow of Chinese manufactured goods into African markets and the relatively little export of processed commodities from Africa to China. Some commentators have compared this imbalance to the economic patterns of the colonial era, when resource extraction took precedence over the promotion of sustainable economic growth.
