africa
international china
A CAUTIOUS SHIFT China’s relations with Africa could be moving towards private sector-led development as the country looks to reduce risk — reputational and otherwise — in its investments Carien du Plessis
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hinese diplomats take exception to any labelling of Chinese loans to Africa as constituting a “debt trap”. After all, according to China’s ambassador for the Forum on China-Africa Co-operation (Focac), Zhou Yuxiao, his country’s own trajectory out of poverty was by way of loans. “Africa’s development is not as fast as we expected it to be because there is a lack of infrastructure, a lack of funds, and a lack of qualified personnel,” he said at a Business Day Dialogues webinar following the Focac summit in Dakar, Senegal, in late November. Still, China believes it can help by “building infrastructure for you to help you”, by lending money to help African governments afford this and by inviting African students to study technology in China. “Our intention is 100% good,” Zhou said. But when countries can’t repay their loans, it is China that loses out. Zambia, for example, owes China $6.6bn.
The next three years In his video address to the recent Forum on China-Africa Co-operation, President Xi Jinping laid out China’s commitment to Africa over the next three years. The programme sees a steep cut in investment pledges and a reduction in planned activities compared with the previous commitment in 2018. ● China is to provide 1-billion doses of vaccines to Africa. It will undertake 10 medical and health projects on the continent and send 1,500 health workers and experts. ● China will undertake 10 poverty reduction and agricultural projects for Africa, and send 500 agricultural experts. It will also encourage Chinese institutions and companies to build “demonstration villages” to showcase co-operation. ● It will provide “green lanes” for agricultural exports to China, and add more products to the list of zero-tariff goods. The
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December 16 - December 22, 2021
At this year’s Focac summit, China for the first time in two decades reduced its financing pledges — from $60bn each in 2015 and 2018 to a total of $40bn. Its actual lending already started falling in 2019, to $7bn from a high of $28bn three years before, according to research by the China-Africa research initiative at Johns Hopkins University. In part, that’s the result of the pandemic’s pinch on China’s economy: its GDP growth dropped from 6% in 2019 to 2.3% last year. But the cuts also reflect the country’s growing risk aversion, says Gert Grobler, former ambassador and senior research fellow at the Institute of African Studies at Zhejiang Normal University. The “debt trap” allegations that arise when countries struggle to repay loans have cast China in a bad light. An Afrobarometer survey in 19 countries, for example, has shown increasing concern among citizens that their governments can’t repay loans from China, or are paying too much for them. “There are also corruption issues on the continent in some of the countries where
aim is for $300bn in total imports from Africa. Beijing will provide $10bn in trade finance, and build a zone in China to promote trade and economic co-operation with Africa. It will undertake 10 connectivity projects and form an expert group on economic co-operation with the African Continental Free Trade Area’s secretariat. ● Chinese businesses will be encouraged to invest $10bn in Africa, and a platform will be established for private investment promotion. China will undertake 10 industrialisation and employment promotion projects, provide credit facilities of $10bn to African financial institutions and support African SME development. It will write off some debts due in 2021 and channel into Africa $10bn from its share of the International Monetary Fund’s new allocation of special drawing rights. ● China will undertake 10 digital economy projects and support the development of joint laboratories, partner institutes and innovation co-operation bases. A market-
China’s state-owned entities and companies are involved, such as recently in the Democratic Republic of Congo [DRC],” says Grobler, “while conflicts in Ethiopia, Sudan and the DRC, where China has a large vested interest, moved the Chinese authorities to take a more cautious stance with financial
ing campaign will showcase 100 African stores and 1,000 African products on ecommerce platforms. ● China will contribute to the Great Green Wall project in the Sahel with 10 green development, environmental protection and climate action programmes. It will build African centres of excellence on lowcarbon development and climate change adaptation. ● China will help build or upgrade 10 African schools and invite 10,000 African professionals to seminars and workshops. Chinese companies will be encouraged to create at least 800,000 jobs in Africa. ● Chinese tourists will be encouraged to travel to Africa and there will be film festivals and China-Africa women’s and youth forums. ● China will undertake 10 peace and security projects for Africa, continue to deliver military assistance to the AU and support regional security and antiterrorism efforts. x
