Will growing insecurity in Africa push back China?
Through Eric Olander
One of the original “China in Africa” memes that still endure today among many people on the continent is that “the Chinese want to colonize Africa” and want to “invade” the continent using a mixture of traps. debt, business dependency and immigration.
I fully understand where this anxiety comes from given the continent’s violent and painful past relationship with foreign powers. After all, not so long ago true colonialism was a reality, and even after liberation the great powers stuck around for decades to further plunder Africa’s resources.
So, yes, these concerns are reasonable. They are simply not accurate.
The biggest problem Africa faces today vis-à-vis China is not that the Chinese are going to take over, as there really is no evidence to suggest that this is actually happening. No. Instead, people should be much more concerned that the Chinese might get bored, finding the region too difficult to hire, and too expensive to do business.
The danger is that they decide that at the end of the day it’s not worth it and they pack their bags and leave.
There are strong indicators suggesting that this process is already underway:
- Loans: It’s been months, maybe even over a year, since we’ve seen a single announcement from a Chinese political bank regarding a new financing deal in Africa. In fact, I can’t even remember the last time I saw a deal involving the China Exim Bank or the China Development Bank in Africa. It just doesn’t happen anymore. Just this week, we got another indication that the well-documented decline in Chinese development finance is hitting Africa hard when Nigerian Transport Minister Rotimi Amaechi said he was waiving Chinese creditors to fund a pair of railroads. The Chinese money tap that has poured billions into Africa’s infrastructure development has been turned off. Maybe for good. And African finance ministries got the message. When they talk about debt financing today, they look at either bond markets or DFIs and don’t even mention China.
- Trade: The painful reality is that China doesn’t really need what Africa has to sell anymore, at least nowhere near as much as it did 10-15 years ago when it started to engage with the continent. 70% of what China buys from Africa is a mixture of oil, minerals and timber – raw materials it can now source from dozens if not hundreds of countries along its vast network Belt and Road. Of course, there are a few strategic resources, namely iron ore, coltan, and cobalt, which China still needs, but that’s pretty insignificant in the bigger picture. The point is, bilateral trade volumes may never again exceed the $ 200 billion level as they did in 2015. China simply has too many choices today to source the same products. it buys in Africa, often at a lower cost, given the continent’s inefficient infrastructure. Also, consider that last year’s $ 187 billion in bilateral trade was the lowest of any region in the world, and a tiny fraction of China’s $ 4.6 billion global trade balance in 2020.
Of course, China is not going to pull out completely. It would be foolish. Instead, Beijing appears to be reorienting its strategy in Africa to focus more on politics, health issues, technology, standard setting, and military engagement – all of which have a very strong footprint. light compared to the resource boom for infrastructure fueled by loans over the past decade.
Ultimately, this is sadly bad news for Africa as a growing number of countries struggle to contain the chaos and despair caused by the Covid-induced financial crisis. And if China loses interest in the continent, we must also wonder if other countries (US cough cough) will follow.
This article first appeared in The China Africa project.
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