With the recent influx of Chinese bilateral relations with African states, do you believe both parties stand to equally gain?
The incoming of China as trade force in Africa had to offer a unique package of economic, political and security incentives to fast track its entry.
With recent developments, the strategy can relatively be termed successful. The Chinese venture has thus far made it a trade foe to western states, case in point: the China-US trade war.
It has also seen Africa map out a space in international trade as South Africa in 2012 was feted China’s third-biggest supplier of iron ore, kicking out India, that came after Vales (second-largest supplier) and Brazil (largest supplier).
Looking at data from both the World Bank and the African Development Bank, it is evident that the success of Chinese firms in Africa has been largely confined to the area of civil works.
Chinese firms are almost non-existent in the area of consulting services, and minimal in the area of equipment supply.
This means dam projects, hydropower, ports, rail and road constructions. While all this is appealing, the means to fund the projects through loans ha caused contention among African citizens who question the “win-win” situation.
A BBC report qualifies China as the largest single creditor nation, saying “almost 40 percent of Sub-Saharan African countries are in danger of slipping into major debt.” Out of this, “around 20 percent of African government external debt is owed to China.”
Concerns on this were raised in a China-Africa summit in 2018, birthing a middle ground. China committed to the following according to Quartz Africa:
To do more to promote African products in China; For example, using e-commerce to promote the products; create a China-Africa Economic and Trade expo; and encourage African countries to participate in the China International Import Expos in Shanghai. In this the poorest African countries will not have to pay exhibition stand fees to take part. These will provide opportunities for regular marketing activities for African products.
The Chinese government offered 50 trade facilitation programs for Africa—that’s close to one per country—and thereby increase cooperation on market regulation and customs procedures.
China further offered to create a new $5 billion-worth fund for financing imports from Africa.
This was followed by a commitment to continue to hold free trade negotiations with interested parties – which could expand the duty-free access that it already gives to 97% of products from the Least Developed Countries (LDCs) in Africa to other middle income African countries too.
If the new plans are anything to go by, generally, the main idea ought to be an equal promotion of African products in China just like Africa would associate good construction works with the Chinese. Perhaps Kenya with its tea, or Ethiopia with its wine.