Amid its declining popularity in the developed world, China’s strategic interests in Africa have become elevated. The Asian powerhouse defends aspects of the liberal order that benefit its economy and explicitly calls for a “new type of international relations”. China’s foreign policy aims to align its global influence with its economic power. By supporting African countries economically and financially, Asia’s largest economy is building a client base that will enable it to reshape the global order to better accommodate and promote its interests.
African policymakers must remain aware that trade and investment are tied to China’s own circumstances. Lazy ideas that China-Africa trade, investment and/or loans are somehow ring-fenced from fluctuations in China’s own circumstances are imprudent. Instead, African policymakers and businesses should anchor their expectations for China-Africa relations to the country’s domestic and international interests.
This week, Beijing is set to host the ninth ministerial conference of the Forum on China-Africa Co-operation (Focac). The summit’s theme, “Joining Hands to Advance Modernisation and Build a High-Level China-Africa Community with a Shared Future”, emphasises mutual respect and equality. With more than 40 presidents and 80 ministers from China and Africa attending it, the focus is not just on style, but also on substance, driven by about 1,000 business leaders engaging in parallel sessions at the Great Hall of the People aimed at boosting collaborative opportunities.
This gathering mirrors a pivotal moment back in 2005, when leaders of Standard Bank and the Industrial and Commercial Bank of China (ICBC) first met. This encounter eventually led to ICBC purchasing a 20% stake in Standard Bank Group for $5.46bn (about R96.31bn) in 2007, marking the largest Chinese outbound investment at that time. This partnership is just a fraction of the broader China-Africa relationship.
Today, China is Africa’s most important commercial partner. The partnership, shaped by Focac, has spurred remarkable growth in bilateral trade, investment and lending, transforming cities across Africa over the last 24 years.
It’s clear to anyone watching that China’s economic landscape is changing. Since President Xi’s “new normal” of 2013, the focus has shifted towards quality over quantity when it comes to development. In 2017, the Chinese government made it clear the country had entered a “new era”, and that the central concern of its domestic economic policy was henceforth to address unbalanced and inadequate development across the country. Here the idea that “housing is for living in, not speculation” emerged. More recently, this year has seen an emphasis on new productive forces.
China’s nominal GDP growth has fallen to just 3.97% — a rate totally unheard of before the pandemic. However, policymakers remain unwavering. Since 2021, annual investment in manufacturing has surged by CN¥10-trillion (about R25-trillion), infrastructure investment has increased by a far more modest CN¥3-trillion, and real estate investment has fallen by nearly CN¥5-trillion.
These developments change how China connects to the rest of the world. Think less oil and less iron ore. Thus, it’s no surprise that since Focac in Dakar in 2021, Chinese imports from Africa have hovered around $100bn, despite commitments to triple imports by 2024. Instead, African countries such as South Africa and Angola have seen reduced market importance. In fact, in 2023 China imported nearly as much from Vietnam as it did from Africa. Only the DRC has benefited in a material way from China’s demand for green economy resources, exporting billions of dollars of copper and cobalt.
Conversely, Africa’s markets are becoming more vital for Chinese exporters. Since the global financial crisis, China has targeted new export destinations. Lower costs, a weaker currency, and supply-side incentives have boosted export competitiveness. A notable 21 of China’s 50 fastest-growing markets since the pandemic are in Africa. Today, one-quarter of all the goods imported into Africa are from China. More than 40% of Angola, Ghana, Kenya and Tanzania’s imports originate from China.
Africa’s trade deficit with China reached $67bn in 2023, and only eight African countries have a trade surplus with China. Africa remains primarily a resource supplier and a consumer of Chinese goods
Africa’s trade deficit with China reached $67bn in 2023, and only eight African countries have a trade surplus with China. China has put in place steps aimed at addressing this imbalance, focusing on credit lines, small and medium-sized enterprises (SMEs), and currency use to facilitate trade. However, Africa remains primarily a resource supplier and a consumer of Chinese goods. What is worse, the Global South is pushing back against China, with countries such as Indonesia and South Africa imposing tariffs on Chinese imports.
This state of affairs reinforces the notion that Africa must take ownership of the relationship, articulating its priorities, such as generating employment, increasing skills and tech transfers, and boosting intra-African trade. The countries of the continent need to establish specific metrics that transcend rhetoric for measuring the execution of coherent objectives. African nations must fortify the benefits of co-operation achieved so far and move China-Africa relations into the “new era”. Merely hoping for balanced trade relations and increased Chinese investment is useless.
To this end, African countries must create environments that attract private investment and foster regional connectivity to support sustainable development. And that is Africa’s homework.
• Stevens is Asia economist for the Standard Bank Group, based in Beijing, China
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.