Date
25 September 2017

China is helping to attract business to Africa

The world is courting Africa, and about time too. The United States has fallen way behind China and is now trying to make up lost ground. Meanwhile, other emerging economies, led by China, are strengthening their ties with the rapidly developing continent.

Africa is a dynamic region, with the United Nations estimating growth in 2014 at 4.7 percent, faster than most of the world except for some parts of Asia. Six of the world’s fastest growing economies are in Africa.

The World Bank predicted in 2011 that Africa could be “on the brink of an economic takeoff, much like China was 30 years ago and India 20 years ago”.

Other emerging economies have been hitching their wagon to the African star. India, for example, has increased its trade with Africa fivefold in the past seven years to the current level of US$70 billion and plans to raise it to at least US$100 billion by 2015.

Brazil’s trade with Africa rose from 3.5 billion euros (US$4.8 billion) in 2003 to 21 billion euros (US$29 billion) in 2012.

But it is China’s trade growth that has been most spectacular. China’s trade with Africa hit US$10.5 billion in 2000, when US trade with the continent was almost four times that, at US$38.6 billion.

However, by 2005, China’s trade had risen to US$40 billion, half the US level that year. By 2009, China had edged out the US and, in the last few years, the gap continued to widen. President Xi Jinping told Senegal’s President Macky Sall when they met on Feb. 20 that, in 2013, China’s trade with Africa exceeded US$200 billion for the first time. This is more than double US trade with Africa last year, which stood at US$85 billion.

Although the European Union collectively does more trade with Africa than any individual country, Europe’s influence in the region is declining, while emerging economies are playing a bigger role.

US President Barack Obama has invited 47 African leaders to a summit meeting in Washington in August. It will be the first such meeting with African heads of state and government. The White House, in making the announcement, referred to Africa as “one of the world’s most dynamic and fastest-growing regions”.

Obama denied that the US was competing with China saying, “This is not a zero-sum game. This is not the Cold War.”

However, Washington is keenly conscious of the fact that it is falling behind the world’s second largest economy in one of the most strategic regions of the world.

In fact, a year ago when the US Senate Foreign Relations Subcommittee on African Affairs held hearings led by Senator Chris Coons, it complained that “the African market is not on the radar screen of the American business community. In fact, the US is effectively ceding the African marketplace to companies from China, India, Brazil, Russia, Turkey, the European Union and elsewhere.”

The subcommittee noted that “trade between Africa and the rest of the world has tripled in the last 10 years, with an increase in exports of more than 200 percent and an increase in imports of 250 percent from 2001 to 2011”.

Despite the explosion in African activity, American trade with the continent has been on a downward trend in absolute as well as relative terms in the last five years.

Unlike the US and Europe, China has an advantage in dealing with Africa in that it doesn’t have any historical baggage. China never seized African territory or enslaved its people.

Chinese Foreign Minister Wang Yi, at a press conference on Saturday during the annual meeting of the National People’s Congress, recalled the long relationship China has had with Africa, saying that when China was poor, “we tightened our belt to support the cause of national independence and liberation of our African brothers”. And, in 1971, he said, it was African countries that helped Beijing enter the United Nations.

More recently, China has helped provide infrastructure for African countries, usually in return for natural resources, largely oil. At the press conference, Wang said that China has helped build over 1,000 projects in Africa and “we have never attached any political condition to these projects”.

While there are well publicized complaints from some African countries about the way some Chinese companies behave, Wang was no doubt right when he pointed out that an important reason behind Africa’s sustained economic growth in recent years “is the boost provided by China-Africa cooperation”. This has spurred interest in Africa from both the West and emerging economies and Africa benefits from such competition.

– Contact the writer at [email protected]

CG

 

Frank Ching opened The Wall Street Journal’s Bureau in China in 1979. He is now a Hong Kong-based writer on Chinese affairs.

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