Most analysts characterize present Chinese-American relations as being complex and multifaceted. The United States and the People’s Republic of China are usually neither allies nor enemies.
However, American business is hard-pressed to compete with what China calls its “noninterference policy,” an indifference to conducting business with political regimes that might be considered undemocratic. Giving a corporate marketing edge to a political position, one Chinese minister asserted that “nonintervention is our brand like intervention is the Americans’ brand.”
China’s commitment to noninterference in African domestic affairs and the will to create alliances based on respect and equality are widely welcomed on the continent.
The rise of China as a global economic power, consolidating the energy sector and trade agreements in Africa, is a major issue that is fundamental to the West in general and to the United States in particular. In reality, Africa has for a long time been a primary source of natural resources for the European and American markets.
China’s strategy to access resources that have so far not been exploited by Western companies because they were considered insignificant in size, geographically too remote or politically risky requires massive investments in mines, oil exploration and auxiliary infrastructure such as pipelines, roads, railways, power plants and power transmission lines that the Chinese are currently building throughout Africa.
Due to China’s resource-related diplomacy, Washington has accused Beijing of attempting to secure raw materials including minerals at the source, something that European and Washington foreign policy has been preoccupied with for at least a century. China’s geopolitical and economic engagement with African nations has occasionally been portrayed as a danger to Western interests, given the West’s substantial reliance on Africa’s natural resources.
In contrast to Western institutions such as the World Bank and the International Monetary Fund, China has extensively extended low-interest or free loans to some of the most impoverished African nations.
To think of Africa as merely the focus of humanitarian efforts is outdated and unproductive. While the United States is willing to address Africa’s pressing humanitarian needs and combat international terrorism, a more comprehensive strategy is required. The world as we know it is changing quickly, and as rivalry for Africa’s resources heats up, other recently emerging U.S. stakes in the continent have become evident.
As a result of China’s fast-increasing engagement and pursuit of Africa’s enormous natural resources, particularly energy, Africa has become a more competitive environment as these interests have grown in importance. These new realities challenge the public thinking as well as policymakers in the United States.
For the United States, “Africa has been seen for centuries as a ‘Dark Continent,’ but the darkness was our ignorance.” “It is not what we don’t know that’s dangerous; it’s what we do know that’s not true.”
The general public should take a moment to consider how Africa has grown to be a place that is increasingly crucial to U.S. national interests.
There is also concern in some Western capitals that China is challenging American and European firms for strategic minerals and that Beijing is using corrupt means in engaging with Africa. In response to this worry, the Chinese government is continuing to pursue development activities in Africa as a means of fortifying its expanding African contacts.
China also likes to remind Western governments of their primary obligations for development in Africa. After the Forum on China-Africa Cooperation (FOCAC), there is a sign that China intends to expand its development activities in Africa.
The FOCAC was established in 2000 as a uni-multilateral partnership platform between China and 54 African countries. The FOCAC remains the most strategically intertwined and far-reaching in its depth, scope and level of cooperation between China and Africa.
Chinese President Xi declared in 2015 at the FOCAC meeting in Johannesburg, South Africa, that China would contribute further funds to the China-Africa Development Fund (CADFund), which was established in 2006, bringing its total worth to $10 billion. By June 2021, the CADFund had made more than $5.5 billion in investments across 37 countries and encouraged $26 billion in funding and investment from Chinese businesses in Africa.
Moreover, Xi declared the creation of the China-Africa Fund, which would have $10 billion in starting capital, for cooperation in production capacity.
Furthermore, in 2018, as the FOCAC opened, President Xi announced that China would provide $60 billion in financial support to Africa. For the partial allocation of the funds, Xi provided the following breakdown: $10 billion for investment finance; $15 billion for grants, interest-free loans and concessional loans; and $20 billion in credit lines. The government will provide funding and help in the form of this support.
Booming Trade Relations between China and Africa
Chinese foreign direct investment annual flows to Africa, commonly referred to as OFDI (overseas foreign direct investment), have been rising steadily since 2003, according to a report by Johns Hopkins University’s China African Research Initiative. China has been Africa’s top trading partner for 12 years since 2009. Africa’s share of China’s commerce in the continent’s overall external trade has been steadily increasing. The percentage surpassed 21% in 2020.
China’s exports to Africa have significantly increased in terms of technology; currently, more than half of all exports are made up of high-tech mechanical and electrical equipment. To facilitate more African manufactured and agricultural products’ entry into the Chinese market, China has expanded its imports of non-resource goods from Africa and granted zero-tariff treatment to 97% of taxable items exported to China by 33 countries in the continent.
Cross-border e-commerce is one of the new business ideas that have witnessed rising trade in China and Africa. Under the Silk Road (traditionally a network of trade routes connecting China and the Far East with the Middle East, Europe and Africa), e-commerce concepts and collaboration have progressed.
China and Rwanda have established an e-commerce cooperation mechanism, and Chinese companies have been investing in foreign order fulfillment facilities. Through e-commerce channels, China can now directly purchase unique and high-quality products from Africa.
Jan. 1, 2021, marked the implementation of the first free trade agreement between China and African countries. It has given China-African trade and economic cooperation a fresh lease on life. The People’s Bank of China and the African Development Bank introduced the $2 billion Africa Growing Together Fund (AGTF) in 2014.
As of the end of October 2021, the AGTF had committed $1.14 billion to 36 projects, involving agriculture, water supply and sanitation, transport, power and other fields, covering 19 African countries. In 2020, 31.4% of all infrastructure projects on the African continent were carried out by Chinese businesses.
Chinese enterprises have built and renovated more than 10,000 kilometers of railway, almost 100,000 kilometers of highways, more than 1,000 bridges, hundreds of ports, and electricity transmission and distribution systems since the FOCAC was founded. No raw material has a higher priority in Beijing at present than the securing of long-term natural resources including strategic minerals in Africa.
Conclusion
For the United States to function well in Africa’s increasingly competitive climate and to address U.S. intelligence and diplomatic shortcomings, a more comprehensive policy framework is required. It should also acknowledge the increasing ability of African institutions and leaders to advance democracy, enhance economic performance and governance, and settle disputes.
Furthermore, achieving a new more comprehensive approach toward Africa must come from the president and the leaders of Congress. The public needs to understand that a purely humanitarian response that is toward charity rather than partnership will not achieve the desired results. U.S. and African interests can thus be effectively addressed by a sustained, coherent, broad-based policy and commitment.
Beijing’s larger interests are also likely to continue to coincide more with those of the West than with Africa’s, though Chinese economic rivalry is also likely to continue with the United States, France, Britain and other Western countries in the quest for Africa’s resources.
This will be a complex relationship of cooperation and competition. The search for natural resources from many quarters is creating a more competitive environment in Africa. Other Asian, Middle Eastern countries and South American countries with rapidly growing economies are also pursuing access to Africa’s natural resources. This has led many to believe there is a new scramble for Africa.
