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China Intensifies Its Engagement With Africa – Analysis

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By H.H.S.Viswanathan

The fifth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) was held on July 19 and 20 in Beijing. The event was used by China to reinforce its engagement with Africa. The Chinese Foreign Minister Yang Jiechi called the Conference a success which “forged consensus and enhanced mutual trust”. It is significant that despite being only a ministerial Conference, six African Heads of State (South Africa, Benin, Cote d’ Ivoire, Equatorial Guinea, Djibouti, Niger) and two Prime Ministers (Kenya and Cape Verde) attended the opening session which was addressed by the Chinese President Hu Jintao. In addition, the UN Secretary General Ban Ki Moon was present at the ceremony. Ministers from 50 African nations who recognise PRC (and not Taiwan) took part in the deliberations at the end of which a Beijing Declaration was issued along with an Action Plan for 2013-2015.

China - Africa Relations
China – Africa Relations

FOCAC is a collective consultative mechanism between China and Africa launched in 2000. It meets once in three years alternatively in Beijing and Africa. So far there have been 4 such Conferences (2000- Beijing, 2003- Ethiopia, 2006- Beijing, and 2009-Egypt). The 2006 Conference in Beijing was followed by a Summit of the Heads of States of African countries and China. These Conferences have been effectively used by China to project its economic diplomacy with offers of grants, concessionary and low cost loans and lines of credit. At the 2006 Summit, Hu Jintao announced US $5 billion worth of concessionary loans and the creation of the China-Africa Development Fund to further Chinese investment in Africa with a US $ 1 billion initial funding which would grow to US $ 5 billion in the future. In 2009, a US $ 10 billion low cost loan was announced; in addition, a $ 1 billion special loan for small and medium businesses was also established.

To strengthen the FOCAC mechanism and ensure better implementation of the decisions taken, China established the FOCAC Follow-up Committee in December 2001. The Committee is composed of senior officials from 21 ministers, state commissions and other concerned agencies. This Committee has been the driving force in the timely implementation of projects.

FOCAC fits in neatly with China’s long term global strategy. With the increasing profile of Africa, its demographic dividend, and the large market combined with China’s own constraints of a shrinking workforce, investment in Africa seems a logical conclusion. Traditionally, China has cultivated African nations for four reasons- natural resources, market, support in International Organisations and the Taiwan factor. Of late, the last reason has become less relevant with an apparent unpublicised understanding between PRC and Taiwan not to poach into each other’s diplomatic recognitions. The other three reasons have become more pronounced in the last decade. China-Africa trade in 2011 was US $ 166.3 billion and is growing. China today is Africa’s largest trading partner. More than 2000 Chinese Companies have dealings in Africa, with investments totalling US $ 14.7 billion. Even though the balance of trade is in favour of Africa (with exports of US $ 93 billion), the pattern of trade is extremely skewed with very few African manufacturers going to China. This has led to considerable criticisms within Africa. President Jacob Zuma of South Africa remarked at the Forum that “Africa should be wary of unsustainable trade with China and there is a growing need for diversification and beneficiation”. China is well aware of this sensitive issue and is trying some course corrections in its pattern of trade. The infra-structure development in many African countries undertaken by China has been acknowledged by the African leaders with gratitude. Earlier this year, China handed over the US $ 200 million AU Conference Centre in Addis Ababa as a gift. Two aspects of China’s engagement have proved to be popular in Africa: i) their non-interference in the domestic affairs of countries and ii) the Angolan model of infrastructure building in return for natural resources.

The 2012 FOCAC has been even more ambitious than the previous ones. At the inauguration ceremony, Hu Jintao announced a US $ 20 billion line of credit to the Continent to be utilised in the next three years. This will be mainly used in sectors of infrastructure, agriculture, manufacturing and small and medium industries. China will also implement the “Africa talents Programme” to train 30,000 personnel in various sectors, offer 18,000 government scholarships and build cultural and vocational training facilities in African countries. A new “Initiative on China-Africa Cooperative Partnership for Peace and Security” was also launched. This is to deepen cooperation in the area of security, provide financial support for AU Peace-Keeping Missions and develop an African stand-by force.

On the sidelines of the conference, the Forum on China-Africa Financial Cooperation (FOCAFC), one of the sub-forums of FOCAC was held and was hosted by China Exim Bank.

On some of the global issues, the Beijing Declaration mentioned the following:

  • Oppose interference in others’ internal affairs and wanton use or threat of force in international affairs.
  • The importance of the principle of “Common but differentiated responsibilities” in climate talks.
  • Advancement of the WTO Doha Round negotiations.
  • Support to BRICS countries in exploring possibilities of a new development bank
  • Work together to promote democracy in international relations

This will be the last FOCAC meeting under the present Hu Jintao/ Wen Jiabao leadership in China. It is noteworthy that under this dispensation in China in the last ten years, China’s engagement with Africa grew exponentially which has caused concern among the traditional colonial powers and the US. If FOCAC 2012 is any indication, it could be presumed that the levels of engagement will continue to rise. China will, of course, have to take the African sensitivities into account and modify the nature of cooperation which would mean restrictions on use of Chinese labour in the African projects, promoting Africa’s manufacturing capacities by reducing cheap Chinese exports and better working conditions for the African labour in Chinese run factories. China’s commitment to continued future cooperation was evident from the fact that Xi Jinping, the man tipped to take over the reigns in China in October/ November this year, had bilateral meetings with many of the African leaders at the conference.

(The writer is a Distinguished Fellow at Observer Research Foundation)

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ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

One thought on “China Intensifies Its Engagement With Africa – Analysis

  • August 16, 2012 at 12:35 pm
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    The West undeveloped Africa-China is developing Africa’s infrastructure for its own purpose-all the resources are moving out of Africa. In fact I saw one report where China has brought in its own labor force with their spouses-the spouses have opened up stalls i9n Africa and competing with the locals to the latter’s detriment.African leaders are corrupted. is there any hope for Africa?

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