CHINA-AFRICA RELATIONS
WHY IN NEWS?
- Recently, the Chinese Minister of Foreign Affairs, Wang Yi, visited four African countries, Egypt, Tunisia, Togo and the Ivory Coast.
ABOUT CHINA-AFRICA RELATIONS:
- Africa has been important to China’s foreign policy since the end of the Chinese civil war in 1947.
- Several African liberation movements during the Cold War were supported by China.
- In 1971, the votes of African countries were instrumental in winning the PRC control of China’s seat in the UN General Assembly and Security Council.
- In the recent years, China’s main focus in Africa was to eliminating all remaining recognition for Taiwan’s government.
- Gradually Burkina Faso, Malawi, Liberia, Senegal and others all switched their recognition from Taiwan to the PRC.
- Eswatini is the only country in Africa, still to recognize Taiwan’s government in 2023.
- In 1999 China came up with ‘Going Out’ strategy, which encouraged Chinese companies to invest beyond China.
- This strategy was a clear indication of China’s growing economic might and created a new wave of Chinese engagement in Africa.
- The strategy was also an important source of employment for Chinese citizens working on new infrastructure projects.
IMPORTANCE OF THIS VISIT:
- The major agenda of this visit was to implement the outcomes of the China-Africa Leaders Dialogue held in August 2023 in Johannesburg, South Africa.
- The dialogue included the execution of three initiatives, including support for Africa’s industrialisation, agricultural modernisation, and cooperation on talent development.
- The Minister’s visit also sets a precedent for the ninth Forum on China-Africa Cooperation 2024 (FOCAC).
CHINA’S OBJECTIVES IN AFRICA:
- As Africa supplies 90% of the world’s cobalt and platinum, and 75% of coltan, thus it is essential for Chinese electronics.
- China also has the largest refineries in Africa for rare earths and minerals, which are important to its tech industry.
- The dominance of China in the mining sector has made the U.S. dependable on China for key minerals from Africa.
- Secondly, the African alliance and its geopolitical aspirations are of much importance to China’s foreign policy.
- As in the UN General Assembly, Africa is the largest bloc and has the power to swing resolutions on contentious issues like the South China Sea.
- Africa has been clear in the support of China in the international arena including its “One China” policy for Taiwan and Hong Kong.
- Third, strengthening the Yuan (RMB) as China is encouraging Africa to trade in Chinese currency.
- With low Chinese interest rates and the depreciation of African local currency, the RMB holds an opportunity as an alternative to the US dollar.
- The RMB offers cross-border yuan-based “panda bonds,” by which foreign governments can issue funds from China at lower interest rates.
- Interestingly, China’s debt restructuring of Zambia’s $4.1 billion loan has incentivised borrowers towards RMB.
- Fourth, commercial opportunities for China.
- As Africa imports largely from China for finished goods.
- Africa’s young population and cheap labour force support Chinese exports globally and in Africa.
IMPORTANCE OF CHINA FOR AFRICA:
- In return for natural resources, Africa receives investment, trade and development aid from China.
- China has also become a significant source of FDI in African nations.
- The idea of “Made in Africa” has become reality due to Chinese-built infrastructure and industrial parks, as they have also provided employment opportunities.
- The Chinese support in advancing hybrid crops also helped Africa further its agricultural sector’s growth.
- In Africa, cooperation with China is viewed with a high degree of mutual trust and as a ‘win-win partnership’.
WAY FORWARD:
- For the best of China, it is important in protecting its reputation in Africa while reaching a reasonable financial settlement.
- But, it will be difficult for China to agree to, having founded BRI deals based on strictly bilateral and often opaque agreements.
- Thus, it is critical that African nations ask China and the West to cooperate on debt distress, ideally speaking with one voice through institutions such as the African Union (AU) and G20.
- An AU joining the G20 could be an important step to creating equitable, cooperative solutions to debt distress between Africa, China and the West.
