The Economic Development Dimension of China-Africa Relations
In China, development is seen as much broader than aid. In their book ‘Going Beyond Aid’, two of China’s most prominent development economists, Justin Lin and Yan Wang, explain how “conventional development aid is inadequate to address the bottlenecks to growth in many developing and emerging market economies, including those in sub-Saharan Africa” and highlight how China relied on a combination of aid, trade, and investment to kick-start its structural transformation process. China’s own experience since the 1978 economic reforms period demonstrated the country’s impressive ability to lift hundreds of millions out of poverty through a gradual and contained approach around markets.
Therefore, it is no surprise that China applies the same approach when dealing with other developing economies, including in Africa. Focusing on economic relations, China proposes a developmental approach that differs from the West’s and challenges the Washington Consensus, based on free markets and economic liberalisation. This is reflected in China’s 2021 White Paper on International Development Cooperation, which notes that Beijing’s approach to cooperation is about “focusing on development and improving people’s lives” and “providing the means for independent development” of each country.
Following these principles, China’s engagement with African countries does not revolve exclusively around aid, but rather around the economic relationship between the two blocsaround trade, investment, development finance, and other forms of cooperation that aim to promote Africa’s growth. As such, China-Africa relations have a strong economic focus, based on mutual economic interests which have contributed to promoting the continent’s economic transformation.
The Belt and Road Initiative: Not a Game-Changer for the African continent
So, what is happening now? In terms of foreign engagement, China’s main tool is the Belt and Road Initiative (BRI), officially launched in 2013. African countries only committed to participating in the Initiative between 2018 and 2019, making it too early to assess its costs and benefits for Africa.
However, much can be said looking at pre-BRI trends in terms of economic and political cooperation. As regards policies and principles, many of the ideas and concepts governing Africa-China relations before the BRI — such as China’s second Africa policy and the ‘three networks and industrialisation’ principle (san wang yi hua 三网一化, based on the construction of roads, railways, aviation networks, and on the development of the industrial sector across the continent) — already encapsulated many BRI ideas. Therefore, the BRI does not represent a break from the past, but rather a continuation of China-Africa relations along the lines already established since 2013.
More practically, one could ask whether the BRI has infused new enthusiasm in China-Africa economic relations: however, this does not seem to be the case. Trade, investment, and lending commitments between China and Africa have undergone a considerable acceleration since 2000, but they have ultimately plateaued and stabilised since 2014. Comparing pre-BRI China-Africa engagement and early BRI trends reveals that the BRI has not disrupted China-Africa relations, but rather has strengthened previous political engagement and economic trends. Therefore, while infrastructure construction remains critical in Africa, the BRI has brought any dramatic changes in the pre-existing trends.
The African Continental Free Trade Agreement: a Potential Game-Changer for Africa’s Industrialisation
For Africa, the African Continental Free Trade Agreement (AfCFTA) is more exciting than the BRI. It is a pan-African initiative led by the African Unionaimed at creating a free-trade area among all African nations with the higher aim of supporting the continent’s economic transformation by promoting industrialisation. Why? Because while African countries mainly export raw materials and primary commodities to the rest of the world, they exchange a lot of manufactured products among themselves. Therefore, by creating a large free trade area, the AfCFTA can potentially contribute to Africa’s industrialisation and ultimately to the continent’s economic transformation, representing a tangible opportunity for Africa to change its position in the global economy.
The African Union and its members are working hard to advance the initiative, developing policies and agreements (the soft infrastructure) necessary to make the AfCFTA work. But what is still missing is the hard infrastructure, the roads, bridges and ports necessary for trade. These are crucial to making sure the AfCFTA does not remain on paper alone and that the benefits actually accrue to African citizens.
The African Development Bank suggests the continent’s hard infrastructure needs about USD130–170 billion a year, with an annual financing gap in the range of $68–$108 billion. Where can such money be found? While China’s financing pipeline may be getting colder, the country remains among the leading parties willing to provide support to close Africa’s infrastructure finance gap. The Chinese government has, in fact, shown a willingness to take part in the future of the AfCFTA, with foreign minister Wang Yi explicitly supporting the initiative, not only in terms of infrastructure development but also through financial assistance and capacity building.
The AfCFTA, China, and the Rest of the World
In sum, while the BRI itself may not be a game-changer for Africa, China’s support to African infrastructure remains vital for the realisation of the African-led AfCFTA. China is signalling to African countries that it is willing to support their economic growth through infrastructure development, which could very much strengthen the China-Africa partnership at the continental level.
Recently, the G7 has made similar promises, launching the Build Back Better World (B3W) Partnership to tackle the infrastructure needs of the developing world. While details are still scarce, it seems to reveal Western countries’ renewed interests in Africa’s infrastructure after years of uncontested Chinese leadership in this area. Should the G7 initiative represent a similar — or even better — offer for Africa than what China is currently providing, it would be very much welcome.