China’s President Xi Jinping and African leaders hailed their shared future as they opened a three-yearly summit, at the same time as debt burdens, tensions over commerce imbalances and rising geopolitical rivalries solid shadows over Beijing’s relationships on the continent.
African leaders from 50 international locations arrived in Beijing this week for the summit, which ends on Friday with a blueprint for China-Africa relations till 2027.
“On the road to modernisation . . . not a single country should fall behind,” Xi advised the leaders in his opening speech to the discussion board on Thursday.
He pledged Rmb360bn ($50bn) in monetary assist over the subsequent three years together with loans, assist and Chinese language company funding in addition to help for African international locations to situation renminbi-denominated “panda bonds” in China’s onshore markets. He additionally laid out a 10-point plan masking commerce, agriculture and safety, in addition to providing “governance” and army coaching.
Beijing is eager to leverage its dominance as Africa’s greatest buying and selling associate to seal profitable mining offers and export alternatives to assist its struggling financial system, in accordance with analysts, whereas heading off geopolitical rivals on the continent, together with the US.
For his or her half, African leaders need Beijing to deal with a commerce imbalance that has allowed China to devour the area’s uncooked supplies, corresponding to iron ore and oil, whereas exporting manufactured items that undercut home manufacturing. China’s commerce surplus with the continent is about $64bn.
“You’re going to see requests [from African leaders] for infrastructure finance, whether it’s for energy or transport and roads or ports, and for support around industrialisation initiatives,” stated Zainab Usman, senior fellow and director of the Africa Program on the Carnegie Endowment for Worldwide Peace.
She stated this could cowl the processing and refining of crucial minerals and associated manufacturing, corresponding to in clear vitality. “This is a huge area right now for a lot of African countries,” she stated.
In 2023, China authorized loans of $4.61bn for eight African international locations and two regional monetary establishments — the primary time the annual mortgage quantity for the continent has risen since 2016.
However this stays far beneath the peak of Xi’s signature Belt and Highway Initiative, when common annual commitments surpassed $10bn, in accordance with the Chinese language Loans to Africa Database of the Boston College International Growth Coverage Heart. From 2000 to 2023, Chinese language loans to Africa totalled $182.28bn.
For Xi, who earlier within the week hailed China’s “shared future” with African international locations, a vital precedence is avoiding additional debt issues, analysts stated.
With China’s funds already stretched by a deep property sector slowdown, Beijing favours smaller authorities lending and better involvement by state-owned enterprises or personal sector buyers.
Zambia defaulted on its debt in 2020, adopted by Ghana and, extra just lately, Ethiopia, with a dozen different African international locations dealing with debt strains. Angola owes China about $17bn, greater than a 3rd of its exterior debt.
“Financing is a big theme given the state of debt in the African countries. There’s lots of talk about extending concessional financing, restructuring debt,” stated a senior financial official of a Horn of Africa nation in Beijing.
The sluggish debt renegotiations, notably with Zambia, have sparked criticism of China’s position. However Tang Xiaoyang, a professor and China Discussion board knowledgeable at Tsinghua College, objected to the notion that “if a country borrows money and they have problems, that the blame should fall on China” regardless of the area’s fast escalation of Chinese language debt.
Regardless of the continent’s debt woes — and the poor document of some BRI tasks — African leaders have stepped up requires extra funding in bilateral conferences with Xi.
In Kenya, for instance, the $5bn Chinese language-funded normal gauge railway linking the port metropolis of Mombasa to the capital Nairobi has been criticised as economically unviable and never benefiting native communities.
However this week, Kenya’s President William Ruto — whose predecessor borrowed closely from Beijing — advised Xi {that a} projected growth of the railway to Uganda and past was one in every of “Kenya’s top priorities in the engagement with China”. He additionally named different tasks in want of funding, together with highways.
Kenya this week additionally formally joined the Asian Infrastructure Funding Financial institution, the Beijing-led different to the World Financial institution.
South Africa’s President Cyril Ramaphosa praised “an increase in our bilateral trade” but additionally urged Beijing to import extra items and construct extra factories in Africa’s most industrialised nation, together with a name for China’s BYD and CATL to spend money on electrical automotive and battery manufacturing.
He added that South Africa “would like to narrow the trade deficit and address the structure of our trade . . . we urge for more sustainable manufacturing and job-creating investments”.
Different international locations lodging requests embody Nigeria, which is looking for investments in manufacturing and vitality infrastructure, whereas Zambia needs new investments in crucial mineral processing and copper.
Zambia would even be a beneficiary of a plan to revamp the Tazara railway, one of many highest-profile offers to be mentioned on the summit.
The $1bn refurbishment of the road, which was constructed within the Nineteen Seventies with Chinese language assist beneath Mao Zedong and connects Zambia to Tanzania, will eschew borrowing and lift money by means of a concession to Chinese language buyers as Beijing retools its method in the direction of extra direct funding.
“We are still going to see Chinese investments in infrastructure,” stated Cliff Mboya, a fellow on the Heart for Africa-China Research on the College of Johannesburg. However new tasks will pursue “innovative ways of funding”.
Looming over the Tazara undertaking is geopolitics. The renovated line will compete with a revamped US-backed railway working from the central African copper belt to Angola’s Atlantic coast — one indication of western international locations more and more courting African leaders for entry to crucial minerals following an extended interval the place they gave China little competitors.
Nonetheless, whereas the US and others have been changing into extra lively within the continent, China retained an edge by means of robust people-to-people ties and its narrative of being a “developing country” helping its companions within the international south alongside the trail of industrialisation, stated Jana de Kluiver, analysis officer on the Institute for Safety Research in Pretoria, South Africa.
The US technique, against this, got here throughout as “being more of an anti-China policy than an Africa policy”, she stated.
