Cross posted from: https://beehaw.org/post/15110888
Chinese leaders have been citing the billions of dollars committed to new construction projects and record two-way trade as evidence of their commitment to assist with the Africa’s modernisation and foster “win-win” cooperation.
But the data reveals a relationship that is still largely extractive and has so far failed to live up to some of Beijing’s rhetoric about the Belt and Road Initiative, President Xi Jinping’s strategy to build an infrastructure network connecting China to the world.
While new Chinese investment in Africa increased 114% last year, according to the Griffith Asia Institute at Australia’s Griffith University, it was heavily focused on minerals essential to the global energy transition and China’s plans to revive its own flagging economy, but has brought less advantage to Africa.
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Minerals and oil also dominated African-Chinese trade. As efforts falter to boost other imports from Africa, including agricultural products and manufactured goods, the continent’s trade deficit with China has ballooned.
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The result is a more one-sided relationship than China says it wants, one that is dominated by imports of Africa’s raw materials and that some analysts argue contains echoes of colonial-era Europe’s economic relations with the continent.
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Although two-way trade reached a record $282 billion last year, according to Chinese customs data, the value of Africa’s exports to China fell 7%, mainly due to a decline in oil prices, and Africa’s trade deficit widened 46%.
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Many projects of China’s Belt and Road Initiative (BRI), which grew rapidly in the two decades before the COVID-19 pandemic, proved unprofitable. As some governments struggled to repay loans, China cut lending. COVID-19 then pushed it to turn inward, and Chinese construction projects in Africa fell.
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China’s hunt for critical minerals is a main driver of African infrastructure construction. In January, for example, Chinese companies pledged up to $7 billion in infrastructure investment under a revision of their copper and cobalt joint venture agreement with Democratic Republic of Congo.
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With one of Africa’s largest trade deficits to China, Kenya has been pushing to increase access to the world’s second-largest consumer market, recently gaining it for avocados and seafood. But cumbersome health and hygiene regulations mean Chinese consumers remain out of reach for many producers.
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Overall, Kenyan exports to China fell over 15% to $228 million, Chinese customs data showed, as a decline in titanium production led to a drop in shipments of the metal – a key export to China. But Chinese manufactured goods kept coming.
Unless African nations can add value to their exports through increased processing and manufacturing, says Francis Mangeni, an advisor at the Secretariat of the African Continental Free Trade Area, “we are just exporting raw minerals to fuel their economy.”