Hello. It looks like you’re using an ad blocker that may prevent our website from working properly. To receive the best Tortoise experience possible, please make sure any blockers are switched off and refresh the page.

If you have any questions or need help, let us know at memberhelp@tortoisemedia.com

Sunday 19 May 2019

china’s world

Dragons in Djibouti

Through aid, trade, business investment and infrastructure investment, China has become Africa’s biggest economic partner – and it’s yielding some tangible results

By Chris Newell, Peter Hoskin and Imogen Harper

So many grand political projects fail to go anywhere. This is not true, however, of the Forum on China-Africa Co-operation (FOCAC). Since it was set up by the Chinese government in 2000, the two regions have done as its name suggests – co-operated. China has gone from a minimal presence in Africa to being the continent’s biggest economic partner.

Often, when this point is made, the focus is on aid spending. Yet aid spending is actually difficult to bring into focus. The Chinese state’s spreadsheets are not particularly comprehensive and there are also questions about what should count as aid.

The usual measure – official development assistance (ODA) – doesn’t capture all the aid-style money that may flow from one state to another. That is why the research group AidData prefers to measure China’s contribution to Africa by including other official flows (OOF) and less certain flows (vague OF) too. This makes China’s aid spending in Africa comparable with US spending:

Yet aid spending, however it is measured, barely scratches the surface. The truth is that China’s co-operation with Africa takes many forms, including trade. Across the past ten years, combined exports and imports between the two regions have grown by 90 per cent, from $96bn to $182bn. The US number has plummeted in the same period:

A similar story could be told about foreign direct investment (FDI) – investment made by individuals or businesses in foreign-based enterprises they control. The stock of Chinese FDI in Africa has risen dramatically since FOCAC was launched:

One question hovers over all the statistics: what does China get out of this? There are the clear answers: oil from Angola, titanium from Sierra Leone, cobalt from the Democratic Republic of Congo and so on. And there are the murkier ones: according to AidData’s research, “if African countries voted with China in the UN General Assembly an extra 10 per cent of the time, they would get an 86 per cent bump in official development assistance on average”.

But it should not be forgotten that Africa gets a lot from this relationship, too – including tangible things, such as power stations, roads and railways. China’s involvement in major infrastructure and capital projects (I&CP) is probably the greatest expression of its African ambitions. It funds almost a fifth of them and builds almost a third:

This investment, whether from China or elsewhere, is certainly needed. According to Deloitte, the funding gap between Africa’s infrastructure requirements and its infrastructure reality is about $68bn to $108bn a year. Chinese money is helping to close this gap and Chinese expertise is helping to raise totems such as the Addis Ababa-Djibouti railway, the continent’s first fully electrified route.

The most recent FOCAC summit was held in September 2018. Is it any wonder that twice as many African leaders attended it than attended the United Nations General Assembly two weeks later?

All our journalism is built to be shared. No walls here – as a member you have unlimited sharing