China and Africa 2.0 – Crafting a New Era of Partnerships: 20 Trends

The report “China and Africa 2.0 – Crafting a New Era of Partnerships: 20 Trends” illustrates the complexity of China’s engagement in Africa in various areas and has been edited in close consultation with Univ.-Prof. Dr. Xuewu Gu.

Dr. Gu is Professor and Chair of International Relations at the Institute of Political Science and Sociology and Director of the Center for Global Studies at the Rheinische Friedrich-Wilhelms-University of Bonn, Germany.

The key findings are summarised here:

Diplomacy, Trade & Investment

By April 2022, 52 of 54 African countries had signed a Belt and Road Initiative (BRI) Memorandum of Understanding with China, a clear indicator that the flagship project of China’s foreign policy in the 21st century is penetrating the entire African continent. In late 2019, China launched a revision of the Belt and Road Initiative, BRI 2.0, that aims to be more green, more sustainable, more digital, and more inclusive of investments in healthcare services.

China acts as a newcomer in the landscape of Africa’s Special Economic Zones (SEZs) and Economic and Trade Cooperation Zones (ETCZs). However, the country´s tiny share on total SEZs in Africa (less than 0,3%) indicates that Beijing seems to have no desire to export its development model to Africa or to try to “colonize” the continent with Chinese philosophy, institutions and business models.

For more than 10 years, annual Chinese foreign direct investment (FDI) flows to Africa grew moderately from $2.1 billion in 2010 to almost $5.4 billion in 2018, with the exception of 2019, when Chinese FDI declined to $2.7 billion. This hesitation is mainly affected by the overall trend of shrinkage of China’s FDI based on investors’ attitudes awaiting further information on upgrading the BRI from 1.0 to 2.0. In 2020, the strategic clarity of BRI 2.0 has encouraged Chinese investors to continue to invest heavily across Africa throughout the pandemic which increased again to $4.2 billion.

China-Africa trade reached a record high of $254 billion in 2021; an impressive increase of 35 percent in comparison with 2020, begging the question if this is a long-term trend or a flash in the pan. Nevertheless, this strong increase is remarkable, particularly since it is made up of an increase in both Chinese exports to Africa (29.9 percent yearly) and imports from Africa (43.7 percent yearly).

Not every country in Africa benefits from China´s investments in the same intensity. In actuality, the beneficiaries are not equally distributed over the continent. Of all Chinese FDI in 2020, 63 percent was focused on only ten countries: South Africa, DRC, Zambia, Ethiopia, Angola, Nigeria, Kenya, Zimbabwe, Algeria, and Ghana. This concentration of investment in ten markets leaves only approximately $380 million for each of the other recipients, a sum which averages at only half the sum amounting from loans.

The resurgence of Chinese FDI in Africa is a clear sign of Beijing´s willingness to continue to shape Africa’s FDI landscape in the coming post-pandemic years. Indeed, projects attracting minerals and raw materials are paving the way for investments in the African service sector such as scientific research and technology services, transport, warehousing, smart cities, and postal services.

The top 10 African trading partners of China account for more than 66 percent of the trade between China and Africa. Topping the list is South Africa, which accounts for $54 billion or 21 percent of total China-Africa trade. It is followed at some distance by Nigeria and Angola. In contrast, only seven African countries recorded a decline in trade volumes, namely Central African Republic, Gabon, Sudan, Chad, Western Sahara, Sao Tome and Principe, and South Sudan. Nevertheless, while the Central African Republic was able to export 62 percent more goods to China, Sao Tome and Principe imported three times the volume of Chinese goods compared to the previous year, even though neither of them joined the BRI until 2021.

With 18 percent of the total share of external debt, China became the most significant debt relief country in the world. It suspended $5.7 billion in debt payments, more than half of the total global debt moratorium and 45 percent of its own debt ratio. By doing so, the country presents itself as a champion of “debt relief” rather than of a “debt trap”.

Health, Vaccines & Medicine

The COVID-19 Pandemic has accelerated the expansion of the so-called “Health Silk Road” to Africa enabling China to play a leading role in sharing masks, respirators and vaccines with the continent. As a result, China emerges as a country that is temporally earlier than the U.S. and spatially wider than the EU in providing Africa with COVID-19 vaccines and other medical supplies to combat the pandemic.

With the prospect of the COVID-19 pandemic continuing, China-Africa aid, investment and trade in medical supplies will see growth in the short term. Given the pre-pandemic pattern of medical cooperation between China and Africa which was dominated by aid, and the unstable trend of trade and investment in pharmaceutical products, the long-term trend in the area of investment and trade is still unclear.

China’s industrial and infrastructure investments in Africa have declined due to the combined effects of the previous global economic slowdown and the COVID-19 pandemic, and are gradually shifting to green and sustainable as well as digital sectors. It seems that China is starting to pay more attention to the impact of its investment and construction in the natural and social environments.

Security, Energy & Technology

Chinese technology and infrastructure companies are becoming a crucial factor in the rapid modernization of African societies and economies. Chinese mobile phone producers dominate African markets. Huawei is more or less monopolizing the transformation of Africa’s telecommunication networks from 4G to 5G even though the infrastructure stacks of African countries remain a mix of Western and Chinese technology.

China is making vigorous efforts to increase its military cooperation with African countries attempting to position itself as a reliable security provider for the continent. Beijing leans mainly on using UN peacekeeping operations as a platform for its security engagement in Africa. Of the five permanent members of the UN Security Council (UNSC P5), China has become the biggest contributor to military observers, verifiers, inspectors, police operations and peacekeeping troops by order of the United Nations.

In recent years, military cooperation between China and Africa has been increasingly institutionalized in that China is taking advantage of the BRI to bestow its projects with a wider framework. Unlike France and the U.S. which maintain a large overt troop presence in Africa, China tends to integrate its military cooperation into UN peacekeeping operations or to present it as accompanying measures to its economic relations with African countries.

Soft Power, Culture & Population

Soft power, which is gaining increasing importance today, refers to the ability to get desired outcomes in international affairs not by (military) coercion or (economic) inducement, but by (cultural) attraction. Africa is encountering a China that recognizes this form of power. Indeed, most African countries are gaining first-hand experience with strong inflows of Chinese soft power elements.

The “Big Four” in the Chinese international media landscape (Xinhua News Agency, Central China Television, China Radio International, and China Daily) have stepped up their game, and Africa has become a key target across the board. At the same time, the number of Confucius Institutes has risen globally to about 550 over the past few years. In Africa, they now rank only second to the French Alliance Française.

China has become a major hub of international student mobility, especially for Africa. In 2020, it ranked second only to France among top destinations for African students, with Ghana, Nigeria, Tanzania, Zambia, and Zimbabwe as the leading countries of origin.

Despite China’s role as a key player in the race for soft power in Africa and around the world, opinion polls and surveys indicate some concerns regarding perceptions of China abroad, a sure sign that the country has a long way to go to enhance the effects of its soft power tools.

The number of Chinese workers going to Africa has declined significantly due to the overlapping effects of travel restrictions since the pandemic and the economic slowdown that preceded the pandemic. It is also a result of the upgrading of the BRI 1.0 to BRI 2.0, requiring Chinese corporations to create more jobs for the local workforce. Numbers of Chinese visitors and emigrants to Africa are expected to remain low for some time to come due to China’s strict pandemic containment strategy, tight restrictions on entry and exit, and the lack of medical infrastructure in Africa.

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