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SINO-AFRICAN ECONOMIC COOPERATION 2010-2020s
I.D. Strokov, Student HSE University (Russia, Moscow)
DOI:10.24412/2411-0450-2022-3-2-129-132
Abstract. The article examines the economic cooperation between the People's Republic of China and African countries in the period from 2010 to 2020. The article explains the reason for China's so high interest in the African continent, which the United States and Europe perceive as a source of migration, corruption, terrorism and insecurity. Based on the above data and analysis, the author suggests that China is interested in cooperation with Africa to obtain a stable source of energy resources, as well as for support at the level of international organizations in exchange for Chinese investments and technologies.
Keywords: China's economic policy, Sino-African relations, trade and investments, One China policy.
In the XV century, Chinese colonization of Africa went along with European one (mainly by Portugal and Spain, followed by England, France, and the United Provinces). A "treasure voyages" (1402-1435) were formed under the Ming Dynasty (1368-1644) to develop diplomatic and economic contacts with surrounding nations, as well as recognition of the Ming Empire in trade and politics. Admiral Zheng He led the expedition, which included roughly 300 ships and about 27 thousand people going to the coasts of East Africa (Somalia and Kenya). The expedition was discontinued a few years after the death of the Yongle Emperor and the strengthening of Confucianism, and China began to expand into neighboring regions such as Manchuria, Mongolia and Korea [1].
European Colonial empires began to fall apart after World War II ended. As a result, China and the newly constituted African states started to establish diplomatic ties. In April 1955, the Bandung Conference was held, where 29 Asian and African countries signed an agreement on cooperation (economic, political, cultural, etc.) and established the peaceful coexistence principles, marking the beginning of the Afro-Asian cooperation based on anticolonial and anti-imperialist policies [2]. China maintained diplomatic ties with another 25 African countries in the 1970s, and 48 African countries recognized Beijing by the end of the 1990s. China-Africa economic links were getting increasingly intertwined by the early 2000s. The execution of new economic
initiatives and investments began during Hu Jintao's presidency, resulting in an unparalleled degree of trust. Thus, more than 50 African presidents and 20 heads of state have visited China [3].
One of the most important principles in Chinese foreign policy is the recognition of the One China Policy in the international arena. Although Taiwan (or the Republic of China) originally represented the China we know today, the PRC has replaced the Republic of China's post in the UN and other international organizations since 1971. Thus, Taiwan has been persistently seeking to the UN for the return of its seat since the 1990s, but other nations, including African ones, have consistently rejected it. 21 African governments have had diplomatic connections with Taiwan since colonial independence, but they were pushed to dissolve them in order to have better relations with China. Burkina Faso became the final African country to break diplomatic ties with Taiwan in 2018 [4]. Moreover, only three African nations, Libya, Nigeria, and South Africa, have informal links with Taiwan in 2021 (through different institutions and organizations). And, by the end of 2021, among the 13 UN member nations who recognize only Taiwan there is only one African - Eswatini (formerly Swaziland). As a result, China enjoys political backing from virtually the whole African continent, which is a significant benefit in international organizations based on voting.
Since 2010, China has surpassed the United States and Europe as Africa's primary commercial partner. Simultaneously, the trade balance has been practically zero (net balance) for a long time, which is a favorable sign in the context of mutually beneficial collaboration. Despite this, the trade turnover for 2015 remains the most "profitable," as the volume of trade plummeted drastically by 35 percent in 2016, to $ 133.2 billion, after the continuous decline in the price of Africa's principal export - raw resources. However, the indicator grew to $ 154.7 billion the next year and continued to rise, reaching $ 175.9 billion in 2020 [5].
Chinese imports are mostly made up of natural resources, accounting for more than 80% of total imports, half of which is oil, with Angola, Sudan, and Algeria being the main African importers. Besides, iron ore, zinc, aluminum, gold, cobalt, platinum, copper, uranium, and bauxite are also imported by China. Due to constraints on logging in its own forest, China is also aggressively procuring timber, with Gabon and Equatorial Guinea being the primary suppliers in Africa. China imports African agricultural goods such as fruits, cereals, coffee, and tobacco in addition to raw resources. These items are just as vital to China as raw commodities because of the country's rapidly rising population. China, in turn, exports completed goods to Africa, including electronics, machinery, textiles, and chemical items. The low cost of Chinese goods in comparison to those from the United States or the European Union is appealing to African consumers, but it poses a dilemma for local businesses, who are still struggling to compete owing to their lack of economic growth [6].
China is actively building commercial relations with Africa, as well as gladly investing, issuing loans, and implementing collaborative projects. China has become the largest investor and lender in African countries since 2013, shifting the United States. According to CARI (China Africa Research Initiative), from 2010 to 2019, Chinese financiers signed 706 loan commitments worth $127.9 billion, and the level of loans reached a new high of $29.5 billion in 2016, of which Angola alone received $18.8 billion. The primary areas for loans were transportation, energy, and mining, with considerable part in information and
communication technology (ICT), military, agriculture, and water supply also being made. However, loans of the next 3 years declined by $ 12.2 billion, $ 10.4 billion, and $ 7.6 billion, respectively, from 2017 to 2019 [5].
In 2011, Africa got up to 52 percent of the money given to China's global foreign aid, while Asia and Latin America received 31% and 8%, respectively. The Ministry of Foreign Affairs, the Ministry of Trade, and the Ministry of Finance are the three primary institutions in charge of providing financial aid. Various institutions, funds, and enterprises, including the People's Bank of China (PBOC), the Export-Import Bank (ExIM), the China Development Bank (CDB), and the China Investment Corporation (CIC), are the direct sources of the allotted money.
The China-Africa Development Fund (CADF) was founded in 2007 to help overseas (in Africa) Chinese enterprises and to encourage new investments in the development of the African continent. Flows of Chinese OFDI (Overseas Foreign Direct Investment) increased from $ 2.1 billion in 2010 to $ 4.2 billion in 2020. It reached a new top of $ 5.6 billion in 2008, as in 2007 the Industrial and Commercial Bank of China (ICBC) bought 20% of Standard Bank of South Africa's shares. Kenya, the Democratic Republic of Congo, South Africa, Ethiopia, and Nigeria were the top five African locations for Chinese OFDI in 2020. By 2017, CADF had invested $ 3.2 billion in 91 projects in 36 countries. The key sectors of OFDI were industrial production, resource extraction and processing (fuel and non-fuel minerals, wood, rubber, precious metals and stones), infrastructure (roads and railroads, sea and river ports, docks, airports), and energy (thermal power plants, hydroelectric power plants, construction of solar and wind generators). Additionally, around 5,750 kilometers of railroads, 4,350 kilometers of roads, 9 ports, 14 airports, 34 power stations, and over 1,000 hydroelectric power stations have been built by the end of 2016 [7]. The Bui dam increased Ghana's power supply capacity from 2,000 megawatts to 6,000 megawatts by 2015, allowing the country to respond more quickly to energy problems [8]. In addition, after the Akosombo project, the dam will be the country's second largest. The Merowe multi-
purpose hydro complex on the Nile River is built at a cost of $3.3 billion by Chinese enter-another African Chinese joint project. It is the prises China Harbour Engineering Company biggest dam on the African continent, planned and China State Construction Engineering to nearly double the Sudan's capacity. The Corporation.
building cost was estimated to be $ 1.2 billion, To summarize, China's engagement with
with ExIm Bank of China contributing $ 608 Africa has grown significantly since 2010, million and the Sudanese government and nu- both politically and economically. Today merous North African development institu- China has a reliable source of natural resources tions covering the remaining expenditures [9]. for its expanding industry and agriculture, as The development of one of the major ports in well as international support, while African Algeria's Al-Hamdaniya area is considered a countries now have the means to develop their magnificent undertaking. There will be 23 economies and infrastructure, allowing them berths in the harbor, with a capacity of up to to overcome financial difficulties and improve 25.7 million tons of cargo. The port is being the country's quality of life.
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КИТАЙСКО-АФРИКАНСКОЕ ЭКОНОМИЧЕСКОЕ СОТРУДНИЧЕСТВО 20102020 ГГ.
И.Д. Строков, студент
Национальный исследовательский университет Высшая школа экономики (Россия, г. Москва)
Аннотация. В статье рассматривается экономическое сотрудничество Китайской Народной Республики и африканских стран в период с 2010 по 2020 год. Статья объясняет причину столь высокого интереса Китая к Африканскому континенту, который США и Европа воспринимают как источник миграции, коррупции, терроризма и ненадежности. На основании приведенных данных и анализа, автор выдвигает предположение, что Китай заинтересован в кооперации с Африкой для получения стабильного источника энергетических ресурсов, а также для поддержки на уровне международных организаций в обмен на китайские инвестиции и технологии.
Ключевые слова: экономическая политика Китая, китайско-африканские отношения, торговля и инвестиции, политика Одного Китая.
