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 instructed 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, support and Chinese language company funding in addition to help for African international locations to difficulty 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 navy coaching.
Beijing is eager to leverage its dominance as Africa’s greatest buying and selling accomplice to seal profitable mining offers and export alternatives to assist its struggling economic system, in response to analysts, whereas heading off geopolitical rivals on the continent, together with the US.
For his or her half, African leaders need Beijing to handle a commerce imbalance that has allowed China to eat the area’s uncooked supplies, reminiscent of 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,” mentioned Zainab Usman, senior fellow and director of the Africa Program on the Carnegie Endowment for Worldwide Peace.
She mentioned this might cowl the processing and refining of vital minerals and associated manufacturing, reminiscent of in clear power. “This is a huge area right now for a lot of African countries,” she mentioned.
In 2023, China permitted 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 Street Initiative, when common annual commitments surpassed $10bn, in response to the Chinese language Loans to Africa Database of the Boston College International Improvement 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 mentioned.
With China’s funds already stretched by a deep property sector slowdown, Beijing favours smaller authorities lending and larger involvement by state-owned enterprises or personal sector buyers.
Zambia defaulted on its debt in 2020, adopted by Ghana and, extra 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,” mentioned a senior financial official of a Horn of Africa nation in Beijing.
The gradual debt renegotiations, significantly with Zambia, have sparked criticism of China’s function. However Tang Xiaoyang, a professor and China Discussion board professional 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 speedy escalation of Chinese language debt.
Regardless of the continent’s debt woes — and the poor file of some BRI initiatives — African leaders have stepped up requires extra funding in bilateral conferences with Xi.
In Kenya, for instance, the $5bn Chinese language-funded customary 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 — instructed Xi {that a} projected enlargement of the railway to Uganda and past was one among “Kenya’s top priorities in the engagement with China”. He additionally named different initiatives in want of funding, together with highways.
Kenya this week additionally formally joined the Asian Infrastructure Funding Financial institution, the Beijing-led various 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 put money into electrical automobile 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 embrace Nigeria, which is in search of investments in manufacturing and power infrastructure, whereas Zambia desires new investments in vital 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 way of a concession to Chinese language buyers as Beijing retools its method in direction of extra direct funding.
“We are still going to see Chinese investments in infrastructure,” mentioned Cliff Mboya, a fellow on the Heart for Africa-China Research on the College of Johannesburg. However new initiatives will pursue “innovative ways of funding”.
Looming over the Tazara challenge 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 vital minerals following an extended interval the place they gave China little competitors.
Nonetheless, whereas the US and others had been turning into extra lively within the continent, China retained an edge by way of sturdy people-to-people ties and its narrative of being a “developing country” helping its companions within the world south alongside the trail of industrialisation, mentioned 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 mentioned.
