Sino-African economic relations: an analytical study

In recent decades, it became clear the extent of China’s “soft” control over the African continent, thanks to the volume of its large investments, as Chinese companies contributed to industrialization and improving livelihoods through their investments in Africa, making it one of the driving forces for the comprehensive economic growth of the continent, as the report showed. The annual report on economic and trade relations between China and Africa, issued in 2021, showed that the value of bilateral trade amounted to $187 billion in 2020, despite the difficulties posed by the Corona virus pandemic, so that China would maintain its leadership as the best trading partner for Africa, for 12 consecutive years. China has also become one of the first countries to grant huge development aid to the African continent. It also grants loans to the point of dumping some countries with them, which raises some concerns about giving China an important margin in negotiating major deals, and gives it preference in winning these giant projects such as iron and material mines. other primary. This is in light of the expectation that bilateral cooperation will enter a new phase of growth with great momentum thanks to the effectiveness of the role of the China-Africa Cooperation Forum, through which economic cooperation will be strengthened in several areas, such as the inauguration of industrial complexes and the improvement of infrastructure within the framework of the Belt and Road Initiative. From this standpoint, the “American McKinsey Agency” expected that the value of financial profits that China reaps from Africa by 2025 will reach 440 billion dollars.

Introduction:

     In the last decade of the twentieth century, Sino-African relations witnessed a great leap, fueled by China’s increasing openness accompanied by developmental and social support for the brown continent, as well as by the African side’s aspiration to search for a profitable partnership away from the old colonial European countries. The Chinese-African relations are distinguished, and this is evident from the various aspects of cooperation between China and the African continent in the fields of politics, economy, culture, etc. This was the basis for the growth of the idea of ​​establishing the China-Africa Cooperation Forum in 2000. For more than 60 years, China-Africa cooperation has continued to meet political calls for comprehensive cooperation, and the friendship between China and Africa has been deepened to reach the stage of “comprehensive strategic partnership”. So that cooperation between China and Africa has become a model for the advancement of Asia and Africa and cooperation between South and South.

      Trade and investment relations between China and African countries have strengthened. On the trade side, China has become the largest trading partner with Africa, as Chinese trade with Africa has recorded rapid growth since 2000, and China’s trade with Africa increased by 14% year on year, to reach $170 billion. US dollars in 2017, and the rapid growth rate continued until the first half of 2018, when the volume of trade jumped by 16% to nearly $100 billion, and in 2020 the volume of trade exchange between the two sides amounted to about $187 billion despite the Corona pandemic. The same applies to the field of investment, as direct annual Chinese investment in Africa amounted to about $4.2 billion in 2020, which included areas such as manufacturing, agricultural field, infrastructure, financial services, green development, trade and investment facilitation, poverty reduction, and public welfare. , and public health.

     At a time when the “Covid-19” pandemic is spreading all over the world, China and Africa have supported each other in facing the epidemic, and massive medical supplies donated by the Chinese government and Chinese companies have reached nearly 50 African countries and regions. These timely donations have helped alleviate the shortage of medical supplies on the continent to tackle the pandemic. Aid of $280 million also flowed from China to support countries on the African continent in light of the Corona pandemic, and much of this money came from the private sector and Chinese businessmen.

The problematic of the study: Despite the multiplicity of aspects of economic cooperation between China and African countries, concerns began about China’s control and the extension of its influence on Africa with soft powers, which is economic power and not the power of arms. On the other hand, some pointed to the nature of the economic gains that African countries enjoy from China, whether in the form of investments, aid, or trade exchange, which helps the countries of the continent to overcome their crises and raise their economic growth rates. Although the problem of the intensity of Chinese loans to Africa represents a concern of interest; Because it may lead Chinese-African relations to a deadlock and negotiating positions in favor of China, even at the expense of indebted African countries. From this point of view, it became worthwhile to study the analysis of the nature of these relationships and the aspects of opportunities and challenges that result from them.

Study questions: Based on the previously presented problem, the study seeks to try to answer the following questions:

1) How did Sino-African relations develop, and what is the nature of the economic goals that China seeks to achieve in Africa?

2) To what extent has trade developed between China and Africa, and what is the structure of this trade exchange?

3) What is the nature of Chinese investment relations in Africa, and which economic sectors are the focus of China?

4) How did Chinese financial aid and loans flow to the African continent, and what are the uses of these flows?

Study Objective: The study seeks to shed light on the nature of the development of economic relations between China and Africa, in terms of trade exchange, investment relations, and financial flows and loans between the two sides. With a focus on the expected economic cooperation opportunities during the coming period, and the challenges that may affect the strength of Sino-African relations.

Study methodology: The study uses the analytical descriptive approach based on the use of economic indicators to analyze the structure of trade, investment, economic aid and loans between China and Africa, such as: the structure and volume of exports and imports and their ratio to China and Africa trade, and the value of Chinese investments in Africa and their distribution to various sectors and their ratio to total investments. And the value of aid, grants, and loans, and the extent of their contribution to the African economy….etc.

The hypotheses of the study:

The study is based on two main hypotheses:

– The establishment of the African Economic Cooperation Forum in 2000 has contributed to the improvement of Sino-African economic relations significantly.

The economic relations between China and Africa are moving in the direction of complementarity, not competition, according to the principle of win-win for both parties.

Previous studies related to the subject of the study:

First – Studies in Arabic:

1) Reda Mohamed Helal, “Chinese Relations with Developing Countries.. Starting Points and Dimensions”, Journal of International Politics, Issue 173 (Cairo: Al-Ahram Center for Strategic Studies, July 2008).

    This study was exposed at its beginning to the general context of Chinese-African relations in terms of the development of the performance of the Chinese economy since 1990, as well as the development of the developmental orientations of the African continent since its independence until the present time. Then the study focused on the political goals of China in Africa as well as the economic ones, which are concentrated in opening African markets for Chinese commodities, and searching for natural resources. The United States of America and the European Union in Africa, and the creation of great economic cooperation opportunities with many African countries, especially in light of the fact that their relations are characterized by non-conditionality and interference in internal political affairs.

2) Hussein Qwadrah, “Chinese-Nigerian economic relations and their impact on socio-economic development in Nigeria,” Researcher Journal for Academic Studies, Volume 6, Issue 10, 2019 (Batna, College of Law and Political Science, 2019).

     This study deals with the Chinese economic expansion in Nigeria as one of the largest economies in Africa, which has received attention from China since 1971. The study first deals with the development of economic relations between the two sides by focusing on Chinese investments in the Nigerian oil sector, where China owns more than 30 companies operating in Nigeria in the energy sector, as well as the construction and communications sectors. The volume of trade between them has also developed rapidly. Then the study presented the influence of China on the level of development in Nigeria. The study concluded that Sino-Nigerian relations do not benefit Nigeria as much as they benefit China, so the economic benefits achieved by China were greater than the case of Nigeria, especially in light of the growth of Chinese loans to the Nigerian government. The study recommended the need for Nigeria to develop development policies in its industrial sector to protect and stimulate it against Chinese imports, and to try to exploit the country’s wealth to limit loans and dictates.

Second – studies in English:

1) Secretariat of the China-Africa Economic and Trade Expo (CAETE) , China- Africa Economic and Trade Relationship Annual Report ,( China-Africa Economic and Trade Expo , 2021)

This study deals with an analysis of the Chinese-African relations from several directions, where it is presented at the beginning to the intra-trade of the two sides and its development and the nature of goods and services subject to exchange, as well as the most important African destinations for Chinese trade, and it was on top: South Africa, Nigeria, Angola and the Congo. Then the investment relations between China and Africa were analyzed in terms of the development of the number of Chinese companies operating in Africa, and the nature of the investment fields. The study concluded that there was a positive development in the Chinese-African economic relations, especially with China adopting a win-win approach, as Chinese investments were concentrated in important development areas for the continent, including mining, oil, infrastructure and information technology. Trade relations were also based on the principle of comparative advantage. Africa is commodities and raw materials, and China provides African countries with the industrial commodities they lack.

2) Xiaoqin Ding, Qiaoyan Chai and Cheng Chen , ” China–Africa Economic and Trade Cooperation from the Perspective of the Community with Shared Benefits: Achievements, Challenges, and Prospects” , World Review of Political Economy , Summer 2020, Vol. 11, No. 2.

    This study deals with the areas of economic cooperation between China and Africa. Where it dealt with the similar historical experiences between China and Africa in terms of colonial exploitation and national liberation movements until the transition towards common development goals. During six decades of economic and trade cooperation, positive indicators were achieved between the two sides, the most important of which was the establishment of the China-Africa Cooperation Forum in 2000, and the increase in the volume of trade exchange from 6.484 billion dollars in 1999 to 221.88 billion dollars in 2014. The level of Chinese investment cooperation with Africa also increased, Although it was initially concentrated in traditional industries such as construction and agriculture. Then the investment moved to other industries such as the clothing and textile industry, medicine and food processing, and investment in services such as the finance and communications sector increased rapidly.

   The study reached several results, the most important of which is the improvement and development of Sino-African relations in the fields of trade and investment. In general, economic and trade cooperation between China and Africa has a very bright future, although it is not without some challenges, including on the trade side, such as unequal levels of production and low competitiveness. for African goods. On the investment side, Chinese investments face fierce competition from companies from Europe, the United States, India and Japan within Africa.

3) Miria Pigato and Wenxia Tang, China and Africa Expanding Economic Ties in an Evolving Global Context , Investing in Africa Forum , Addis Ababa , March.2015 .

   This study indicated an improvement in the business environment in Africa, in light of the high average economic growth rates, averaging about 5% per year over the past decade, which led to the improvement of living standards and the enhancement of human development indicators across the continent. This has greatly helped countries’ opportunities to participate in global markets. In recent years, many countries in the region have benefited from the increasingly favorable external environment and particularly strong demand for natural resources by emerging economies, particularly China. In the long run, Chinese investment has flowed into Africa, and the study finds that only a few African countries have been able to benefit from large-scale Chinese investment outside the resource sector. Where it became necessary for Africa to create opportunities to benefit from the potential offered by the gradually intensive Chinese trade and investment relations with sub-Saharan Africa.

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4) Raphael Kaplinsky, Dorothy McCormick, and Mike Morris ,China and Sub Saharan Africa: Impacts and Challenges of a Growing Relationship , the African Studies Program at School of Advanced International Studies ( SAIS) Working Papers in African Studies, ( Washington , D.C: (SAIS) , 2008 )

   This study praised the nature of Chinese-African relations, which did not witness any fundamental differences, and China has no colonial history in Africa, and therefore the relations of the two parties are devoid of sensitivity, fears, and doubts. Fourth, there is a perfect integration of the economies of the two parties, as each of them almost meets the needs of the other. China has capital and technologies and is going through a stage of economic growth in need of many resources, and Africa is a virgin land for investments and thirsts for technologies that suit its conditions and needs an international partner that invests, develops and develops its resources without To have ambitions beyond the common economic benefit. The study then exposed the forms of economic interaction between China and Africa, focusing on three main channels: trade flows, foreign investment flows, and financial aid and loan flows. In each channel, relations between China and sub-Saharan Africa may be either complementary or competitive. In trade, for example, China may provide sub-Saharan countries with cheap consumer goods, while Africa provides China with the commodities and raw materials it needs in industry. The relationship here is complementary, and on the contrary, the relationship is competitive in the field of investment. It remains for the economies of sub-Saharan Africa to be able to change, seize opportunities, reduce threats, and open wider areas for economic cooperation, such as Chinese tourism in Africa, as well as encouraging Chinese investments in the quality of African labor to improve employment rates in Africa.

Study division:

 This study analyzes the following main points:

1- The development of Sino-African relations.

2- The economic objectives of the Chinese presence in Africa

3- Analysis of trade relations between China and Africa

4- Chinese investments in Africa

5- Aid, grants and loans between China and Africa

6- Opportunities and challenges of the Chinese presence in Africa…. The following is the detail:

First – the development of Chinese-African relations:

      The African continent is a repository of primary resources that the West needs in industrialization, and due to what the continent possesses of rare natural ingredients, this qualified it to be an area of ​​international competition between the major powers represented in the United States of America and the European Union, in addition to new international players such as China. The competition began since the European colonialism that invaded the continent with the start of the Berlin Conference in the year 1884 AD, when it colonized an area estimated at 93% of the total African lands, and during that these forces practiced a number of colonial policies that extended their effects, including: the policy of looting, plundering, enslavement, starvation and attrition, And other policies related to religion, laws, and culture, such as church preaching, the policy of closed areas, the imposition of Western culture, and others. After the emergence of the new world order and the collapse of the Soviet Union; The United States of America imposed some policies of economic reform and liberalization programs, which cast shadows that affected various aspects of political, economic, social, cultural and intellectual life.

     Sino-African relations witnessed a long history of communication dating back to before World War II. And the strength of Chinese-African relations was increased by the support provided by China for movements to undermine colonialism and political independence in developing countries, including Africa. Add to that the common goals that brought China together with many African countries under the umbrella of the Non-Aligned Movement during the Cold War. Contemporary Chinese-African relations are still distinguished. Because of its breadth and depth, the multiplicity of sectors of cooperation, and the levels of the relationship that are characterized by a solid structure. Therefore, it is natural to refer to these relations as a “strategic partnership.” The patterns of Sino-African relations continue to advance, driven by global economic and geopolitical currents, especially China’s ambitions and rise in international politics.

     With the beginning of the 21st century, in order to consolidate and develop existing “Chinese-African” cooperation relations, and push for the establishment of a new international, political and economic order, China and Africa established the “China-Africa Cooperation” forum in 2000, and Egypt was among the first African countries to consult with China to establish the forum. The forum is held every 3 years in China and one of the African countries alternately. The forum is a collective consultation and dialogue mechanism between China and African countries. It is the first of its kind in the history of “Chinese-African” relations, and as a major step forward for the future by the two sides in the context of “south-south” cooperation. To seek common development in the new situation.

     However, the most important motive for China to interact with Africa is the economic factor. Therefore, China views Africa as a central element in the project to sustain the growth and development of China’s economy in the long run. Where Africa is an important source to supply China with its growing need for raw materials, it has one of the largest reserves of raw materials, and it is the main source of natural resources, in addition to the various opportunities for Chinese trade and investments, due to the presence of the growing population density in Africa and its purchasing power, and the urgent need for the existence of a structure social and economic infrastructure. African countries have adhered to their relations with China since 2000, and have accelerated the wheel of those relations as well as tried to consolidate them. The clearest indications of that relationship lie in the expansion of Chinese trade across the continent, and most importantly the highly present activities that bring together China and Africa.

1) China’s approach based on “not dictating political conditions” and adopting an economic interaction approach close to the traditional Western approach in economic activity with Africa has been accepted by African leaders for several reasons. Among them: is the history of colonialism and Africa’s desire to effectively protect its political independence, as well as the preference of African leaders for centralized political systems and authorities, and not like Western systems based on the devolved democratic system favored by Western governments, and finally what China offers African leaders of alternative paths to development, not There is room for external domination.

2) China’s promise of a “win-win” partnership, especially China’s determination to invest and support in the field of development in the social and economic infrastructure in Africa, which suffers from a large deficit in infrastructure, especially in roads, bridges, ports, hospitals, schools, etc. . China’s commitment to invest in this field indicates that it responds to the developmental needs of African countries.

3) China’s adoption of a unique approach in providing development aid and financing, as it combines special grants, interest-free loans (preferential loans), and concessional loans to finance scholarships, building infrastructure facilities and communications equipment, and capacity building in the field of agriculture and mining.

 Second – the economic objectives of the Chinese presence in Africa:

      China launched many initiatives to strengthen its trade and economic relations with the African continent, including: a new strategy for development in Africa in 2001, an action plan to accelerate industrial development in Africa in 2007, the plan for infrastructure development in Africa in 2013, and support for Africa’s vision 2063 to enhance its economic presence. And trade in the African continent. It is worth mentioning the most important motives behind pushing China towards deepening those relations with African countries, the most important of which are as follows:

Searching for natural resources in Africa: It is estimated that Africa contains 90% of the world’s total supply of platinum and cobalt, half of the world’s gold supply, two-thirds of the world’s manganese, and 35% of the world’s uranium. It also accounts for about 75% of the world’s coltan, which is an important mineral used in electronic devices, including cell phones. It also possesses huge potential in the agricultural field that qualifies it to become a global food basket. In addition to the water resources needed for agriculture, as 13 rivers flow through it, as well as rainwater and groundwater reserves. In addition to that, the diversity of its climatic regions makes it a suitable environment for growing many crops, especially in light of the presence of suitable agricultural lands representing about 35% of the continent’s area, of which only 7% of it is exploited; Thus, investment in the agricultural field is considered one of the best options offered by Africa to the countries of the world, including China.

   China is also aware of the growing need for natural resources, food markets, and products necessary for continuous economic growth, hence the focus on resource-rich Africa, where mining investments represent about a third of China’s total foreign direct investment, due to its desire to secure a solid base of vital raw materials that strengthen China’s economy for decades. coming . Hence, supplying natural resources is one of the most important goals of the Chinese approach to the African continent, especially energy. In 2013, China became the second largest oil importer in the world after the United States of America, as it imports nearly seven million barrels of oil per day, and its oil needs are increasing at a rate of 30% annually. China takes about a third of its oil needs from Africa, and it is expected that its dependence on importing oil from the continent will increase in the coming years. Therefore, Angola has replaced Saudi Arabia as the largest supplier of oil to China at the international level, providing it with about 15% of all its oil imports. China also has oil activities in Algeria, Chad, Sudan, Equatorial Guinea, Congo and Nigeria.

    China has also worked to buy large stakes in the Niger Delta region. In early 2007, the China National Offshore Oil Company announced that it had purchased a 45% stake in Nigeria’s oil and gas field, and also bought 35% of an exploration license in the Niger Delta, in addition to Chinese investments in the Niger Delta. This area is Angola. Some studies in the field of energy indicated that Chinese oil consumption is expected to double in the short term, as the actual consumption rose from about 4.2 million barrels per day of oil in 1997 to about 9.5 million barrels per day in 2020, in exchange for the emergence of a large gap. The Chinese demand for oil and natural gas due to the shortage in the local reserves of energy, which compels it to raise the rates of search and exploration for new reserves in other depths of the territorial waters of the South China Sea.

    Over the last decade, China’s imports from Africa of all raw materials, except for iron, have increased more than they have from the rest of the world. China sought to sign contracts to monopolize the extraction and exploitation of ores: cobalt, tantalum (used in the manufacture of mobile phones and computers), coal, uranium, gold, manganese, diamonds, and zinc with the governments of the Congo, Nigeria, Zambia, Kenya, Senegal, Egypt, Algeria, Chad, and Ethiopia. The value of these contracts was estimated at about $29 billion, funded by the China Development Bank.

Opening new African markets: Chinese-African trade relations have witnessed great development, as they have increased more than ten times since the beginning of the twenty-first century. Where China became the second trading partner of the continent since 2010 after the United States of America, but in the year 2013 China became the first trading partner of Africa; Statistics indicate that the volume of trade exchange between the two countries reached the level of 200 billion dollars in the year 2013-2014, thus exceeding the volume of trade exchange between the United States and the African continent by about two times. In order to encourage African exports to China, the latter abolished, starting in 2012, customs duties on nearly 60% of the exports of 30 African countries with which it has stable diplomatic relations. Trade relations between China and Africa remain concentrated with a few African countries; About 60% of Chinese exports are directed to six African countries only, namely South Africa, Egypt, Nigeria, Algeria, Morocco and Benin. While 70% of Chinese imports come from four countries, namely Angola, South Africa, Sudan and the Republic of the Congo.

Political and security motives: The African continent is a fertile ground for the expansion of Chinese political influence, as China is already considered the prominent power in Asia, and it has been able to access the basic economic elements in Africa such as the utilities and communications sector in African countries, while developing its military influence, it possesses Also a large political alliance in those countries. And because supplying African natural resources, especially energy, has become one of the pillars of Chinese national security; It is natural for us to witness Chinese protection of areas of influence on this continent, whether through participation in peacekeeping operations deployed in some African countries (Liberia, Côte d’Ivoire, South Sudan, Sudan, and the Democratic Republic of the Congo), or by supplying arms; Africa imported 13% of Chinese exports of conventional weapons during the period 2007-2012, with a financial value of $6462 million.

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Third – Analysis of trade relations between China and Africa:

     Economic cooperation and trade exchange between China and Africa witnessed rapid growth, as the volume of total trade exchange between them increased from about one billion US dollars in 1980 to more than 10 billion US dollars in 2000, then China became Africa’s largest trading partner in 2010. The volume of trade exchange increased to reach nearly 115 billion US dollars, an increase of 43.5% compared to 2009. It continued to rise to 166.3 billion in 2011. As for 2012, the volume of trade exchange reached 198.49 billion dollars (an increase of 19.3% over 2011). And it continued to rise, reaching about $148 billion in 2017 instead of $215 billion in 2014. While the total volume of Chinese trade with Africa reached 204. 19 billion US dollars in 2018, although it decreased relatively in 2020 due to the spread of the Corona pandemic, bringing the volume of bilateral trade between them to about 176 billion dollars, and China still maintains its position as the best trading partner for Africa in 2020 despite the difficulties imposed by the pandemic. The Global Economist magazine indicated that about 33 of the poorest countries in Africa directed about 97% of their exports to China without tariffs or customs duties. Also, the successful regional trade signed within the framework of the African Continental Free Trade Area, which Africa declared in January 2021, will link the richest and poorest countries in the region, promote the growth of value chains and lay the foundations for increasing international trade. African countries already enjoy it with China and the continent’s other major trading partners.

Figure No. (1) The development of the volume of trade (exports and imports) between China and Africa during the period (2002-2020)

billion US dollars

– Source : China Africa Research Initiative , CHINA-AFRICA TRADE, 2022 , AVAILABLE AT :

http://www.sais-cari.org/data-china-africa-trade

 Sub-Saharan Africa has gained great importance in Chinese trade policies, as China overtook the United States as a trading partner for sub-Saharan Africa after the global financial crisis in 2008, which led to an increase in China’s share in sub-Saharan Africa’s total trade, as China’s total trade increased with Sub-Saharan countries from 4% in 2001 to 25.6% in 2020, while during the same period the share of the European Union and the United States in total sub-Saharan African trade decreased from 30.3% to 22.3% and from 15.5% to 5.6%, respectively.

Figure No. (2) The evolution of the share of China, the European Union and the United States of America in the total trade volume of sub-Saharan African countries during the period (2000 to 2020)

Source : Amin Mohseni-Cheraghlou , ” China and Sub-Saharan Africa trade: A case of growing interdependence ” , Atlantic Council , July 22, 2021, Available at :

China and Sub-Saharan Africa trade: A case of growing interdependence

   Not only has China become a growing strategic trading partner for Sub-Saharan Africa in the past two decades, but Sub-Saharan Africa’s share of China’s total trade has also increased over the same period: from 1.48% of China’s total trade in 2001 to 3.18% in 2020. At the same time At the same time, the weight of sub-Saharan countries in total EU trade remained relatively the same – 1.3% in 2001 and 1.2% in 2020 – while it experienced a decline in the United States – 1.5% in 2001 to 0.85% in 2020. In other words The weight of sub-Saharan countries in total Chinese trade has more than doubled in the past two decades, while remaining relatively constant for the European Union and declining for the United States.

Figure No. (3) The share of Sub-Saharan Africa in the total trade volume of China, the European Union and the United States of America

 Source :Amin Mohseni-Cheraghlou , ” China and Sub-Saharan Africa trade: A case of growing interdependence ” , Atlantic Council , July 22, 2021, Available at :

China and Sub-Saharan Africa trade: A case of growing interdependence

 China has become a destination for about 15 to 16% of sub-Saharan Africa’s exports, and a source of between 14 to 21% of the region’s imports. South Africa, Nigeria and Egypt imported from China, as shown in Figure (4).

Figure No. (4) China’s imports and exports from Africa, distributed by African countries

Source : United Nations Conference On Trade and Development (UNCTAD ) , COMTRADE, , at:https://comtrade.un.org/Data/

     Most of Africa’s exports to China consist of: oil and its derivatives. In 2019, the sub-Saharan region accounted for more than 16 percent of the total crude oil imported by China, and the volume of Sub-Saharan Africa’s crude exports to China grew by more than 100 percent between 2008 and 2008. And 2019 from 0.7 million barrels per day in 2008 to 1.5 million barrels per day in 2019. As well as lubricants, and minerals such as (uranium, aluminum, zinc, phosphate, copper, nickel, and gold), as well as some agricultural commodities such as (timber, rubber, coffee, cotton, cocoa, fish, and cashews). At a time when Africa’s imports from China vary, as shown in Figure (5), where electronic devices, machinery and transport equipment represent the largest share, followed by consumer goods, especially textiles and clothing. The most important characteristic of these Chinese commodities is that they are less expensive than similar commodities in the European Union countries, which makes them more attractive and in demand in Africa.

Figure No. (5) The structure of Africa’s imports from China

– Source : Miria Pigato and Wenxia Tang, China and Africa Expanding Economic Ties in an Evolving Global Context , Investing in Africa Forum , Addis Ababa , March.2015 , P.5, at:https://www.worldbank.org/content/dam/Worldbank/Event/Africa/Investing%20in%20Africa%20Forum/2015/investing-in-africa-forum-china-and-africa-expanding-economic-ties- in-an-evolving-global-context.pdf

Third – Chinese investments in Africa:

     China has sought to invest in Africa, by signing economic and investment contracts covering various fields, which has strengthened China’s centrality in the development of the continent, which, according to recent estimates of the African Development Bank (AFDB), needs about $170 billion annually. To develop its infrastructure and maintain its economic growth. Africa is the third largest destination for Chinese investment after the countries of Asia and Europe, as Chinese foreign direct investment in Africa developed from 20 million dollars in the early 1990s to nearly 100 million dollars in 2000 and reached more than one billion dollars in 2006. The volume of Chinese investment in Africa remained in an increasing trend from 2006 until 2017, when it amounted to about $110 million (after the 2015 China-Africa Forum summit), in which China committed $60 billion to the continent. Chinese investment in Africa also witnessed an important expansion, despite the downward trend in global trade and economy resulting from the effects of the Corona epidemic, as the volume of Chinese investment flow in the brown continent amounted to about $ 2.5 billion for the year 2020, an increase of 9.5% from 2019. Chinese investment amounted to direct sales until the end of July 2021, amounting to $ 2 billion, better than the level recorded in 2019 before the pandemic. Most of these investments are distributed over 52 African countries, and are largely concentrated in Kenya, the Democratic Republic of the Congo, South Africa, Ethiopia, Niger, Zambia, Senegal, and Madagascar.

. Figure No. (6) The evolution of the volume of Chinese investment flows in Africa during the period (2003-2020)

billion US dollars

   Source : Yike Fu , The Quiet China-Africa Revolution: Chinese Investment , The Diplomate , November 22, 2021, Available at :https://thediplomat.com/2021/11/the-quiet-china-africa-revolution-chinese-investment/

    A report prepared by the China-Africa Business Council revealed the balance of direct investment of Chinese companies in Africa, as it amounted to 56 billion US dollars at the end of 2020, and private companies represent about 70% of the volume of this investment. It can be said that the total value of Chinese cumulative foreign direct investment in Africa amounted to nearly 100 times during the 17-year period between the period (2003 to 2020), and it reached its peak in 2018 at $46.1 billion.

    There is no doubt that these projects contribute greatly to the creation of job opportunities in Africa, as they amounted to more than 130 thousand job opportunities in the period between 2005 and 2016, and in a study conducted on only a small sample of Chinese projects in Africa consisting of 156 companies, it was found that they contributed In creating about 39,000 job opportunities during 2017. It is noteworthy that the number of Chinese companies operating in the African continent until the end of 2016 amounted to about 3,100 Chinese companies, and it rose to 3,670 companies until 2018, working in various projects in the fields of transport, energy, communications, industrial zones, agricultural technology centers, water supply, schools and hospitals. This is in addition to the presence of Chinese industrial zones in Africa, where there are 25 Chinese zones for economic and trade cooperation in 16 African countries, which enhances the development of the brown continent and contributes to the transfer of Chinese technology to African countries and opens the door to the localization and deepening of industry in these countries and increases the added value of its resources. By the end of 2020, these regions attracted about 623 companies with investments estimated at $7.35 billion, and provided more than 46,000 job opportunities for the host countries. A study conducted by the US agency “McKinsey” indicates that the value of financial profits that China reaps from Africa by 2025 will reach 440 billion dollars, an increase of 144%.

     As for the geographical distribution of those Chinese investments in Africa, the top 10 recipients of foreign direct investment (South Africa, Democratic Republic of the Congo, Zambia, Ethiopia, Angola, Nigeria, Kenya, Zimbabwe, Algeria, Ghana) accounted for 63% of the total Chinese foreign direct investment in Africa. Africa, as shown in Figure (7), while the remaining 37% is distributed among the rest of the other African countries.

Figure No. (7) The first ten African countries receiving Chinese investments for the year 2020

 Source : Yike Fu , The Quiet China-Africa Revolution: Chinese Investment , The Diplomate , November 22, 2021, Available at :https://thediplomat.com/2021/11/the-quiet-china-africa-revolution-chinese-investment/

    It should be noted here that Nigeria receives relatively large funds from China for the development of railways, as China supports two major railway projects: one is a line from Lagos to Kano, and the other is a coastal railway from Lagos to Calabar. The Nigerian government also hopes that the latter will support peacekeeping in the Niger Delta region, and thus improve oil investments there. China is also involved in railway construction in Kenya, Ethiopia, Zambia and others. For example, the Export-Import Bank of China provided 85% of the financing for the $475 million Addis Ababa Railway, which serves 4 million residents of the city. Statistics also indicate that Chinese companies often make the strongest competitive offers in deals related to road construction projects, railway networks, ports, dams, airports, and telecommunications.

   As for the sectoral distribution of Chinese investments in Africa, investments in the energy sector represent the largest part of investments, especially oil and gas investments such as Nigeria and Angola, and investment in clean energy such as hydroelectric power. China is also one of the largest investors in the field of renewable energy in the world, as China invested 3 dollars in renewable energy for every dollar invested by the United States in this field, as well as investment in the transportation, mining, construction and health sectors. It should be noted here that China’s investments in Africa are still in the early stages compared to the investments of the main European countries that have a colonial past in Africa, especially France and the United Kingdom. China ranks fifth as one of the largest investing countries in Africa, after France, New Zealand, the United States of America, and England.

   Fifth – Aid, grants and loans between China and Africa:

       Chinese aid to Africa is characterized by the fact that it is not bound by any political conditions, does not interfere in the internal affairs of aid-receiving countries, and respects the rights of aid-receiving countries to choose the development paths and methods that suit them, which is consistent with China’s policy of non-interference in internal affairs. Where most of the Chinese foreign aid granted free of charge has been classified as aid concerned with infrastructure and social and health aspects, as China supports recipient countries to improve medical conditions and health care, improve disease control and prevention, and enhance capacity building in the field of public health by building hospitals and providing Medicines, medical equipment, dispatch of medical teams, and training of medical personnel. At the end of 2018, China had more than 200 projects related to infrastructure in Africa, which makes China the largest donor of aid in this field, for example:

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      As for Chinese loans to Africa, in fact, Africa has been the largest recipient of Chinese funds since 2009, as China provided 10 billion US dollars to finance Africa in the form of “soft loans”, and this commitment doubled to reach 20 billion US dollars from 2013 until 2015. The loans provided by China to Africa – estimated at about $153 billion during the period (2000-2019) topped the 10 largest loan recipients – representing 68% of the total – including various countries such as Angola, Ethiopia, Zambia and Cameroon. In 2019, about 24% of the total African debt was owed to China, while 32% was owed to international institutions, and 4% of government external debt was owed to private sector lenders, as shown in Figure (8).

Figure No. (8) African debts distributed according to the nature of the creditor for the year 2019

Source : Ben Chandler,COVID-19 & AFRICAN DEBT: FURTHER DISTRESS OR THE BEGINNING OF A NEW PARADIGM?, Mo Ebrahim Foundation , 2020 , Available at:https://mo.ibrahim.foundation/sites/default/files/2020-06/debt-distress-covid19.pd

     In addition, granting China interest-free loans or the so-called “preferential loans” that are directed to various economic sectors such as infrastructure projects, and improving the efficiency of some important economic sectors such as agriculture. As the World Bank indicated that more than a third of Chinese loans are used in the electricity sector and transportation facilities, within the framework of Chinese-African cooperation on foreign aid for economic basic facilities. China has provided a large number of soft loans to improve agricultural production capacity in Africa, product quality, training of agricultural technicians, and the establishment of a large number of agricultural technology testing stations, extension stations, and water conservancy, which has led to improving agricultural production capacity and raising the level of food security for some African countries. China’s loans and grants have helped some African countries build infrastructure projects related to transportation, communications and electricity.

    China often provides low-interest loans to countries that depend on commodities such as oil or mineral resources. The closest example of this is the so-called “Angola pattern”, which China took in providing aid to Africa, as China helped rebuild Angola after the two countries agreed that Angola would pay Chinese debts using its oil in the future, this type of aid, described by a report issued About the World Bank with the “Angola style”. Although doubts have arisen here about this pattern that focuses on bartering infrastructure for resources and the blurring of the distinction between aid, trade and investment. In fact, the “Angola style” is agreements and contracts signed between Chinese and Angolan institutions with the support of the governments of the two countries and on the basis of mutual respect for sovereignty and non-interference in internal affairs.

  Sixth – Opportunities and Challenges of the Chinese Presence in Africa:

   Economic relations between China and Africa have witnessed a great improvement at all levels, especially trade and investment. China is expected to enhance its interests on the continent, and in this context, the China-Africa Cooperation Forum is a good opportunity for a win-win partnership between the two sides, which will benefit Africa, given that the Chinese economy is one of the world’s largest economies. In its previous sessions, the China-Africa Forum resulted in a number of results that confirmed the two parties’ pursuit of mutual benefit, the most prominent of which we can monitor in:

In 2015, China announced ten plans for cooperation between China and Africa to help the continent accelerate agricultural industrialization and modernization. A $10 billion China-Africa production capacity cooperation fund has also been set up to support cooperation projects such as economic and industrial zones in Africa.

The launch of the Free Trade Zone in Djibouti as a platform for implementing the “exit” strategy for Chinese companies and will contribute to solving some trade problems such as low customs clearance efficiency, slow logistics, complex administrative procedures and lack of support services, which will enhance trade facilitation between China and African countries.

– The announcement of the Belt and Road Initiative came in 2013 to link China, Asia, Europe and Africa. The initiative is based on developing the infrastructure of the countries covered by the initiative, and includes extending energy, gas and electricity networks. year 2050 This initiative achieves benefits for all parties, as it enhances the political and economic influence of China across three continents, and the African continent benefits from development projects, especially related to infrastructure within the initiative.

– In the field of community development, especially in the health field, the Chinese role stands out based on the 2006 document entitled “China’s African Policy”, which includes China sending medical aid and medicines to African countries and helping to improve the quality of infrastructure and training of medical personnel, and cooperation for prevention and treatment of infection Infectious diseases such as immunodeficiency, AIDS, malaria, and other diseases. China also helped Africa recover from the Covid-19 pandemic and improve its competitiveness in the global market, as China donated more than 600 million doses, with the aim of raising vaccination rates in Africa.

     However, this cooperation does not mean that the African-Chinese relations are devoid of obstacles and challenges, which we can summarize as follows:

1. The geographical distance between the two sides. It is true that there are Chinese reinforcements to facilitate connectivity with the countries of the African continent within its “Belt and Road” project. However, it is also true that the focus is mainly on eastern and southeastern Africa, bearing in mind that this does not mean neglecting the middle And the west of the continent, although the interest in it is less compared to the east and southeast regions. This geographical divergence may be a factor that limits the expected rapprochement between the two sides.

2. International and regional competition in the continent, where China faces strong international and regional competition in the African continent, that competition that may reach the point of competition between many parties, some of which seek to maintain the balance of their presence in that continent, and others seek to gain areas of presence and influence from By strengthening his relations with the leaders of the countries of the continent in various ways.

3. The weakness of the cultural and linguistic ties between the two sides, which is embodied in the language barrier, as most of the regions of the continent, by virtue of ancient colonialism, speak in addition to the local languages, either English or French, which makes it difficult for social communication between the two sides. It is true that China is trying, through those in development projects, to be familiar with the languages ​​spread in those regions to facilitate communication with its citizens. It also seeks to open cultural centers to teach the Chinese language in some areas.

Results of the study: The study concluded a number of results, the most important of which are as follows:

– The trade structure between China and Africa reflects the continent’s continuation in producing and exporting its natural resources, mainly energy and minerals, while it imports manufactured and high-tech goods from China, in light of the fact that China’s trading partners are mainly concentrated in a small number of African countries in accordance with the comparative advantage For each country, which represents a continuation of the original pattern of international division of labor, so that Africa becomes the source of wealth for all countries of the world, including China.

Chinese investment in Africa witnessed a steady expansion despite the downward trend resulting from the spread of the Corona pandemic, as China brought a large amount of investment in African infrastructure, and Chinese investment in the service sector in Africa witnessed a significant increase, as investment in sub-sectors such as scientific research and service services increased. Technology, transportation, storage and postal services by more than two times.

– China did not associate its aid to Africa with any political purposes, as Chinese aid included many developmental aspects of the continent, although the main fear was the over-reliance of African governments on Chinese loans. The International Monetary Fund classifies more than 20 African countries as being at high risk of debt distress or already in debt distress due to the “Covid-19” pandemic. In the year 2020, as Zambia, Angola and Ethiopia have become the largest African borrowers from China, and with the increase and intensity of these debts, the prospects of China making more concessions for debt relief weaken, especially with its exposure to the repercussions of the Corona pandemic.

– China and Africa are complementary to each other in economic development, and they are still united by giant development projects such as the Silk Road within the Belt and Road Initiative, and the free trade zone in Djibouti as a platform for implementing the strategy of entry of Chinese goods to the countries of the continent, and many aspects of economic cooperation.

    In conclusion, the first hypothesis of the study can be accepted, according to which the establishment of the African Economic Cooperation Forum in 2000 has contributed to a significant improvement in Sino-African economic relations, as the indicators of trade exchange and investment between China and Africa improved significantly after the establishment of the forum. Likewise, accepting the second hypothesis, according to which economic relations between China and Africa are moving in the complementary and not competitive direction, as the trade relations between the two parties were highly complementary, and China’s initiatives to build and improve infrastructure such as roads, railways, and communication systems are considered an important addition to the manufacturing sector. In Africa ; China has helped Africa overcome many developmental problems in various fields. Therefore, the economic relations between China and Africa are based on the win-win approach.

Study recommendations:

The study reached a number of recommendations that would enhance the benefit of African economies from China, the most important of which are as follows:

– In the Sino-African case, China enjoys comparative advantages in the field of technologies, capital and technical expertise, and Africa enjoys superiority in natural resources, potential for development and markets, and Africa must focus on how to benefit from Chinese capabilities in order to maximize its economies and raise the degree of its competitiveness.

– Africa must set conditions for Chinese investors related to the employment of African workers. Usually, Chinese investments employ Chinese workers in existing projects in Africa. Hence, there must be an African plan through which the developmental role of Chinese investments can be enhanced to rehabilitate the African human element and transfer expertise to it. With the need to keep part of the profits made to be reinvested in vital projects that serve the African citizen in the first place

– Raising the negotiating capabilities of African governments, so that the maximum benefit can be made from the Chinese economic presence in Africa. There is a need for African countries to establish an equal partnership that enables them to localize technology and build productive economies.

Developing African development plans through which it is possible to benefit from Chinese capabilities in specific sectors such as the field of infrastructure, as well as its experience in agriculture and rural development.

The Chinese economy has become seriously competing with the United States of America and the rest of the Western countries, not only in Africa but also in various parts of the world, as strategic studies recommend that it be able to overtake America on the horizon of the year 2025, and this requires Africans to learn from past experiences, especially from unequal partnerships with the West. That left the scourge, and this requires the establishment of an African partnership based on the basis of winner-winner.

– The “Belt and Road” initiative launched by China with the aim of enhancing interdependence and cooperation remains one of the most important global initiatives that will bring about tremendous changes in the level of the African economy and geopolitical balances, which Africa must benefit from and move forward with.